Delaware
|
5731
|
98-1566891
|
||
(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Rachel Proffitt
David Peinsipp
David Ambler
Cooley LLP 3 Embarcadero Center, 20
th
Floor
San Francisco, CA 94111 (415)
693-2000
|
Tiffany
Meriweather
Chief Legal Officer Enjoy Technology, Inc. 3240 Hillview Avenue Palo Alto, California 94304
1-(888)
463-6569
|
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated
filer
|
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
|
||||||||
Title of each class of securities to be
registered |
|
Amount to be
registered
(1)(2)
|
|
Proposed maximum
offering price per share security |
|
Proposed maximum
aggregate offering price |
|
Amount of
registration fee |
Primary Offering
|
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value per share.
|
|
15,660,417
(3)
|
|
$10.65
(6)
|
|
$166,783,441
(7)
|
|
$15,461
(6)
|
Secondary Offering
|
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value per share
|
|
89,627,117
(4)
|
|
$10.65
(6)
|
|
$948,679,784
(7)
|
|
$87,943
(6)
|
Warrants
|
|
6,316,667
(5)
|
|
—
|
|
—
|
|
—
(7)
|
Total
|
|
|
|
|
|
$1,115,463,225
|
|
$103,404
|
|
||||||||
|
(1)
|
Immediately prior to the consummation of the Merger described in the prospectus forming part of this registration statement (the “prospectus”), Marquee Raine Acquisition Corp., a Cayman Islands exempted company (“MRAC”), effected a deregistration under the Cayman Islands Companies Law (2020 Revision) and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which MRAC’s jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware (the “Domestication”), and was renamed “Enjoy Technology, Inc.” (“New Enjoy”), as further described in the prospectus. All securities being registered were or will be issued by New Enjoy.
|
(2)
|
Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
|
(3)
|
Consists of (i) 6,316,667 shares of Common Stock issuable upon the exercise of 6,316,667 Private Placement Warrants (as defined below) and (ii) 9,343,750 shares of Common Stock issuable upon the exercise of 9,343,750 Public Warrants (as defined below) included in the publicly sold units to purchase Common Stock, in each case at an exercise price of $11.50 per share.
|
(4)
|
Consists of (i) up to 89,627,117 shares of Common Stock, consisting of (a) up to 8,000,000 PIPE Shares (as defined below), (b) up to 9,343,750 sponsor shares (including 2,201,250 Sponsor Earnout Shares (as defined below)), (c) up to 6,316,667 shares of Common Stock issuable upon the exercise of the Private Placement Warrants, (d) 5,500,906 shares of Common Stock issued pursuant to the Backstop Agreement (as defined below), (e) 450,000 shares of Common Stock issued pursuant to the Equity Fee Agreement (as defined below) and (f) up to 60,015,794 shares of Common Stock pursuant to the Registration Rights Agreement (as defined below).
|
(5)
|
Represents the resale of 6,316,667 Private Placement Warrants, which were originally issued on
|
(6)
|
Estimated pursuant to Rule 457(c) under the Securities Act and solely for the purpose of calculating the registration fee based on the average of the high and low prices of the shares of Common Stock on the Nasdaq Capital Market (“Nasdaq”) on October 27, 2021.
|
(7)
|
In accordance with Rule 457(i), the entire registration fee for the Warrants is allocated to the shares of Common Stock underlying the Warrants, and no separate fee is payable for the Warrants.
|
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|
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F-1 | ||||
I-1 |
• |
“2021 Plan” are to the 2021 Equity Incentive Plan of the Company;
|
• |
“Backstop Agreements” are to the subscription agreements entered into with MRAC pursuant to which the subscribers signatory thereto have agreed to purchase shares of Common Stock in a private placement as part of the PIPE Investment in the event of redemptions, if any, in excess of 26,375,000 MRAC Class A ordinary shares;
|
• |
“Backstop Investment” are to the purchase of shares of Common Stock pursuant to the Backstop Agreements;
|
• |
“Backstop Investment Amount” are to the aggregate gross purchase price, if any, received by the Company prior to or substantially concurrently with the Closing in respect of in the Backstop Investment;
|
• |
“Backstop Investors” are to ET2 Investment LLC and Ron Johnson;
|
• |
“Business Combination” are to the Domestication together with the Merger;
|
• |
“Bylaws” are to Amended and Restated Bylaws of the Company;
|
• |
“Cayman Islands Companies Act” are to the Cayman Islands Companies Act (2020 Revision) of the Cayman Islands as the same may be amended;
|
• |
“Certificate of Incorporation” are to the Certificate of Incorporation of the Company dated October 14, 2021;
|
• |
“Closing” are to the closing of the Business Combination
|
• |
“Closing Date” are to October 15, 2021, the date on which the Closing occurred;
|
• |
“Company,” “we,” “us” and “our” are to MRAC prior to the Business Combination and to New Enjoy after the Business Combination;
|
• |
“Common Stock” are to shares of our common stock, par value $0.0001 per share;
|
• |
“Continental” are to Continental Stock Transfer & Trust Company;
|
• |
“Customers” or “Business Partners” are to companies with which Enjoy has contractual partnerships, commercial relationships, and/or authorized dealer agreements. Our current commercial relationships are with AT&T in the United States, BT Group, including EE, in the United Kingdom, Rogers communications in Canada, and Apple in select cities of the United States;
|
• |
“Consumers” are to Business Partners’ customers;
|
• |
“DGCL” are to the General Corporation Law of the State of Delaware;
|
• |
“Domestication” are to MRAC changing its jurisdiction of incorporation from the Cayman Islands to the State of Delaware by deregistering as an exempted company in the Cayman Islands and domesticating as a corporation formed under the laws of the State of Delaware. In connection with the domestication, MRAC changed its name to “Enjoy Technology, Inc.”;
|
• |
“Enjoy” are to Private Enjoy or New Enjoy, as context requires;
|
• |
“ESPP” are to the 2021 Employee Stock Purchase Plan of the Company;
|
• |
“Equity Fee Agreement” are to that certain agreement by and between the Company and Credit Suisse Securities (USA) LLC (“CS”) whereby the Company agreed to issue CS 450,000 shares of Common Stock as partial payment of the aggregate fee payable to CS in connection with the services provided by CS in connection with the Business Combination, with the remaining amount of the aggregate fee payable in cash;
|
• |
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
|
• |
“Experts” are to Enjoy employees who provide the Enjoy experience to Consumers. For the avoidance of doubt, Experts do not refer to the independent registered public accounting firms referred to elsewhere in this prospectus;
|
• |
“GAAP” are to accounting principles generally accepted in the United States;
|
• |
“IPO” are to MRAC’s initial public offering, which was consummated on December 17, 2020;
|
• |
“IRS” are to the United States Internal Revenue Service;
|
• |
“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;
|
• |
“Merger” are to the merger of Merger Sub with and into Private Enjoy, with Private Enjoy surviving as a wholly owned subsidiary of the Company;
|
• |
“Merger Agreement” are to the Agreement and Plan of Merger and Reorganization, dated as of April 28, 2021, and amended on July 23, 2021 and September 13, 2021, by and among MRAC, Merger Sub and Private Enjoy;
|
• |
“Merger Sub” are to MRAC Merger Sub Corp., a Delaware corporation and subsidiary of MRAC;
|
• |
“Mobile Store” are to Enjoy’s new channel of eCommerce that pairs the convenience of online shopping with the personal touch of an
in-store
retail experience brought together in the comfort of Consumers’ homes;
|
• |
“MRAC” are to Marquee Raine Acquisition Corp., a Cayman Islands exempted company, prior to the Domestication;
|
• |
“MRAC Class A ordinary shares” are to MRAC’s Class A ordinary shares, par value $0.0001 per share;
|
• |
“MRAC Class B ordinary shares” are to MRAC’s Class B ordinary shares, par value $0.0001 per share;
|
• |
“MRAC Units” are to each issued and outstanding unit of MRAC prior to the Business Combination;
|
• |
“MRAC Warrants” are to the Public Warrants and the Private Placement Warrants;
|
• |
“Nasdaq” are to the Nasdaq Capital Market;
|
• |
“New Enjoy” are to the Enjoy Technology, Inc.;
|
• |
“NPS” are to the Net Promoter Score;
|
• |
“ordinary shares” are to the MRAC Class A ordinary shares and the MRAC Class B ordinary shares, collectively;
|
• |
“Organizational Documents” are to the Certificate of Incorporation and the Bylaws;
|
• |
“Person” are to any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind;
|
• |
“PIPE Investment” are to that certain private placement in the aggregate amount of $80 million, consummated substantially concurrently with the Closing, pursuant to those certain subscription agreements with MRAC, and subject to the conditions set forth therein, pursuant to which the subscribers purchased 8 million shares of Common Stock at a purchase price of $10.00 per share;
|
• |
“PIPE Investment Amount” are to the aggregate gross purchase price received by MRAC prior to or substantially concurrently with Closing for the shares in the PIPE Investment;
|
• |
“PIPE Investors” are to those certain investors participating in the PIPE Investment pursuant to the Subscription Agreements;
|
• |
“PIPE Shares” are to the 8,000,000 shares of Common Stock issued to the subscribers in the PIPE Financing;
|
• |
“Private Enjoy” are to Enjoy Technology Operating Corp. (f/k/a Enjoy Technology Inc.), which became the wholly owned subsidiary of the Company after the Business Combination;
|
• |
“Private Enjoy Awards” are to Private Enjoy Options or Private Enjoy Restricted Stock Awards;
|
• |
“Private Enjoy Capital Stock” are to shares of the Private Enjoy Common Stock and the Private Enjoy Preferred Stock;
|
• |
“Private Enjoy Common Stock” are to shares of Enjoy common stock, par value $0.00001 per share;
|
• |
“Private Enjoy Common Warrants” are to warrants to purchase Private Enjoy Common Stock;
|
• |
“Private Enjoy Convertible Notes” are to the issued and outstanding convertible notes issued by Private Enjoy;
|
• |
“Private Enjoy Note Conversion” are to the conversion of all issued and outstanding convertible notes issued by Private Enjoy into shares of Common Stock and Enjoy Technology Preferred Stock in accordance with the terms of the applicable note purchase agreements;
|
• |
“Private Enjoy Options” are to options to purchase shares of Private Enjoy Common Stock;
|
• |
“Private Enjoy Preferred Conversion” are to the conversion of each share of Private Enjoy Preferred Stock into one share of Common Stock;
|
• |
“Private Enjoy Preferred Stock” are to shares of the Private Enjoy Series Seed Preferred Stock, the Series A Preferred Stock, the Series B Preferred Stock and the Series C preferred Stock (each as defined below);
|
• |
“Private Enjoy Preferred Warrants” are to the warrants to purchase shares of Private Enjoy Series B preferred stock;
|
• |
“Private Enjoy Restricted Stock Awards” are to awards of restricted shares of Private Enjoy Common Stock;
|
• |
“Private Enjoy Series A Preferred Stock” are to shares of Private Enjoy Series A preferred stock, par value $0.00001 per share;
|
• |
“Private Enjoy Series B Preferred Stock” are to shares of Private Enjoy Series B preferred stock, par value $0.00001 per share;
|
• |
“Private Enjoy Series C Preferred Stock” are to shares of Private Enjoy Series C preferred stock, par value $0.00001 per share;
|
• |
“Private Enjoy Series Seed Preferred Stock” are to shares of Private Enjoy Series Seed preferred stock, par value $0.00001;
|
• |
“Private Enjoy Stockholders” are to the stockholders of Private Enjoy immediately prior to the consummation of the Business Combination;
|
• |
“Private Enjoy Warrant Settlement” are to the exercise of certain Private Enjoy Warrants in full on a cash or cashless basis in accordance with their respective terms;
|
• |
“Private Enjoy Warrants” are to the Private Enjoy Common Warrants together with the Enjoy Preferred Warrants;
|
• |
“Private Enjoy Restricted Stock Awards” are to restricted shares of Enjoy Common Stock;
|
• |
“Private Enjoy RSUs” are to restricted stock units based on shares of Private Enjoy Common Stock;
|
• |
“Private Enjoy Stockholders” are to the stockholders of Private Enjoy and holders of Private Enjoy Awards prior to the Business Combination;
|
• |
“Private Placement Warrants” or “Private Warrants” are to warrants to purchase one (1) MRAC Class A ordinary share at an exercise of $11.50 per warrant, which were issued to the Sponsor in connection with MRAC’s IPO;
|
• |
“pro forma” are to giving pro forma effect to the Business Combination;
|
• |
“public shareholders” are to holders of public shares, whether acquired in MRAC’s IPO or acquired in the secondary market;
|
• |
“public shares” are to the MRAC Class A ordinary shares (including those that underlie the units) that were offered and sold by MRAC in its IPO and registered pursuant to the IPO registration statement or the shares of our common stock issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires;
|
• |
“Public Warrants” are to the redeemable warrants (including those that underlie the units) that were offered and sold by MRAC in its IPO and registered pursuant to the IPO registration statement or the redeemable warrants of New Enjoy issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires;
|
• |
“redemption” are to each redemption of public shares for cash pursuant to the Cayman Constitutional Documents and the Organizational Documents;
|
• |
“Registration Rights Agreement” are to the Amended and Restated Registration Rights Agreement entered into at the Closing, by and among New Enjoy, Sponsor, the independent directors of MRAC, certain shareholders of Private Enjoy and certain of their respective affiliates;
|
• |
“Sarbanes Oxley Act” are to the Sarbanes-Oxley Act of 2002;
|
• |
“SEC” are to the United States Securities and Exchange Commission;
|
• |
“Securities Act” are to the Securities Act of 1933, as amended;
|
• |
“Sponsor” are to Marquee Raine Acquisition Sponsor LP, a Cayman Islands exempted limited partnership;
|
• |
“Sponsor Earnout Shares” are to the 2,201,250 sponsor shares that are subject to forfeiture unless the volume-weighted average closing price of New Enjoy Common Stock equals or exceeds $15.00 on 20 out of 30 consecutive trading days after consummation of the Business Combination and on or prior to the fifth (5th) anniversary of the Closing (or a change of control occurs with respect to Enjoy at or above such share price during such period);
|
• |
“sponsor shares” are to the MRAC Class B ordinary shares initially purchased by the Sponsor in a private placement prior to the IPO and the Common Stock that were issued upon the automatic conversion of the MRAC Class B ordinary shares at the time of the Business Combination;
|
• |
“Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment has been consummated;
|
• |
“trust account” are to the trust account established at the consummation of MRAC’s IPO and maintained by Continental, acting as trustee;
|
• |
“Trust Agreement” are to the Investment Management Trust Agreement, dated December 17, 2020, by and between MRAC and Continental, as trustee; and
|
• |
“Warrants” are to Private Placement Warrants and Public Warrants.
|
• |
factors relating to our business, operations and financial performance, including:
|
• |
our projected financial information, anticipated growth rate, and market opportunity;
|
• |
the impact of the regulatory environment and complexities with compliance related to such environment;
|
• |
the impact of the
COVID-19
pandemic;
|
• |
our ability to evaluate future prospects of our strategy for delivering products and services;
|
• |
our ability to develop and maintain an effective system of internal controls over financial reporting;
|
• |
our ability to grow market share in our existing markets or any new markets we may enter;
|
• |
our ability to respond to general economic conditions;
|
• |
the impact of economic downturns and other macroeconomic conditions or trends;
|
• |
the impact of consumer discretionary spending;
|
• |
the health of the mobile retail industry;
|
• |
risks associated with our assets and increased competition in the global mobile retail market;
|
• |
our ability to manage our growth effectively;
|
• |
our ability to achieve and maintain profitability in the future;
|
• |
our ability to maintain existing commercial relationships and successfully enter into new commercial relationships;
|
• |
our ability to access sources of capital, including debt financing and securitization funding to finance our leased warehouses and inventories and other sources of capital to finance operations and growth;
|
• |
our ability to maintain and enhance our products and brand, and to attract Consumers;
|
• |
our ability to maintain or enhance current Customer and Consumer satisfaction and trust levels;
|
• |
our ability to manage, develop and refine our technology platform, including our Mobile Store;
|
• |
our ability to recruit and maintain experienced and highly-skilled Experts;
|
• |
the success of strategic relationships with third parties; and
|
• |
other factors detailed under the section entitled “
Risk Factors
|
• |
The
COVID-19
pandemic may continue to impact our key metrics and results of operations.
|
• |
We have a limited operating history with a new model and strategy in an evolving industry and we may fail to achieve the market acceptance necessary for success.
|
• |
A number of factors may cause our results of operations to fluctuate.
|
• |
We rely on consumer discretionary spending.
|
• |
The loss of key senior management personnel could harm our business.
|
• |
If the mobile retail store market does not continue to grow our results of operations could be adversely affected.
|
• |
Risks associated with our commercial relationships could adversely affect our financial performance, reputation and commercial relationships.
|
• |
We rely on third-party background check providers.
|
• |
We identified material weaknesses in our internal control over financial reporting.
|
• |
We may face difficulties as we expand our operations into new local markets.
|
• |
Our global operations involve additional risks.
|
• |
Two of our Business Partners account for a significant portion of our revenue.
|
• |
Our operating results are subject to the seasonal nature of consumer behavior patterns.
|
• |
Our business will require significant amounts of capital to sustain operations.
|
• |
Our warrants are accounted for as liabilities.
|
• |
Future issuances of debt securities and equity securities may adversely affect us, our Common Stock and may be dilutive to existing stockholders.
|
• |
Our failure to meet the continued listing requirements of Nasdaq.
|
• |
Our Warrants may be out of the money at the time they become exercisable and they may expire worthless.
|
• |
With the approval by the holders of at least 50% of the then-outstanding Public Warrants, we may amend the terms of the Warrants in a manner that may be adverse to holders.
|
• |
We may issue additional shares of Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of the Common Stock.
|
Issuer | Enjoy Technology, Inc. (formerly known as Marquee Raine Acquisition Corp.) | |
Issuance of Common Stock
|
||
Shares of Common Stock Offered by us |
15,660,417 shares of Common Stock, including shares of Common Stock issuable upon exercise of the Warrants, consisting of (i) 6,316,667 shares of Common Stock that are issuable upon the exercise of 6,316,667 Private Placement Warrants by the holders thereof, and (ii) 9,343,750 shares of Common Stock that are issuable upon the exercise of 9,343,750 Public Warrants by the holders thereof.
|
|
Shares of Common Stock Outstanding Prior to Exercise of All Warrants
|
119,171,866 shares (as of October 15, 2021)
|
|
Shares of Common Stock Outstanding Assuming Exercise of All Warrants
|
15,660,417 shares (based on total shares outstanding as of October 15, 2021)
|
|
Exercise Price of Warrants | $11.50 per share, subject to adjustment as described herein. | |
Use of Proceeds |
We will receive up to an aggregate of approximately $180.1 million from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. See the section entitled “
Use of Proceeds
|
|
Resale of Common Stock and Warrants
|
||
Shares of Common Stock Offered by the Selling Securityholders
|
We are registering the resale by the selling securityholders named in this prospectus, or their permitted transferees, and aggregate of 89,627,117 shares of Common Stock, consisting of:
• up to 8,000,000 PIPE Shares;
• up to 9,343,750 sponsor shares (including 2,201,250 Sponsor Earnout Shares);
• up to 6,316,667 shares of Common Stock issuable upon the exercise of the Private Placement Warrants;
• 5,500,906 shares of Common Stock issued pursuant to the Backstop Agreement;
• 450,000 shares of Common Stock issued pursuant to the Equity Fee Agreement; and
|
• up to 60,015,794 shares of Common Stock pursuant to the Registration Rights Agreement
In addition, we are registering 9,343,750 shares of Common Stock issuable upon exercise of the Public Warrants that were previously registered.
|
||
Warrants Offered by the Selling Securityholders
|
6,316,667 Private Placement Warrants | |
Redemption |
The Warrants are redeemable in certain circumstances. See the section entitled “
Description of our Securities — Warrants
|
|
Use of Proceeds | We will not receive any proceeds from the sale of shares of Common Stock or Warrants by the Selling Securityholders. | |
Lock-Up
Restrictions
|
Certain of our stockholders are subject to certain restrictions on transfer until the termination of applicable
lock-up periods.
See the section entitled “
Certain Relationships and Related Party Transactions
|
|
Market for Common Stock and
Warrants |
Our Common Stock and Public Warrants are currently traded on the Nasdaq under the symbols “ENJY” and “ENJYW,” respectively.
|
|
Risk Factors |
See the section entitled “
Risk Factors
|
• |
accurately forecast our revenue and plan our operating expenses;
|
• |
increase the number of and maintain existing multi-year contractual relationships with leading telecommunications and technology companies;
|
• |
increase the number of and retain existing Consumers and Experts that service Consumers;
|
• |
successfully compete with current and future competitors;
|
• |
successfully expand our business in existing markets and enter new markets and geographies;
|
• |
anticipate and respond to macroeconomic changes and changes in the markets in which we operate;
|
• |
maintain and enhance the value of our reputation and brand;
|
• |
adapt to rapidly evolving trends in the ways consumers interact with technology;
|
• |
avoid interruptions or disruptions in our services;
|
• |
develop a scalable, high-performance infrastructure that can efficiently and reliably handle increased demand, as well as the deployment of new features and services;
|
• |
hire, integrate, and retain talented technology, sales, customer service, and other personnel;
|
• |
effectively manage rapid growth in our personnel and operations; and
|
• |
effectively manage our costs related to Experts.
|
• |
We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient number of professionals with (i) an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately, and (ii) an appropriate level of knowledge and experience to establish effective processes and controls. Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions.
|
• |
We did not design and maintain effective controls in response to the risks of material misstatement. Specifically, changes to existing controls or the implementation of new controls were not sufficient to respond to changes to the risks of material misstatement to financial reporting.
|
• |
We did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations. Specifically, certain personnel have the ability to both (i) create and post journal entries within our general ledger system and (ii) prepare and review account reconciliations.
|
• |
We did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of the financial statements. Specifically, we did not design and maintain: (i) program change management controls for all financial systems to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications and data to appropriate personnel; (iii) computer operations controls to ensure that critical batch jobs are monitored, and data backups are authorized and monitored; and (iv) testing and approval controls for program development to ensure that new software
|
development is aligned with business and IT requirements. These IT deficiencies did not result in a misstatement to the financial statements, however, the deficiencies, when aggregated, could impact our ability to maintain effective segregation of duties, as well as the effectiveness of
IT-dependent
controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.
|
• |
Hiring additional finance, accounting and IT personnel during 2021 to bolster our accounting and IT capabilities and capacity, and to establish and maintain our internal control over financial reporting;
|
• |
Designing and implementing controls to formalize roles and review responsibilities to align with our team’s skills and experience and designing and implementing controls over segregation of duties;
|
• |
Providing ongoing training for our personnel on accounting, financial reporting and internal control over financial reporting;
|
• |
Engaging an external advisor to assist with evaluating and documenting the design and operating effectiveness of internal control over financial reporting and assist with the remediation of deficiencies, as necessary;
|
• |
Designing and implementing controls over the preparation and review of journal entries and account reconciliations, including controls over the segregation of duties; and
|
• |
Designing and implementing IT general controls, including controls over the provisioning and monitoring of user access rights and privileges, change management processes and procedures, batch job and data backup authorization and monitoring, and program development approval and testing.
|
• |
build our brand and launch new commercial relationships;
|
• |
acquire new Consumers and increase repeat purchases from existing Consumers;
|
• |
develop new features to enhance the Consumer experience;
|
• |
increase the frequency with which new and repeat Consumers purchase products from our Customer’s sites through merchandising, data, analytics and technology;
|
• |
increase delivery speed and improve the delivery experience for Consumers through the continued
build-out
of our proprietary logistics network;
|
• |
continue to expand internationally; and
|
• |
opportunistically pursue strategic acquisitions.
|
• |
currency exchange restrictions or costs and exchange rate fluctuations;
|
• |
exposure to local economic or political instability, threatened or actual acts of terrorism and security concerns in general;
|
• |
compliance with various laws and regulatory requirements relating to anticorruption, antitrust or competition, economic sanctions, data content, data protection and privacy, consumer protection, employment and labor laws, health and safety, and advertising and promotions;
|
• |
differences, inconsistent interpretations and changes in various laws and regulations, including international, national, state and provincial and local tax laws;
|
• |
weaker or uncertain enforcement of our contractual and intellectual property rights;
|
• |
preferences by local populations for local providers;
|
• |
slower adoption of the internet and mobile devices as advertising, broadcast and commerce mediums and the lack of appropriate infrastructure to support widespread internet and mobile device usage in those markets;
|
• |
our ability to support new technologies, including mobile devices, that may be more prevalent in certain global markets;
|
• |
difficulties in attracting and retaining qualified employees in certain international markets, as well as managing staffing and operations due to increased complexity, distance, time zones, language and cultural and employment law differences; and
|
• |
uncertainty regarding liability for services and content, including uncertainty as a result of local laws and lack of precedent.
|
• |
changes in tax laws, tax treaties, and regulations or the interpretation of them;
|
• |
changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
|
• |
changes to our assessment of our ability to realize our deferred tax assets that are based on estimates of our future results, the feasibility of possible tax planning strategies, and the economic and political environments in which we do business; and
|
• |
the outcome of current and future tax audits, examinations or administrative appeals.
|
• |
changes in the industries in which we and our Business Partners operate;
|
• |
developments involving our competitors;
|
• |
changes in laws and regulations affecting our business;
|
• |
variations in our operating performance and the performance of our competitors in general;
|
• |
actual or anticipated fluctuations in our quarterly or annual operating results;
|
• |
publication of research reports by securities analysts about our Company or our competitors or our industry;
|
• |
the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
|
• |
actions by stockholders, including the sale by the PIPE Investors of any of their shares of our Common Stock;
|
• |
additions and departures of key personnel;
|
• |
commencement of, or involvement in, litigation involving our company;
|
• |
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
|
• |
the volume of shares of our Common Stock available for public sale;
|
• |
general economic and political conditions, such as the effects of the
COVID-19
outbreak, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism; and
|
• |
failure to comply with the requirements of Nasdaq.
|
• |
a limited availability of market quotations for our securities;
|
• |
reduced liquidity for our securities;
|
• |
a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; or
|
• |
a decreased ability to issue additional securities or obtain additional financing in the future.
|
• |
result in us incurring substantial costs;
|
• |
affect our ability to timely file our periodic reports until the restatement is completed;
|
• |
divert the attention of our management and employees from managing our business;
|
• |
result in material changes to our historical and future financial results;
|
• |
result in investors losing confidence in our operating results;
|
• |
subject us to securities class action litigation; and
|
• |
cause our stock price to decline.
|
• |
existing stockholders’ proportionate ownership interest in us will decrease;
|
• |
the amount of cash available per share, including for payment of dividends in the future, may decrease;
|
• |
the relative voting strength of each previously outstanding Common Stock may be diminished; and
|
• |
the market price of the Common Stock may decline.
|
• |
our ability to attract and retain Business Partners and Consumers that utilize our services in a cost-effective manner;
|
• |
our ability to accurately forecast revenue and appropriately plan expenses;
|
• |
the effects of increased competition on our business;
|
• |
our ability to successfully expand in existing markets and successfully enter new markets;
|
• |
changes in consumer behavior with respect to
in-home
delivery and set up as well as related support services;
|
• |
increases in marketing, sales and other operating expenses that we may incur to grow and acquire new Consumers and establish new commercial relationships;
|
• |
the impact of worldwide economic conditions, including the resulting effect on consumer spending on consumer electronics;
|
• |
the impact of weather on our business;
|
• |
our ability to maintain an adequate rate of growth and effectively manage that growth;
|
• |
the effects of changes in search engine placement and prominence;
|
• |
our ability to keep pace with technology changes in our industry;
|
• |
the success of our sales and marketing efforts;
|
• |
the effects of negative publicity on our, and our Business Partners’, business, reputation, or brand;
|
• |
our ability to protect, maintain and enforce our intellectual property;
|
• |
costs associated with defending claims, including intellectual property infringement claims and related judgments or settlements;
|
• |
changes in governmental or other regulations affecting our business, including regulations regarding data privacy and security that may affect how we handle personal information;
|
• |
interruptions in service and any related impact on our business, reputation, or commercial relationships;
|
• |
the attraction and engagement of qualified employees and key personnel;
|
• |
our ability to choose and effectively manage third-party service providers;
|
• |
the effects of natural or human-made catastrophic events;
|
• |
the impact of a pandemic or an outbreak of disease or similar public health concern, such as the recent
COVID-19
pandemic, or fear of such an event;
|
• |
the effectiveness of our internal control over financial reporting;
|
• |
the impact of payment processor costs and procedures;
|
• |
changes in the online payment transfer rate; and
|
• |
changes in our tax rates or exposure to additional tax liabilities.
|
• |
the accompanying notes to the unaudited pro forma condensed combined financial statements;
|
• |
the historical unaudited condensed financial statements of MRAC as and for the six months ended June 30, 2021 and the related notes;
|
• |
the historical audited financial statements, as restated, of MRAC as of December 31, 2020 and for the period from October 16, 2020 (inception) through December 31, 2020 and the related notes;
|
• |
the historical unaudited condensed consolidated financial statements of Enjoy as of and for the six months ended June 30, 2021 and the related notes;
|
• |
the historical audited consolidated financial statements of Enjoy as of December 31, 2020 and for the year ended December 31, 2020 and the related notes; and
|
• |
the section entitled “
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Historical
|
Actual Redemptions
|
|||||||||||||||||||||||||||||
MRAC
|
Enjoy
Technology Inc |
Additional
Convertible Loan of $15.0 million issued in August and September 2021 |
Convertible notes
mark-to-market
adjustments |
Transaction
Accounting Adjustments |
Pro Forma Balance
Sheet
|
|||||||||||||||||||||||||
Short-term convertible loan, at fair value (related party carrying value of $0.2 million)
|
75,845 | 15,000 | 5(w) | 10,873 | 5(x) | (81,736 | ) | 5(p) | — | |||||||||||||||||||||
(19,982 | ) | 5(u) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total current liabilities
|
5,304 | 106,109 | 15,000 | 10,873 | (113,435 | ) | 23,851 | |||||||||||||||||||||||
Deferred legal fees
|
463 | (463 | ) | 5(e) | — | |||||||||||||||||||||||||
Deferred underwriting fee payable
|
13,081 | — | (13,081 | ) | 5(d) | — | ||||||||||||||||||||||||
Long-term debt, net of discount
|
— | 39,887 | (34,323 | ) | 5(l) | — | ||||||||||||||||||||||||
(5,564 | ) | 5(l) | ||||||||||||||||||||||||||||
Long-term convertible loan, at fair value (related party carrying value of $20.0 million)
|
— | 53,156 | 4,636 | 5(x) | (57,792 | ) | 5(h) | — | ||||||||||||||||||||||
Redeemable convertible preferred stock warrant liability
|
— | 575 | (575 | ) | 5(s) | — | ||||||||||||||||||||||||
Derivative warrant liabilities
|
20,045 | 20,045 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities
|
$ | 38,893 | $ | 199,727 | $ | 15,000 | $ | 15,509 | $ | (225,233 | ) | $ | 43,896 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
Actual Redemptions
|
|||||||||||||||||||||||||||
MRAC
|
Enjoy
Technology, Inc |
Additional
Convertible Loan of $15.0 million issued in August and September |
Convertible notes
mark-to-market
adjustments |
Transaction
Accounting Adjustments |
Pro
Forma Balance
Sheet
|
|||||||||||||||||||||||
Class A ordinary shares, $0.0001 par value; 33,137,137 shares subject to possible redemption at $10.00 per share at June 30, 2021
|
$ | 331,371 | $ | — | $ | (373,750 | ) | 5(a) | $ | — | ||||||||||||||||||
42,379 | 5(q) | |||||||||||||||||||||||||||
REDEEMABLE CONVERTIBLE PREFERRED STOCK:
|
||||||||||||||||||||||||||||
Enjoy Series Seed redeemable convertible preferred stock
|
— | 3,651 | (3,651 | ) | 5(j) | — | ||||||||||||||||||||||
Enjoy Series A redeemable convertible preferred stock
|
— | 26,371 | (26,371 | ) | 5(j) | — | ||||||||||||||||||||||
Enjoy Series B redeemable convertible preferred stock
|
— | 181,592 | (181,592 | ) | 5(j) | — | ||||||||||||||||||||||
Enjoy Series C redeemable convertible preferred stock
|
— | 157,078 | (157,078 | ) | 5(j) | — | ||||||||||||||||||||||
MRAC Preference shares
|
— | — | — | |||||||||||||||||||||||||
MRAC Class A ordinary shares
|
— | — | — | 5(q) | — | |||||||||||||||||||||||
MRAC Class B ordinary shares
|
1 | — | (1 | ) | 5(b) | — | ||||||||||||||||||||||
— | ||||||||||||||||||||||||||||
MRAC (Domesticated) Class A ordinary shares subject to possible redemption 37,375,000 shares at $10.00 per share
|
— | — | 373,750 | 5(a) | — | |||||||||||||||||||||||
(318,759 | ) | 5(n) | ||||||||||||||||||||||||||
(54,991 | ) | 5(g) | ||||||||||||||||||||||||||
MRAC (Domesticated) Class A ordinary shares
|
— | — | 1 | 5(b) | 13 | |||||||||||||||||||||||
1 | 5(g) | |||||||||||||||||||||||||||
9 | 5(k) | |||||||||||||||||||||||||||
1 | 5(t) | |||||||||||||||||||||||||||
1 | 5(m) |
Historical
|
Actual Redemptions
|
|||||||||||||||||||||||||||
MRAC
|
Enjoy
Technology, Inc |
Additional
Convertible Loan of $15.0 million issued in August and September |
Convertible notes
mark-to-market
adjustments |
Transaction
Accounting Adjustments |
Pro
Forma Balance
Sheet
|
|||||||||||||||||||||||
Enjoy Common stock
|
— | 1 | 2 | 5(h) | — | |||||||||||||||||||||||
(21 | ) | 5(k) | ||||||||||||||||||||||||||
2 | 5(p) | |||||||||||||||||||||||||||
0 | 5(v) | |||||||||||||||||||||||||||
15 | 5(j) | |||||||||||||||||||||||||||
1 | 5(u) | |||||||||||||||||||||||||||
— | 5(o) | |||||||||||||||||||||||||||
Additional
paid-in
capital
|
8,447 | 46,798 | (636 | ) | 5(e) | 711,806 | ||||||||||||||||||||||
54,990 | 5(g) | |||||||||||||||||||||||||||
57,790 | 5(h) | |||||||||||||||||||||||||||
79,999 | 5(m) | |||||||||||||||||||||||||||
(1,685 | ) | 5(m) | ||||||||||||||||||||||||||
(3,436 | ) | 5(k) | ||||||||||||||||||||||||||
(0 | ) | 5(v) | ||||||||||||||||||||||||||
368,677 | 5(j) | |||||||||||||||||||||||||||
(8,657 | ) | 5(c) | ||||||||||||||||||||||||||
(25,400 | ) | 5(i) | ||||||||||||||||||||||||||
81,734 | 5(p) | |||||||||||||||||||||||||||
(42,379 | ) | 5(q) | ||||||||||||||||||||||||||
19,981 | 5(u) | |||||||||||||||||||||||||||
55,008 | 5(t) | |||||||||||||||||||||||||||
575 | 5(s) | |||||||||||||||||||||||||||
— | 5(o) | |||||||||||||||||||||||||||
20,000 | 5(r) | |||||||||||||||||||||||||||
Accumulated other comprehensive income
|
— | 780 | 780 | |||||||||||||||||||||||||
Accumulated deficit
|
(3,448 | ) | (517,358 | ) | (15,509 | ) | 5(x) | 3,448 | 5(k) | (556,544 | ) | |||||||||||||||||
(3,677 | ) | 5(l) | ||||||||||||||||||||||||||
(20,000 | ) | 5(r) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total stockholders’ equity (deficit)
|
$ | 5,000 | $ | (469,779 | ) | $ | — | $ | (15,509 | ) | $ | 636,343 | $ | 156,055 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
$ | 375,264 | $ | 98,640 | $ | 15,000 | $ | — | $ | (288,953 | ) | $ | 199,951 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
Actual Redemptions
|
|||||||||||||||||||
MRAC
|
Enjoy
Technology Inc |
Transaction
Accounting Adjustments |
Pro Forma
Statement of Operations |
|||||||||||||||||
Revenue
|
$ | — | $ | 40,211 | $ | — | $ | 40,211 | ||||||||||||
Operating expenses:
|
||||||||||||||||||||
Cost of revenue
|
— | 51,587 | — | 51,587 | ||||||||||||||||
Operations and technology
|
— | 36,337 | — | 36,337 | ||||||||||||||||
General and administrative
|
5,820 | 25,755 | — | 31,575 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses
|
5,820 | 113,679 | — | 119,499 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations
|
(5,820 | ) | (73,468 | ) | — | (79,288 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Change in fair value of derivative warrant liabilities
|
7,204 | 7,204 | ||||||||||||||||||
Financing costs - derivative warrant liabilities
|
— | |||||||||||||||||||
Unrealized loss on long-term convertible loan
|
— | (19,226 | ) | 19,226 | 6(b) | — | ||||||||||||||
Interest expense
|
— | (2,817 | ) | 2,710 | 6(a) | (107 | ) | |||||||||||||
Interest income
|
— | 4 | 4 | |||||||||||||||||
Other expense
|
— | 294 | 294 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before provision for income taxes
|
1,384 | (95,213 | ) | 21,936 | (71,893 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Provision for income taxes
|
— | 212 | — | 6(f) | 212 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
$ | 1,384 | $ | (95,425 | ) | $ | 21,936 | $ | (72,105 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per share, basic and diluted
|
$ | 0.15 | $ | (1.50 | ) | $ | (0.62 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||
Weighted average shares used in computing net loss per share, basic and diluted
|
9,343,750 | 63,616,729 | 116,970,464 | 6(g) | ||||||||||||||||
|
|
|
|
|
|
Historical
|
Actual Redemptions
|
|||||||||||||||||||
MRAC (as
restated) |
Enjoy Technology
Inc |
Transaction
Accounting
Adjustments
|
Pro Forma
Statement of Operations |
|||||||||||||||||
Revenue
|
$ | — | $ | 60,323 | $ | — | $ | 60,323 | ||||||||||||
Operating expenses:
|
||||||||||||||||||||
Cost of revenue
|
— | 76,045 | — | 76,045 | ||||||||||||||||
Operations and technology
|
— | 60,254 | — | 60,254 | ||||||||||||||||
General and administrative
|
128 | 35,651 | — | 35,779 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses
|
128 | 171,950 | — | 172,078 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations
|
(128 | ) | (111,627 | ) | — | (111,755 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Change in fair value of derivative warrant liabilities
|
(3,759 | ) | (3,759 | ) | ||||||||||||||||
Financing costs - derivative warrant liabilities
|
(946 | ) | (946 | ) | ||||||||||||||||
Unrealized loss on long-term convertible loan
|
— | (42,907 | ) | (4,636 | ) | 6(c) | — | |||||||||||||
(5,891 | ) | 6(c) | ||||||||||||||||||
(4,982 | ) | 6(c) | ||||||||||||||||||
58,416 | 6(b) | |||||||||||||||||||
Interest expense
|
— | (2,003 | ) | 656 | 6(a) | (5,024 | ) | |||||||||||||
(3,677 | ) | 6(d) | ||||||||||||||||||
Interest income
|
— | 276 | 276 | |||||||||||||||||
Other expense
|
— | (1,426 | ) | (20,000 | ) | 6(e) | (21,426 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before provision for income taxes
|
(4,833 | ) | (157,687 | ) | 19,886 | (142,634 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Provision for income taxes
|
— | 97 | — | 6(f) | 97 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
$ | (4,833 | ) | $ | (157,784 | ) | $ | 19,886 | $ | (142,731 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per share, basic and diluted
|
$ | (0.57 | ) | $ | (2.55 | ) | $ | (1.22 | ) | |||||||||||
|
|
|
|
|
|
|||||||||||||||
Weighted average shares used in computing net loss per share, basic and diluted
|
8,429,688 | 61,852,957 | 116,970,464 | 6(g) | ||||||||||||||||
|
|
|
|
|
|
• |
the accompanying notes to the unaudited pro forma condensed combined financial statements;
|
• |
the historical unaudited condensed financial statements of MRAC as and for the six months ended June 30, 2021 and the related notes;
|
• |
the historical audited financial statements, as restated, of MRAC as of December 31, 2020 and for the period from October 16, 2020 (inception) through December 31, 2020 and the related notes;
|
• |
the historical unaudited condensed consolidated financial statements of Enjoy as of and for the six months ended June 30, 2021 and the related notes;
|
• |
the historical audited consolidated financial statements of Enjoy as of December 31, 2020 and for the year ended December 31, 2020 and the related notes; and
|
• |
the sections entitled “
Management’s Discussion and Analysis of Financial Condition and Results of Operation
|
Number of
Enjoy Shares as of June 30, 2021 |
Conversion of
Convertible Loan into shares of Enjoy Common Stock |
Conversion of
Enjoy options into shares of Enjoy Common Stock |
Conversion of the
2021 Convertible Loan into shares of Enjoy Common Stock |
Conversion of the
Additional Convertible Loan issued in August and September 2021 into shares
of Enjoy
Common Stock |
Conversion of
Enjoy Redeemable Convertible Preferred Stock into Enjoy Common Stock |
Conversion of the
Enjoy Common Warrants into shares of Enjoy Common Stock |
Enjoy common stock
assumed outstanding prior to the closing of the Business Combination, the PIPE Investment and the Backstop Investment |
|||||||||||||||||||||||||
Series Seed convertible preferred stock
|
10,220,000 | (10,220,000 | ) | — | ||||||||||||||||||||||||||||
Series A convertible preferred stock
|
23,298,748 | (23,298,748 | ) | — | ||||||||||||||||||||||||||||
Series B convertible preferred stock
|
76,469,756 | (76,469,756 | ) | — | ||||||||||||||||||||||||||||
Series C convertible preferred stock
|
43,485,135 | (43,485,135 | ) | — | ||||||||||||||||||||||||||||
Common stock
|
65,230,349 | 15,945,550 | 422,732 | 22,573,382 | 5,491,068 | 153,473,639 | 473,011 | 263,609,731 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total
|
218,703,988 | 15,945,550 | 422,732 | 22,573,382 | 5,491,068 | — | 473,011 | 263,609,731 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Enjoy common stock assumed outstanding prior to the closing of the Business Combination and the PIPE Investment
|
|
263,609,724 | ||||||||||||||||||||||||||||||
Assumed Exchange Ratio
|
|
0.3446 | ||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Estimated shares of MRAC common stock issued to Enjoy Stockholders upon closing of the Business Combination
|
|
90,827,964 | ||||||||||||||||||||||||||||||
|
|
a) |
To reflect the domestication of the MRAC Class A Ordinary Shares. Each issued and outstanding share of the MRAC Class A Ordinary Shares converted automatically, on a
one-for-one
|
b) |
To reflect the domestication of the MRAC Class B Ordinary Shares. Each issued and outstanding share of the MRAC Class B Ordinary Shares converted automatically, on a
one-for-one
|
c) |
To reflect the payment of MRAC’s total estimated advisory, legal, accounting and auditing fees and other professional fees of $14.0 million that are deemed to be direct and incremental costs of the Business Combination. The payment of $14.0 million of costs directly attributable to the Business Combination have been recorded as a reduction of $8.7 million to additional
paid-in
capital, a reduction of $1.0 million to accrued expenses and other current liabilities and a reduction of $4.3 million to accounts payable.
|
d) |
To reflect the settlement of $13.1 million of deferred underwriters’ fees incurred during MRAC’s initial public offering that are payable upon completion of the Business Combination.
|
e) |
To reflect the payment of deferred legal fees of $0.5 million from the trust account and a reclassification of deferred transaction cost of $0.6 million from prepaid expenses to additional paid-in capital.
|
f) |
To reflect the release of the remaining cash balance of $41.9 million from the cash held in trust account to cash and cash equivalents after redemption of 31,875,906 MRAC public shareholders and payment of the deferred underwriting fee of $13.1 million.
|
g) |
To reflect the reclassification of ordinary shares subject to redemption of $55.0 million to common stock of $1,000 and additional
paid-in
capital $55.0 million.
|
h) |
To reflect the automatic conversion of Enjoy’s Convertible Loan into shares of Enjoy Common Stock and subsequent conversion into shares of New Enjoy Common Stock at a 10% discount. Upon the conversion, the fair value of the debt of $57.8 million was derecognized. The shares of New Enjoy Common Stock issued in exchange for the debt were recorded at the fair value of the common stock in the amount of $2,000 and additional
paid-in
capital in the amount of $57.8 million.
|
i) |
To reflect the payment of Enjoy’s total estimated advisory, legal, accounting and auditing fees and other professional fees of $25.4 million that are deemed to be direct and incremental costs of the Business Combination. The payment of $19.3 million of costs directly attributable to the Business Combination have been recorded as a reduction to additional
paid-in
capital of $25.4 million, reduction to accounts payable of $1.9 million and reduction to other assets of $7.9 million.
|
j) |
To reflect the conversion of Enjoy Redeemable Convertible Preferred Stock of $368.7 million into Enjoy Common Stock in amount of $15,000 and additional
paid-in
capital of $368.7 million.
|
k) |
To reflect the recapitalization of Enjoy through the contribution of all outstanding common stock of Enjoy to MRAC and the issuance of 90,827,964 shares of New Enjoy Common Stock and the elimination of the accumulated deficit of MRAC, the accounting acquiree. As a result of the recapitalization, Enjoy Common Stock of $21,000 and MRAC’s accumulated deficit of $3.4 million were derecognized. The shares of New Enjoy Common Stock issued in exchange for Enjoy’s capital were recorded as increase to common stock of $9,000 and decrease to additional
paid-in
capital in amount of $3.4 million.
|
l) |
To reflect the repayment of the Blue Torch Loan of $37.0 million, an early repayment fee of $1.0 million and derecognition of unamortized discount of $3.7 million related to the Blue Torch Loan and the repayment of the PPP loan of $10.1 million and accrued interest of $0.1 million.
|
m) |
To reflect the issuance of an aggregate of 8,000,000 shares of New Enjoy Common Stock in the PIPE Investment (excluding the Backstop Investment) at a price of $10.00 per share, for an aggregate purchase price of $80.0 million and to record the fees associated with the consummation of the PIPE Investment (excluding the Backstop Investment) in the amount of $1.7 million.
|
n) |
To reflect MRAC’s public shareholders exercise of their redemption rights totaling 31,875,906 MRAC Class A Ordinary Shares prior to the consummation of the Business Combination at a redemption price of approximately $10.00 per share, or $318.8 million in cash.
|
o) |
To reflect the conversion of the Enjoy Common Warrants into shares of Enjoy Common Stock that resulted in an increase to common stock and decrease to additional
paid-in
capital of $47.
|
p) |
To reflect the automatic conversion of the 2021 Convertible Loan into shares of Enjoy Common Stock and subsequent conversion into shares of New Enjoy Common Stock at a 20% discount. Enjoy recorded the 2021 Convertible Loan under the fair value option. Under the fair value option, the convertible loans are measured at fair value in each reporting period until they are settled, with changes in the fair values being recognized in the consolidated statements of operations as income or expense. Upon the conversion, the fair value of the debt of $81.7 million was derecognized. The shares of New Enjoy Common Stock issued in exchange for the debt were recorded at the fair value of the common stock in the amount of $2,000 and additional
paid-in
capital in the amount of $81.7 million.
|
q) |
To reflect the reclassification of 4,237,863 MRAC Class A ordinary shares from permanent equity to shares of New Enjoy Common Stock subject to possible redemption in order to arrive at the total number of shares subject to redemption of 37,375,000.
|
r) |
To induce one of its stockholders, LCH Enjoir L.P. (“LCH”), to waive certain of its rights in connection with the pending merger with MRAC, Enjoy entered into the Stockholder Contribution Agreement with Ron Johnson and the Stock Issuance Agreement with LCH. Pursuant to the Stockholder Contribution Agreement, immediately prior to and contingent on Closing, Mr. Johnson shall surrender to Enjoy a number of shares of the Company’s Common Stock equal to the quotient obtained by dividing $20.0 million by the product obtained by multiplying $10.00 by the exchange ratio calculated in accordance with the Merger Agreement used to determine that number of shares each share of the Company’s Common Stock will be exchanged for at the closing of the Business Combination (“Contributed Shares”). Thereafter, as detailed in the Stock Issuance Agreement, Enjoy shall issue a number of shares equal to the Contributed Shares to LCH. This transaction results in an increase to additional
paid-in
capital and decrease to accumulated deficit of $20.0 million (see note 6(e) below).
|
s) |
To reflect the conversion of Enjoy’s redeemable convertible preferred stock warrant liability to New Enjoy common warrants as all Enjoy preferred stock was converted into common stock immediately prior to the closing of the Transactions, which resulted in an increase to additional
paid-in
capital and a decrease to the redeemable convertible preferred stock warrant liability of $0.6 million.
|
t) |
To reflect the issuance of an aggregate of 5,500,906 shares of New Enjoy Common Stock in the Backstop Investment at a price of $10.00 per share, for an aggregate purchase price of $55.0 million.
|
u) |
To reflect the automatic conversion of the Additional Convertible Loan of $15 million issued in August and September 2021 into shares of Enjoy Common Stock and subsequent conversion into shares of New Enjoy Common Stock at a 20% discount. Enjoy recorded the Additional Convertible Loan of $15 million issued in August and September 2021 under the fair value option. Under the fair value option, the convertible loans are measured at fair value in each reporting period until they are settled, with changes in the fair values being recognized in the consolidated statements of operations as income
|
or expense. Upon the conversion, the fair value of the debt of $20.0 million was derecognized. The shares of New Enjoy Common Stock issued in exchange for the debt were recorded at the fair value of the common stock in the amount of $1,000 and additional
paid-in
capital in the amount of $20.0 million.
|
v) |
To reflect the conversion of Enjoy options into 422,732 Class A Ordinary shares of Enjoy that resulted in an increase to common stock and decrease to additional
paid-in
capital of $42.
|
w) |
To reflect the August and September 2021 issuance of the Additional Convertible Loan of $15.0 million under a convertible unsecured subordinated loan agreement to borrow up to $75.0 million, of which $60.0 million had been borrowed as of June 30, 2021.
|
x) |
To reflect the
mark-to-market
|
a) |
To reflect an adjustment to eliminate interest expense, amortization of discount and debt issuance cost on the Blue Torch Loan, PPP loan and Convertible Loan as it is assumed that the Blue Torch Loan and PPP loan would have been paid off and the Convertible Loan converted into Enjoy Common Stock as if the Business Combination had occurred on January 1, 2020.
|
b) |
To reflect an adjustment to eliminate unrealized loss on the Convertible loan as it is assumed that the convertible notes would have been converted to Enjoy Common Stock and then to shares of New Enjoy Common Stock as if the Business Combination had occurred on January 1, 2020.
|
c) |
To reflect
mark-to-market
|
d) |
To reflect write off unamortized discount of $3.7 million on repayment of the Blue Torch Loan as described in 5(l) above.
|
e) |
To reflect loss on forfeiture of the Contributed Shares equal to $20.0 million in accordance with the Stockholder Contribution Agreement and the Stock Issuance Agreement (see note 5(r) above).
|
f) |
New Enjoy will not recognize current or deferred tax expense upon consummation of the transaction. Enjoy’s current tax expense is related to foreign jurisdictions, in which, there will be no impact from the transaction. New Enjoy’s U.S. deferred tax balances will be offset by a full valuation allowance. Therefore, no income tax provision impact related to the transaction accounting adjustments is reflected.
|
g) |
The pro forma basic and diluted net loss per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of MRAC’s shares outstanding as if the Transactions occurred on January 1, 2020. The calculation of weighted average shares outstanding for pro forma basic and diluted net loss per share assumes that the shares issuable in connection with the Transactions have been outstanding for the entirety of the period presented. The
|
2,201,250 Sponsor Earnout Shares are participating securities that contractually entitle the holders of such shares to participate in nonforfeitable dividends but does not contractually obligate the holders of such shares to participate in losses. The unaudited pro forma condensed combined statements of operations reflect net losses for the periods presented and, accordingly, no loss amounts have been allocated to the Sponsor Earnout Shares. The Sponsor Earnout Shares have also been excluded from basic and diluted pro forma net loss per share as such shares are subject to forfeiture until the earnout Triggering Event has occurred. |
Six Months Ended
June 30, 2021 |
||||
Weighted average shares calculation - basic and diluted
|
||||
MRAC weighted average public shares outstanding
|
7,142,500 | |||
MRAC common stock subject to redemption reclassified to equity
|
5,499,094 | |||
Issuance of MRAC common stock in connection with closing of the PIPE Investment (excluding Backstop Investment)
|
8,000,000 | |||
Issuance of MRAC common stock in connection with closing of the Backstop Investment
|
5,500,906 | |||
Issuance of MRAC common stock to Enjoy shareholders in connection with Business Combination
|
90,827,964 | |||
|
|
|||
Pro forma weighted average shares outstanding—basic and diluted
|
116,970,464 | |||
|
|
• |
Integrations: Powered by our proprietary APIs, we are deeply integrated with our Business Partners and are embedded into their checkout flows.
|
• |
Scheduling and Routing: Powered by machine learning and analytics, our technology assigns Experts in real time.
|
• |
Inventory and Logistics: Our inventory is assigned to vehicles and Experts based on given and predicted demand, and is powered by machine learning and analytics.
|
• |
Modern Retail Tools: We use internally built tools to empower our Experts to provide the best and most personalized experience for every Consumer.
|
2
|
We calculate our total addressable market revenue by multiplying the estimated potential visits with our current and future potential Business Partners in our current and future potential geographies, respectively, by our projected revenue per visit of $150 in 2025E and then we multiply by an illustrative potential market share of 10%. We calculate total addressable market EBITDA by further multiplying the total addressable market revenue by our 2025E projected Adjusted EBITDA margin of 30%. We estimate our potential visits with our current and future potential Business Partners in our current and future potential geographies by summing the number of subscribers of our telecommunication Business Partners and number of devices sold by our Consumer electronics Business Partners in the relevant region.
|
1. |
We operate in a mode of continuous and agile development.
|
2. |
We hold ourselves accountable to solving problems versus jumping directly to building a solution.
|
3. |
We start with a minimum viable product (MVP) and move to scaling the product after we better understand the data, learnings and impact with each iteration.
|
4. |
We constantly strive to ruthlessly prioritize our roadmaps to make sure we work on the most impactful problems that scale our business and drive real improvements.
|
5. |
We continuously focus on opportunities for
re-architecting
and refactoring to unlock the capacity for scale and next-level system performance.
|
• |
Traditional
on-demand
“to the door” delivery services
|
• |
Similar through the door services of traditional retailers and independent service providers
|
• |
We believe the principal competitive factors in our market include, but are not limited to:
|
• |
Near-zero Consumer acquisition cost
|
• |
Operational efficiency and speed of delivery
|
• |
Business Partnerships
|
• |
Technological innovation
|
• |
Ability to attract, train, and retain talent
|
• |
Service standards and capabilities; and
|
• |
Consumer experience
|
• |
Asset-light model
|
Six Months Ended June 30, 2021
|
||||||||||||
North America
|
Europe
|
Consolidated
|
||||||||||
Daily Mobile Stores
|
433 | 151 | 584 | |||||||||
Daily Revenue Per Mobile Store
|
$ | 417 | $ | 275 | $ | 380 | ||||||
Mobile Store Loss
|
$ | (7,074 | ) | $ | (4,302 | ) | $ | (11,376 | ) | |||
Mobile Store Margin
|
(21.6 | )% | (57.1 | )% | (28.3 | )% | ||||||
Segment Loss
|
$ | (39,914 | ) | $ | (13,314 | ) | ||||||
Adjusted EBITDA
|
$ | (69,165 | ) |
Six Months Ended June 30, 2020
|
||||||||||||
North America
|
Europe
|
Consolidated
|
||||||||||
Daily Mobile Stores
|
283 | 97 | 380 | |||||||||
Daily Revenue Per Mobile Store
|
$ | 391 | $ | 323 | $ | 373 | ||||||
Mobile Store Loss
|
$ | (3,359 | ) | $ | (1,957 | ) | $ | (5,316 | ) | |||
Mobile Store Margin
|
(16.7 | )% | (34.2 | )% | (20.6 | )% | ||||||
Segment Loss
|
$ | (30,097 | ) | $ | (7,459 | ) | ||||||
Adjusted EBITDA
|
$ | (47,549 | ) | |||||||||
Year Ended December 31, 2020
|
||||||||||||
North America
|
Europe
|
Consolidated
|
||||||||||
Daily Mobile Stores
|
334 | 130 | 464 | |||||||||
Daily Revenue Per Mobile Store
|
$ | 382 | $ | 289 | $ | 356 | ||||||
Mobile Store Loss
|
$ | (10,869 | ) | $ | (4,853 | ) | $ | (15,722 | ) | |||
Mobile Store Margin
|
(23.3 | )% | (35.3 | )% | (26.1 | )% | ||||||
Segment Loss
|
$ | (64,669 | ) | $ | (18,167 | ) | ||||||
Adjusted EBITDA
|
$ | (106,552 | ) | |||||||||
Year Ended December 31, 2019
|
||||||||||||
North America
|
Europe
|
Consolidated
|
||||||||||
Daily Mobile Stores
|
296 | 61 | 357 | |||||||||
Daily Revenue Per Mobile Store
|
$ | 359 | $ | 313 | $ | 351 | ||||||
Mobile Store Loss
|
$ | (5,977 | ) | $ | (2,417 | ) | $ | (8,394 | ) | |||
Mobile Store Margin
|
(15.4 | ) | (34.9 | )% | (18.4 | )% | ||||||
Segment Loss
|
$ | (54,923 | ) | $ | (9,379 | ) | ||||||
Adjusted EBITDA
|
$ | (87,209 | ) |
Six months ended
June 30, |
Change
|
|||||||||||||||
(dollars in thousands)
|
2021
|
2020
|
$
|
%
|
||||||||||||
Revenue
|
$ | 40,211 | $ | 25,825 | $ | 14,386 | 55.7 | % | ||||||||
Operating expenses:
|
||||||||||||||||
Cost of revenue
|
51,587 | 31,141 | 20,446 | 65.7 | % | |||||||||||
Operations and technology
|
36,337 | 27,538 | 8,799 | 32.0 | % | |||||||||||
General and administrative
|
25,755 | 16,910 | 8,845 | 52.3 | % | |||||||||||
|
|
|
|
|||||||||||||
Total operating expenses
|
113,679 | 75,589 | 38,090 | 50.4 | % | |||||||||||
|
|
|
|
|||||||||||||
Loss from operations
|
(73,468 | ) | (49,764 | ) | (23,704 | ) | 47.6 | % | ||||||||
Unrealized loss on long-term convertible loan
|
(19,226 | ) | — | (19,226 | ) | N/M | ||||||||||
Interest income
|
4 | 238 | (234 | ) | (98.3 | )% | ||||||||||
Interest expense
|
(2,817 | ) | (643 | ) | (2,174 | ) | 338.1 | % | ||||||||
Other income (expense)
|
294 | (573 | ) | 867 | N/M | |||||||||||
|
|
|
|
|||||||||||||
Loss before provision for income taxes
|
(95,213 | ) | (50,742 | ) | (44,471 | ) | 87.6 | % | ||||||||
Provision for income taxes
|
212 | 14 | 198 | 1,414.3 | % | |||||||||||
|
|
|
|
|||||||||||||
Net loss
|
$ | (95,425 | ) | $ | (50,756 | ) | $ | (44,669 | ) | 88.0 | % | |||||
|
|
|
|
Years Ended
December 31, |
Change
|
|||||||||||||||
(dollars in thousands)
|
2020
|
2019
|
$
|
%
|
||||||||||||
Revenue
|
$ | 60,323 | $ | 45,657 | $ | 14,666 | 32.1 | % | ||||||||
Operating expenses:
|
||||||||||||||||
Cost of revenue
|
76,045 | 54,051 | 21,994 | 40.7 | % | |||||||||||
Operations and technology
|
60,254 | 50,996 | 9,258 | 18.2 | % | |||||||||||
General and administrative
|
35,651 | 30,368 | 5,283 | 17.4 | % | |||||||||||
|
|
|
|
|||||||||||||
Total operating expenses
|
171,950 | 135,415 | 36,535 | 27.0 | % | |||||||||||
|
|
|
|
Years Ended
December 31, |
Change
|
|||||||||||||||
(dollars in thousands)
|
2020
|
2019
|
$
|
%
|
||||||||||||
Loss from operations
|
$ | (111,627 | ) | $ | (89,758 | ) | $ | (21,869 | ) | 24.4 | % | |||||
Unrealized loss on long-term convertible loan
|
(42,907 | ) | — | (42,907 | ) | N/M | ||||||||||
Interest income
|
276 | 1,628 | (1,352 | ) | (83.0 | )% | ||||||||||
Interest expense
|
(2,003 | ) | (1,405 | ) | (598 | ) | 42.6 | % | ||||||||
Other expense
|
(1,426 | ) | (81 | ) | (1,345 | ) | N/M | |||||||||
|
|
|
|
|||||||||||||
Loss before provision for income taxes
|
(157,687 | ) | (89,616 | ) | (68,071 | ) | 76.0 | % | ||||||||
Provision for income taxes
|
97 | 78 | 19 | 24.4 | % | |||||||||||
|
|
|
|
|||||||||||||
Net loss
|
$ | (157,784 | ) | $ | (89,694 | ) | $ | (68,090 | ) | 75.9 | % | |||||
|
|
|
|
• |
Is widely used by analysts, investors and competitors to measure a company’s operating performance;
|
• |
Is a financial measurement that is used by rating agencies, lenders, and other parties to evaluate our credit worthiness; and
|
• |
Is used by our management for various purposes, including as a measure of performance and as a basis for strategic planning and forecasting.
|
Six Months
Ended June 30, |
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Net loss
|
$ | (95,425 | ) | $ | (50,756 | ) | ||
Add back:
|
||||||||
Interest expense
|
2,817 | 643 | ||||||
Other (income) expense
|
(294 | ) | 573 | |||||
Provision for income taxes
|
212 | 14 | ||||||
Depreciation and amortization
|
1,882 | 1,341 | ||||||
Stock-based compensation
|
1,910 | 874 | ||||||
Unrealized loss on long-term convertible loan
|
19,226 | — | ||||||
Transaction-related costs (1)
|
511 | — | ||||||
Deduct:
|
||||||||
Interest income
|
(4 | ) | (238 | ) | ||||
|
|
|
|
|||||
Adjusted EBITDA
|
$ | (69,165 | ) | $ | (47,549 | ) | ||
|
|
|
|
Years Ended
December 31, |
||||||||
(in thousands)
|
2020
|
2019
|
||||||
Net loss
|
$ | (157,784 | ) | $ | (89,694 | ) | ||
Add back:
|
||||||||
Interest expense
|
2,003 | 1,405 | ||||||
Other expense
|
1,426 | 81 | ||||||
Provision for income taxes
|
97 | 78 | ||||||
Depreciation and amortization
|
3,138 | 1,755 | ||||||
Stock-based compensation
|
1,749 | 794 | ||||||
Unrealized loss on long-term convertible loan
|
42,907 | — | ||||||
Transaction-related costs (1)
|
188 | — | ||||||
Deduct:
|
||||||||
Interest income
|
(276 | ) | (1,628 | ) | ||||
|
|
|
|
|||||
Adjusted EBITDA
|
$ | (106,552 | ) | $ | (87,209 | ) | ||
|
|
|
|
As of
|
||||||||||||
(in thousands)
|
June 30,
2021 |
December 31,
2020 |
December 31,
2019 |
|||||||||
Cash and cash equivalents
|
$ | 58,656 | $ | 58,452 | $ | 61,685 | ||||||
Restricted cash
|
5,494 | 5,494 | 4,329 | |||||||||
Accounts receivable, net
|
3,551 | 4,544 | 12,847 |
Six Months
Ended June 30, |
||||||||
(in thousands)
|
2021
|
2020
|
||||||
Net cash used in operating activities
|
$ | (71,844 | ) | $ | (40,187 | ) | ||
Net cash (used in) provided by investing activities
|
(1,389 | ) | 1,269 | |||||
Net cash provided by financing activities
|
73,758 | 8,604 | ||||||
Effect of exchange rate on cash, cash equivalents and restricted cash
|
(320 | ) | 108 | |||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$ | 205 | $ | (30,206 | ) | |||
|
|
|
|
Years Ended
December 31, |
||||||||
(in thousands)
|
2020
|
2019
|
||||||
Net cash used in operating activities
|
$ | (95,342 | ) | $ | (90,295 | ) | ||
Net cash provided by (used in) investing activities
|
14,498 | (29,398 | ) | |||||
Net cash provided by financing activities
|
78,427 | 167,559 | ||||||
Effect of exchange rate on cash, cash equivalents and restricted cash
|
349 | (217 | ) | |||||
|
|
|
|
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
$ | (2,068 | ) | $ | 47,649 | |||
|
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||
(in thousands)
|
Total
|
2021
|
2022-
2023 |
2024-
2025 |
Thereafter
|
|||||||||||||||||||
Paycheck Protection Program Loan
|
(i | ) | $ | 10,000 | $ | 2,105 | $ | 7,895 | $ | — | $ | — | ||||||||||||
Blue Torch Loan
|
(i | ) | 37,000 | — | 37,000 | — | — | |||||||||||||||||
Convertible Loan
|
(i | ) | 43,451 | — | — | 43,451 | — | |||||||||||||||||
Interest Payments Due on Debt
|
(ii | ) | 35,393 | 11,703 | 23,161 | 530 | ||||||||||||||||||
Operating Lease Commitments
|
(iii | ) | 38,795 | 12,204 | 16,576 | 9,218 | 797 |
(i) |
Represents principal repayments only.
|
(ii) |
Assumes an effective interest rate of 14.9%, 14.0% and 1.0% per annum, for the Blue Torch, Convertible and PPP loans, respectively, consistent with the interest rate as of December 31, 2020.
|
(iii) |
Operating lease commitments represent the undiscounted future minimum lease payments for the Company’s operating leases.
|
• |
Identification of the contract with a customer;
|
• |
Identification of the performance obligations in the contract;
|
• |
Determination of the transaction price;
|
• |
Allocation of the transaction price to the performance obligations in the contract; and
|
• |
Recognition of revenue when, or as, the Company satisfies a performance obligation.
|
Name
|
Age
|
Position
|
||
Executive Officers
|
||||
Ron Johnson | 62 |
Director,
Co-Founder
and Chief Executive Officer
|
||
Fareed Khan | 55 | Chief Financial Officer | ||
Jonathan Mariner | 66 | Director, Chief Administrative and People Officer | ||
Tiffany Meriweather | 37 | Chief Legal Officer and Corporate Secretary | ||
Non-Employee
Directors
|
||||
Fred Harman
(1)(3)
|
59 | Director | ||
Thomas Ricketts
(2)
|
55 | Director | ||
Brett Varsov
(3)
|
46 | Director | ||
Salaam Coleman Smith
(3)
|
51 | Director | ||
Denise Young Smith
(1)(2)
|
65 | Director | ||
Gideon Yu
(1)
|
49 | Director |
(1) |
Member of the Audit Committee
|
(2) |
Member of the Compensation Committee
|
(3) |
Member of the Nominating and Corporate Governance Committee
|
• |
appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm;
|
• |
discussing with our independent registered public accounting firm their independence from management;
|
• |
reviewing with our independent registered public accounting firm the scope and results of their audit;
|
• |
pre-approving
all audit and permissible
non-audit
services to be performed by our independent registered public accounting firm;
|
• |
overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;
|
• |
reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; and
|
• |
establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.
|
• |
reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officers, evaluating the performance of our Chief Executive Officer in light of these goals
|
and objectives and setting or making recommendations to the board of directors regarding the compensation of our Chief Executive Officer;
|
• |
reviewing and setting or making recommendations to our board of directors regarding the compensation of other executive officers;
|
• |
making recommendations to our board of directors regarding the compensation of our directors;
|
• |
reviewing and approving or making recommendations to our board of directors regarding our incentive compensation and equity-based plans and arrangements; and
|
• |
appointing and overseeing any compensation consultants.
|
• |
identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors;
|
• |
recommending to our board of directors the nominees for election to our board of directors at annual meetings of our stockholders;
|
• |
overseeing an evaluation of our board of directors and its committees; and
|
• |
developing and recommending to our board of directors a set of corporate governance guidelines.
|
• |
for any transaction from which the director derives an improper personal benefit;
|
• |
for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
|
• |
for any unlawful payment of dividends or redemption of shares; or
|
• |
for any breach of a director’s duty of loyalty to the corporation or its stockholders.
|
• |
Ron Johnson,
Co-Founder
and Chief Executive Officer.
|
• |
Tim Cawley, Chief Operating Officer.
|
• |
Kristina Eastman, Chief Retail Officer.
|
Name and Principal Position
|
Year
|
Salary ($)(1)
|
Bonus ($)
|
Stock
Awards ($) |
Option
Awards ($)(2) |
All Other
Compensation ($) |
Total ($)
|
|||||||||||||||||||||
Ron Johnson
|
2020 | 49,920 | — | — | — | — | 49,920 | |||||||||||||||||||||
Co-Founder
and Chief Executive Officer
|
||||||||||||||||||||||||||||
Tim Cawley
|
2020 | 400,000 | — | — | — | — | 400,000 | |||||||||||||||||||||
Chief Operating Officer
|
||||||||||||||||||||||||||||
Kristina Eastman
(3)
|
2020 | 375,000 | 200,000 | — | 269,082 | — | 844,082 | |||||||||||||||||||||
Chief Retail Officer
|
(1) |
Salary amounts represent actual amounts paid during 2020.
|
(2) |
Amounts reported in this column do not reflect the amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of each option award granted to the named executive officers during 2020, as computed in accordance with Accounting Standards Codification 718 using the assumptions described in Note 2 to Enjoy’s audited financial statements for the
|
year ended December 31, 2020 included elsewhere in this prospectus. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
(3) |
Bonus amount represents a
one-time
discretionary performance bonus due to Ms. Eastman.
|
• |
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 of our executive officers and directors as a group.
|
Name and Address of Beneficial Owner
(1)
|
Number of
Shares |
% of
Ownership |
||||||
5% or Greater Stockholders:
|
||||||||
LCH Enjoir L.P.
(2)
|
16,615,259 | 13.9 | % | |||||
SCP Venture Fund I, L.P.
(3)
|
9,248,980 | 7.7 | % | |||||
Marquee Raine Acquisition Sponsor LP
(4)
|
9,268,750 | 7.8 | % | |||||
Executive Officers and Directors:
|
||||||||
Tim Cawley
(5)
|
454,375 | * | ||||||
Kristina Eastman
|
344,556 | * | ||||||
Fred Harman
(6)
|
5,264,509 | 4.4 | % | |||||
Ron Johnson
(7)
|
19,615,172 | 16.4 | % | |||||
Jonathan Mariner
|
20,602 | * | ||||||
Thomas Ricketts
|
— | — | ||||||
Brett Varsov
|
— | — | ||||||
Salaam Coleman Smith
|
— | — | ||||||
Denise Young Smith
|
— | — | ||||||
Gideon Yu
(8)
|
137,822 | * | ||||||
All directors and executive officers as a group (12 individuals)
|
60,970,025 | 54.4 | % |
* |
Less than one percent
|
(1) |
Unless otherwise noted, the business address of each of the following entities or individuals is c/o Enjoy Technology, Inc. 3240 Hillview Ave, Palo Alto, CA 94304.
|
(2) |
LCH Partners GP L.P. is the general partner of LCH Enjoir L.P. (“LCH”) and LCH Partners Limited is the general partner of LCH Partners GP L.P. The management of LCH Partners Limited is controlled by a board of directors. J. Michael Chu is a director of LCH Partners Limited and as such could be deemed to share voting control and investment power over shares that may be deemed to be beneficially owned by LCH. Mr. Chu disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The address of the entities and individuals mentioned in this footnote is 599 West Putnam Avenue, Greenwich, CT 06830.
|
(3) |
SCP Venture GP I, LLC is the general partner of SCP Venture Fund I, L.P. (“SCP”), the sole member and manager of which is Stamos Capital Associates, LLC. The managing member of Stamos Capital Associates, LLC is Peter Stamos. As such, Mr. Stamos could be deemed to share voting control and investment power
|
over shares that may be deemed to be beneficially owned by SCP. Mr. Stamos disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The principal business address for all entities and individuals affiliated with SCP is 2498 Sand Hill Road, Menlo Park, California 94025. |
(4) |
Marquee Raine Acquisition Sponsor GP Ltd. is the general partner of Marquee Raine Acquisition Sponsor LP. Voting and investment decisions at Marquee Raine Acquisition Sponsor GP Ltd. are made by its board of directors consisting of Brandon Gardner, Crane H. Kenney, Thomas Ricketts and Brett Varsov. Raine Holdings AIV LLC is the sole member of Raine SPAC Holdings LLC, which, in turn, is the sole member of Raine RR SPAC SPV I LLC, which owns a 50% interest in each of Marquee Raine Acquisition Sponsor GP Ltd. and Marquee Raine Acquisition Sponsor LP. Ricketts SPAC Investment LLC is the manager of Marquee Sports Holdings SPAC I, LLC, which owns a 50% interest in each of Marquee Raine Acquisition Sponsor GP Ltd. and Marquee Raine Acquisition Sponsor LP. Based upon the relationships among the entities described in this footnote, such entities may be deemed to beneficially own the securities reported herein. Each of the entities described in this footnote disclaims beneficial ownership of the securities held directly or indirectly by such entities, except to the extent of their respective pecuniary interests
|
(5) |
Consists of 454,375 shares of New Enjoy Common Stock issuable to Mr. Cawley pursuant to vested options exercisable within 60 days of October 15, 2021.
|
(6) |
Mr. Harman, a director for the Company, is a managing partner of Oak Investment Partners XIII, Limited Partnership, a Delaware limited partnership (“Oak”), and, as such, may be deemed to possess shared beneficial ownership of any shares of common stock held by Oak. The business address for Oak is 901 Main Avenue, Suite 600, Norwalk, CT 06851. Mr. Harman disclaims beneficial ownership of the shares held by Oak except to the extent of his pecuniary interest in the shares.
|
(7) |
Consists of (i) 1,555,673 shares of New Enjoy Common Stock held by The Johnson 2011 Trust, as nominee for The Johnson 2011 Irrevocable Children’s Trust, of which Mr. Johnson is
a co-trustee, and
(ii) 18,059,499 shares of New Enjoy Common Stock.
|
(8) |
Consists of 137,822 shares of New Enjoy Common Stock issuable to Mr. Yu pursuant to vested options exercisable within 60 days of October 15, 2021.
|
Before the Offering
|
After the Offering
|
|||||||||||||||||||||||||||
Name of Selling Securityholder
|
Number of
Shares of Common Stock |
Number of
Warrants |
Number of
Shares of Common Stock Being Offered |
Number of
Warrants Being Offered |
Number of
Shares of Common Stock |
Percentage
of Outstanding Shares of Common Stock |
Number
of Warrants |
|||||||||||||||||||||
Jonathan Mariner
(1)
|
20,602 | — | 20,602 | — | — | — | — | |||||||||||||||||||||
KPCB XVI Founders Fund, LLC
(2)
|
4,202,116 | — | 4,202,116 | — | — | — | — | |||||||||||||||||||||
LCH Enjoir L.P.
(3)
|
16,615,259 | — | 16,615,259 | — | — | — | — | |||||||||||||||||||||
Oak Investment Partners XIII, Limited Partnership
(4)
|
5,264,509 | — | 5,264,509 | — | — | — | — | |||||||||||||||||||||
Riverwood Capital Partners II
(Parallel-B)
L.P.
(5)
|
1,309,456 | — | 1,309,456 | — | — | — | — | |||||||||||||||||||||
Riverwood Capital Partners II L.P.
(5)
|
5,004,339 | — | 5,004,339 | — | — | — | — | |||||||||||||||||||||
SCP Venture Fund I, L.P.
(6)
|
9,248,980 | — | 9,248,980 | — | — | — | — | |||||||||||||||||||||
Waycross Ventures LLC
(7)
|
1,485,814 | — | 1,485,814 | — | — | — | — | |||||||||||||||||||||
Ronald Johnson
(8)
|
19,615,172 | — | 19,615,172 | — | — | — | — | |||||||||||||||||||||
ET2 Investment LLC
(9)
|
2,750,453 | — | 2,750,453 | — | — | — | — | |||||||||||||||||||||
Credit Suisse Securities (USA) LLC
(10)
|
450,000 | — | 450,000 | — | — | — | — | |||||||||||||||||||||
Brian C. Baker
|
10,000 | — | 10,000 | — | — | — | — |
Before the Offering
|
After the Offering
|
|||||||||||||||||||||||||||
Name of Selling Securityholder
|
Number of
Shares of Common Stock |
Number of
Warrants |
Number of
Shares of Common Stock Being Offered |
Number of
Warrants Being Offered |
Number of
Shares of Common Stock |
Percentage
of Outstanding Shares of Common Stock |
Number
of Warrants |
|||||||||||||||||||||
D. E. Shaw Oculus Portfolios, L.L.C.
(11)
|
50,000 | — | 50,000 | — | — | — | — | |||||||||||||||||||||
D. E. Shaw Valence Portfolios, L.L.C.
(12)
|
150,000 | — | 150,000 | — | — | — | — | |||||||||||||||||||||
Eun J. Lee
|
17,500 | — | 17,500 | — | — | — | — | |||||||||||||||||||||
Gotham United Ventures LLC
(13)
|
10,000 | — | 10,000 | — | — | — | — | |||||||||||||||||||||
Flow State Group II, LP
(14)
|
57,500 | — | 57,500 | — | — | — | — | |||||||||||||||||||||
Ghisallo Master Fund LP
(15)
|
3,712,970 | — | 1,500,000 | — | 1,937,970 | 1.6 | % | — | ||||||||||||||||||||
Ilan J. Shalit 2017 Irrevocable Gift Trust
|
500,000 | — | 500,000 | — | — | — | — | |||||||||||||||||||||
Iridian Eagle Fund, LP
(16)
|
300,000 | — | 300,000 | — | — | — | — | |||||||||||||||||||||
Jason Mendelson
|
50,000 | — | 50,000 | — | — | — | — | |||||||||||||||||||||
John D DesPrez III
|
50,000 | — | 50,000 | — | — | — | — | |||||||||||||||||||||
Kent P. Dauten
|
300,000 | — | 300,000 | — | — | — | — | |||||||||||||||||||||
Merrick Venture Management, LLC
(17)
|
500,000 | — | 500,000 | — | — | — | — | |||||||||||||||||||||
Neon Barley, L.L.C.
(18)
|
6,888,903 | — | 3,000,000 | — | 3,888,903 | 3.3 | % | — | ||||||||||||||||||||
Park West Investors Master Fund, Limited
(19)
|
2,960,953 | 1,228,544 | 911,000 | 1,228,544 | 2,049,953 | 1.7 | % | — | ||||||||||||||||||||
Park West Partners International, Limited
(19)
|
288,544 | 120,953 | 89,000 | 120,953 | 199,544 | * | — | |||||||||||||||||||||
Patrick M. Gallagher Trust
|
89,000 | — | 10,000 | — | — | — | — | |||||||||||||||||||||
RM/MM Millennium Partners, L.P.
(20)
|
30,000 | — | 30,000 | — | — | — | — | |||||||||||||||||||||
Robins Holdings II, LLC
(21)
|
10,000 | — | 10,000 | — | — | — | — | |||||||||||||||||||||
Schonfeld Strategic 460 Fund LLC
(22)
|
440,407 | 407 | 440,000 | 407 | — | — | — | |||||||||||||||||||||
Steven Galanis
(23)
|
5,000 | — | 5,000 | — | — | — | — | |||||||||||||||||||||
Techra Investments LLC
(24)
|
10,000 | — | 10,000 | — | — | — | — | |||||||||||||||||||||
Marquee Raine Acquisition Sponsor LP
(25)
|
9,268,750 | 6,316,667 | — | 6,316,667 | — | — | — | |||||||||||||||||||||
Other Selling Securityholders
(26)
|
75,000 | — | 75,000 | — | — | — | — |
* |
Less than 1%.
|
** |
Percentage of total voting power represents voting power with respect to all shares of Common Stock, as a single class.
|
(1) |
Mr. Mariner is our Chief Administrative and People Officer and a member of our board of directors.
|
(2) |
Consists of (i) 4,063,027 shares of Common Stock held by Kleiner Perkins Caufield & Byers XVI, LLC (“KPCB XVI”) and (ii) 139,089 shares of Common Stock held by KPCB XVI Founders Fund, LLC (“XVI Founders”). All shares are held for convenience in the name of “KPCB Holdings, Inc., as nominee” for the
|
accounts of such individuals and entities. The managing member of KPCB XVI and XVI Founders is KPCB XVI Associates, LLC (“KPCB XVI Associates”). L. John Doerr, Beth Seidenberg, Randy Komisar, Theodore E. Schlein and Wen Hsieh, the managing members of KPCB XVI Associates, exercise shared voting and dispositive control over the shares held by KPCB XVI and XVI Founders. Such managing members disclaim beneficial ownership of all shares held by KPCB XVI and XVI Founders except to the extent of their pecuniary interest therein. The principal business address for all entities and individuals affiliated with Kleiner Perkins Caufield & Byers is c/o Kleiner Perkins Caufield & Byers, LLC, 2750 Sand Hill Road, Menlo Park, CA 94025. |
(3) |
All of the shares of Common Stock are held by LCH Enjoir, L.P. (“LCH”). LCH Partners GP L.P. is the general partner of LCH and LCH Partners Limited is the general partner of LCH Partners GP L.P. The management of LCH Partners Limited is controlled by a board of directors. The address of the entities and individuals mentioned in this footnote is 599 West Putnam Avenue, Greenwich, CT 06830.
|
(4) |
Oak Associates XIII, LLC is the general partner of Oak Investment Partners XIII, Limited Partnership. Each of Bandel Carano, Edward Glassmeyer, Frederic Harman and Ann Lamont is a managing member of Oak Associates XIII, LLC and has shared power to vote and dispose of the shares held by Oak Investment Partners XIII, Limited Partnership. Each of Mr. Carano, Mr. Glassmeyer, Mr. Harman and Ms. Lamont disclaims beneficial ownership of the shares held by Oak Investment Partners XIII, Limited Partnership, except to the extent of their pecuniary interest therein. Mr. Harman is a member of our board of directors. The address of the selling securityholder is 901 Main Avenue, Suite 600, Norwalk, CT 06851.
|
(5) |
Consists of (i) 5,004,339 shares of Common Stock held directly by Riverwood Capital Partners II L.P. and (ii) 1,309,456 shares of Common Stock held directly by Riverwood Capital Partners II
(Parallel-B)
L.P. (together with Riverwood Capital Partners II L.P., “Riverwood Capital”). Riverwood Capital II L.P. is the general partner of Riverwood Capital. The general partner of Riverwood Capital II L.P. is Riverwood Capital GP II Ltd. Riverwood Capital II L.P. and Riverwood Capital GP II Ltd. may be deemed to have shared voting and dispositive power over, and be deemed to be indirect beneficial owners of the shares directly held by Riverwood Capital. All investment decisions with respect to the shares held by Riverwood Capital are made by a majority vote of a four-member investment committee, comprised of Messrs. Francisco Alvarez-Demalde, Jeffrey Parks, Thomas Smach and Christopher Varelas. All voting decisions over the shares held by Riverwood Capital are made by a majority vote of Riverwood Capital GP II Ltd.’s multiple shareholders. No natural person controls investment or voting decisions with respect to the shares held by Riverwood Capital. The business address of Riverwood Capital is 70 Willow Road, Suite 100 Menlo Park CA 94025-3652.
|
(6) |
Stamos Capital Partners, L.P., the investment manager of SCP Venture Fund I, L.P., has voting and investment power over the securities held by SCP Venture Fund I, L.P. Peter S. Stamos is the managing member of Stamos Capital Partners GP, L.L.C., which is the general partner of Stamos Capital Partners, L.P. Each of SCP Venture Fund I, L.P., Stamos Capital Partners GP, L.L.C. and Peter S. Stamos disclaims beneficial ownership over these securities. The business address of Stamos Capital Partners, L.P. is 2498 Sand Hill Road, Menlo Park, CA 94025.
|
(7) |
All of the shares of Common Stock are held by Waycross Ventures LLC (“Waycross”). The managing member of Waycross is Brook Byers. Mr. Byers disclaims beneficial ownership of all shares held by Waycross except to the extent of his pecuniary interest therein. The business address of Waycross Ventures LLC is 2750 Sand Hill Road, Menlo Park, CA 94025.
|
(8) |
Consists of (i) 1,555,673 shares of Common Stock held by The Johnson 2011 Trust, as nominee for The Johnson 2011 Irrevocable Children’s Trust, of which Mr. Johnson is a
co-trustee,
and (ii) 18,059,499 shares of Common Stock. Mr. Johnson is our Chief Executive Officer and a member of our board of directors. The address of the trust is 2498 Sand Hill Road, Menlo Park, Californian 94027.
|
(9) |
Voting and investment decisions for ET2 Investment LLC are made by the majority vote of an investment committee comprised of three individuals. The business address is P.O. Box 3168, Jackson WY 83001. Thomas Ricketts has an indirect pecuniary interest in a portion of the company securities owned by ET2 Investment LLC, but disclaims beneficial ownership of such securities.
|
(10) |
Consists of 450,000 shares of Common Stock issued to Credit Suisse Securities (USA) LLC as partial payment for their fees. The address of Credit Suisse Securities (USA) LLC is 11 Madison Avenue 24th Floor, New York NY 10010.
|
(11) |
D. E. Shaw Oculus Portfolios, L.L.C. has the power to vote or to direct the vote of (and the power to dispose or direct the disposition of) the 50,000 shares of common stock of the Company to be registered for resale pursuant to the Registration Statement (the “Subject Shares,” and, together with an additional 16,200 shares of common stock beneficially owned by D. E. Shaw Oculus Portfolios, L.L.C., the “Shares”).
|
(12) |
D. E. Shaw Valence Portfolios, L.L.C. has the power to vote or to direct the vote of (and the power to dispose or direct the disposition of) the 150,000 shares of common stock of the Company to be registered for resale pursuant to the Registration Statement (the “Subject Shares,” and, together with an additional 48,635 shares of common stock beneficially owned by D. E. Shaw Valence Portfolios, L.L.C., the “Shares”).
|
(13) |
Ezra Kucharz is the managing member of Gotham United Ventures LLC (“Gotham”) and may direct the vote and disposition of all shares held by Gotham and may be deemed to have beneficial ownership of such shares. The address for Gotham is 298 Highwood Ave, Glen Rock, NJ 07452.
|
(14) |
Flow State Investments, LP. is the investment manager of Flow State Group II, LP and has voting and investment power over the securities held by Flow State Group II, LP. Flow State Investments GP, LLC (the “GP”) is the general partner of Flow State Investments, LP. The GP disclaims beneficial ownership over these securities. The business address is 155 N Wacker Drive, Ste 1760, Chicago, IL 60606.
|
(15) |
Ghisallo Master Fund LP (“Ghisallo”) is managed by Ghisallo Capital Management LLC. Michael Germino, managing member of Ghisallo Capital Management LLC, is Ghisallo’s investment manager and thus may be deemed to have voting and/or investment control over the shares held by Ghisallo. The address of Ghisallo is c/o Walkers, 190 Elgin Avenue, George Town, Grand Cayman, CI KY1-9008.
|
(16) |
Iridian Asset Management LLC is the investment manager of Iridian Eagle Fund, LP and has voting and investment power over the securities being registered for resale. Harold Levy and David Cohen exercise control over Iridian Asset Management LLC and share voting and investment power over the shares, and disclaim beneficial ownership of such shares. The address of Iridian Asset Management LLC is 276 Post Road West, Westport, CT 06880.
|
(17) |
Michael W. Ferro, Jr. serves as the manager of Merrick Venture Management, LLC and has voting and dispositive control over the shares beneficially owned by Merrick Venture Management, LLC. The business address of Merrick Venture Management, LLC is C/O Merrick Ventures, LLC, 400 Clematis St., Suite 208, West Palm Beach, FL 33401.
|
(18) |
King Street Capital Management, L.P. (“LSCM”) is the investment manager of King Street Capital, L.P. and King Street Capital Master Fund, Ltd, the entities on whose behalf Neon Barley, L.L.C. holds the 6,888,903 shares of Common Stock. Jay Ryan is the Chief Financial Officer of the general partner of King Street Capital Management L.P., the sole manager of Neon Barley, L.L.C., and Mr. Ryan may be deemed to have beneficial ownership of the 6,888,903 Shares held by Neon Barley, L.L.C. The address for KSCM is 299 Park Avenue, 40th Floor, New York, New York 10171.
|
(19) |
Park West Asset Management LLC is the investment manager to the Selling Securityholder. Peter S. Park, through one or more affiliated entities, is the controlling manager of Park West Asset Management LLC. The business address of Park West Asset Management LLC is 900 Larkspur Landing Circle, Suite 165, Larkspur, California 94939.
|
(20) |
RM/MM Millennium Partners, L.P. (“RM/MM”) is a limited partnership managed by its three general partners: R.J. Melman, Jerrod Melman and Molly Melman. The general partners collectively own 2% of the partnership interests. The remaining 98% of the partnership interests are owned by trusts for the general partners’ benefits. Larry Swibel is the sole trustee of those trusts and has power of attorney to sign documents on behalf of the general partners. The general partners have voting and/or investment control over the shares held by RM/MM. The address of RM/MM is 5419 N. Sheridan Rd., Chicago, IL 60640; Attn: R.J. Melman.
|
(21) |
Jason Robins, as manager of Robins Holdings II LLC, directly exercises sole voting and investment control over the registrable securities. The business address of Robins Holdings II, LLC is 2001 Kirby Dr., Suite 808, Houston, Texas 77019.
|
(22) |
Schonfeld Strategic Advisors LLC is a Registered Investment Adviser and has been delegated the legal power to vote and/or direct the disposition of such securities on behalf of Schonfeld Strategic 460 Fund LLC as a general partner or investment manager and would be considered the beneficial owner of such securities. The above shall not be deemed to be an admission by the record owners or Schonfeld Strategic 460 Fund LLC that they are themselves beneficial owners of these securities for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or any other purpose. The address of Schonfeld Strategic 460 Fund LLC is 460 Park Ave, Floor 19, New York, NY 10022.
|
(23) |
The address for Mr. Galanis is 2900 NE 7th Ave PH 5001 Miami, FL 33137.
|
(24) |
Mark Tebbe and Robin Tebbe are managing members of the Techra Investments LLC (“Techra Investments”) and may direct the vote and disposition of all shares held by Techra Investments and may be deem to have beneficial ownership of such shares. The address for Techra Investments is 900 N Michigan Ave, Suite 930, Chicago, IL 60601.
|
(25) |
Represents 9,268,750 shares of Common Stock and 6,316,667 warrants to buy shares of Common Stock directly held by Marquee Raine Acquisition Sponsor LP. Voting and investment decisions at Marquee Raine Acquisition Sponsor GP, Ltd. are made by its board of directors consisting of Brandon Gardner, Crane H. Kenney, Thomas Ricketts and Brett Varsov. Raine Holdings AIV LLC is the sole member of Raine SPAC Holdings LLC, which, in turn, is the sole member of Raine RR SPAC SPV I LLC, which owns a 50% interest in each of Marquee Raine Acquisition Sponsor GP Ltd. and Marquee Raine Acquisition Sponsor LP. Ricketts SPAC Investment LLC is the manager of Marquee Sports Holdings SPAC I, LLC, which owns a 50% interest in each of Marquee Raine Acquisition Sponsor GP Ltd. and Marquee Raine Acquisition Sponsor LP. Based upon the relationships among the entities described in this footnote, such entities may be deemed to beneficially own the securities reported herein. Each of the entities described in this footnote disclaims beneficial ownership of the securities held directly or indirectly by such entities, except to the extent of their respective pecuniary interests. The business and/or mailing address for Marquee Raine Acquisition Sponsor L.P. is 65 East 55th Street, 24th Floor, New York, NY 10022.
|
(26) |
Consists of shares of Common Stock beneficially owned by 3 selling securityholders affiliated with the Sponsor who own less than 1.0% of our outstanding Common Stock prior to this offering. The address of this group is 65 East 55th Street, 24th Floor New York, NY 10022.
|
Name
|
Shares of Series C Preferred Stock
|
Total Purchase Price
|
||||||
LCH Enjoir L.P.(1)
|
39,531,941 | $ | 149,999,996.93 |
(1) |
Julian Mack is an affiliate of LCH Enjoir L.P (“Catterton”). Catterton currently holds more than 5% of our capital stock.
|
Name
|
Shares of Series B Preferred Stock
|
Total Purchase Price
|
||||||
Ron Johnson (1)
|
2,101,900 | $ | 4,999,999.72 | |||||
Entities affiliated with Oak Investment Partners(2)
|
4,371,952 | $ | 10,399,999.42 | |||||
SCP Venture Fund I, L.P.(3)
|
11,875,737 | $ | 28,250,003.18 |
(1) |
Ron Johnson is Enjoy’s chief executive officer, a member of the Company’s board of directors and currently holds more than 5% of our capital stock.
|
(2) |
Fred Harman is member of the Company’s board of directors and an affiliate of Oak Investment Partners XIII, Limited Partnership. Entities affiliated with Oak Investment Partners include Oak Investment Partners XIII, Limited Partnership.
|
(3) |
Peter Stamos was a member of the Private Enjoy board of directors and an affiliate of SCP Venture Fund I, L.P., which currently holds more than 5% of our capital stock.
|
• |
any person who is, or at any time during the applicable period was, one of Enjoy’s executive officers or directors;
|
• |
any person who is known by the post-combination company to be the beneficial owner of more than 5% of Enjoy voting stock;
|
• |
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.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
if, and only if, the last reported sale price of the shares of our Common Stock for any 20 trading days within a
30-trading
day period ending three business days before we send to the notice of redemption to the warrant holders (which we refer to as the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like).
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our shares (as defined below);
|
• |
if, and only if, the Reference Value (as defined above) equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like); and
|
• |
if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
|
Redemption Date (period to expiration of
warrants) |
Fair Market Value of Shares of New Enjoy Common Stock
|
|||||||||||||||||||||||||||||||||||
£
$10.00 |
$11.00
|
$12.00
|
$13.00
|
$14.00
|
$15.00
|
$16.00
|
$17.00
|
³
$18.00 |
||||||||||||||||||||||||||||
60 months
|
0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months
|
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months
|
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months
|
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months
|
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months
|
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months
|
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months
|
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months
|
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months
|
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months
|
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months
|
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months
|
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months
|
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months
|
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months
|
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months
|
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months
|
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months
|
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months
|
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months
|
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• |
1% of the total number of our Common Stock then outstanding; or
|
• |
the average weekly reported trading volume of our Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
• |
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
• |
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
• |
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form
8-K
reports; and
|
• |
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
|
• |
purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
|
• |
ordinary brokerage transactions and transactions in which the broker solicits purchasers;
|
• |
block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
• |
an
over-the-counter distribution
|
• |
through trading plans entered into by a Selling Securityholder pursuant to
Rule 10b5-1 under
the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans;
|
• |
short sales;
|
• |
distribution to employees, members, limited partners or stockholders of the Selling Securityholders; through the writing or settlement of options or other hedging transaction, whether through an options exchange or otherwise;
|
• |
by pledge to secured debts and other obligations;
|
• |
delayed delivery arrangements;
|
• |
to or through underwriters or broker-dealers;
|
• |
in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;
|
• |
in privately negotiated transactions;
|
• |
in options transactions;
|
• |
through a combination of any of the above methods of sale; or
|
• |
any other method permitted pursuant to applicable law.
|
Financial Statements (Audited) as of December 31, 2020 for the period from October 16, 2020 (inception) to December 31, 2020
|
|
|||
F-2
|
||||
F-3
|
||||
F-4
|
||||
F-5
|
||||
F-6
|
||||
F-7
|
||||
Consolidated Financial Statements for the three and six months ended June 30, 2021
|
||||
F-22 | ||||
F-23 | ||||
F-24 | ||||
F-25 | ||||
F-26 | ||||
ENJOY TECHNOLOGY, INC.
|
|
|||
Audited consolidated financial statements Enjoy Technology, Inc.:
|
|
|||
F-43
|
||||
F-44
|
||||
F-45
|
||||
F-46
|
||||
F-47
|
||||
F-48
|
||||
Unaudited Condensed Consolidated Financial Statements for the six months ended June 30, 2021
|
||||
F-75 | ||||
F-76 | ||||
F-77 | ||||
F-78 | ||||
F-79 |
Assets
|
||||
Current assets:
|
||||
Cash
|
$ | 2,266,049 | ||
Prepaid expenses
|
831,645 | |||
|
|
|||
Total current assets
|
3,097,694 | |||
Cash held in Trust Account
|
373,750,000 | |||
|
|
|||
Total Assets
|
$
|
376,847,694
|
|
|
|
|
|||
Liabilities and Shareholders’ Equity
|
||||
Current liabilities:
|
||||
Accounts payable
|
$ | 578,902 | ||
Accrued expenses
|
488,824 | |||
|
|
|||
Total current liabilities
|
1,067,726 | |||
Deferred underwriting commissions
|
13,081,250 | |||
Derivative warrant liabilities
|
27,249,130 | |||
|
|
|||
Total liabilities
|
41,398,106 | |||
Commitments and Contingencies
|
||||
Class A ordinary shares, $0.0001 par value; 33,044,958 shares subject to possible redemption at $10.00 per share
|
330,449,580 | |||
Shareholders’ Equity
|
||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding
|
— | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 4,330,042 shares issued and outstanding (excluding 33,044,958 shares subject to possible redemption)
|
433 | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 9,343,750 shares issued and outstanding
|
934 | |||
Additional
paid-in
capital
|
9,830,842 | |||
Accumulated deficit
|
(4,832,201 | ) | ||
|
|
|||
Total shareholders’ equity
|
5,000,008 | |||
|
|
|||
Total Liabilities and Shareholders’ Equity
|
$
|
376,847,694
|
|
|
|
|
General and administrative expenses
|
$ | 127,691 | ||
|
|
|||
Loss from operations
|
(127,691 | ) | ||
Other income (expenses)
|
||||
Change in fair value of derivative warrant liabilities
|
(3,758,500 | ) | ||
Transaction costs—derivative warrant liabilities
|
(946,010 | ) | ||
|
|
|||
Net loss
|
$ | (4,832,201 | ) | |
|
|
|||
Weighted average Class A ordinary shares outstanding, basic and diluted
|
37,375,000 | |||
|
|
|||
Basic and diluted net income per ordinary share, Class A
|
$ | — | ||
|
|
|||
Weighted average Class B ordinary shares outstanding, basic and diluted
|
8,429,688 | |||
|
|
|||
Basic and diluted net loss per ordinary share, Class B
|
$ | (0.57 | ) | |
|
|
Ordinary Shares
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||||||
Class A
|
Class B
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance—October 16, 2020 (inception)
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|||||||
Issuance of Class B ordinary shares to Sponsor
|
— | — | 9,343,750 | 934 | 24,066 | — | 25,000 | |||||||||||||||||||||
Sale of units in initial public offering, less fair value of public warrants
|
37,375,000 | 3,738 | — | — | 359,730,632 | — | 359,734,370 | |||||||||||||||||||||
Offering costs, net of reimbursement from underwriters
|
— | — | — | — | (19,477,581 | ) | — | (19,477,581 | ) | |||||||||||||||||||
Class A ordinary shares subject to possible redemption
|
(33,044,958 | ) | (3,305 | ) | — | — | (330,446,275 | ) | — | (330,449,580 | ) | |||||||||||||||||
Net loss
|
— | — | — | — | — | (4,832,201 | ) | (4,832,201 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance—December 31, 2020
|
|
4,330,042
|
|
$
|
433
|
|
|
9,343,750
|
|
$
|
934
|
|
$
|
9,830,842
|
|
$
|
(4,832,201
|
)
|
$
|
5,000,008
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$ | (4,832,201 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares
|
25,000 | |||
Change in fair value of derivative warrant liabilities
|
3,758,500 | |||
Transaction costs—derivative warrant liabilities
|
946,010 | |||
Changes in operating assets and liabilities:
|
||||
Prepaid expenses
|
(831,645 | ) | ||
Accounts payable
|
578,902 | |||
Accrued expenses
|
53,590 | |||
|
|
|||
Net cash used in operating activities
|
(301,844 | ) | ||
|
|
|||
Cash Flows from Investing Activities:
|
||||
Cash deposited in Trust Account
|
(373,750,000 | ) | ||
|
|
|||
Net cash used in investing activities
|
(373,750,000 | ) | ||
|
|
|||
Cash Flows from Financing Activities:
|
||||
Proceeds received from note payable to related party
|
127,850 | |||
Repayment of note payable to related party
|
(127,850 | ) | ||
Proceeds received from initial public offering, gross
|
373,750,000 | |||
Proceeds received from private placement
|
9,475,000 | |||
Reimbursement from underwriters
|
2,990,000 | |||
Offering costs paid
|
(9,897,107 | ) | ||
|
|
|||
Net cash provided by financing activities
|
376,317,893 | |||
|
|
|||
Net change in cash
|
2,266,049 | |||
Cash—beginning of the period
|
— | |||
|
|
|||
Cash—end of the period
|
$
|
2,266,049
|
|
|
|
|
|||
Supplemental disclosure of noncash financing activities:
|
||||
Offering costs included in accrued expenses
|
$ | 435,234 | ||
Deferred underwriting commissions
|
$ | 13,081,250 | ||
Initial value of Class A ordinary shares subject to possible redemption
|
$ | 333,685,710 | ||
Change in initial value of Class A ordinary shares subject to possible redemption
|
$ | (3,236,130 | ) | |
Initial measurement of derivative warrants issued in connection with the initial public offering accounted for as liabilities
|
$ | 23,490,630 |
As of December 31, 2020
|
||||||||||||
As Previously
Reported |
Restatement
Adjustment |
As Restated
|
||||||||||
Balance Sheet
|
||||||||||||
Total assets
|
$ | 376,847,694 | $ | — | $ | 376,847,694 | ||||||
|
|
|
|
|
|
|||||||
Liabilities and shareholders’ equity
|
||||||||||||
Total current liabilities
|
$ | 1,067,726 | $ | — | $ | 1,067,726 | ||||||
Deferred legal fees
|
— | — | ||||||||||
Deferred underwriting commissions
|
13,081,250 | — | 13,081,250 | |||||||||
Derivative warrant liabilities
|
— | 27,249,130 | 27,249,130 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities
|
14,148,976 | 27,249,130 | 41,398,106 | |||||||||
Class A ordinary shares, $0.0001 par value; shares subject to possible redemption
|
357,698,710 | (27,249,130 | ) | 330,449,580 | ||||||||
Shareholders’ equity
|
||||||||||||
Preference shares—$0.0001 par value
|
— | — | — | |||||||||
Class A ordinary shares—$0.0001 par value
|
161 | 272 | 433 | |||||||||
Class B ordinary shares—$0.0001 par value
|
934 | — | 934 | |||||||||
Additional
paid-in-capital
|
5,126,604 | 4,704,238 | 9,830,842 | |||||||||
Accumulated deficit
|
(127,691 | ) | (4,704,510 | ) | (4,832,201 | ) | ||||||
|
|
|
|
|
|
|||||||
Total shareholders’ equity
|
5,000,008 | — | 5,000,008 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ equity
|
$ | 376,847,694 | $ | — | $ | 376,847,694 | ||||||
|
|
|
|
|
|
Period From October 16, 2020 (Inception)
Through December 31, 2020 |
||||||||||||
As Previously
Reported |
Restatement
Adjustment |
As Restated
|
||||||||||
Statement of Operations
|
||||||||||||
Loss from operations
|
$ | (127,691 | ) | $ | — | $ | (127,691 | ) | ||||
Other (expense) income:
|
||||||||||||
Change in fair value of derivative warrant liabilities
|
— | (3,758,500 | ) | (3,758,500 | ) | |||||||
Transaction costs—derivative warrant liabilities
|
— | (946,010 | ) | (946,010 | ) | |||||||
Net gain from investments held in Trust Account
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total other (expense) income
|
— | (4,704,510 | ) | (4,704,510 | ) | |||||||
|
|
|
|
|
|
|||||||
Net loss
|
$ | (127,691 | ) | $ | (4,704,510 | ) | $ | (4,832,201 | ) | |||
|
|
|
|
|
|
|||||||
Basic and Diluted weighted-average Class A ordinary shares outstanding
|
37,375,000 | — | 37,375,000 | |||||||||
Basic and Diluted net loss per Class A share
|
$ | — | — | $ | — | |||||||
Basic and Diluted weighted-average Class B ordinary shares outstanding
|
8,429,688 | — | 8,429,688 | |||||||||
Basic and Diluted net loss per Class B share
|
$ | (0.02 | ) | $ | (0.55 | ) | $ | (0.57 | ) |
Period From October 16, 2020 (Inception) Through
December 31, 2020 |
||||||||||||
As Previously
Reported |
Restatement
Adjustment |
As Restated
|
||||||||||
Statement of Cash Flows
|
||||||||||||
Net loss
|
$ | (127,691 | ) | $ | (4,704,510 | ) | $ | (4,832,201 | ) | |||
Change in fair value of derivative warrant liabilities
|
— | 3,758,500 | 3,758,500 | |||||||||
Transaction costs - derivative warrant liabilities
|
— | 946,010 | 946,010 |
• |
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
|
• |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
• |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon a minimum of 30 days’ prior written notice of redemption; and
|
• |
if, and only if, the last reported sale price of Class A Ordinary Shares for any 20 trading
days within a 30-trading day period ending
on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like).
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption
provided
|
• |
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like); and
|
• |
if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), the Private Placement Warrants must also concurrently be called for redemption on the same terms (except as described herein with respect to a holders’ ability to cashless exercise its warrants) as the outstanding warrants, as described above.
|
Description
|
Quoted Prices in
Active Markets (Level 1) |
Significant Other
Observable Inputs (Level 2) |
Significant Other
Unobservable Inputs (Level 3) |
|||||||||
Liabilities:
|
||||||||||||
Derivative warrant liabilities
|
$ | — | $ | — | $ | 27,249,130 |
As of
December 17, 2020 |
As of
December 31, 2020 |
|||||||
Volatility
|
22.4 | % | 21.7 | % | ||||
Stock price
|
$ | 10.45 | $ | 10.40 | ||||
Expected life of the options to convert
|
5.5 | 5.5 | ||||||
Risk-free rate
|
0.45 | % | 0.43 | % | ||||
Dividend yield
|
0.0 | % | 0.0 | % |
Derivative warrant liabilities at October 16, 2020 (inception)
|
$ | — | ||
Issuance of Public and Private Warrants
|
23,490,630 | |||
Change in fair value of derivative warrant liabilities
|
3,758,500 | |||
|
|
|||
Derivative warrant liabilities at December 31, 2020
|
$ | 27,249,130 | ||
|
|
June 30, 2021
|
December 31, 2020
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | 877,620 | $ | 2,266,049 | ||||
Prepaid expenses
|
636,568 | 831,645 | ||||||
|
|
|
|
|||||
Total current assets
|
1,514,188 | 3,097,694 | ||||||
Cash held in Trust Account
|
373,750,000 | 373,750,000 | ||||||
|
|
|
|
|||||
Total Assets
|
$
|
375,264,188
|
|
$
|
376,847,694
|
|
||
|
|
|
|
|||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 4,289,351 | $ | 578,902 | ||||
Accrued expenses
|
1,014,468 | 488,824 | ||||||
|
|
|
|
|||||
Total current liabilities
|
5,303,819 | 1,067,726 | ||||||
Deferred legal fees
|
462,409 | — | ||||||
Deferred underwriting commissions
|
13,081,250 | 13,081,250 | ||||||
Derivative warrant liabilities
|
20,045,330 | 27,249,130 | ||||||
|
|
|
|
|||||
Total liabilities
|
38,892,808 | 41,398,106 | ||||||
Commitments and Contingencies
|
||||||||
Class A ordinary shares, $0.0001 par value; 33,137,137 and 33,044,958 shares subject to possible redemption at $10.00 per share at June 30, 2021 and December 31, 2020, respectively
|
331,371,370 | 330,449,580 | ||||||
Shareholders’ Equity
|
||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at June 30, 2021 and December 31, 2020
|
— | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 4,237,863 and 4,330,042 shares issued and outstanding (excluding 33,137,137 and 33,044,958 shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively
|
424 | 433 | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 9,343,750 shares issued and outstanding at June 30, 2021 and December 31, 2020
|
934 | 934 | ||||||
Additional
paid-in
capital
|
8,446,652 | 9,830,842 | ||||||
Accumulated deficit
|
(3,448,000 | ) | (4,832,201 | ) | ||||
|
|
|
|
|||||
Total shareholders’ equity
|
5,000,010 | 5,000,008 | ||||||
|
|
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$
|
375,264,188
|
|
$
|
376,847,694
|
|
||
|
|
|
|
For The Three Months
Ended June 30, 2021 |
For The Six Months
Ended June 30, 2021
|
|||||||
General and administrative expenses
|
$ | 2,357,741 | $ | 5,819,599 | ||||
|
|
|
|
|||||
Loss from operations
|
(2,357,741 | ) | (5,819,599 | ) | ||||
Other income / (expense)
|
||||||||
Change in fair value of derivative warrant liabilities
|
(626,410 | ) | 7,203,800 | |||||
|
|
|
|
|||||
Net income (loss)
|
$ | (2,984,151 | ) | $ | 1,384,201 | |||
|
|
|
|
|||||
Weighted average Class A ordinary shares outstanding, basic and diluted
|
37,375,000 | 37,375,000 | ||||||
|
|
|
|
|||||
Basic and diluted net income per ordinary share, Class A
|
$ | — | $ | — | ||||
|
|
|
|
|||||
Weighted average Class B ordinary shares outstanding, basic and diluted
|
9,343,750 | 9,343,750 | ||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per ordinary share, Class B
|
$ | (0.32 | ) | $ | 0.15 | |||
|
|
|
|
Ordinary Shares
|
Total
|
|||||||||||||||||||||||||||
Class A
|
Class B
|
Additional Paid-in
|
Accumulated
|
Shareholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balance - December 31, 2020
|
|
4,330,042
|
|
$
|
433
|
|
|
9,343,750
|
|
$
|
934
|
|
$
|
9,830,842
|
|
$
|
(4,832,201
|
)
|
$
|
5,000,008
|
|
|||||||
Offering costs
|
— | — | — | — | (266,102 | ) | — | (266,102 | ) | |||||||||||||||||||
Shares subject to possible redemption
|
(410,225 | ) | (41 | ) | — | — | (4,102,209 | ) | — | (4,102,250 | ) | |||||||||||||||||
Net income
|
— | — | — | — | — | 4,368,352 | 4,368,352 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - March 31, 2021 (Unaudited)
|
|
3,919,817
|
|
|
392
|
|
|
9,343,750
|
|
|
934
|
|
|
5,462,531
|
|
|
(463,849
|
)
|
|
5,000,008
|
|
|||||||
Offering costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(196,307 | ) |
|
—
|
|
(196,307 | ) | |||||||||
Shares subject to possible redemption
|
318,046 | 32 |
|
—
|
|
|
—
|
|
3,180,428 |
|
—
|
|
3,180,460 | |||||||||||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(2,984,151 | ) | (2,984,151 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - June 30, 2021 (Unaudited)
|
|
4,237,863
|
|
$
|
424
|
|
|
9,343,750
|
|
$
|
934
|
|
$
|
8,446,652
|
|
$
|
(3,448,000
|
)
|
$
|
5,000,010
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
||||
Net income
|
$ | 1,384,201 | ||
Adjustment to reconcile net income to net cash used in operating activities:
|
||||
Change in fair value of derivative warrant liabilities
|
(7,203,800 | ) | ||
Changes in operating assets and liabilities:
|
||||
Prepaid expenses
|
195,077 | |||
Accounts payable
|
3,710,449 | |||
Accrued expenses
|
890,878 | |||
|
|
|||
Net cash used in operating activities
|
(1,023,195 | ) | ||
|
|
|||
Cash Flows from Financing Activities:
|
||||
Offering costs paid
|
(365,234 | ) | ||
|
|
|||
Net cash used in financing activities
|
(365,234 | ) | ||
|
|
|||
Net change in cash
|
(1,388,429 | ) | ||
Cash - beginning of the period
|
2,266,049 | |||
|
|
|||
Cash - end of the period
|
$
|
877,620
|
|
|
|
|
|||
Supplemental disclosure of noncash financing activities:
|
||||
Deferred legal fees
|
$ | 462,409 | ||
Change in initial value of Class A ordinary shares subject to possible redemption
|
$ | 921,790 |
• |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
• |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
• |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
For The Three
Months Ended June 30, 2021 |
For The Six Months
Ended June 30, 2021 |
|||||||
Class A Ordinary shares subject to possible redemption
|
||||||||
Numerator: Earnings allocable to Ordinary shares subject to possible redemption
|
||||||||
Income from investments held in Trust Account
|
$ | — | $ | — | ||||
Less: Company’s portion available to be withdrawn to pay taxes
|
— | — | ||||||
|
|
|
|
|||||
Net income attributable
|
$
|
—
|
|
$
|
—
|
|
||
|
|
|
|
|||||
Denominator: Weighted average Class A ordinary shares subject to possible redemption
|
||||||||
Basic and diluted weighted average shares outstanding
|
|
37,375,000
|
|
|
37,375,000
|
|
||
|
|
|
|
|||||
Basic and diluted net income per share
|
$
|
—
|
|
$
|
—
|
|
||
|
|
|
|
For The Three
Months Ended June 30, 2021 |
For The Six Months
Ended June 30, 2021 |
|||||||
Non-Redeemable
Ordinary Shares
|
||||||||
Numerator: Net Income (Loss) minus Net Earnings
|
||||||||
Net income (loss)
|
$ | (2,984,151 | ) | $ | 1,384,201 | |||
Net income allocable to Class A ordinary shares subject to possible redemption
|
— | — | ||||||
|
|
|
|
|||||
Non-redeemable
net income (loss)
|
$
|
(2,984,151
|
)
|
$
|
1,384,201 |
|
||
|
|
|
|
|||||
Denominator: Weighted average
Non-redeemable
ordinary shares
|
||||||||
Basic and diluted weighted average shares outstanding,
Non-redeemable
ordinary shares
|
|
9,343,750
|
|
|
9,343,750
|
|
||
|
|
|
|
|||||
Basic and diluted net loss per share,
Non-redeemable
ordinary shares
|
$
|
(0.32
|
)
|
$
|
0.15
|
|
||
|
|
|
|
• |
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; and
|
• |
if, and only if, the last reported sale price of Class A Ordinary Shares for any 20 trading days within a
30-trading
day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like).
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption
provided
|
• |
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like); and
|
• |
if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), the Private Placement Warrants must also concurrently be called for redemption on the same terms (except as described herein with respect to a holders’ ability to cashless exercise its warrants) as the outstanding warrants, as described above.
|
Description
|
Quoted Prices in Active
Markets (Level 1) |
Significant Other
Observable Inputs (Level 2) |
Significant Other
Unobservable Inputs (Level 3) |
|||||||||
Liabilities:
|
||||||||||||
Derivative warrant liabilities - Public
|
$ | 11,960,000 | $ | — | $ | — | ||||||
Derivative warrant liabilities - Private
|
$ | — | $ | 8,085,330 | $ | — |
Description
|
Quoted Prices in Active
Markets (Level 1) |
Significant Other
Observable Inputs (Level 2) |
Significant Other
Unobservable Inputs (Level 3) |
|||||||||
Liabilities:
|
||||||||||||
Derivative warrant liabilities - Public
|
$ | — | $ | — | $ | 16,258,130 | ||||||
Derivative warrant liabilities - Private
|
$ | — | $ | — | $ | 10,991,000 |
Level 3 - Derivative warrant liabilities at December 31, 2020
|
$ | 27,249,130 | ||
Change in fair value of derivative warrant liabilities
|
(3,158,330 | ) | ||
Transfer of Public Warrants out of level 3
|
(16,258,130 | ) | ||
|
|
|||
Level 3 - Derivative warrant liabilities at March 31, 2021
|
$ | 7,832,670 | ||
Transfer of Private Warrants out of level 3
|
(7,832,670 | ) | ||
|
|
|||
Level 3 - Derivative warrant liabilities at June 30, 2021
|
$ | — | ||
|
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Revenue
|
$ | 60,323 | $ | 45,657 | ||||
Operating expenses:
|
||||||||
Cost of revenue
|
76,045 | 54,051 | ||||||
Operations and technology
|
60,254 | 50,996 | ||||||
General and administrative
|
35,651 | 30,368 | ||||||
|
|
|
|
|||||
Total operating expenses
|
171,950 | 135,415 | ||||||
|
|
|
|
|||||
Loss from operations
|
(111,627) | (89,758) | ||||||
Unrealized loss on long-term convertible loan
|
(42,907) | — | ||||||
Interest expense
|
(2,003) | (1,405) | ||||||
Interest income
|
276 | 1,628 | ||||||
Other expense
|
(1,426) | (81) | ||||||
|
|
|
|
|||||
Loss before provision for income taxes
|
(157,687) | (89,616) | ||||||
Provision for income taxes
|
97 | 78 | ||||||
|
|
|
|
|||||
Net loss
|
$ | (157,784) | $ | (89,694) | ||||
|
|
|
|
|||||
Other comprehensive loss, net of tax
|
||||||||
Net unrealized loss on investment
|
— | (2) | ||||||
Cumulative translation adjustment
|
695 | 132 | ||||||
|
|
|
|
|||||
Total comprehensive loss
|
$ | (157,089) | $ | (89,564) | ||||
|
|
|
|
|||||
Net loss per share, basic and diluted
|
$ | (2.55) | $ | (1.48) | ||||
|
|
|
|
|||||
Weighted average shares used in computing net loss per share, basic and diluted
|
61,852,957 | 60,753,169 | ||||||
|
|
|
|
Redeemable
Convertible Preferred Stock |
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated Other
Comprehensive
Income
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||
Balances at January 1, 2019
|
99,479,004 | $ | 186,638 | 59,077,665 | $ | 1 | $ | 1,863 | $ | 59 | $ | (174,455 | ) | $ | (172,532 | ) | ||||||||||||||||
Issuance of common stock upon exercise of stock options
|
— | — | 2,276,594 | — | 505 | — | — | 505 | ||||||||||||||||||||||||
Issuance of Series B redeemable convertible preferred stock (net of issuance costs)
|
10,509,500 | 24,976 | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of Series C redeemable convertible preferred stock (net of issuance costs)
|
39,531,941 | 142,078 | — | — | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation
|
— | — | — | — | 794 | — | — | 794 | ||||||||||||||||||||||||
Net unrealized loss on short term investments
|
— | — | — | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | 132 | — | 132 | ||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | (89,694 | ) | (89,694 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances at December 31, 2019
|
149,520,445 | $ | 353,692 | 61,354,259 | $ | 1 | $ | 3,162 | $ | 189 | $ | (264,149 | ) | (260,797 | ) | |||||||||||||||||
Issuance of common stock upon exercise of stock options
|
— | — | 802,253 | — | 333 | — | — | 333 | ||||||||||||||||||||||||
Issuance of warrants
|
— | — | — | — | 1,357 | — | — | 1,357 | ||||||||||||||||||||||||
Stock-based compensation
|
— | — | — | — | 1,749 | — | — | 1,749 | ||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | 695 | — | 695 | ||||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | (157,784 | ) | (157,784 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances at December 31, 2020
|
149,520,445 | $ | 353,692 | 62,156,512 | $ | 1 | $ | 6,601 | $ | 884 | $ | (421,933 | ) | (414,447 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (157,784 | ) | $ | (89,694 | ) | ||
Adjustments to reconcile net loss to net cash used in operations:
|
||||||||
Depreciation and amortization
|
3,138 | 1,755 | ||||||
Loss (gain) on asset disposal
|
320 | (2 | ) | |||||
Net accretion of discount on investments
|
— | 3 | ||||||
Stock-based compensation
|
1,749 | 794 | ||||||
Accretion of debt discount
|
293 | 333 | ||||||
Revaluation of warrants
|
469 | 113 | ||||||
Foreign currency transaction loss
|
687 | — | ||||||
Revaluation of convertible debt
|
42,907 | — | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
8,417 | (6,436 | ) | |||||
Prepaid expenses and other current assets
|
(115 | ) | (1,240 | ) | ||||
Other assets
|
(2,850 | ) | (1,645 | ) | ||||
Accounts payable
|
(136 | ) | 1,081 | |||||
Accrued expenses and other current liabilities
|
7,563 | 4,643 | ||||||
|
|
|
|
|||||
Net cash used in operating activities
|
(95,342 | ) | (90,295 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(8,012 | ) | (6,883 | ) | ||||
Proceeds from maturity of
available-for-sale
|
22,510 | — | ||||||
Purchase of investments
|
— | (22,515 | ) | |||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities
|
14,498 | (29,398 | ) | |||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Payment of deferred financing costs
|
(884 | ) | — | |||||
Proceeds from issuance of Blue Torch loan and warrants
|
35,790 | — | ||||||
Proceeds from PPP loan
|
10,000 | — | ||||||
Proceeds from convertible loan
|
43,451 | — | ||||||
Payment of TriplePoint loan
|
(10,263 | ) | — | |||||
Proceeds from issuance of redeemable convertible preferred stock
|
— | 175,001 | ||||||
Issuance costs associated with issuance of redeemable convertible preferred stock
|
— | (7,947 | ) | |||||
Proceeds from exercises of stock options
|
333 | 505 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
78,427 | 167,559 | ||||||
|
|
|
|
|||||
Effect of exchange rate on cash, cash equivalents and restricted cash
|
349 | (217 | ) | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(2,068 | ) | 47,649 | |||||
Cash, cash equivalents and restricted cash, beginning of year
|
66,014 | 18,365 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash, end of year
|
$ | 63,946 | $ | 66,014 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the year for interest
|
$ | 2,003 | $ | 1,405 | ||||
Cash paid during the year for income taxes
|
$ | 97 | $ | 23 | ||||
Supplemental disclosure of
non-cash
financing activity:
|
||||||||
Deferred success fee
|
$ | 1,000 | $ | — | ||||
Non-cash
interest
|
$ | 565 | $ | — |
1.
|
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Reconciliation of cash, cash equivalents and restricted cash:
|
||||||||
Cash and cash equivalents
|
$ | 58,452 | $ | 61,685 | ||||
Restricted cash
|
5,494 | 4,329 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash
|
$ | 63,946 | $ | 66,014 | ||||
|
|
|
|
Property and Equipment
|
Useful Life
|
|
Office equipment | 3 years | |
Computer equipment | 3 years | |
Vehicles | 3 years | |
Leasehold improvements | Shorter of estimated life of the asset or remaining lease term | |
Furniture and fixtures | 5 years |
• |
Identification of the contract with a customer;
|
• |
Identification of the performance obligations in the contract;
|
• |
Determination of the transaction price;
|
• |
Allocation of the transaction price to the performance obligations in the contract; and
|
• |
Recognition of revenue when, or as, the Company satisfies a performance obligation.
|
Chargebacks
|
||||
Balance as of January 1, 2019
|
$ | — | ||
Provision
|
2,178 | |||
Credits/payments made
|
— | |||
|
|
|||
Balance as of December 31, 2019
|
2,178 | |||
Provision
|
8,981 | |||
Credits/payments made
|
(5,763 | ) | ||
|
|
|||
Balance as of December 31, 2020
|
$ | 5,396 | ||
|
|
3.
|
SHORT-TERM INVESTMENTS
|
December 31, 2019
|
||||||||||||||||
Amortized Cost
|
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair Value
|
|||||||||||||
U.S. Treasury bills
|
$ | 3,721 | $ | 1 | $ | — | $ | 3,722 | ||||||||
U.S. Government securities
|
18,791 | — | (3 | ) | 18,788 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total short-term investments
|
$ | 22,512 | $ | 1 | $ | (3 | ) | $ | 22,510 | |||||||
|
|
|
|
|
|
|
|
4.
|
FAIR VALUE MEASUREMENTS
|
5.
|
PROPERTY AND EQUIPMENT, NET
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Leasehold improvements
|
$ | 16,512 | $ | 9,984 | ||||
Furniture and fixtures
|
1,438 | 892 | ||||||
Office equipment
|
356 | 397 | ||||||
Computer equipment
|
81 | 81 | ||||||
Vehicles
|
66 | 65 | ||||||
|
|
|
|
|||||
18,453 | 11,419 | |||||||
Less: accumulated depreciation
|
(4,379 | ) | (2,310 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 14,074 | $ | 9,109 | ||||
|
|
|
|
6.
|
INTANGIBLE ASSETS, NET
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Domain Name
|
$ | 1,500 | 1,500 | |||||
Less: accumulated amortization
|
(533 | ) | (433 | ) | ||||
|
|
|
|
|||||
Intangible assets, net
|
$ | 967 | $ | 1,067 | ||||
|
|
|
|
Years Ending December 31,
|
||||
2021
|
$ | 100 | ||
2022
|
100 | |||
2023
|
100 | |||
2024
|
100 | |||
2025
|
100 | |||
Thereafter
|
467 | |||
|
|
|||
Total estimated future amortization expense
|
$ | 967 | ||
|
|
7.
|
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Accrued salaries and wages
|
$ | 8,088 | $ | 3,850 | ||||
Deferred rent
|
3,876 | 3,400 | ||||||
Accrued payables
|
2,774 | 1,409 | ||||||
Accrued tax
|
2,210 | 798 | ||||||
Accrued vacation and benefits
|
813 | 557 | ||||||
Accrued other
|
136 | 70 | ||||||
|
|
|
|
|||||
Total accrued expenses and other current liabilities
|
$ | 17,897 | $ | 10,084 | ||||
|
|
|
|
8.
|
DEBT
|
Years Ending December 31,
|
Total
|
|||
2021
|
$ | 2,105 | ||
2022
|
7,895 | |||
2023
|
37,000 | |||
2024
|
43,451 | |||
2025
|
— | |||
Thereafter
|
— | |||
|
|
|||
Subtotal
|
90,451 | |||
Fair value premium of convertible loan
|
42,906 | |||
Deferred financing costs and unamortized discount
|
(3,317 | ) | ||
|
|
|||
Total
|
$ | 130,040 | ||
|
|
9.
|
STOCK WARRANTS
|
Balance at January 1, 2019
|
$ | 224 | ||
Change in fair value
|
113 | |||
|
|
|||
Balance at December 31, 2019
|
337 | |||
Change in fair value
|
469 | |||
|
|
|||
Balance at December 31, 2020
|
$ | 806 | ||
|
|
10.
|
REDEEMABLE CONVERTIBLE PREFERRED STOCK
|
Preferred
Shares Authorized |
Preferred
Shares Issued and Outstanding |
Issuance
Price Per Share |
Conversion
Price Per Share |
Carrying
Value |
Liquidation
Preference |
|||||||||||||||||||
Series Seed
|
10,220,000 | 10,220,000 | $ | 0.3572 | $ | 0.3572 | $ | 3,651 | $ | 3,651 | ||||||||||||||
Series A
|
23,298,748 | 23,298,748 | 1.1374 | 1.1374 | 26,371 | 26,500 | ||||||||||||||||||
Series B
|
76,806,060 | 76,469,756 | 2.3788 | 2.3788 | 181,592 | 181,906 | ||||||||||||||||||
Series C
|
39,531,941 | 39,531,941 | 3.7944 | 3.7944 | 142,078 | 150,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total
|
149,856,749 | 149,520,445 | $ | 353,692 | $ | 362,057 | ||||||||||||||||||
|
|
|
|
|
|
|
|
11.
|
COMMON STOCK
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Conversion of redeemable convertible preferred stock
|
149,520,445 | 149,520,445 | ||||||
Warrants to purchase redeemable convertible preferred stock
|
810,692 | 336,304 | ||||||
Options outstanding under the Equity Incentive Plan
|
22,874,690 | 21,628,240 | ||||||
Options available for future grant under the Equity Incentive Plan
|
12,845,397 | 4,354,889 | ||||||
|
|
|
|
|||||
Total
|
186,051,224 | 175,839,878 | ||||||
|
|
|
|
12.
|
STOCK-BASED COMPENSATION
|
Number of
Shares |
Weighted
Average Exercise Price |
Remaining
Contractual Term (In Years) |
Aggregate
Intrinsic Value |
|||||||||||||
Balance at January 1, 2019
|
17,467,312 | $ | 0.31 | 8.29 | $ | 2,177 | ||||||||||
Options granted
|
10,331,400 | 0.89 | ||||||||||||||
Options exercised
|
(2,276,594 | ) | 0.21 | |||||||||||||
Options cancelled
|
(3,893,878 | ) | 0.41 | |||||||||||||
|
|
|||||||||||||||
Balance at December 31, 2019
|
21,628,240 | 0.58 | 8.49 | $ | 6,783 | |||||||||||
Options granted
|
4,229,800 | 0.89 | ||||||||||||||
Options exercised
|
(802,253 | ) | 0.41 | |||||||||||||
Options cancelled
|
(2,181,097 | ) | 0.74 | |||||||||||||
|
|
|||||||||||||||
Balance at December 31, 2020
|
22,874,690 | 0.62 | 7.71 | $ | 51,134 | |||||||||||
|
|
|||||||||||||||
Options exercisable as of December 31, 2020
|
12,289,789 | 0.49 | 7.00 | $ | 29,151 | |||||||||||
|
|
|||||||||||||||
Vested and expected to vest—December 31, 2020
|
22,874,690 | $ | 0.62 | 7.71 | $ | 51,134 | ||||||||||
|
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Cost of revenue
|
$ | 34 | $ | 15 | ||||
Operations and technology
|
631 | 484 | ||||||
General and administrative
|
1,084 | 295 | ||||||
|
|
|
|
|||||
Total stock-based compensation expense
|
$ | 1,749 | $ | 794 | ||||
|
|
|
|
13.
|
INCOME TAXES
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Federal
|
$ | (160,042 | ) | $ | (95,463 | ) | ||
Foreign
|
2,355 | 5,847 | ||||||
|
|
|
|
|||||
Loss before provision for income taxes
|
$ | (157,687 | ) | $ | (89,616 | ) | ||
|
|
|
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Federal statutory rate
|
21.0 | % | 21.0 | % | ||||
Effect of:
|
||||||||
State statutory rate, net of federal tax benefit
|
3.0 | % | 4.6 | % | ||||
Foreign tax
|
(2.6 | %) | (0.1 | %) | ||||
Change in valuation allowance
|
(16.2 | %) | (25.0 | %) | ||||
Loss on Convertible Loan
|
(5.0 | %) | — | |||||
Other
|
(0.3 | %) | (0.6 | %) | ||||
|
|
|
|
|||||
Total
|
(0.1 | %) | (0.1 | %) | ||||
|
|
|
|
Years Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Current provision:
|
||||||||
Federal
|
$ | — | $ | — | ||||
State
|
22 | 15 | ||||||
Foreign
|
75 | 37 | ||||||
|
|
|
|
|||||
Total current provision
|
97 | 52 | ||||||
|
|
|
|
|||||
Deferred provision:
|
||||||||
Federal
|
— | — | ||||||
State
|
— | — | ||||||
Foreign
|
— | 26 | ||||||
|
|
|
|
|||||
Total deferred provision
|
— | 26 | ||||||
|
|
|
|
|||||
Provision for income taxes
|
$ | 97 | $ | 78 | ||||
|
|
|
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$ | 96,646 | $ | 67,127 | ||||
Accruals and reserves
|
462 | 333 | ||||||
Property and equipment
|
568 | 328 | ||||||
|
|
|
|
|||||
Total deferred tax asset before valuation allowance
|
97,676 | 67,788 | ||||||
Valuation allowance
|
(97,676 | ) | (67,788 | ) | ||||
Deferred tax assets, net of valuation allowance
|
$ | — | $ | — | ||||
|
|
|
|
Gross unrecognized tax benefits at January 1, 2019
|
$ | 1,538 | ||
Increase for tax positions during 2019
|
2,071 | |||
|
|
|||
Gross unrecognized tax benefits at December 31, 2019
|
3,609 | |||
Increase for tax positions during 2020
|
1,763 | |||
|
|
|||
Gross unrecognized tax benefits at December 31, 2020
|
$ | 5,372 | ||
|
|
14.
|
NET LOSS PER SHARE
|
Year Ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Numerator:
|
||||||||
Net loss
|
$ | (157,784 | ) | $ | (89,694 | ) | ||
Denominator:
|
||||||||
Weighted-average common shares outstanding—basic and diluted
|
61,852,957 | 60,753,169 | ||||||
|
|
|
|
|||||
Net loss per share—basic and diluted
|
$ | (2.55 | ) | $ | (1.48 | ) | ||
|
|
|
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
Conversion of redeemable convertible preferred stock
|
149,520,445 | 149,520,445 | ||||||
Warrants to purchase redeemable convertible preferred stock
|
810,692 | 336,304 | ||||||
Options to purchase common stock
|
22,874,690 | 21,628,240 | ||||||
Conversion of convertible loan
|
11,708,273 | — | ||||||
|
|
|
|
|||||
Total common stock equivalents
|
184,914,100 | 171,484,989 | ||||||
|
|
|
|
15.
|
SEGMENT INFORMATION
|
• |
North America: The North America segment consist of operations within the United States and Canada.
|
• |
Europe: The Europe segment consists of operations withing the United Kingdom.
|
For the Year Ended December 31, 2020
|
||||||||||||
North America
|
Europe
|
Total
|
||||||||||
Revenue
|
$ | 46,593 | $ | 13,730 | $ | 60,323 | ||||||
Segment loss
|
(64,669 | ) | (18,167 | ) | (82,836 | ) | ||||||
Unallocated corporate expenses:
|
||||||||||||
Operations and technology
|
(12,879 | ) | ||||||||||
General and administrative
|
(15,912 | ) | ||||||||||
|
|
|||||||||||
Loss from operations
|
$ | (111,627 | ) | |||||||||
|
|
|||||||||||
For the Year Ended December 31, 2019
|
||||||||||||
North America
|
Europe
|
Total
|
||||||||||
Revenue
|
$ | 38,722 | $ | 6,935 | $ | 45,657 | ||||||
Segment loss
|
(54,923 | ) | (9,379 | ) | (64,302 | ) | ||||||
Unallocated corporate expenses:
|
||||||||||||
Operations and technology
|
(12,305 | ) | ||||||||||
General and administrative
|
(13,151 | ) | ||||||||||
|
|
|||||||||||
Loss from operations
|
$ | (89,758 | ) | |||||||||
|
|
As of December 31,
|
||||||||
2020
|
2019
|
|||||||
North America
|
$ | 7,920 | $ | 5,621 | ||||
Europe
|
6,154 | 3,488 | ||||||
|
|
|
|
|||||
Total long-lived assets
|
$ | 14,074 | $ | 9,109 | ||||
|
|
|
|
16.
|
EMPLOYEE BENEFIT PLANS
|
17.
|
COMMITMENTS AND CONTINGENCIES
|
Years Ending December 31,
|
||||
2021
|
$ | 12,204 | ||
2022
|
8,701 | |||
2023
|
7,875 | |||
2024
|
6,107 | |||
2025
|
3,111 | |||
Thereafter
|
797 | |||
|
|
|||
Total minimum lease payments
|
$ | 38,795 | ||
|
|
18.
|
RISKS AND UNCERTAINTIES
|
19.
|
SUBSEQUENT EVENTS
|
ENJOY
|
TECHNOLOGY INC.
|
Six months ended June 30,
|
||||||||
2021
|
2020
|
|||||||
Revenue
|
$ | 40,211 | $ | 25,825 | ||||
Operating expenses:
|
||||||||
Cost of revenue
|
51,587 | 31,141 | ||||||
Operations and technology
|
36,337 | 27,538 | ||||||
General and administrative
|
25,755 | 16,910 | ||||||
|
|
|
|
|||||
Total operating expenses
|
113,679 | 75,589 | ||||||
|
|
|
|
|||||
Loss from operations
|
(73,468 | ) | (49,764 | ) | ||||
Unrealized loss on long-term convertible loan
|
(19,226 | ) | — | |||||
Interest expense
|
(2,817 | ) | (643 | ) | ||||
Interest income
|
4 | 238 | ||||||
Other income (expense), net
|
294 | (573 | ) | |||||
|
|
|
|
|||||
Loss before provision for income taxes
|
(95,213 | ) | (50,742 | ) | ||||
Provision for income taxes
|
212 | 14 | ||||||
|
|
|
|
|||||
Net loss
|
$ | (95,425 | ) | $ | (50,756 | ) | ||
|
|
|
|
|||||
Other comprehensive loss, net of tax
|
||||||||
Cumulative translation adjustment
|
(104 | ) | (315 | ) | ||||
|
|
|
|
|||||
Total comprehensive loss
|
$ | (95,529 | ) | $ | (51,071 | ) | ||
|
|
|
|
|||||
Net loss per share, basic and diluted
|
$ | (1.50 | ) | $ | (0.82 | ) | ||
|
|
|
|
|||||
Weighted average shares used in computing net loss per share, basic and diluted
|
63,616,729 | 61,646,777 | ||||||
|
|
|
|
Redeemable Convertible
Preferred Stock |
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated Other
Comprehensive
Income
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||
Balances at December 31, 2019
|
149,520,445 | $ | 353,692 | 61,354,259 | $ | 1 | $ | 3,162 | $ | 189 | $ | (264,149 | ) | (260,797 | ) | |||||||||||||||||
Issuance of common stock upon exercise of stock options
|
— | — | 374,468 | — | 173 | — | — | 173 | ||||||||||||||||||||||||
Stock-based compensation
|
— | — | 874 | — | — | 874 | ||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | (315 | ) | — | (315 | ) | ||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | (50,756 | ) | (50,756 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances at June 30, 2020
|
149,520,445 | 353,692 | 61,728,727 | 1 | 4,209 | (126 | ) | (314,905 | ) | (310,821 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible
Preferred Stock |
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated Other
Comprehensive
Income
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||
Balances at December 31, 2020
|
149,520,445 | $ | 353,692 | 62,156,512 | $ | 1 | $ | 6,601 | $ | 884 | $ | (421,933 | ) | (414,447 | ) | |||||||||||||||||
Issuance of Series C redeemable convertible preferred stock
|
3,953,194 | 15,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
— | — | 3,073,837 | — | 1,505 | — | — | 1,505 | ||||||||||||||||||||||||
Gain on extinguishment of convertible loan
|
— | — | — | — | 36,782 | — | — | 36,782 | ||||||||||||||||||||||||
Stock-based compensation
|
— | — | — | — | 1,910 | — | — | 1,910 | ||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | (104 | ) | — | (104 | ) | ||||||||||||||||||||||
Net loss
|
— | — | — | — | — | — | (95,425 | ) | (95,425 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances at June 30, 2021
|
153,473,639 | 368,692 | 65,230,349 | 1 | 46,798 | 780 | (517,358 | ) | (469,779 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30,
|
||||||||
2021
|
2020
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (95,425 | ) | $ | (50,756 | ) | ||
Adjustments to reconcile net loss to net cash used in operations:
|
||||||||
Depreciation and amortization
|
1,882 | 1,341 | ||||||
Stock-based compensation
|
1,910 | 874 | ||||||
Net amortization of premium on short-term investments
|
— | 34 | ||||||
Accretion of debt discount
|
639 | 180 | ||||||
Revaluation of warrants
|
(231 | ) | 314 | |||||
Foreign currency transaction loss
|
103 | 47 | ||||||
Unrealized loss on long-term convertible loan
|
19,226 | — | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
1,101 | 7,191 | ||||||
Prepaid expenses and other current assets
|
(283 | ) | (3 | ) | ||||
Other assets
|
(1,241 | ) | (352 | ) | ||||
Accounts payable
|
413 | (57 | ) | |||||
Accrued expenses and other current liabilities
|
62 | 1,000 | ||||||
|
|
|
|
|||||
Net cash used in operating activities
|
(71,844 | ) | (40,187 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(1,389 | ) | (2,993 | ) | ||||
Purchases of short-term investments
|
— | (3,226 | ) | |||||
Maturities of short-term investments
|
— | 7,488 | ||||||
|
|
|
|
|||||
Net cash (used in) provided by investing activities
|
(1,389 | ) | 1,269 | |||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from convertible loan
|
60,200 | — | ||||||
Proceeds from issuance of redeemable convertible preferred stock
|
15,000 | — | ||||||
Proceeds from exercises of stock options
|
1,505 | 173 | ||||||
Proceeds from PPP loan
|
— | 10,000 | ||||||
Payment of TPC loan
|
— | (1,569 | ) | |||||
Payment of deferred transaction costs related to merger
|
(2,947 | ) | — | |||||
|
|
|
|
|||||
Net cash provided by financing activities
|
73,758 | 8,604 | ||||||
|
|
|
|
|||||
Effect of exchange rate on cash, cash equivalents and restricted cash
|
(320 | ) | 108 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
205 | (30,206 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period
|
63,946 | 66,014 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$ | 64,151 | $ | 35,808 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the year for interest
|
$ | 2,153 | $ | 622 | ||||
Supplemental disclosure of
non-cash
investing and financing activity:
|
||||||||
Non-cash
interest
|
$ | 664 | $ | 21 | ||||
Fixed assets included in accounts payable
|
$ | 483 | $ | — | ||||
Deferred transaction costs included in accounts payable
|
$ | 580 | $ | — | ||||
Deferred transaction costs included in accrued expenses
|
$ | 2,913 | $ | — | ||||
Gain on extinguishment of convertible loan
|
$ | 36,782 | $ | — |
1.
|
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
3.
|
FAIR VALUE MEASUREMENTS
|
June 30, 2021
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Redeemable convertible preferred stock warrant liability
|
$ | — | $ | — | $ | 575 | $ | 575 | ||||||||
Convertible loans
|
129,001 | 129,001 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total financial liabilities
|
$ | — | $ | — | $ | 129,576 | $ | 129,576 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2020
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Liabilities:
|
||||||||||||||||
Redeemable convertible preferred stock warrant liability
|
$ | — | $ | — | $ | 806 | $ | 806 | ||||||||
Convertible loan
|
— | — | 86,357 | 86,357 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total financial liabilities
|
$ | — | $ | — | $ | 87,163 | $ | 87,163 | ||||||||
|
|
|
|
|
|
|
|
4.
|
PROPERTY AND EQUIPMENT, NET
|
June 30, 2021
|
December 31, 2020
|
|||||||
Leasehold improvements
|
$ | 18,048 | $ | 16,512 | ||||
Furniture and fixtures
|
1,747 | 1,438 | ||||||
Office equipment
|
495 | 356 | ||||||
Computer equipment
|
81 | 81 | ||||||
Vehicles
|
66 | 66 | ||||||
|
|
|
|
|||||
20,437 | 18,453 | |||||||
Less: accumulated depreciation
|
(6,095 | ) | (4,379 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 14,342 | $ | 14,074 | ||||
|
|
|
|
5.
|
INTANGIBLE ASSETS, NET
|
June 30, 2021
|
December 31, 2020
|
|||||||
Domain Name
|
$ | 1,500 | $ | 1,500 | ||||
Less: accumulated amortization
|
(583 | ) | (533 | ) | ||||
|
|
|
|
|||||
Intangible assets, net
|
$ | 917 | $ | 967 | ||||
|
|
|
|
6.
|
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
June 30, 2021
|
December 31, 2020
|
|||||||
Accrued salaries and wages
|
$ | 8,189 | $ | 8,088 | ||||
Deferred rent
|
4,033 | 3,876 | ||||||
Accrued payables
|
4,584 | 2,774 | ||||||
Accrued tax
|
2,193 | 2,210 | ||||||
Accrued vacation and benefits
|
1,776 | 813 | ||||||
Accrued other
|
207 | 136 | ||||||
|
|
|
|
|||||
Total accrued expenses and other current liabilities
|
$ | 20,982 | $ | 17,897 | ||||
|
|
|
|
7.
|
DEBT
|
Balance at December 31, 2020
|
$ | 86,357 | ||
Debt extinguishment of convertible loans
|
(36,782 | ) | ||
Change in fair value
|
19,226 | |||
Proceeds from issuance of convertible loans
|
60,200 | |||
|
|
|||
Balance as of June 30, 2021
|
$ | 129,001 | ||
|
|
June 30, 2021
|
December 31, 2020
|
|||||||
Paycheck Protection Program Loan principal
|
$ | 10,000 | $ | 10,000 | ||||
Blue Torch Loan principal
|
37,000 | 37,000 | ||||||
Deferred financing costs and unamortized discount
|
(2,677 | ) | (3,317 | ) | ||||
Less: current portion
|
(4,436 | ) | (2,105 | ) | ||||
|
|
|
|
|||||
Long-term debt, net of discount
|
$ | 39,887 | $ | 41,578 | ||||
|
|
|
|
|||||
Convertible loans principal
|
$ | 103,650 | $ | 43,451 | ||||
Fair value premium of convertible loans
|
25,351 | 42,906 | ||||||
Less current portion of:
|
||||||||
Principal
|
(60,000 | ) | — | |||||
Fair value premium of Convertible Loan
|
(15,845 | ) | $ | — | ||||
|
|
|
|
|||||
Long-term convertible loans, at fair value
|
$ | 53,156 | $ | 86,357 | ||||
|
|
|
|
8.
|
STOCK WARRANTS
|
Balance at December 31, 2020
|
$ | 806 | ||
Change in fair value
|
(231 | ) | ||
|
|
|||
Balance at June 30, 2021
|
$ | 575 | ||
|
|
|||
Balance at December 31, 2019
|
$ | 337 | ||
Change in fair value
|
314 | |||
|
|
|||
Balance at June 30, 2020
|
$ | 651 | ||
|
|
9.
|
REDEEMABLE CONVERTIBLE PREFERRED STOCK
|
June 30, 2021
|
||||||||||||||||||||||||
Preferred
Shares Authorized |
Preferred
Shares Issued and Outstanding |
Issuance
Price Per Share |
Conversion
Price Per Share |
Carrying
Value |
Liquidation
Preference |
|||||||||||||||||||
Series Seed
|
10,220,000 | 10,220,000 | $ | 0.3572 | $ | 0.3572 | $ | 3,651 | $ | 3,651 | ||||||||||||||
Series A
|
23,298,748 | 23,298,748 | 1.1374 | 1.1374 | 26,371 | 26,500 | ||||||||||||||||||
Series B
|
76,806,060 | 76,469,756 | 2.3788 | 2.3788 | 181,592 | 181,906 | ||||||||||||||||||
Series C
|
43,485,135 | 43,485,135 | 3.7944 | 3.7944 | 157,078 | 165,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total
|
153,809,943 | 153,473,639 | $ | 368,692 | $ | 377,057 | ||||||||||||||||||
|
|
|
|
|
|
|
|
December 31, 2020
|
||||||||||||||||||||||||
Preferred
Shares Authorized |
Preferred
Shares Issued and Outstanding |
Issuance
Price Per Share |
Conversion
Price Per Share |
Carrying
Value |
Liquidation
Preference |
|||||||||||||||||||
Series Seed
|
10,220,000 | 10,220,000 | $ | 0.3572 | $ | 0.3572 | $ | 3,651 | $ | 3,651 | ||||||||||||||
Series A
|
23,298,748 | 23,298,748 | 1.1374 | 1.1374 | 26,371 | 26,500 | ||||||||||||||||||
Series B
|
76,806,060 | 76,469,756 | 2.3788 | 2.3788 | 181,592 | 181,906 | ||||||||||||||||||
Series C
|
39,531,941 | 39,531,941 | 3.7944 | 3.7944 | 142,078 | 150,000 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total
|
149,856,749 | 149,520,445 | $ | 353,692 | $ | 362,057 | ||||||||||||||||||
|
|
|
|
|
|
|
|
10.
|
COMMON STOCK
|
June 30, 2021
|
December 31, 2020
|
|||||||
Conversion of redeemable convertible preferred stock
|
153,473,639 | 149,520,445 | ||||||
Warrants to purchase redeemable convertible preferred stock
|
810,692 | 810,692 | ||||||
Shares available for grant under 2014 Equity Incentive Plan
|
32,646,250 | 22,874,690 | ||||||
Conversion of convertible loan
|
28,583,645 | 11,708,273 | ||||||
|
|
|
|
|||||
Total common stock equivalents
|
215,514,226 | 184,914,100 | ||||||
|
|
|
|
11.
|
STOCK-BASED COMPENSATION
|
Six Months Ended
June 30,
|
||||||||
2021
|
2020
|
|||||||
Cost of revenue
|
$ | 53 | $ | 18 | ||||
Operations and technology
|
489 | 327 | ||||||
General and administrative
|
1,368 | 529 | ||||||
|
|
|
|
|||||
Total stock-based compensation expense
|
$ | 1,910 | $ | 874 | ||||
|
|
|
|
Number of
Shares
|
Weighted
Average
Exercise
Price |
Weighted
Average
Remaining
Contractual
Term
(In Years)
|
Aggregate
Intrinsic
Value |
|||||||||||||
Balance at December 31, 2020
|
22,874,790 | 0.62 | 7.71 | $ | 51,134 | |||||||||||
Options granted
|
10,231,800 | 3.11 | ||||||||||||||
Options exercised
|
(3,073,937 | ) | 0.49 | |||||||||||||
Options cancelled
|
(786,568 | ) | 1.64 | |||||||||||||
|
|
|||||||||||||||
Balance at June 30, 2021
|
29,246,085 | 1.48 | 8.17 | $ | 57,635 | |||||||||||
|
|
|||||||||||||||
Options exercisable as of June 30, 2021
|
11,902,445 | 0.62 | 6.91 | $ | 33,725 | |||||||||||
|
|
|||||||||||||||
Vested and expected to vest—June 30, 2021
|
29,246,085 | 1.48 | 8.17 | $ | 57,635 | |||||||||||
|
|
Number of RSUs
|
Weighted-Average
Grant Date Fair
Value per Share |
Aggregate Intrinsic
Value |
||||||||||
Outstanding at December 31, 2020
|
— | $ | — | $ | — | |||||||
Granted
|
2,083 | 3.45 | 7,186 | |||||||||
Released
|
— | — | — | |||||||||
Cancelled/Forfeited
|
— |
|
—
|
|
— | |||||||
|
|
|||||||||||
Outstanding at June 30, 2021
|
2,083 | $ | 3.45 | $ | 7,186 | |||||||
|
|
12.
|
INCOME TAXES
|
13.
|
NET LOSS PER SHARE
|
Six months ended June 30,
|
||||||||
2021
|
2020
|
|||||||
Numerator:
|
||||||||
Net loss
|
$ | (95,425 | ) | $ | (50,756 | ) | ||
Denominator:
|
||||||||
Weighted-average common shares outstanding—basic and diluted
|
63,616,729 | 61,646,777 | ||||||
|
|
|
|
|||||
Net loss per share—basic and diluted
|
$ | (1.50 | ) | $ | (0.82 | ) |
Six months ended June 30,
|
||||||||
2021
|
2020
|
|||||||
Conversion of redeemable convertible preferred stock
|
153,473,639 | 149,520,445 | ||||||
Warrants to purchase redeemable convertible preferred stock
|
810,692 | 336,304 | ||||||
Options to purchase common stock
|
30,563,285 | 25,482,230 | ||||||
Restricted stock units
|
2,082,965 | — | ||||||
Conversion of convertible loan
|
28,583,645 | — | ||||||
|
|
|
|
|||||
Total common stock equivalents
|
215,514,226 | 175,338,979 | ||||||
|
|
|
|
• |
North America: The North America segment consist of operations within the United States and Canada.
|
• |
Europe: The Europe segment consists of operations within the United Kingdom.
|
Six Months Ended June 30, 2021
|
||||||||||||
North America
|
Europe
|
Total
|
||||||||||
Revenue
|
$ | 32,677 | $ | 7,534 | $ | 40,211 | ||||||
Segment loss
|
(39,914 | ) | (13,314 | ) | (53,228 | ) | ||||||
Unallocated corporate expenses:
|
||||||||||||
Operations and technology
|
(6,445 | ) | ||||||||||
General and administrative
|
(13,795 | ) | ||||||||||
|
|
|||||||||||
Loss from operations
|
$ | (73,468 | ) | |||||||||
|
|
Six Months Ended June 30, 2020
|
||||||||||||
North America
|
Europe
|
Total
|
||||||||||
Revenue
|
$ | 20,108 | $ | 5,717 | $ | 25,825 | ||||||
Segment loss
|
(30,097 | ) | (7,459 | ) | (37,556 | ) | ||||||
Unallocated corporate expenses:
|
||||||||||||
Operations and technology
|
(5,819 | ) | ||||||||||
General and administrative
|
(6,389 | ) | ||||||||||
|
|
|||||||||||
Loss from operations
|
$ | (49,764 | ) | |||||||||
|
|
Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
United States
|
85 | % | 93 | % | ||||
Canada
|
15 | % | 7 | % | ||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
Amount
|
||||
Securities and Exchange Commission registration fee
|
$ | 103,404 | ||
Accounting fees and expenses
|
$ | 75,000 | ||
Legal fees and expenses
|
$ | 125,000 | ||
Financial printing and miscellaneous expenses
|
$ | 75,000 | ||
|
|
|||
Total expenses
|
$ | 378,404 | ||
|
|
(1) |
In December 2020, we issued an aggregate of 9,343,750 MRAC Class B Ordinary Shares for a total subscription price of $25,000.
|
(2) |
In December 2020, we issued an aggregate of 6,316,667 private placement warrants to the Sponsor at a price of $1.50 per private placement warrant, generating gross proceeds of approximately $9.5 million.
|
(3) |
In October 2021, substantially concurrently with the Closing, the PIPE Investors purchased from us an aggregate of 8,000,000 million shares of our Common Stock at a price of $10.00 per share, for an aggregate purchase price equal to $80.0 million.
|
(4) |
In October 2021, substantially concurrently with the Closing, we issued 5,500,906 shares of Common Stock for an aggregate purchase price of approximately $55.0 million to the Backstop Investors at a purchase price of $10.00 per share.
|
(5) |
In October 2021, substantially concurrently with the Closing, we issued 450,000 shares of Common Stock to Credit Suisse Securities (USA) LLC (“CS”) as partial payment of the aggregate fee payable to CS in connection with the services provided by CS in connection with the Business Combination.
|
101.INS*
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document). | |
101.CAL*
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.SCH*
|
Inline XBRL Taxonomy Extension Schema Document. | |
101.DEF*
|
Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB*
|
Inline XBRL Taxonomy Extension Labels Linkbase Document. | |
101.PRE*
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104*
|
Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
* |
Filed herewith.
|
† |
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The
Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
|
+ |
Indicates a management contract or compensatory plan, contract or arrangement.
|
(a) |
The undersigned registrant hereby undertakes as follows:
|
(1) |
To file, during any period in 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 of 1933;
|
(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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
|
(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 of 1933, 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 of 1933 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, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
|
(5) |
That, for the purpose of determining any liability under the Securities Act of 1933 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 our 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.
|
(b) |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the undersigned pursuant to the foregoing provisions, or otherwise, the undersigned has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the undersigned of expenses incurred or paid by a director, officer or controlling person of the undersigned 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 undersigned will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
|
ENJOY TECHNOLOGY, INC.
|
||
By: |
/s/ Fareed Khan
|
|
Name: Fareed Khan | ||
Title: Chief Financial Officer |
Signature
|
Title
|
Date
|
||
/s/ Ron Johnson
Ron Johnson
|
Director and Executive Officer | October 28, 2021 | ||
/s/ Fareed Khan
Fareed Khan
|
Chief Financial Officer | October 28, 2021 | ||
/s/ Jonathan Mariner
Jonathan Mariner
|
Director and Chief Administrative and People Office | October 28, 2021 | ||
/s/ Fred Harman
Fred Harman
|
Director | October 28, 2021 | ||
/s/ Salaam Coleman Smith
Salaam Coleman Smith
|
Director | October 28, 2021 | ||
/s/ Thomas Ricketts
Thomas Ricketts
|
Director | October 28, 2021 | ||
/s/ Brett Varsov
Brett Varsov
|
Director | October 28, 2021 |
/s/ Denise Young Smith
Denise Young Smith
|
Director | October 28, 2021 | ||
/s/ Gideon Yu
Gideon Yu
|
Director | October 28, 2021 |
Exhibit 5.1 |
Rachel Proffitt
+1 415 693 2031
rproffitt@cooley.com
October 28, 2021
Enjoy Technology, Inc.
3240 Hillview Ave
Palo Alto, California 94304
Re: |
Enjoy Technology, Inc. Registration Statement on Form S-1 |
Ladies and Gentlemen:
We have acted as counsel to Enjoy Technology, Inc., a Delaware corporation (the Company), and you have requested our opinion in connection with the filing of a Registration Statement on Form S-1 (the Registration Statement) with the Securities and Exchange Commission, including a related prospectus included in the Registration Statement (the Prospectus), covering the registration of (a) the issuance of shares of common stock, $0.0001 par value per share (Common Stock), of the Company upon the exercise of warrants issued by the Company, and (b) the resale of Common Stock and warrants issued by the Company held by certain stockholders and holders of outstanding warrants of the Company, as follows:
(i) |
the issuance of up to 6,316,667 shares of Common Stock (the Private Warrant Shares) issuable upon the exercise of certain outstanding warrants (the Private Warrants) by the holders thereof; |
(ii) |
the issuance of up to 9,343,750 shares of Common Stock (the Public Warrant Shares and, together with the Private Warrant Shares, the Warrant Shares) issuable upon the exercise of certain outstanding warrants (the Public Warrants and together with the Private Warrants, the Warrants) by the holders thereof; |
(iii) |
the resale of 6,316,667 Private Warrants (the Resale Warrants); and |
(iv) |
the resale of up to 89,627,117 shares of Common Stock (the Selling Stockholder Shares), consisting of: |
|
7,142,500 shares of Common Stock issued in a private placement in connection with the Companys initial public offering (IPO) |
|
2,201,250 shares of Common Stock (the Earnout Shares) issued in a private placement in connection with the Companys IPO that are subject to the vesting and forfeiture provisions set forth in that certain Sponsor Agreement, dated as of April 28, 2021, as amended on September 13, 2021 (the Sponsor Agreement)); |
|
up to 6,316,667 Private Warrant Shares; |
|
8,000,000 shares of Common Stock issued in a private placement pursuant to subscription agreements dated April 28, 2021 (the Subscription Agreements); |
|
450,000 shares of Common Stock issued pursuant to that certain equity fee agreement, dated October 15, 2021 between the Company and Credit Suisse Securities (USA) LLC (the Equity Fee Agreement); |
|
60,015,794 shares of Common Stock issued pursuant to that certain Agreement and Plan of Merger, dated April 28, 2021, as amended on July 23, 2021 and September 13, 2021 (the Merger Agreement), among the Company, MRAC Merger Sub Corp. and Enjoy Technology Inc.; and |
|
5,500,906 shares of Common Stock issued in a private placement pursuant to that certain backstop agreement dated September 13, 2021 (the Backstop Agreement) |
The Warrants were issued pursuant to a Warrant Agreement dated December 17, 2020, between the Company and Continental Stock Transfer & Trust Company, as warrant agent (Warrant Agreement).
In connection with this opinion, we have examined and relied upon (a) the Registration Statement and the Prospectus, (b) the Companys certificate of incorporation and bylaws, each as currently in effect, (c) the Warrant Agreement, (d) the Subscription Agreements, (e) Backstop Agreement, (f) the Sponsor Agreement; (g) the Equity Fee Agreement, (h) the Merger Agreement and (i) originals or copies certified to our satisfaction of such opinions, records, documents, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies, the accuracy, completeness and authenticity of certificates of public officials and the due authorization, execution and delivery of all documents by all persons other than the Company where due authorization, execution and delivery are prerequisites to the effectiveness thereof. As to certain factual matters, we have relied upon a certificate of an officer of the Company and have not independently verified such matters.
We note that the Company was initially incorporated under the laws of the Cayman Islands and was domesticated as a corporation in the State of Delaware in accordance with Section 388 of the DGCL (the Domestication). We have assumed all matters determinable under the laws of the Cayman Islands, including without limitation that (i) immediately prior to the Domestication, the Company was duly organized, validly existing and in good standing under the laws of the Cayman Islands, (ii) the Company had full power, authority and legal right to domesticate in the State of Delaware pursuant to Section 388, (iii) the laws of the Cayman Islands permitted the Company to domesticate in the State of Delaware pursuant to Section 388, (iv) the discontinuation of the Company from the Cayman Islands was duly authorized by all necessary corporate action as provided in its governing documents and was duly effected in accordance with Cayman Islands law, (v) any and all consents, approvals and authorizations from applicable Cayman Island governmental authorities required to authorize and permit the Company to domesticate in the State of Delaware pursuant to Section 388 were obtained, and (vi) the issued and outstanding ordinary shares of the Company as an exempted company incorporated under the laws of the Cayman Islands immediately prior to the Domestication were validly issued, fully paid and nonassessable, and (vii) all share issuances and documents related thereto that were authorized by the Company prior to the Domestication, including those to be effected pursuant to the Warrants, the Subscription Agreements, the Equity Fee Agreement and the Merger Agreement were done in accordance with the applicable governing documents of the Company as a Cayman Islands exempted company and the laws of the Cayman Islands.
Our opinion is expressed only with respect to the General Corporation Law of the State of Delaware and the laws of the State of New York. We express no opinion to the extent that any other laws are applicable to the subject matter hereof and express no opinion and provide no assurance as to compliance with any federal or state securities law, rule or regulation.
With respect to the Warrants and the Warrant Shares, we express no opinion to the extent that future issuances of securities of the Company, including the Warrant Shares and/or antidilution adjustments to
Cooley LLP 3 Embarcadero Center, 20th Floor San Francisco, CA 94111-4004
t: (415) 693-2000 f: (415) 693-2222 cooley.com
outstanding securities of the Company, including the Warrants, may cause the number of Warrant Shares issuable upon exercise of the Warrants to be greater than the number of shares of Common Stock that then remain authorized but unissued. Further, we have assumed the exercise price of the Warrants will not be adjusted to an amount below the par value per share of Common Stock.
With regard to our opinion concerning the Resale Warrants constituting valid and binding obligations of the Company:
(i) Our opinion is subject to, and may be limited by, (a) applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, debtor and creditor, and similar laws which relate to or affect creditors rights generally, and (b) general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) regardless of whether considered in a proceeding in equity or at law.
(ii) Our opinion is subject to the qualification that the availability of specific performance, an injunction or other equitable remedies is subject to the discretion of the court before which the request is brought.
(iii) We express no opinion as to any provision of the Warrants that: (a) provides for liquidated damages, buy-in damages, monetary penalties, prepayment or make-whole payments or other economic remedies to the extent such provisions may constitute unlawful penalties, (b) relates to advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of limitations, trial by jury, or procedural rights, (c) restricts non-written modifications and waivers, (d) provides for the payment of legal and other professional fees where such payment is contrary to law or public policy, (e) relates to exclusivity, election or accumulation of rights or remedies, (f) authorizes or validated conclusive or discretionary determinations, or (g) provides that provisions of the Warrants are severable to the extent an essential part of the agreed exchange is determined to be invalid and unenforceable.
(iv) We express no opinion as to whether a state court outside of the State of New York or a federal court of the United States would give effect to the choice of New York law provided for in the Warrants.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that:
1. |
The Warrant Shares, when issued and paid for upon exercise of the Warrants in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable. |
2. |
The Resale Warrants constitute valid and binding obligations of the Company. |
3. |
The Selling Stockholder Shares, other than any Private Warrant Shares or Earnout Shares included in the Selling Stockholder Shares, are validly issued, fully paid and nonassessable. |
4. |
Any Private Warrant Shares included in the Selling Stockholder Shares, when issued and paid for in accordance with the terms of the Private Warrants, will be validly issued, fully paid and nonassessable. |
5. |
The Earnout Shares included in the Selling Stockholder Shares have been validly issued and are nonassessable and, when the conditions to vesting stated in the Sponsor Agreement have been satisfied, will be fully paid and no longer subject to forfeiture. |
Our opinion is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated. Our opinion is based on these laws as in effect on the date hereof, and we disclaim any obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinion expressed herein.
Cooley LLP 3 Embarcadero Center, 20th Floor San Francisco, CA 94111-4004
t: (415) 693-2000 f: (415) 693-2222 cooley.com
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption Legal Matters in the Prospectus.
[signature page follows]
Cooley LLP 3 Embarcadero Center, 20th Floor San Francisco, CA 94111-4004
t: (415) 693-2000 f: (415) 693-2222 cooley.com
Very truly yours,
COOLEY LLP
By: |
/s/ Rachel Proffitt |
|
Rachel Proffitt |
Cooley LLP 3 Embarcadero Center, 20th Floor San Francisco, CA 94111-4004
t: (415) 693-2000 f: (415) 693-2222 cooley.com
Exhibit 10.10
ENJOY TECHNOLOGY, INC.
2021 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: SEPTEMBER 21, 2021
APPROVED BY THE STOCKHOLDERS: OCTOBER 13, 2021
1. |
GENERAL. |
(a) Plan Purpose. The Company, by means of the Plan, seeks to secure and retain the services of Employees, Directors and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Awards.
(b) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards.
(c) Adoption Date; Effective Date. The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective Date.
2. |
SHARES SUBJECT TO THE PLAN. |
(a) Share Reserve. Subject to adjustment in accordance with Section 2(c) and any adjustments as necessary to implement any Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed 11,282,583 shares (equal to 8% of the shares of Fully-Diluted Common Stock as of immediately following closing of the transactions contemplated by the Merger Agreement). In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments, such aggregate number of shares of Common Stock will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to five percent (5%) of the Fully-Diluted Common Stock on December 31 of the preceding year; provided, however, that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock.
(b) Aggregate Incentive Stock Option Limit. Notwithstanding anything to the contrary in Section 2(a) and subject to any adjustments as necessary to implement any Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is 33,847,749 shares.
(c) Share Reserve Operation.
(i) Limit Applies to Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy its obligations to issue shares pursuant to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, NYSE American Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
(ii) Actions that Do Not Constitute Issuance of Common Stock and Do Not Reduce Share Reserve. The following actions do not result in an issuance of shares under the Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance under the Plan: (1) the
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expiration or termination of any portion of an Award without the shares covered by such portion of the Award having been issued, (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Common Stock), (3) the withholding of shares that would otherwise be issued by the Company to satisfy the exercise, strike or purchase price of an Award; or (4) the withholding of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Award.
(iii) Reversion of Previously Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock previously issued pursuant to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan: (1) any shares that are forfeited back to or repurchased by the Company because of a failure to meet a contingency or condition required for the vesting of such shares; (2) any shares that are reacquired by the Company to satisfy the exercise, strike or purchase price of an Award; and (3) any shares that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Award.
3. |
ELIGIBILITY AND LIMITATIONS. |
(a) Eligible Award Recipients. Subject to the terms of the Plan, Employees, Directors and Consultants are eligible to receive Awards.
(b) Specific Award Limitations.
(i) Limitations on Incentive Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a parent corporation or subsidiary corporation thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
(ii) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
(iii) Limitations on Incentive Stock Options Granted to Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an Incentive Stock Option unless (i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and (ii) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
(iv) Limitations on Nonstatutory Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted to Employees, Directors and Consultants unless the stock underlying such Awards is treated as service recipient stock under Section 409A or unless such Awards otherwise comply with the requirements of Section 409A.
(c) Aggregate Incentive Stock Option Limit. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is the number of shares specified in Section 2(b).
(d) Non-Employee Director Compensation Limit. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Non-Employee Director with respect to any calendar year, including Awards granted and cash fees paid by the Company to such Non-Employee Director, will not exceed (i) $750,000 in total value or (ii) in the event such Non-Employee Director is first appointed or elected to the Board during such calendar year, $1,000,000 in total value, in each case, calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes. The limitations in this Section 3(d) shall apply commencing with the first calendar year that begins following the Effective Date.
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4. |
OPTIONS AND STOCK APPRECIATION RIGHTS. |
Each Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock Option at the time of grant; provided, however, that if an Option is not so designated or if an Option designated as an Incentive Stock Option fails to qualify as an Incentive Stock Option, then such Option will be a Nonstatutory Stock Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. Each SAR will be denominated in shares of Common Stock equivalents. The terms and conditions of separate Options and SARs need not be identical; provided, however, that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(a) Term. Subject to Section 3(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of grant of such Award or such shorter period specified in the Award Agreement.
(b) Exercise or Strike Price. Subject to Section 3(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c) Exercise Procedure and Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement:
(i) by cash or check, bank draft or money order payable to the Company;
(ii) pursuant to a cashless exercise program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) at the time of exercise the Common Stock is publicly traded, (2) any remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares are endorsed or accompanied by an executed assignment separate from certificate, and (5) such shares have been held by the Participant for any minimum period necessary to avoid adverse accounting treatment as a result of such delivery;
(iv) if the Option is a Nonstatutory Stock Option, by a net exercise arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the date of exercise that does not exceed the exercise price,
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provided that (1) such shares used to pay the exercise price will not be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash or other permitted form of payment; or
(v) in any other form of consideration that may be acceptable to the Board and permissible under Applicable Law.
(d) Exercise Procedure and Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised under such SAR, over (ii) the strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the SAR Agreement.
(e) Transferability. Options and SARs may not be transferred to third party financial institutions for value. The Board may impose such additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability of Options and SARs will apply, provided that except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer:
(i) Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participants request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.
(ii) Domestic Relations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to a domestic relations order.
(f) Vesting. The Board may impose such restrictions on or conditions to the vesting and/or exercisability of an Option or SAR as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Options and SARs will cease upon termination of the Participants Continuous Service.
(g) Termination of Continuous Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participants Continuous Service is terminated for Cause, the Participants Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
(h) Post-Termination Exercise Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 4(i), if a Participants Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested, but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)):
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(i) three months following the date of such termination if such termination is a termination without Cause (other than any termination due to the Participants Disability or death);
(ii) 12 months following the date of such termination if such termination is due to the Participants Disability;
(iii) 18 months following the date of such termination if such termination is due to the Participants death; or
(iv) 18 months following the date of the Participants death if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right, title or interest in the terminated Award, the shares of Common Stock subject to the terminated Award, or any consideration in respect of the terminated Award.
(i) Restrictions on Exercise; Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participants Continuous Service terminates for any reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participants Option or SAR would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable Law, or (ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate the Companys Trading Policy, then the applicable Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)).
(j) Non-Exempt Employees. No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event of (i) such Participants death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted, (iii) a Change in Control, or (iv) such Participants retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Companys then current employment policies and guidelines). This Section 4(j) is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.
(k) Whole Shares. Options and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
5. |
AWARDS OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS. |
(a) Restricted Stock Awards and RSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined by the Board; provided, however, that each Restricted Stock Award Agreement and RSU Award Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
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(i) Form of Award.
(1) Restricted Stock Awards: To the extent consistent with the Companys Bylaws, at the Boards election, shares of Common Stock subject to a Restricted Stock Award may be (i) held in book entry form subject to the Companys instructions until such shares become vested or any other restrictions lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting and other rights as a stockholder of the Company with respect to any shares subject to a Restricted Stock Award.
(2) RSU Awards: An RSU Award represents a Participants right to be issued on a future date the number of shares of Common Stock that is equal to the number of restricted stock units subject to the RSU Award. As a holder of an RSU Award, a Participant is an unsecured creditor of the Company with respect to the Companys unfunded obligation, if any, to issue shares of Common Stock in settlement of such Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award (unless and until shares are actually issued in settlement of a vested RSU Award).
(ii) Consideration.
(1) Restricted Stock Awards: A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable to the Company, (B) services to the Company or an Affiliate, or (C) any other form of consideration as the Board may determine and permissible under Applicable Law.
(2) RSU Awards: Unless otherwise determined by the Board at the time of grant, an RSU Award will be granted in consideration for the Participants services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form other than the Participants services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law.
(iii) Vesting. The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participants Continuous Service.
(iv) Termination of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participants Continuous Service terminates for any reason, (i) the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant under his or her Restricted Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement and the Participant will have no further right, title or interest in the Restricted Stock Award, the shares of Common Stock subject to the Restricted Stock Award, or any consideration in respect of the Restricted Stock Award and (ii) any portion of his or her RSU Award that has not vested will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award, the shares of Common Stock issuable pursuant to the RSU Award, or any consideration in respect of the RSU Award.
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(v) Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement.
(vi) Settlement of RSU Awards. An RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof) or in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
(b) Performance Awards. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance Goals have been attained will be determined by the Board.
(c) Other Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof, may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.
6. |
ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS. |
(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the class(es) and maximum number of shares of Common Stock subject to the Plan and the maximum number of shares by which the Share Reserve may annually increase pursuant to Section 2(a), (ii) the class(es) and maximum number of shares that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 2(b), and (iii) the class(es) and number of securities and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no fractional shares or rights for fractional shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate equivalent benefit, if any, for any fractional shares or rights to fractional shares that might be created by the adjustments referred to in the preceding provisions of this Section.
(b) Dissolution or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Companys right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Companys repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service; provided, however, that the Board may determine to cause some or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c) Corporate Transaction. The following provisions will apply to Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award.
(i) Awards May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporations parent company) may assume or continue any
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or all Awards outstanding under the Plan or may substitute similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successors parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume or continue the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by the Board.
(ii) Awards Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the Current Participants), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and that have multiple vesting levels depending on the level of performance, unless otherwise provided in the Award Agreement, the vesting of such Performance Awards will accelerate at 100% of the target level upon the occurrence of the Corporate Transaction in which the Awards are not assumed in accordance with Section 6(c)(i). With respect to the vesting of Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and are settled in the form of a cash payment, such cash payment will be made no later than 30 days following the occurrence of the Corporate Transaction or such later date as required to comply with Section 409A of the Code.
(iii) Awards Held by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
(iv) Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise.
(d) Appointment of Stockholder Representative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the Participants behalf with respect to any escrow, indemnities and any contingent consideration.
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(e) No Restriction on Right to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares pursuant to any Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
7. |
ADMINISTRATION. |
(a) Administration by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in subsection (c) below.
(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine from time to time: (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be identical), including the time or times when a person will be permitted to receive an issuance of Common Stock or other payment pursuant to an Award; (5) the number of shares of Common Stock or cash equivalent with respect to which an Award will be granted to each such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole or in part by reference to, or otherwise based on, the Common Stock, including the amount of cash payment or other property that may be earned and the timing of payment.
(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective.
(iii) To settle all controversies regarding the Plan and Awards granted under it.
(iv) To accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
(v) To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Corporate Transaction, for reasons of administrative convenience.
(vi) To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vii) To amend the Plan in any respect the Board deems necessary or advisable; provided, however, that stockholder approval will be required for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted before amendment of the Plan will not be Materially Impaired by any amendment of the Plan unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
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(viii) To submit any amendment to the Plan for stockholder approval.
(ix) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that, a Participants rights under any Award will not be Materially Impaired by any such amendment unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
(x) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.
(xi) To adopt such procedures and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement to ensure or facilitate compliance with the laws of the relevant foreign jurisdiction).
(xii) To effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding Option or SAR; (2) the cancellation of any outstanding Option or SAR and the grant in substitution therefor of (A) a new Option, SAR, Restricted Stock Award, RSU Award or Other Award, under the Plan or another equity plan of the Company, covering the same or a different number of shares of Common Stock, (B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles.
(c) Delegation to Committee.
(i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each Committee may retain the authority to concurrently administer the Plan with Committee or subcommittee to which it has delegated its authority hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority to concurrently administer the Plan with any Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii) Rule 16b-3 Compliance. To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two or more Non- Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or modifying the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available.
(d) Effect of Boards Decision. All determinations, interpretations and constructions made by the Board or any Committee in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
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(e) Delegation to an Officer. The Board or any Committee may delegate to one or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by Applicable Law, other types of Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such Awards granted to such Employees; provided, however, that the resolutions or charter adopted by the Board or any Committee evidencing such delegation will specify the total number of shares of Common Stock that may be subject to the Awards granted by such Officer and that such Officer may not grant an Award to himself or herself. Any such Awards will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine the Fair Market Value.
8. |
TAX WITHHOLDING |
(a) Withholding Authorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll and any other amounts payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required to satisfy any U.S. federal, state, local and/or foreign tax or social insurance contribution withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise, vesting or settlement of such Award, as applicable. Accordingly, a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue shares of Common Stock subject to an Award, unless and until such obligations are satisfied.
(b) Satisfaction of Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) by allowing a Participant to effectuate a cashless exercise pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board, or (vi) by such other method as may be set forth in the Award Agreement.
(c) No Obligation to Notify or Minimize Taxes; No Liability to Claims. Except as required by Applicable Law the Company has no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award and will not be liable to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from such Award or other Company compensation and (ii) acknowledges that such Participant was advised to consult with his or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the fair market value of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise price or strike price is less than the fair market value of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
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(d) Withholding Indemnification. As a condition to accepting an Award under the Plan, in the event that the amount of the Companys and/or its Affiliates withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure by the Company and/or its Affiliates to withhold the proper amount.
9. |
MISCELLANEOUS. |
(a) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
(b) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general funds of the Company.
(c) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
(d) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to such Award is reflected in the records of the Company.
(e) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultants agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(f) Change in Time Commitment. In the event a Participants regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
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(g) Execution of Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional documents or instruments necessary or desirable, as determined in the Plan Administrators sole discretion, to carry out the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrators request.
(h) Electronic Delivery and Participation. Any reference herein or in an Award Agreement to a written agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Companys intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in the Plan through any on-line electronic system established and maintained by the Plan Administrator or another third party selected by the Plan Administrator. The form of delivery of any Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
(i) Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Companys securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participants right to voluntary terminate employment upon a resignation for good reason, or for a constructive termination or any similar term under any plan of or agreement with the Company.
(j) Securities Law Compliance. A Participant will not be issued any shares in respect of an Award unless either (i) the shares are registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Each Award also must comply with other Applicable Law governing the Award, and a Participant will not receive such shares if the Company determines that such receipt would not be in material compliance with Applicable Law.
(k) Transfer or Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued, or in the case of Restricted Stock and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein, the terms of the Trading Policy and Applicable Law.
(l) Effect on Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participants benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Companys or any Affiliates employee benefit plans.
(m) Deferrals. To the extent permitted by Applicable Law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may also establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements of Section 409A.
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(n) Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes deferred compensation under Section 409A is a specified employee for purposes of Section 409A, no distribution or payment of any amount that is due because of a separation from service (as defined in Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participants separation from service or, if earlier, the date of the Participants death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
(o) Choice of Law. This Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
10. |
COVENANTS OF THE COMPANY. |
(a) Compliance with Law. The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary, having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting of such Awards unless and until such authority is obtained. A Participant is not eligible for the grant of an Award or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable Law.
11. |
ADDITIONAL RULES FOR AWARDS SUBJECT TO SECTION 409A. |
(a) Application. Unless the provisions of this Section of the Plan are expressly superseded by the provisions in the form of Award Agreement, the provisions of this Section shall apply and shall supersede anything to the contrary set forth in the Award Agreement for a Non-Exempt Award.
(b) Non-Exempt Awards Subject to Non-Exempt Severance Arrangements. To the extent a Non-Exempt Award is subject to Section 409A due to application of a Non-Exempt Severance Arrangement, the following provisions of this subsection (b) apply.
(i) If the Non-Exempt Award vests in the ordinary course during the Participants Continuous Service in accordance with the vesting schedule set forth in the Award Agreement, and does not accelerate vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the shares be issued in respect of such Non-Exempt Award any later than the later of: (i) December 31st of the calendar year that includes the applicable vesting date, or (ii) the 60th day that follows the applicable vesting date.
(ii) If vesting of the Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with the Participants Separation from Service, and such vesting acceleration
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provisions were in effect as of the date of grant of the Non-Exempt Award and, therefore, are part of the terms of such Non-Exempt Award as of the date of grant, then the shares will be earlier issued in settlement of such Non-Exempt Award upon the Participants Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60th day that follows the date of the Participants Separation from Service. However, if at the time the shares would otherwise be issued the Participant is subject to the distribution limitations contained in Section 409A applicable to specified employees, as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of such Participants Separation from Service, or, if earlier, the date of the Participants death that occurs within such six month period.
(iii) If vesting of a Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with a Participants Separation from Service, and such vesting acceleration provisions were not in effect as of the date of grant of the Non-Exempt Award and, therefore, are not a part of the terms of such Non-Exempt Award on the date of grant, then such acceleration of vesting of the Non-Exempt Award shall not accelerate the issuance date of the shares, but the shares shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the ordinary course during the Participants Continuous Service, notwithstanding the vesting acceleration of the Non-Exempt Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4).
(c) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Employees and Consultants. The provisions of this subsection (c) shall apply and shall supersede anything to the contrary set forth in the Plan with respect to the permitted treatment of any Non-Exempt Award in connection with a Corporate Transaction if the Participant was either an Employee or Consultant upon the applicable date of grant of the Non-Exempt Award.
(i) Vested Non-Exempt Awards. The following provisions shall apply to any Vested Non-Exempt Award in connection with a Corporate Transaction:
(1) If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Vested Non-Exempt Award. Upon the Section 409A Change in Control the settlement of the Vested Non-Exempt Award will automatically be accelerated and the shares will be immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the Company may instead provide that the Participant will receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control.
(2) If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue or substitute each Vested Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entitys discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of the Fair Market Value of the shares made on the date of the Corporate Transaction.
(ii) Unvested Non-Exempt Awards. The following provisions shall apply to any Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to subsection (e) of this Section.
(1) In the event of a Corporate Transaction, the Acquiring Entity shall assume, continue or substitute any Unvested Non-Exempt Award. Unless otherwise determined by the Board, any Unvested Non-Exempt Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of any Unvested Non-Exempt
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Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entitys discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value of the shares made on the date of the Corporate Transaction.
(2) If the Acquiring Entity will not assume, substitute or continue any Unvested Non-Exempt Award in connection with a Corporate Transaction, then such Award shall automatically terminate and be forfeited upon the Corporate Transaction with no consideration payable to any Participant in respect of such forfeited Unvested Non-Exempt Award. Notwithstanding the foregoing, to the extent permitted and in compliance with the requirements of Section 409A, the Board may in its discretion determine to elect to accelerate the vesting and settlement of the Unvested Non-Exempt Award upon the Corporate Transaction, or instead substitute a cash payment equal to the Fair Market Value of such shares that would otherwise be issued to the Participant, as further provided in subsection (e)(ii) below. In the absence of such discretionary election by the Board, any Unvested Non-Exempt Award shall be forfeited without payment of any consideration to the affected Participants if the Acquiring Entity will not assume, substitute or continue the Unvested Non-Exempt Awards in connection with the Corporate Transaction.
(3) The foregoing treatment shall apply with respect to all Unvested Non-Exempt Awards upon any Corporate Transaction, and regardless of whether or not such Corporate Transaction is also a Section 409A Change in Control.
(d) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Non-Employee Directors. The following provisions of this subsection (d) shall apply and shall supersede anything to the contrary that may be set forth in the Plan with respect to the permitted treatment of a Non-Exempt Director Award in connection with a Corporate Transaction.
(i) If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Non-Exempt Director Award. Upon the Section 409A Change in Control the vesting and settlement of any Non-Exempt Director Award will automatically be accelerated and the shares will be immediately issued to the Participant in respect of the Non-Exempt Director Award. Alternatively, the Company may provide that the Participant will instead receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control pursuant to the preceding provision.
(ii) If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue or substitute the Non-Exempt Director Award. Unless otherwise determined by the Board, the Non-Exempt Director Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of the Non-Exempt Director Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entitys discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value made on the date of the Corporate Transaction.
(e) If the RSU Award is a Non-Exempt Award, then the provisions in this Section 11(e) shall apply and supersede anything to the contrary that may be set forth in the Plan or the Award Agreement with respect to the permitted treatment of such Non-Exempt Award:
(i) Any exercise by the Board of discretion to accelerate the vesting of a Non-Exempt Award shall not result in any acceleration of the scheduled issuance dates for the shares in respect of the Non-Exempt Award unless earlier issuance of the shares upon the applicable vesting dates would be in compliance with the requirements of Section 409A.
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(ii) The Company explicitly reserves the right to earlier settle any Non-Exempt Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix).
(iii) To the extent the terms of any Non-Exempt Award provide that it will be settled upon a Change in Control or Corporate Transaction, to the extent it is required for compliance with the requirements of Section 409A, the Change in Control or Corporate Transaction event triggering settlement must also constitute a Section 409A Change in Control. To the extent the terms of a Non-Exempt Award provides that it will be settled upon a termination of employment or termination of Continuous Service, to the extent it is required for compliance with the requirements of Section 409A, the termination event triggering settlement must also constitute a Separation From Service. However, if at the time the shares would otherwise be issued to a Participant in connection with a separation from service such Participant is subject to the distribution limitations contained in Section 409A applicable to specified employees, as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of the Participants Separation From Service, or, if earlier, the date of the Participants death that occurs within such six month period.
(iv) The provisions in this subsection (e) for delivery of the shares in respect of the settlement of an RSU Award that is a Non-Exempt Award are intended to comply with the requirements of Section 409A so that the delivery of the shares to the Participant in respect of such Non-Exempt Award will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted.
12. |
SEVERABILITY. |
If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
13. |
TERMINATION OF THE PLAN. |
The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of: (i) the Adoption Date, or (ii) the date the Plan is approved by the Companys stockholders. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
14. |
DEFINITIONS. |
As used in the Plan, the following definitions apply to the capitalized terms indicated below:
(a) Acquiring Entity means the surviving or acquiring corporation (or its parent company) in connection with a Corporate Transaction.
(b) Adoption Date means the date the Plan is first approved by the Board or Compensation Committee.
(c) Affiliate means, at the time of determination, any parent or subsidiary of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which parent or subsidiary status is determined within the foregoing definition.
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(d) Applicable Law means any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority).
(e) Award means any right to receive Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, an RSU Award, a SAR, a Performance Award or any Other Award).
(f) Award Agreement means a written or electronic agreement between the Company and a Participant evidencing the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general terms and conditions applicable to the Award and which is provided, including through electronic means, to a Participant along with the Grant Notice.
(g) Board means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and binding on all Participants
(h) Capitalization Adjustment means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Award after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(i) Cause has the meaning ascribed to such term in any written agreement between a Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) the Participants dishonest statements or acts with respect to the Company or any Affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the Participants commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Participants failure to perform the Participants assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, after written notice given to the Participant by the Company; (iv) the Participants gross negligence, willful misconduct or insubordination with respect to the Company or any Affiliate of the Company; or (v) the Participants material violation of any provision of any agreement(s) between the Participant and the Company relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions. The determination that a termination of the Participants Continuous Service is either for Cause or without Cause will be made by the Board with respect to Participants who are executive officers of the Company and by the Companys Chief Executive Officer with respect to Participants who are not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
(j) Change in Control or Change of Control means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Companys then outstanding securities other
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than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Companys securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the Subject Person) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the Acquiring Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the Acquiring Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(iv) individuals who, on the date the Plan is adopted by the Board, are members of the Board (the Incumbent Board) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Change in Control, the transaction or event described in clause (i), (ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code.
(k) Code means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(l) Committee means the Compensation Committee and any other committee of one or more Directors to whom authority has been delegated by the Board or Compensation Committee in accordance with the Plan.
(m) Common Stock means the common stock of the Company.
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(n) Company means Enjoy Technology, Inc. a Delaware corporation.
(o) Compensation Committee means the Compensation Committee of the Board.
(p) Consultant means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a Consultant for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Companys securities to such person.
(q) Continuous Service means that the Participants service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participants service with the Company or an Affiliate, will not terminate a Participants Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participants Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that partys sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Companys leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of separation from service as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).
(r) Corporate Transaction means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) a sale or other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and its Subsidiaries;
(ii) a sale or other disposition of at least 50% of the outstanding securities of the Company;
(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Corporate Transaction shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Corporate Transaction (or any analogous term) in an individual
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written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Corporate Transaction or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Corporate Transaction, the transaction or event described in clause (i), (ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code.
(s) Director means a member of the Board.
(t) determine or determined means as determined by the Board or the Committee (or its designee) in its sole discretion.
(u) Disability means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(v) Effective Date means the effective date of this Plan, which is the date of the closing of the transactions contemplated by the Merger Agreement, provided that this Plan is approved by the Companys stockholders prior to such date.
(w) Employee means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an Employee for purposes of the Plan.
(x) Employer means the Company or the Affiliate of the Company that employs the Participant.
(y) Entity means a corporation, partnership, limited liability company or other entity.
(z) Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(aa) Exchange Act Person means any natural person, Entity or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that Exchange Act Person will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Companys then outstanding securities.
(bb) Fair Market Value means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as determined on a per share or aggregate basis, as applicable) determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
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(ii) If there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(iii) In the absence of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(cc) Fully-Diluted Common Stock means, as of any date, the aggregate number of (i) shares of Common Stock issued and outstanding and (ii) securities convertible into or exercisable for shares of Common Stock (whether vested or unvested).
(dd) Governmental Body means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any Tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority).
(ee) Grant Notice means the notice provided to a Participant that he or she has been granted an Award under the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject to the Award or potential cash payment right, (if any), the vesting schedule for the Award (if any) and other key terms applicable to the Award.
(ff) Incentive Stock Option means an option granted pursuant to Section 4 of the Plan that is intended to be, and qualifies as, an incentive stock option within the meaning of Section 422 of the Code.
(gg) Materially Impair means any amendment to the terms of the Award that materially adversely affects the Participants rights under the Award. A Participants rights under an Award will not be deemed to have been Materially Impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participants rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participants rights under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option or SAR that may be exercised, (ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (iv) to clarify the manner of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A, or (v) to comply with other Applicable Laws.
(hh) Merger Agreement means that certain Agreement and Plan of Merger by and among Marquee Raine Acquisition Corp., MRAC Merger Sub Corp. and Enjoy Technology Inc., dated as of April 28, 2021.
(ii) Non-Employee Director means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (Regulation S-K)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K, or (ii) is otherwise considered a non-employee director for purposes of Rule 16b-3.
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(jj) Non-Exempt Award means any Award that is subject to, and not exempt from, Section 409A, including as the result of (i) a deferral of the issuance of the shares subject to the Award which is elected by the Participant or imposed by the Company, or (ii) the terms of any Non-Exempt Severance Agreement.
(kk) Non-Exempt Director Award means a Non-Exempt Award granted to a Participant who was a Director but not an Employee on the applicable grant date.
(ll) Non-Exempt Severance Arrangement means a severance arrangement or other agreement between the Participant and the Company that provides for acceleration of vesting of an Award and issuance of the shares in respect of such Award upon the Participants termination of employment or separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and without regard to any alternative definition thereunder) (Separation from Service) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4), 1.409A-1(b)(9) or otherwise.
(mm) Nonstatutory Stock Option means any option granted pursuant to Section 4 of the Plan that does not qualify as an Incentive Stock Option.
(nn) Officer means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(oo) Option means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(pp) Option Agreement means a written or electronic agreement between the Company and the Optionholder evidencing the terms and conditions of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of the general terms and conditions applicable to the Option and which is provided, including through electronic means, to a Participant along with the Grant Notice. Each Option Agreement will be subject to the terms and conditions of the Plan.
(qq) Optionholder means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(rr) Other Award means an award valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of grant) that is not an Incentive Stock Option, Nonstatutory Stock Option, SAR, Restricted Stock Award, RSU Award or Performance Award.
(ss) Other Award Agreement means a written or electronic agreement between the Company and a holder of an Other Award evidencing the terms and conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
(tt) Own, Owned, Owner, Ownership means that a person or Entity will be deemed to Own, to have Owned, to be the Owner of, or to have acquired Ownership of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(uu) Participant means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
(vv) Performance Award means an Award that may vest or may be exercised or a cash award that may vest or become earned and paid contingent upon the attainment during a Performance Period of certain
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Performance Goals and which is granted under the terms and conditions of Section 5(b) pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the Common Stock.
(ww) Performance Criteria means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board: earnings (including earnings per share and net earnings); earnings before interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; total stockholder return; return on equity or average stockholders equity; return on assets, investment, or capital employed; stock price; margin (including gross margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholders equity; capital expenditures; debt levels; operating profit or net operating profit; workforce diversity; growth of net income or operating income; billings; financing; regulatory milestones; stockholder liquidity; corporate governance and compliance; intellectual property; personnel matters; progress of internal research; progress of partnered programs; partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations, analysts and communication; implementation or completion of projects or processes; employee retention; number of users, including unique users; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with respect to the marketing, distribution and sale of the Companys products; supply chain achievements; co-development, co-marketing, profit sharing, joint venture or other similar arrangements; individual performance goals; corporate development and planning goals; and other measures of performance selected by the Board or Committee whether or not listed herein.
(xx) Performance Goals means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are unusual in nature or occur infrequently as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Companys bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, the Board may establish or provide for other adjustment items in the Award Agreement at the time the Award is granted or in such other document setting forth the Performance Goals at the time the Performance Goals are established. In addition, the Board retains the discretion to reduce or eliminate the compensation or
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economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Cash Award.
(yy) Performance Period means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participants right to vesting or exercise of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(zz) Plan means this Enjoy Technology, Inc. 2021 Equity Incentive Plan.
(aaa) Plan Administrator means the person, persons, and/or third-party administrator designated by the Company to administer the day to day operations of the Plan and the Companys other equity incentive programs.
(bbb) Post-Termination Exercise Period means the period following termination of a Participants Continuous Service within which an Option or SAR is exercisable, as specified in Section 4(h).
(ccc) Restricted Stock Award or RSA means an Award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(ddd) Restricted Stock Award Agreement means a written or electronic agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement includes the Grant Notice for the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the Restricted Stock Award and which is provided, including by electronic means, to a Participant along with the Grant Notice. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(eee) RSU Award or RSU means an Award of restricted stock units representing the right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(fff) RSU Award Agreement means a written or electronic agreement between the Company and a holder of an RSU Award evidencing the terms and conditions of an RSU Award. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing the written summary of the general terms and conditions applicable to the RSU Award and which is provided, including by electronic means, to a Participant along with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions of the Plan.
(ggg) Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
(hhh) Rule 405 means Rule 405 promulgated under the Securities Act.
(iii) Section 409A means Section 409A of the Code and the regulations and other guidance thereunder.
(jjj) Section 409A Change in Control means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Companys assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(kkk) Securities Act means the Securities Act of 1933, as amended.
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(lll) Share Reserve means the number of shares available for issuance under the Plan as set forth in Section 2(a).
(mmm) Stock Appreciation Right or SAR means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 4.
(nnn) SAR Agreement means a written or electronic agreement between the Company and a holder of a SAR evidencing the terms and conditions of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the general terms and conditions applicable to the SAR and which is provided, including by electronic means, to a Participant along with the Grant Notice. Each SAR Agreement will be subject to the terms and conditions of the Plan.
(ooo) Subsidiary means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(ppp) Ten Percent Stockholder means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(qqq) Trading Policy means the Companys policy permitting certain individuals to sell Company shares only during certain window periods and/or otherwise restricts the ability of certain individuals to transfer or encumber Company shares, as in effect from time to time.
(rrr) Unvested Non-Exempt Award means the portion of any Non-Exempt Award that had not vested in accordance with its terms upon or prior to the date of any Corporate Transaction.
(sss) Vested Non-Exempt Award means the portion of any Non-Exempt Award that had vested in accordance with its terms upon or prior to the date of a Corporate Transaction.
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Exhibit 10.11
ENJOY TECHNOLOGY, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: SEPTEMBER 21, 2021
APPROVED BY THE STOCKHOLDERS: OCTOBER 13, 2021
1. |
GENERAL; PURPOSE. |
(a) The Plan provides a means by which Eligible Employees of the Company and certain Designated Companies may be given an opportunity to purchase shares of Common Stock. The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan. In addition, the Plan permits the Company to grant a series of Purchase Rights to Eligible Employees that do not meet the requirements of an Employee Stock Purchase Plan.
(b) The Plan includes two components: a 423 Component and a Non-423 Component. The Company intends (but makes no undertaking or representation to maintain) the 423 Component to qualify as an Employee Stock Purchase Plan. The provisions of the 423 Component, accordingly, will be construed in a manner that is consistent with the requirements of Section 423 of the Code. Except as otherwise provided in the Plan or determined by the Board, the Non-423 Component will operate and be administered in the same manner as the 423 Component.
(c) The Company, by means of the Plan, seeks to retain the services of Eligible Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations.
2. |
ADMINISTRATION. |
(a) The Board or the Committee will administer the Plan. References herein to the Board shall be deemed to refer to the Committee except where context dictates otherwise.
(b) The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical).
(ii) To designate from time to time (A) which Related Corporations will be eligible to participate in the Plan as Designated 423 Corporations, (B) which Related Corporations or Affiliates will be eligible to participate in the Plan as Designated Non-423 Corporations, and (C) which Designated Companies will participate in each separate Offering (to the extent that the Company makes separate Offerings).
(iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective.
(iv) To settle all controversies regarding the Plan and Purchase Rights granted under the Plan.
(v) To suspend or terminate the Plan at any time as provided in Section 12.
(vi) To amend the Plan at any time as provided in Section 12.
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(vii) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan with respect to the 423 Component.
(viii) To adopt such rules, procedures and sub-plans as are necessary or appropriate to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States. Without limiting the generality of, and consistent with, the foregoing, the Board specifically is authorized to adopt rules, procedures, and sub-plans regarding, without limitation, eligibility to participate in the Plan, the definition of eligible earnings, handling and making of Contributions, establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share issuances, any of which may vary according to applicable requirements, and which, if applicable to a Designated Non-423 Corporation, do not have to comply with the requirements of Section 423 of the Code.
(c) The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Further, to the extent not prohibited by Applicable Law, the Board or Committee may, from time to time, delegate some or all of its authority under the Plan to one or more officers of the Company or other persons or groups of persons as it deems necessary, appropriate or advisable under conditions or limitations that it may set at or after the time of the delegation. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.
(d) All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
3. |
SHARES OF COMMON STOCK SUBJECT TO THE PLAN. |
(a) Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of shares of Common Stock that may be issued under the Plan will not exceed 2,383,437 shares (equal to 2% of the shares of Fully-Diluted Common Stock as of immediately following completion of the transactions contemplated by the Merger Agreement), plus the number of shares of Common Stock that are automatically added on January 1st of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (i) 1% of the Fully-Diluted Common Stock on December 31st of the preceding calendar year, and (ii) 4,766,874 shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year to provide that there will be no January 1st increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For the avoidance of doubt, up to the maximum number of shares of Common Stock reserved under this Section 3(a) may be used to satisfy purchases of Common Stock under the 423 Component and any remaining portion of such maximum number of shares may be used to satisfy purchases of Common Stock under the Non-423 Component.
(b) If any Purchase Right granted under the Plan terminates without having been exercised in full, the shares of Common Stock not purchased under such Purchase Right will again become available for issuance under the Plan.
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(c) The stock purchasable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market.
4. |
GRANT OF PURCHASE RIGHTS; OFFERING. |
(a) The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and, with respect to the 423 Component, will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.
(b) If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company or a third party designated by the Company (each, a Company Designee): (i) each form will apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.
(c) The Board will have the discretion to structure an Offering so that if the Fair Market Value of a share of Common Stock on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.
5. |
ELIGIBILITY. |
(a) Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation or an Affiliate. Except as provided in Section 5(b) or as required by Applicable Law, an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company, a Related Corporation or an Affiliate, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be equal to or greater than two years. In addition, the Board may (unless prohibited by Applicable Law) provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employees customary employment with the Company, the Related Corporation, or the Affiliate is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code with respect to the 423 Component. The Board may also exclude from participation in the Plan or any Offering Employees who are highly compensated employees (within the meaning of Section 423(b)(4)(D) of the Code) of the Company or a Related Corporation or a subset of such highly compensated employees.
(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering. Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:
(i) the date on which such Purchase Right is granted will be the Offering Date of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;
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(ii) the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.
(c) No Employee will be eligible for the grant of any Purchase Rights under the 423 Component if, immediately after any such Purchase Rights are granted, such Employee owns stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of any Related Corporation. For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and options will be treated as stock owned by such Employee.
(d) As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the 423 Component only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employees rights to purchase stock of the Company or any Related Corporation to accrue at a rate which, when aggregated, exceeds US $25,000 of Fair Market Value of such stock (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.
(e) Officers of the Company and any Designated Company, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may (unless prohibited by Applicable Law) provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.
(f) Notwithstanding anything in this Section 5 to the contrary, in the case of an Offering under the Non-423 Component, an Eligible Employee (or group of Eligible Employees) may be excluded from participation in the Plan or an Offering if the Board has determined, in its sole discretion, that participation of such Eligible Employee(s) is not advisable or practical for any reason.
6. |
PURCHASE RIGHTS; PURCHASE PRICE. |
(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of shares of Common Stock purchasable either with a percentage of earnings or with a maximum dollar amount, as designated by the Board, during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.
(b) The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and shares of Common Stock will be purchased in accordance with such Offering.
(c) In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participants accumulated Contributions) allocation of the shares of Common Stock (rounded down to the nearest whole share) available will be made in as nearly a uniform manner as will be practicable and equitable.
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(d) The purchase price of shares of Common Stock acquired pursuant to Purchase Rights will be specified by Board prior to the commencement of an Offering and will not be less than the lesser of:
(i) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the Offering Date; or
(ii) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date.
7. |
PARTICIPATION; WITHDRAWAL; TERMINATION. |
(a) An Eligible Employee may elect to participate in an Offering and authorize payroll deductions as the means of making Contributions by completing and delivering to the Company or a Company Designee, within the time specified for the Offering, an enrollment form provided by the Company or Company Designee. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participants Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where Applicable Law requires that Contributions be deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering). If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. If required under Applicable Law or if specifically provided in the Offering and to extent permitted by Section 423 of the Code with respect to the 423 Component, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through payment by cash, check or wire transfer prior to a Purchase Date.
(b) During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company or a Company Designee a withdrawal form provided by the Company. The Company may impose a deadline before a Purchase Date for withdrawing. Upon such withdrawal, such Participants Purchase Right in that Offering will immediately terminate and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions and such Participants Purchase Right in that Offering shall thereupon terminate. A Participants withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.
(c) Unless otherwise required by Applicable Law, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason (subject to any post-employment participation period required by Applicable Law) or (ii) is otherwise no longer eligible to participate. The Company will distribute as soon as practicable to such individual all of his or her accumulated but unused Contributions.
(d) Unless otherwise determined by the Board, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company and a Designated Company or between Designated Companies will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participants Purchase Right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Purchase Right will remain non-qualified under the Non-423 Component. The Board may establish different and additional rules governing transfers between separate Offerings within the 423 Component and between Offerings under the 423 Component and Offerings under the Non-423 Component.
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(e) During a Participants lifetime, Purchase Rights will be exercisable only by such Participant. Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.
(f) Unless otherwise specified in the Offering or as required by Applicable Law, the Company will have no obligation to pay interest on Contributions.
8. |
EXERCISE OF PURCHASE RIGHTS. |
(a) On each Purchase Date, each Participants accumulated Contributions will be applied to the purchase of shares of Common Stock, up to the maximum number of shares of Common Stock permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares will be issued unless specifically provided for in the Offering.
(b) Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participants account after the purchase of shares of Common Stock on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest (unless otherwise required by Applicable Law).
(c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable U.S. federal and state, foreign and other securities, exchange control and other laws applicable to the Plan. If on a Purchase Date the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and, subject to Section 423 of the Code with respect to the 423 Component, the Purchase Date will be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will in no event be more than 27 months from the Offering Date. If, on the Purchase Date, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in material compliance with all Applicable Laws, as determined by the Company in its sole discretion, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed to the Participants without interest (unless the payment of interest is otherwise required by Applicable Law).
9. |
COVENANTS OF THE COMPANY. |
The Company will seek to obtain from each U.S. federal or state, foreign or other regulatory commission, agency or other Governmental Body having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell shares of Common Stock thereunder unless the Company determines, in its sole discretion, that doing so is not practical or would cause the Company to incur costs that are unreasonable. If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Common Stock under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Common Stock upon exercise of such Purchase Rights.
10. |
DESIGNATION OF BENEFICIARY. |
(a) The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any shares of Common Stock and/or Contributions from the Participants account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant. The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.
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(b) If a Participant dies, and in the absence of a valid beneficiary designation, the Company will deliver any shares of Common Stock and/or Contributions to the executor or administrator of the estate of the Participant. If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or Contributions, without interest (unless the payment of interest is otherwise required by Applicable Law), to the Participants spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
11. |
ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS. |
(a) In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering. The Board will make these adjustments, and its determination will be final, binding and conclusive.
(b) In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporations parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the stockholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants accumulated Contributions will be used to purchase shares of Common Stock (rounded down to the nearest whole share) within ten business days (or such other period specified by the Board) prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.
12. |
AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN. |
(a) The Board may amend the Plan at any time in any respect the Board deems necessary or advisable. However, except as provided in Section 11(a) relating to Capitalization Adjustments, stockholder approval will be required for any amendment of the Plan for which stockholder approval is required by Applicable Law.
(b) The Board may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.
Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to facilitate compliance with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. To be clear, the Board may amend outstanding Purchase Rights without a Participants consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code with respect to the 423 Component or with respect to other Applicable Laws. Notwithstanding anything in the Plan or any Offering Document to the contrary, the Board will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars; (ii) permit Contributions in excess of the amount designated by a Participant in order to adjust for mistakes in the Companys processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting
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procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participants Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code with respect to the 423 Component; and (v) establish other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board pursuant to this paragraph will not be considered to alter or impair any Purchase Rights granted under an Offering as they are part of the initial terms of each Offering and the Purchase Rights granted under each Offering.
13. |
TAX QUALIFICATION; TAX WITHHOLDING. |
(a) Although the Company may endeavor to (i) qualify a Purchase Right for special tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan. The Company will be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants.
(b) Each Participant will make arrangements, satisfactory to the Company and any applicable Related Corporation, to enable the Company or the Related Corporation to fulfill any withholding obligation for Tax-Related Items. Without limitation to the foregoing, in the Companys sole discretion and subject to Applicable Law, such withholding obligation may be satisfied in whole or in part by (i) withholding from the Participants salary or any other cash payment due to the Participant from the Company or a Related Corporation; (ii) withholding from the proceeds of the sale of shares of Common Stock acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company; or (iii) any other method deemed acceptable by the Board. The Company shall not be required to issue any shares of Common Stock under the Plan until such obligations are satisfied.
(c) The 423 Component is exempt from the application of Section 409A of the Code, and any ambiguities herein shall be interpreted to so be exempt from Section 409A of the Code. The Non-423 Component is intended to be exempt from the application of Section 409A of the Code under the short-term deferral exception and any ambiguities shall be construed and interpreted in accordance with such intent. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Committee determines that an option granted under the Plan may be subject to Section 409A of the Code or that any provision in the Plan would cause an option under the Plan to be subject to Section 409A, the Committee may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Committee determines is necessary or appropriate, in each case, without the participants consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Section 409A of the Code, but only to the extent any such amendments or action by the Committee would not violate Section 409A of the Code. Notwithstanding the foregoing, the Company shall have no liability to a participant or any other party if the option under the Plan that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee with respect thereto.
14. |
EFFECTIVE DATE OF PLAN. |
The Plan will become effective immediately prior to and contingent upon the Effective Date. No Purchase Rights will be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.
15. |
MISCELLANEOUS PROVISIONS. |
(a) Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights will constitute general funds of the Company.
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(b) A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock subject to Purchase Rights unless and until the Participants shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).
(c) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering will in any way alter the at will nature of a Participants employment or amend a Participants employment contract, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation or an Affiliate, or on the part of the Company, a Related Corporation or an Affiliate to continue the employment of a Participant.
(d) The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that states conflicts of laws rules.
(e) If any particular provision of the Plan is found to be invalid or otherwise unenforceable, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision were omitted.
(f) If any provision of the Plan does not comply with Applicable Law, such provision shall be construed in such a manner as to comply with Applicable Law.
16. |
DEFINITIONS. |
As used in the Plan, the following definitions will apply to the capitalized terms indicated below:
(a) 423 Component means the part of the Plan, which excludes the Non-423 Component, pursuant to which Purchase Rights that satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(b) Affiliate means any entity, other than a Related Corporation, whether now or subsequently established, which is at the time of determination, a parent or subsidiary of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which parent or subsidiary status is determined within the foregoing definition.
(c) Applicable Law means shall mean the Code and any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of the NASDAQ Stock Market, the New York Stock Exchange or the Financial Industry Regulatory Authority).
(d) Board means the board of directors of the Company.
(e) Capitalization Adjustment means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
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(f) Code means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(g) Committee means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).
(h) Common Stock means the common stock of the Company.
(i) Company means Enjoy Technology, Inc., a Delaware corporation.
(j) Contributions means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions and, with respect to the 423 Component, to the extent permitted by Section 423 of the Code.
(k) Corporate Transaction means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its subsidiaries;
(ii) a sale or other disposition of more than 50% of the outstanding securities of the Company;
(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
(l) Designated 423 Corporation means any Related Corporation selected by the Board to participate in the 423 Component.
(m) Designated Company means any Designated Non-423 Corporation or Designated 423 Corporation, provided, however, that at any given time, a Related Corporation participating in the 423 Component shall not be a Related Corporation participating in the Non-423 Component.
(n) Designated Non-423 Corporation means any Related Corporation or Affiliate selected by the Board to participate in the Non-423 Component.
(o) Director means a member of the Board.
(p) Effective Date means the effective date of this Plan, which is the date of the closing of the transactions contemplated by the Merger Agreement, provided that this Plan is approved by the Companys stockholders prior to such date.
(q) Eligible Employee means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.
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(r) Employee means any person, including an Officer or Director, who is employed for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation, or solely with respect to the Non-423 Component, an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an Employee for purposes of the Plan.
(s) Employee Stock Purchase Plan means a plan that grants Purchase Rights intended to be options issued under an employee stock purchase plan, as that term is defined in Section 423(b) of the Code.
(t) Exchange Act means the U.S. Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
(u) Fair Market Value means, as of any date, the value of the Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in such source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.
(ii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith in compliance with Applicable Laws and regulations and, to the extent applicable as determined in the sole discretion of the Board, in a manner that complies with Sections 409A of the Code
(v) Fully-Diluted Common Stock means, as of any date, the aggregate number of (i) shares of Common Stock issued and outstanding and (ii) securities convertible into or exercisable for shares of Common Stock (whether vested or unvested).
(w) Governmental Body means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or entity and any court or other tribunal, and for the avoidance of doubt, any tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the NASDAQ Stock Market, the New York Stock Exchange and the Financial Industry Regulatory Authority).
(x) Merger Agreement means that certain Agreement and Plan of Merger by and among Marquee Raine Acquisition Corp., MRAC Merger Sub Corp. and Enjoy Technology Inc., dated as of April 28, 2021.
(y) Non-423 Component means the part of the Plan, which excludes the 423 Component, pursuant to which Purchase Rights that are not intended to satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(z) Offering means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the Offering Document approved by the Board for that Offering.
(aa) Offering Date means a date selected by the Board for an Offering to commence.
(bb) Officer means a person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.
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(cc) Participant means an Eligible Employee who holds an outstanding Purchase Right.
(dd) Plan means this Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan, as amended from time to time, including both the 423 Component and the Non-423 Component.
(ee) Purchase Date means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of shares of Common Stock will be carried out in accordance with such Offering.
(ff) Purchase Period means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.
(gg) Purchase Right means an option to purchase shares of Common Stock granted pursuant to the Plan.
(hh) Related Corporation means any parent corporation or subsidiary corporation of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.
(ii) Securities Act means the U.S. Securities Act of 1933, as amended.
(jj) Tax-Related Items means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items arising out of or in relation to a Participants participation in the Plan, including, but not limited to, the exercise of a Purchase Right and the receipt of shares of Common Stock or the sale or other disposition of shares of Common Stock acquired under the Plan.
(kk) Trading Day means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, including but not limited to the New York Stock Exchange, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.
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Exhibit 21.1
Enjoy Technology, Inc.
List of Subsidiaries
Subsidiary |
Jurisdiction |
|
Enjoy Technology Operating Corp. |
Delaware | |
Enjoy (UK) Limited |
United Kingdom | |
Enjoy Technology Canada Ltd. |
Canada | |
Enjoy Technology LLC |
Delaware |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Prospectus constituting a part of this Registration Statement on Form S-1 of our report dated May 13, 2021, relating to the financial statements of Marquee Raine Acquisition Corp. (as restated), which is contained in that Prospectus. We also consent to the reference to our Firm under the caption Experts in the Prospectus.
/s/ WithumSmith+Brown, PC
New York, New York
October 28, 2021
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Enjoy Technology, Inc., as the successor to Marquee Raine Acquisition Corp., of our report dated March 19, 2021 relating to the financial statements of Enjoy Technology, Inc., which appears in this Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
October 28, 2021