S-4 1 d157023ds4.htm FORM S-4 Form S-4
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As filed with the Securities and Exchange Commission on May 14, 2021

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Marquee Raine Acquisition Corp.*

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Cayman Islands*   6770   98-1566891
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
 

(I.R.S. Employer

Identification Number)

65 East 55th Street, 24th Floor

New York, NY 10022

Telephone: 212-603-5500

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Joseph Beyrouty

Chief Financial Officer

Marquee Raine Acquisition Corp.

65 East 55th Street, 24th Floor

New York, NY 10022

Telephone: 212-603-5500

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Jaclyn L. Cohen
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000 Fax: (212) 310-8007
  Rachel Proffitt
Garth Osterman
David Ambler
Cooley LLP
3175 Hanover Street
Palo Alto, CA 94304
Tel: (650) 843-5000
Fax: (650) 849-7400

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the Business Combination described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer  Tender Offer)  ☐

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of
securities to be registered
  Amount
to be
registered(5)
  Proposed
maximum
offering price
per share
security
  Proposed
maximum
aggregate
offering price
  Amount of
registration fee

Common stock

  81,251,651(1)   $9.85(2)   $800,328,762.35(2)   $87,315.87

Redeemable warrants

  9,343,750(3)   $0.8975(4)   $8,386,015.63(4)   $914.91

Total

          $808,714,777.98   $88,230.78(6)

 

 

(1)

The number of shares of common stock of New Enjoy (as defined below) being registered represents (i) the 37,375,000 Class A ordinary shares of Marquee Raine Acquisition Corp. (“MRAC”) that were registered pursuant to the Registration Statement on Form S-1 (333-250997) (the “IPO Registration Statement”) and underlie the units offered by MRAC in its initial public offering (the “public shares”), which public shares automatically will be converted by operation of law into shares of common stock of New Enjoy (the “New Enjoy Common Stock”) in the Domestication (as defined below) and (ii) 43,876,651 shares of New Enjoy Common Stock to be issued in connection with the Merger described herein to certain holders of shares of common stock of Enjoy Technology Inc. (“Enjoy”) as of immediately prior to the consummation of the Merger, which number of shares excludes an aggregate of 58,362,661 shares of New Enjoy Common Stock to be issued in a private placement pursuant to Section 4(a)(2) of the Securities Act, as further described herein, to certain holders of shares of common stock of Enjoy as of immediately prior to the consummation of the Merger.

(2)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the public shares of MRAC (the company to which New Enjoy will succeed following the Domestication) on the Nasdaq on May 12, 2021 ($9.85 per public share) (such date being within five business days of the date that this registration statement was first filed with the SEC). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(3)

The number of redeemable warrants to acquire shares of New Enjoy Common Stock being registered represents the number of redeemable warrants to acquire public shares that were registered pursuant to the IPO Registration Statement and underlie the units offered by MRAC in its initial public offering (the “MRAC Public Warrants”). The MRAC Public Warrants automatically will be converted by operation of law into redeemable warrants to acquire shares of New Enjoy Common Stock in the Domestication.

(4)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the MRAC Public Warrants on the Nasdaq on May 11, 2021 ($0.8975 per warrant) (such date being within five business days of the date that this registration statement was first filed with the SEC). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(5)

Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (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.

(6)

Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001091.

*

Prior to the consummation of the Merger described herein, MRAC intends to effect a deregistration under Article 206 of 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 will be changed from the Cayman Islands to the State of Delaware (the “Domestication”). All securities being registered will be issued by the continuing entity following the Domestication, which will be renamed “Enjoy Technology, Inc.” upon the consummation of the Domestication. As used herein, “New Enjoy” refers to MRAC after the Domestication, including after such change of name.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MAY 14, 2021

PROXY STATEMENT FOR

EXTRAORDINARY GENERAL MEETING OF

MARQUEE RAINE ACQUISITION CORP.

(A CAYMAN ISLANDS EXEMPTED COMPANY)

PROSPECTUS FOR

81,251,651 SHARES OF COMMON STOCK AND

9,343,750 REDEEMABLE WARRANTS

OF

MARQUEE RAINE ACQUISITION CORP.

(AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN THE STATE OF DELAWARE),

THE CONTINUING ENTITY FOLLOWING THE DOMESTICATION, WHICH WILL BE RENAMED “ENJOY TECHNOLOGY, INC.” IN CONNECTION WITH THE BUSINESS COMBINATION DESCRIBED HEREIN

 

 

The board of directors of Marquee Raine Acquisition Corp., a Cayman Islands exempted company (“MRAC” and, after the Domestication as described below, “New Enjoy”), has unanimously approved (1) the domestication of MRAC as a Delaware corporation (the “Domestication”); (2) the merger of MRAC Merger Sub Corp. (“Merger Sub”), a Delaware corporation and subsidiary of MRAC, with and into Enjoy Technology Inc. (“Enjoy”), a Delaware corporation (the “Merger”), with Enjoy surviving the Merger as a wholly owned subsidiary of MRAC, pursuant to the terms of the Agreement and Plan of Merger, dated as of April 28, 2021, by and among MRAC, Merger Sub and Enjoy, attached to this proxy statement/prospectus as Annex A (the “Merger Agreement”), as more fully described elsewhere in this proxy statement/prospectus; and (3) the other transactions contemplated by the Merger Agreement and documents related thereto. In connection with the Business Combination, MRAC will change its name to “Enjoy Technology, Inc.”

As a result of and upon the effective time of the Domestication, among other things, (1) each then issued and outstanding Class A ordinary share, par value $0.0001 per share, of MRAC (the “MRAC Class A Ordinary Shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of New Enjoy (the “New Enjoy Common Stock”); (2) each then issued and outstanding Class B ordinary share, par value $0.0001 per share, of MRAC (the “MRAC Class B Ordinary Shares”) will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock; (3) each then issued and outstanding warrant of MRAC (the “MRAC Warrants”) will convert automatically into a warrant to acquire one share of New Enjoy Common Stock (the “New Enjoy Warrants”) pursuant to the Warrant Agreement, dated December 17, 2020, between MRAC and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent; and (4) each then issued and outstanding unit of MRAC (the “MRAC Units”) will be separated and converted automatically into one share of New Enjoy Common Stock and one-fourth of one New Enjoy Warrant. Accordingly, this proxy statement/prospectus covers (1) 37,375,000 shares of New Enjoy Common Stock to be issued in the Domestication in exchange for MRAC Class A Ordinary Shares, (2) 43,876,651 shares of New Enjoy Common Stock to be issued in connection with the Merger to certain holders of shares of common stock of Enjoy as of immediately prior to the consummation of the Merger and (3) 9,343,750 redeemable New Enjoy Warrants to be issued in the Domestication in exchange for redeemable MRAC Warrants.

The total number of shares of New Enjoy Common Stock to be received by Enjoy’s stockholders or reserved for issuance pursuant to the New Enjoy equity awards into which Enjoy’s equity awards (including restricted stock awards and options) are converted and warrants to purchase Enjoy’s capital stock assumed by New Enjoy will be equal to the quotient obtained by dividing (x) the sum of (i) the Base Purchase Price (as defined below), plus (ii) the aggregate exercise price of each outstanding option to purchase common stock of Enjoy, plus (iii) the aggregate exercise price of each outstanding warrant of Enjoy, by (y) $10.00 (the “Aggregate Merger Consideration”). The “Base Purchase Price” means the sum of (a) $1,028,738,000, plus (b) 125% of the aggregate amount actually funded prior to the Closing (as defined below) in connection with an Excluded Financing (as defined below), up to a maximum aggregate amount equal to $60 million, plus (c) the aggregate amount actually funded prior to the Closing in connection with an Excluded Financing (to the extent in excess of


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the amounts set forth in clause (b) above), up to a maximum aggregate amount equal to $15 million. “Excluded Financing” means the capital raising transactions that Enjoy may enter into prior to the Closing in the form of equity and/or convertible debt, subject to certain conditions, in an aggregate amount not to exceed $75 million, as further set forth in this proxy statement/prospectus.

As a result of and upon the Closing, among other things, each outstanding share of Enjoy Common Stock (other than shares subject to Enjoy equity awards, treasury shares and dissenting shares (after giving effect to the Enjoy Preferred Conversion, the Enjoy Warrant Settlement and the Enjoy Note Conversion (each as defined below), as more fully described elsewhere in this proxy statement/prospectus)), will be cancelled upon the effective time of the Merger in exchange for the right to receive a number of shares of New Enjoy Common Stock equal to the quotient obtained by dividing (x) the Aggregate Merger Consideration by (y) the aggregate number of shares of Enjoy’s common stock that are outstanding on a fully diluted basis as of immediately prior to the Effective Time, determined in accordance with the terms of the Merger Agreement.

In addition, all (i) options to purchase shares of Enjoy Common Stock (“Enjoy Options”) and (ii) restricted share awards with respect to Enjoy Common Stock (“Enjoy Restricted Stock Awards” and, together with the Enjoy Options, the “Enjoy Awards”), in each case, that are outstanding as of immediately prior to the Merger, will be converted into (a) options to purchase shares of New Enjoy Common Stock (“New Enjoy Options”) and (b) the right to receive restricted shares of New Enjoy Common Stock (“New Enjoy Restricted Stock Awards”). All warrants to purchase Enjoy capital stock (“Enjoy Warrants”) that remain outstanding and unexercised as of immediately prior to the Merger will automatically be assumed by MRAC in accordance with their respective terms (including as to vesting and exercisability).

The MRAC Units, MRAC Class A Ordinary Shares and MRAC Warrants are currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols “MRACU” “MRAC” and “MRACW,” respectively. MRAC will apply for listing, to be effective at the time of the Business Combination, of New Enjoy Common Stock and New Enjoy Warrants on Nasdaq under the proposed symbols “ENJY” and “ENJYW,” respectively. It is a condition of the consummation of the Business Combination described above that MRAC receives confirmation from Nasdaq that the securities have been conditionally approved for listing on Nasdaq, but there can be no assurance such listing conditions will be met or that MRAC will obtain such confirmation from Nasdaq. If such listing conditions are not met or if such confirmation is not obtained, the Business Combination described above will not be consummated unless the Nasdaq condition set forth in the Merger Agreement is waived by the applicable parties.

This proxy statement/prospectus provides shareholders of MRAC with detailed information about the proposed business combination and other matters to be considered at the extraordinary general meeting of MRAC. We encourage you to read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors beginning on page 23 of this proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

 

This proxy statement/prospectus is dated                 , 2021, and

is first being mailed to MRAC’s shareholders on or about                 , 2021.


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MARQUEE RAINE ACQUISITION CORP.

A Cayman Islands Exempted Company

(Company Number 367125)

66 East 55th Street, 24th Floor

New York, NY 10022

Dear Marquee Raine Acquisition Corp. Shareholders:

You are cordially invited to virtually attend the extraordinary general meeting (the “extraordinary general meeting”) of Marquee Raine Acquisition Corp., a Cayman Islands exempted company (“MRAC” and, after the Domestication, as described below, “New Enjoy”), at [●], on [●], 2021, via live webcast at www.[●].com, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

At the extraordinary general meeting, MRAC shareholders will be asked to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of April 28, 2021 (as the same may be amended, the “Merger Agreement”), by and among MRAC, MRAC Merger Sub Corp. (“Merger Sub”) and Enjoy Technology Inc. (“Enjoy”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A (such proposal, the “Business Combination Proposal”). The Merger Agreement provides for, among other things, following the Domestication of MRAC to Delaware as described below, the merger of Merger Sub with and into Enjoy (the “Merger”), with Enjoy surviving the Merger as a wholly owned subsidiary of New Enjoy, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in the accompanying proxy statement/prospectus.

As a condition to the consummation of the Merger, the board of directors of MRAC has unanimously approved a change of MRAC’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Merger, the “Business Combination”). As described in this proxy statement/prospectus, you will be asked to consider and vote upon a proposal to approve the Domestication (the “Domestication Proposal”). In connection with the consummation of the Business Combination, MRAC will change its name to “Enjoy Technology, Inc.”

As a result of and upon the effective time of the Domestication, (1) each then issued and outstanding Class A ordinary share, par value $0.0001 per share, of MRAC (the “MRAC Class A Ordinary Shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of New Enjoy (the “New Enjoy Common Stock”), (2) each then issued and outstanding Class B ordinary share, par value $0.0001 per share, of MRAC (the “Class B Ordinary Shares”) will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock, (3) each then issued and outstanding warrant of MRAC will convert automatically into a warrant to acquire one share of New Enjoy Common Stock (the “New Enjoy Warrants”) pursuant to the Warrant Agreement, dated December 17, 2020, between MRAC and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each then issued and outstanding unit of MRAC (the “MRAC Units”), will separate and convert automatically into one share of New Enjoy Common Stock and one fourth of one New Enjoy Warrant. As used herein, “public shares” shall mean the MRAC Class A Ordinary Shares (including those that underlie the MRAC Units) that were registered pursuant to the Registration Statement on Form S-1 (333-250997) and the shares of New Enjoy Common Stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication. For further details, see “Domestication Proposal.”

You will also be asked to consider and vote upon (1) a proposal to approve and adopt the proposed certificate of incorporation and bylaws of New Enjoy (the “Organizational Documents Proposal”), (2) proposals to approve, on a non-binding advisory basis, certain material differences between MRAC’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman

 

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Constitutional Documents”) and the proposed certificate of incorporation and bylaws of New Enjoy, presented separately in accordance with the United States Securities and Exchange Commission requirements (the “Governance Proposal”), (3) a proposal to elect nine directors who, upon consummation of the Business Combination, will be the directors of New Enjoy (the “Director Election Proposal”), (4) a proposal to approve for the purposes of complying with the applicable provisions of Nasdaq Rule 5635, the issuance of New Enjoy Common Stock to (a) the PIPE Investors, pursuant to the PIPE Investment and (b) Enjoy’s stockholders pursuant to the Merger Agreement (the “Stock Issuance Proposal”), (5) a proposal to approve and adopt the Enjoy Technology, Inc. 2021 Incentive Award Plan (the “Incentive Award Plan Proposal”), (6) a proposal to approve the Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan (the “ESPP Proposal”) and (7) a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more of the foregoing proposals at the extraordinary general meeting (the “Adjournment Proposal”). The transactions contemplated by the Merger Agreement will be consummated only if the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal (collectively the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of the Condition Precedent Proposals. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.

The total number of shares of New Enjoy Common Stock to be received by Enjoy’s stockholders or reserved for issuance pursuant to the New Enjoy equity awards into which Enjoy Awards are converted and the Enjoy Warrants assumed by New Enjoy will be equal to the quotient obtained by dividing (x) the sum of (i) the Base Purchase Price (as defined below), plus (ii) the aggregate exercise price of each outstanding option to purchase common stock of Enjoy, plus (iii) the aggregate exercise price of each outstanding warrant of Enjoy, by (y) $10.00 (the “Aggregate Merger Consideration”). The “Base Purchase Price” means the sum of (a) $1,028,738,000, plus (b) 125% of the aggregate amount actually funded prior to the Closing (as defined below) in connection with an Excluded Financing (as defined below), up to a maximum aggregate amount equal to $60 million, plus (c) the aggregate amount actually funded prior to the Closing in connection with an Excluded Financing (to the extent in excess of the amounts set forth in clause (b) above), up to a maximum aggregate amount equal to $15 million. “Excluded Financing” means the capital raising transactions that Enjoy may enter into prior to the Closing in the form of equity and/or convertible debt, subject to certain conditions, in an aggregate amount not to exceed $75 million, as further set forth in the accompanying proxy statement/prospectus.

As a result of and upon the Closing, among other things, each outstanding share of common stock of Enjoy (other than shares subject to Enjoy equity awards, treasury shares and dissenting shares (after giving effect to the Enjoy Preferred Conversion, the Enjoy Warrant Settlement and the Enjoy Note Conversion (each as defined and more fully described elsewhere in this proxy statement/prospectus), will be cancelled upon the effective time of the Merger in exchange for the right to receive a number of shares of New Enjoy Common Stock equal to the quotient obtained by dividing (x) the Aggregate Merger Consideration by (y) the aggregate number of shares of Enjoy’s common stock that are outstanding on a fully diluted basis as of immediately prior to the Effective Time, determined in accordance with the terms of the Merger Agreement.

In addition, all (i) options to purchase shares of Enjoy’s common stock and (ii) restricted share awards with respect to Enjoy’s common stock, in each case, that are outstanding as of immediately prior to the Merger, will be converted into (a) options to purchase shares of New Enjoy Common Stock and (b) rights to receive restricted shares of New Enjoy Common Stock. All warrants to purchase Enjoy capital stock that remain outstanding and unexercised as of immediately prior to the Merger will automatically be assumed by MRAC in accordance with their respective terms (including as to vesting and exercisability).

In connection with the Business Combination, certain related agreements have been, or will be, entered into on or prior to the date of the Closing of the Business Combination (the “Closing Date”), including (i) the

 

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Registration Rights Agreement and (ii) the Subscription Agreements. For additional information, see “Business Combination ProposalRelated Agreements” in the accompanying proxy statement/prospectus.

Pursuant to the Cayman Constitutional Documents, any holder of public shares (a “public shareholder”), excluding shares held by Marquee Raine Acquisition Sponsor LP, a Cayman Islands exempted limited partnership and shareholder of MRAC (the “Sponsor”), and certain related parties, may request that MRAC redeem all or a portion of such shareholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public shareholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal or any other Condition Precedent Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, MRAC’s transfer agent, New Enjoy will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of [●], 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of New Enjoy Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of MRACRedemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The Class B Ordinary Shares held by the Sponsor and such other persons will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor and MRAC’s independent directors, collectively, own 20% of the issued and outstanding ordinary shares.

The Merger Agreement provides that the obligations of Enjoy to consummate the Merger are conditioned on, among other things, that as of the Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Enjoy or MRAC) (such amount, the “Trust Amount”) plus the PIPE Investment Amount (as defined herein) actually received by MRAC at or prior to the Closing Date (as defined herein), is equal to at least $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million) (the “Minimum Available MRAC Cash Amount” and such condition, the “Minimum Cash Condition”). This condition is for the sole benefit of Enjoy. If such condition is not met, and such condition is not waived under the terms of the Merger Agreement, then the

 

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Merger Agreement could terminate and the proposed Business Combination may not be consummated. The Merger Agreement also provides that the obligations of MRAC to consummate the Merger are conditioned on, among other things, that as of the Closing, the PIPE Investment shall have been consummated. If such condition is not met, and such condition is not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will MRAC redeem public shares in an amount that would cause New Enjoy’s net tangible assets to be less than $5,000,001.

The Merger Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.

MRAC is providing the accompanying proxy statement/prospectus and accompanying proxy card to MRAC’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination and other related business to be considered by MRAC’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of MRAC’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 23 of this proxy statement/prospectus.

After careful consideration, the board of directors of MRAC has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to MRAC’s shareholders in the accompanying proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of MRAC, you should keep in mind that MRAC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination ProposalInterests of MRAC’s Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/prospectus for a further discussion of these considerations.

The approval of each of the Domestication Proposal and Organizational Documents Proposal requires the affirmative vote of holders of at least two-thirds of the MRAC Common Stock represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Business Combination Proposal, the Governance Proposal (which is constituted of non-binding advisory proposals), the Director Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal require the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in the accompanying proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.

 

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If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. A broker non-vote will not be counted toward the quorum requirement and will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

If you have any questions or need assistance voting your ordinary shares, please contact D.F. King & Co., Inc., our proxy solicitor, by calling (877) 536-1561, or banks and brokers can call collect at (212) 269-5550 or by emailing MRAC@dfking.com.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO MRAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of MRAC’s board of directors, we would like to thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,    
         
Brett Varsov       Thomas Ricketts
Co-Chief Executive Officer       Co-Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated [●], 2021 and is first being mailed to shareholders on or about [●], 2021.

 

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MARQUEE RAINE ACQUISITION CORP.

A Cayman Islands Exempted Company

(Company Number 367125)

66 East 55th Street, 24th Floor

New York, NY 10022

NOTICE OF EXTRAORDINARY GENERAL MEETING

TO BE HELD ON [], 2021

TO THE SHAREHOLDERS OF MARQUEE RAINE ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of Marquee Raine Acquisition Corp., a Cayman Islands exempted company, company number 367125 (“MRAC”), will be held at [●], on [●], 2021, virtually via live webcast at www.[●].com. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

 

   

Proposal No. 1The Business Combination Proposal - to consider and vote upon a proposal to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of April 28, 2021 (the “Merger Agreement”), by and among MRAC, MRAC Merger Sub Corp. (“Merger Sub”) and Enjoy Technology Inc. (“Enjoy”), a copy of which is attached to this proxy statement/prospectus statement as Annex A. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Enjoy (the “Merger”), with Enjoy surviving the Merger as a wholly owned subsidiary of MRAC, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Business Combination Proposal”);

 

   

Proposal No. 2The Domestication Proposal - to consider and vote upon a proposal to approve by special resolution, the change of MRAC’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Merger, the “Business Combination”) (the “Domestication Proposal”);

 

   

Proposal No. 3—The Organizational Documents Proposal – to consider and vote upon a proposal to approve by special resolution and adopt the proposed new certificate of incorporation (“Proposed Certificate of Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of Marquee Raine Acquisition Corp., a corporation incorporated in the State of Delaware, and the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the Delaware General Corporation Law (the “DGCL”), which will be renamed “Enjoy Technology, Inc.” in connection with the Business Combination (MRAC after the Domestication, including after such change of name, is referred to herein as “New Enjoy”);

 

   

Proposal No. 4The Governance Proposal – to consider and vote upon, on a non-binding advisory basis, certain material differences between MRAC’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the Proposed Certificate of Incorporation and Proposed Bylaws, presented separately in accordance with the United States Securities and Exchange Commission requirements;

 

   

Proposal No. 5The Director Election Proposal—to consider and vote upon a proposal to elect nine directors who, upon consummation of the Business Combination, will be the directors of New Enjoy (the “Director Election Proposal”);

 

   

Proposal No. 6The Stock Issuance Proposal—to consider and vote upon a proposal to approve by ordinary resolution, for the purposes of complying with the applicable provisions of Nasdaq Rule 5635, the issuance of New Enjoy Common Stock to (a) the PIPE Investors pursuant to the PIPE Investment (each as defined in this proxy statement/prospectus) and (b) Enjoy’s stockholders pursuant to the Merger Agreement (the “Stock Issuance Proposal”);

 

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Proposal No. 7The Incentive Award Plan Proposal—to consider and vote upon a proposal to approve by ordinary resolution, the Enjoy Technology, Inc. 2021 Incentive Award Plan (the “Incentive Award Plan Proposal”);

 

   

Proposal No. 8The ESPP Proposal—to consider and vote upon a proposal to approve by ordinary resolution, the Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan (the “ESPP Proposal”); and

 

   

Proposal No. 9The Adjournment Proposal—to consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).

Each of Proposal No. 1 through 3 and 6 (the “Condition Precedent Proposals”) are cross-conditioned on the approval of the others. Each of Proposal No. 5, 7 and 8 are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. Proposal No. 4 is constituted of non-binding advisory proposals.

These items of business are described in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.

Only holders of record of ordinary shares at the close of business on [●], 2021 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.

This proxy statement/prospectus and accompanying proxy card is being provided to MRAC’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to virtually attend the extraordinary general meeting, all of MRAC’s shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 23 of this proxy statement/prospectus.

After careful consideration, the board of directors of MRAC has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to MRAC’s shareholders in this proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of MRAC, you should keep in mind that MRAC’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal - Interests of MRAC’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

Pursuant to the Cayman Constitutional Documents, a holder of public shares (as defined herein) (a “public shareholder”) may request of MRAC that New Enjoy redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental Stock Transfer & Trust Company (“Continental”), MRAC’s transfer agent, that New Enjoy redeem all or a portion of your public shares for cash; and

 

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  (iii)

deliver your public shares to Continental, MRAC’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on [] 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, MRAC’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem public shares regardless of how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank.

If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, MRAC’s transfer agent, New Enjoy will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of [●], 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of New Enjoy Common Stock that will be redeemed promptly after consummation of the Business Combination. See “Extraordinary General Meeting of MRACRedemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

Marquee Raine Acquisition Sponsor LP, a Cayman Islands exempted limited partnership and shareholder of MRAC (the “Sponsor”), and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The Class B ordinary shares of MRAC held by the Sponsor and such other persons will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor and MRAC’s independent directors, collectively, own 20% of the issued and outstanding ordinary shares.

The Merger Agreement provides that the obligations of Enjoy to consummate the Merger are conditioned on, among other things, that as of the Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Enjoy or MRAC) (such amount, the “Trust Amount”) plus the PIPE Investment Amount (as defined herein) actually received by MRAC at or prior to the Closing Date (as defined herein), is at least equal to $250.0 million minus

 

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the amount of any Excluded Financing (not to exceed $60.0 million) (the “Minimum Available Cash Amount” and such condition, the “Minimum Cash Condition”). This condition is for the sole benefit of Enjoy. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. The Merger Agreement also provides that the obligations of MRAC to consummate the Merger are conditioned on, among other things, that as of the Closing, the PIPE Investment shall have been consummated. If such condition is not met, and such condition is not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will MRAC redeem public shares in an amount that would cause New Enjoy’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

The Merger Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.

The approval of each of the Domestication Proposal and Organizational Documents Proposals requires the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The Business Combination Proposal, the Governance Proposal (which is constituted of non-binding advisory proposals), the Director Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal, and the Adjournment Proposal require the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Your vote is very important. Whether or not you plan to virtually attend the extraordinary general meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not virtually attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. A broker non-vote will not be counted toward the quorum requirement and will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you virtually attend the extraordinary general meeting and wish to vote virtually, you may withdraw your proxy and vote virtually.

Your attention is directed to the remainder of the proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein.

 

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If you have any questions or need assistance voting your ordinary shares, please contact D.F. King, our proxy solicitor, by calling (877) 536-1561, or banks and brokers can call collect at (212) 269-5550 or by emailing MRAC@dfking.com.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of Marquee Raine Acquisition Corp., May     , 2021

 

         
Brett Varsov       Thomas Ricketts
Co-Chief Executive Officer       Co-Chairman of the Board of Directors

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO MRAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

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TABLE OF CONTENTS

 

     Page  

REFERENCES TO ADDITIONAL INFORMATION

     ii  

TRADEMARKS

     iii  

SELECTED DEFINITIONS

     iv  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     x  

QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF MRAC

     xiii  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     1  

MARKET PRICE AND DIVIDEND INFORMATION

     22  

RISK FACTORS

     23  

EXTRAORDINARY GENERAL MEETING OF MRAC

     78  

SHAREHOLDER PROPOSAL NO.1 – THE BUSINESS COMBINATION PROPOSAL

     86  

SHAREHOLDER PROPOSAL NO.2 – DOMESTICATION PROPOSAL

     129  

SHAREHOLDER PROPOSAL NO.3 – ORGANIZATIONAL DOCUMENTS PROPOSAL

     132  

SHAREHOLDER PROPOSAL NO.4 – GOVERNANCE PROPOSAL

     135  

SHAREHOLDER PROPOSAL NO.5 – DIRECTOR ELECTION PROPOSAL

     138  

SHAREHOLDER PROPOSAL NO.6 – STOCK ISSUANCE PROPOSAL

     140  

SHAREHOLDER PROPOSAL NO.7 – INCENTIVE AWARD PLAN PROPOSAL

     143  

SHAREHOLDER PROPOSAL NO.8 – ESPP PROPOSAL

     151  

SHAREHOLDER PROPOSAL NO.9 – ADJOURNMENT PROPOSAL

     155  

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     156  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     170  

INFORMATION ABOUT MRAC

     182  

MRAC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     192  

INFORMATION ABOUT ENJOY

     198  

ENJOY MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     216  

MANAGEMENT OF NEW ENJOY FOLLOWING THE BUSINESS COMBINATION

     235  

EXECUTIVE COMPENSATION

     241  

BENEFICIAL OWNERSHIP OF SECURITIES

     245  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     249  

COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS

     256  

DESCRIPTION OF NEW ENJOY’S SECURITIES

     259  

SECURITIES ACT RESTRICTIONS ON RESALE OF NEW ENJOY SECURITIES

     268  

SHAREHOLDER PROPOSALS AND NOMINATIONS

     269  

SHAREHOLDER COMMUNICATIONS

     270  

LEGAL MATTERS

     271  

EXPERTS

     272  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     273  

ENFORCEABILITY OF CIVIL LIABILITY

     274  

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

     275  

FINANCIAL STATEMENTS

     F-1  

ANNEX A: Merger Agreement

     A-1  

ANNEX B: Sponsor Agreement

     B-1  

ANNEX C: Form of Subscription Agreement

     C-1  

ANNEX D: Registration Rights Agreement

     D-1  

ANNEX E: Enjoy Technology, Inc. 2021 Equity Incentive Plan

     E-1  

ANNEX F: Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan

     F-1  

ANNEX G: Cayman Constitutional Documents of MRAC

     G-1  

ANNEX H: Form of Proposed Certificate of Incorporation

     H-1  

ANNEX I: Form of Proposed Bylaws

     I-1  

ANNEX J: Opinion of MRAC’s Financial Advisor

     J-1  

INFORMATION NOT REQUIRED IN PROSPECTUS

     II-1  

 

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REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information that is not included in or delivered with this proxy statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus or other publicly available information concerning MRAC, without charge, by written request to MRAC at Marquee Raine Acquisition Corp., 65 East 55th Street, 24th Floor, New York, NY 10022, or by telephone request at (212) 603-5500; or D.F. King & Co., Inc., MRAC’s proxy solicitor, by calling (877) 536-1561 or banks and brokers can call collect at (212) 269-5550, or by emailing MRAC@dfking.com, or from the SEC through the SEC website at the address provided above.

In order for MRAC’s shareholders to receive timely delivery of the documents in advance of the extraordinary general meeting of MRAC to be held on [], 2021 you must request the information no later than [], 2021 five business days prior to the date of the extraordinary general meeting.

 

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TRADEMARKS

This document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. MRAC does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.

 

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SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

 

   

“2021 Plan” are to the Enjoy Technology, Inc. 2021 Incentive Award Plan attached to this proxy statement/prospectus as Annex E;

 

   

“Aggregate Fully Diluted Enjoy Common Shares” are to (without duplication) the aggregate number of shares of Enjoy Common Stock that are (i) issued and outstanding immediately prior to the Effective Time or (ii) issuable upon, or subject to, the settlement of Enjoy Options (whether or not then vested or exercisable), Enjoy Restricted Stock Awards and Enjoy Warrants, in each case, that are issued and outstanding immediately prior to the Effective Time;

 

   

“Aggregate Merger Consideration” are to a number of shares of New Enjoy Common Stock equal to the quotient obtained by dividing (i) the sum of (a) the Base Purchase Price, plus (b) the aggregate exercise price of the Enjoy Options that are issued and outstanding immediately prior to the Effective Time, plus (c) the aggregate exercise price of the Enjoy Warrants that are issued and outstanding immediately prior to the Effective Time, by (ii) $10.00;

 

   

“Ancillary Agreements” are to each agreement, instrument or document attached to the Merger Agreement as an exhibit, and the other agreements, certificates and instruments to be executed or delivered by any of the parties to the Merger Agreement in connection with or pursuant to the Merger Agreement;

 

   

“Available MRAC Cash” are to the sum of (i) the Trust Amount and (ii) the PIPE Investment Amount;

 

   

“Base Purchase Price” are to an amount equal to the sum of (i) $1,028,738,000, plus (ii) the product of (a) 1.25 and (b) the aggregate amount actually funded prior to the Closing in connection with an Excluded Financing, up to a maximum aggregate amount equal to $60,000,000, plus (iii) the aggregate amount actually funded prior to the Closing in connection with an Excluded Financing, to the extent in excess of the amounts set forth in clause (ii) above, up to a maximum aggregate amount equal to $15,000,000;

 

   

“Business Combination” are to the Domestication together with the Merger;

 

   

“Cayman Constitutional Documents” are to MRAC’s Amended and Restated Memorandum and Articles of Association, as amended from time to time;

 

   

“Cayman Islands Companies Law” are to the Cayman Islands Companies Law (2020 Revision);

 

   

“Closing” are to the closing of the Business Combination;

 

   

“Company,” “we,” “us” and “our” are to MRAC prior to its domestication as a corporation in the State of Delaware and to New Enjoy after its domestication as a corporation incorporated in the State of Delaware, including after its change of name to Enjoy Technology, Inc.;

 

   

“Condition Precedent Approvals” are to the approval at the extraordinary general meeting of the Condition Precedent Proposals;

 

   

“Condition Precedent Proposals” are to the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposals and the Stock Issuance Proposal, collectively;

 

   

“Consumers” are to Enjoy’s Business Partners’ customers. The Business Partner invoices the Consumer and Enjoy invoices the Business Partner. For example, a Consumer submits payment directly to BT Group when purchasing wireless services or technology products during an Enjoy experience;

 

   

“Continental” are to Continental Stock Transfer & Trust Company;

 

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“Customers” or “Business Partners” are to companies with which Enjoy has contractual partnerships, commercial relationships, and/or authorized dealer agreements. Enjoy’s current commercial relationships are with AT&T in the US, BT Group, including EE, in the U.K., Rogers Communications in Canada, and Apple in select US cities. Enjoy submits an invoice to, and receives payment directly from, these companies;

 

   

“DGCL” are to the General Corporation Law of the State of Delaware;

 

   

“Domestication” are to the domestication of Marquee Raine Acquisition Corp. as a corporation incorporated in the State of Delaware;

 

   

“Effective Time” are to the time at which the Merger shall become effective in accordance with the terms of the Merger Agreement;

 

   

“Enjoy” are to Enjoy Technology Inc. prior to the Business Combination;

 

   

“Enjoy Awards” are to Enjoy Options or Enjoy Restricted Stock Awards;

 

   

“Enjoy Capital Stock” are to the shares of the Enjoy Common Stock and the Enjoy Preferred Stock;

 

   

“Enjoy Common Stock” are to shares of Enjoy common stock, par value $0.00001 per share;

 

   

“Enjoy Common Warrants” are to the warrants to purchase shares of Enjoy Common Stock;

 

   

“Enjoy Convertible Notes” are to the issued and outstanding convertible notes issued by Enjoy;

 

   

“Enjoy Material Adverse Effect” are to any change, event, state of facts, development, circumstance, occurrence or effect (collectively, “Events”) that (i) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Enjoy and its subsidiaries, taken as a whole or (ii) does or would reasonably be expected to, individually or in the aggregate, prevent or materially delay the ability of Enjoy to consummate the Merger; provided, however, that in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, an “Enjoy Material Adverse Effect” pursuant to clause (i) above: (a) any change in applicable Laws or GAAP or any interpretation thereof following the date of the Merger Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the taking of any action required by the Merger Agreement, (d) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic (including, for the avoidance of doubt, COVID-19) or change in climate (including any effect directly resulting from, directly arising from or otherwise directly related to such natural disaster, pandemic, or change in climate), (e) any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions, (f) any failure of Enjoy to meet any projections or forecasts (provided that clause (f) shall not prevent any Event not otherwise excluded from this definition of Enjoy Material Adverse Effect underlying such failure to meet projections or forecasts from being taken into account in determining if an Enjoy Material Adverse Effect has occurred), (g) any Events generally applicable to the industries or markets in which Enjoy and its subsidiaries operate (including increases in the cost of products, supplies, materials or other goods purchased from third party suppliers), or (h) the announcement of the Merger Agreement and consummation of the transactions contemplated hereby, including any termination of, reduction in the scope of, or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on, relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of Enjoy and its subsidiaries (it being understood that this clause (h) shall be disregarded for purposes of the representation and warranty set forth in Section 4.4 of the Merger Agreement and the condition to Closing with respect thereto) or (i) actions taken by, or at the written request of, MRAC or Merger Sub; provided, further, that any Event referred to in clauses (a), (b), (d), (e) or (g) above may be taken into account in determining if an Enjoy Material Adverse Effect has occurred to the extent it has a disproportionate and adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Enjoy and its

 

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subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Enjoy and its subsidiaries conduct their respective operations, but only to the extent of the incremental disproportionate effect on Enjoy and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Enjoy and its subsidiaries conduct their respective operations;

 

   

“Enjoy Note Conversion” are to the conversion of all issued and outstanding convertible notes issued by Enjoy into shares of Enjoy Common Stock and Enjoy Preferred Stock in accordance with the terms of the applicable note purchase agreements;

 

   

“Enjoy Options” are to options to purchase shares of Enjoy Common Stock;

 

   

“Enjoy Preferred Conversion” are to the conversion of each share of Enjoy Preferred Stock into one share of Enjoy Common Stock;

 

   

“Enjoy Preferred Stock” are to shares of the 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);

 

   

“Enjoy Preferred Warrants” are to the warrants to purchase shares of Enjoy Series B preferred stock;

 

   

“Enjoy Restricted Stock Awards” are to awards of restricted shares of Enjoy Common Stock;

 

   

“Enjoy Series A Preferred Stock” are to shares of Enjoy Series A preferred stock, par value $0.00001 per share;

 

   

“Enjoy Series B Preferred Stock” are to shares of Enjoy Series B preferred stock, par value $0.00001 per share;

 

   

“Enjoy Series C Preferred Stock” are to shares of Enjoy Series C preferred stock, par value $0.00001 per share;

 

   

“Enjoy Series Seed Preferred Stock” are to shares of Enjoy Series Seed preferred stock, par value $0.00001 per share;

 

   

“Enjoy Stockholders” are to the stockholders of Enjoy immediately prior to the consummation of the Business Combination;

 

   

“Enjoy Warrant Settlement” are to the exercise of certain Enjoy Warrants in full on a cash or cashless basis in accordance with their respective terms;

 

   

“Enjoy Warrants” are to the Enjoy Common Warrants together with the Enjoy Preferred Warrants;

 

   

“ESPP” are to the Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan attached to this proxy statement/prospectus as Annex F;

 

   

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

   

“Exchange Ratio” are to the quotient obtained by dividing (i) the number of shares constituting the Aggregate Merger Consideration by (ii) the number of Aggregate Fully Diluted Enjoy Common Shares;

 

   

“Excluded Financing” means any one or more capital raising transactions entered into on or after the date hereof on substantially the same terms and subject to substantially the same conditions as previously provided in writing to MRAC, in an aggregate amount not to exceed $75,000,000, in which Enjoy is the issuer, whether through the sale of equity securities or convertible debt securities or a combination thereof (including any preferred stock or other securities convertible into or exercisable for Enjoy Common Stock); provided, that (i) the aggregate number of securities issued or issuable by the Enjoy does not result in a change of control of the Enjoy and (ii) any such capital raising transaction would not alter the terms of the Merger Agreement or the Ancillary Agreements or delay or impair the transactions contemplated hereunder and thereunder;

 

   

“Existing Indebtedness” are to the indebtedness outstanding pursuant to (i) that certain Financing Agreement, dated November 13, 2020, by and among Enjoy, as the borrower, certain subsidiaries of

 

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Enjoy party thereto, as guarantors, the lenders from time to time party thereto, and Blue Torch Finance, LLC, as administrative agent and collateral agent and (ii) that certain Note – Paycheck Protection Program, dated April 15, 2020, issued by Enjoy in favor of Newtek Small Business Finance, LLC, as the lender;

 

   

“Experts” are to Enjoy employees who provide the Enjoy experience to Consumers. For the avoidance of doubt, Experts does not refer to the independent registered public accounting firms referred to elsewhere in this proxy statement/prospectus;

 

   

“extraordinary general meeting” are to the meeting of shareholders of MRAC duly called by the board of directors of MRAC and held for the purpose of considering and voting upon the proposals set forth in this proxy statement/prospectus;

 

   

“founder shares” are to the MRAC Class B Ordinary Shares, and the shares of New Enjoy Common Stock to be issued to the Sponsor and certain related parties in respect thereof in connection with the Domestication;

 

   

“GAAP” are to accounting principles generally accepted in the United States of America;

 

   

“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

“initial public offering” are to MRAC’s initial public offering that was consummated on December 17, 2020;

 

   

“initial shareholders” are to MRAC’s Sponsor and independent directors as of December 17, 2020;

 

   

“IPO registration statement” are to the Registration Statement on Form S-1 (333-250997) filed by MRAC in connection with its initial public offering, which became effective on December 14, 2020;

 

   

“IRS” are to the U.S. Internal Revenue Service;

 

   

“Investment Company Act” are to the Investment Company Act of 1940, as amended;

 

   

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

 

   

“Merger” are to the merger of Merger Sub with and into Enjoy, with Enjoy surviving the merger as a wholly owned subsidiary of New Enjoy;

 

   

“Minimum Available Cash Amount” are to $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million);

 

   

“Minimum Cash Condition” are to the Trust Amount and the PIPE Investment Amount, in the aggregate, being at least the Minimum Available Cash Amount;

 

   

“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. prior to its domestication as a corporation in the State of Delaware;

 

   

“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 Public Warrants” are to warrants to purchase one (1) MRAC Class A Ordinary Share at an exercise price of eleven Dollars fifty cents ($11.50), a fraction equal to one-fourth of which was included in each unit sold as part of MRAC’s initial public offering;

 

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“MRAC Private Placement Warrants” are to warrants to purchase one (1) MRAC Class A Ordinary Share at an exercise price of eleven Dollars fifty cents ($11.50), which were issued to the Sponsor in connection with MRAC’s initial public offering;

 

   

“MRAC Units” are to each issued and outstanding unit of MRAC prior to the Domestication;

 

   

“MRAC Warrants” are to the MRAC Public Warrants and the MRAC Private Placement Warrants;

 

   

“Nasdaq” are to the Nasdaq Global Select Market;

 

   

“New Enjoy” are to MRAC after the Domestication and its name change from Marquee Raine Acquisition Corp. to “Enjoy Technology, Inc.”;

 

   

“New Enjoy Common Stock” are to shares common stock of New Enjoy, par value $0.0001 per share;

 

   

“New Enjoy Options” are to options to purchase shares of New Enjoy Common Stock;

 

   

“New Enjoy Restricted Stock Awards” are to rights to receive restricted shares of New Enjoy Common Stock;

 

   

“New Enjoy Warrants” are to warrants to purchase one (1) share of New Enjoy Common Stock at an exercise price of eleven Dollars fifty cents ($11.50) issued as a matter of law upon conversion of the MRAC Warrants at the time of the domestication;

 

   

“ordinary shares” are to the MRAC Class A Ordinary Shares and the MRAC Class B Ordinary Shares, collectively;

 

   

“Payoff Letters” are to the customary payoff letters in form and substance reasonably satisfactory to MRAC from the holders of Existing Indebtedness or the agents representing the foregoing that is required to be repaid at the Closing;

 

   

“Per Share Merger Consideration” are to the product obtained by multiplying (i) the Exchange Ratio by (ii) $10.00;

 

   

“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 the purchase of shares of New Enjoy Common Stock to be issued in a private placement transaction immediately following the Domestication and immediately prior to the Merger;

 

   

“PIPE Investment Amount” are to the aggregate gross purchase price received by MRAC prior to or substantially concurrently with the 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;

 

   

“pro forma” are to giving pro forma effect to the Business Combination;

 

   

“Proposed Bylaws” are to the proposed bylaws of New Enjoy upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex I;

 

   

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of New Enjoy upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex H;

 

   

“Proposed Organizational Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;

 

   

“public shareholders” are to holders of public shares, whether acquired in MRAC’s initial public offering or acquired in the secondary market;

 

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“public shares” are to the MRAC Class A Ordinary Shares (including those included in the units) that were offered and sold by MRAC in its initial public offering and registered pursuant to the IPO registration statement or the shares of New Enjoy Common Stock 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 Proposed Organizational Documents;

 

   

“Registration Rights Agreement” are to the Registration Rights Agreement to be entered into at the Closing, by and among New Enjoy, Sponsor, the independent directors of MRAC, certain shareholders of 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 Agreement” are to that certain letter agreement, dated as of April 28, 2021, by and between MRAC and the Sponsor, a copy of which is attached hereto as Annex B;

 

   

“Sponsor Earnout Shares” are to the 1,121,250 founder shares that will be subject to forfeiture unless the volume-weighted average closing price of New Enjoy Common Stock equals or exceeds $15.00 on 20 out of any 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 New Enjoy at or above such share price during such period);

 

   

“Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment will be consummated;

 

   

“trust account” are to the trust account established at the consummation of MRAC’s initial public offering and maintained by Continental, acting as trustee;

 

   

“Treasury Shares” are to the shares of Enjoy Common Stock held in Enjoy’s treasury, and will be cancelled as part of the Merger;

 

   

“Trust Agreement” are to the Investment Management Trust Agreement, dated December 17, 2020, by and between MRAC and Continental Stock Transfer & Trust Company, as trustee;

 

   

“Trust Amount” are to the amount of cash available in the trust account as of the Closing, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their redemption rights; and

 

   

“working capital loans” are to the funds that the Sponsor or an affiliate of the Sponsor, or certain of MRAC’s officers and directors may loan MRAC as may be required.

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, all references in this proxy statement/prospectus to MRAC Class A Ordinary Shares, public shares, shares of New Enjoy Common Stock, MRAC Public Warrants or New Enjoy Warrants include such securities underlying the MRAC Units, as applicable.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations, including as they relate to the potential Business Combination, of MRAC. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement/prospectus, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “might,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “propose,” “seek,” “should,” “strategy,” “strive,” “target,” “will,” “ will be,” “will continue,” “would,” “will likely result” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When MRAC discusses its strategies or plans, including as they relate to the potential Business Combination, it is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, MRAC’s management.

Forward-looking statements in this proxy statement/prospectus and in any document incorporated by reference in this proxy statement/prospectus may include, for example, statements about:

 

   

MRAC’s ability to complete the Business Combination or, if MRAC does not consummate such Business Combination, any other initial business combination;

 

   

satisfaction or waiver (if applicable) of the conditions to the Merger, including, among other things:

 

   

the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of MRAC and Enjoy, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part of, (iii) expiration or termination of the waiting period under the HSR Act, (iv) receipt of approval for listing on Nasdaq the shares of New Enjoy Common Stock to be issued in connection with the Merger, (v) that MRAC have at least $5,000,001 of net tangible assets upon Closing, (vi) the absence of any injunction, order, statute, rule, or regulation enjoining or prohibiting the consummation of the Merger and (vii) that, in the event Enjoy determines to change the structure of the Business Combination in accordance with the terms of the Merger Agreement in order to preserve the intended tax treatment of the transaction and is unable to obtain certain consents that would be required from contractual counterparties, appraisal rights have been properly exercised in respect of no more than 20% of the outstanding shares of Enjoy’s capital stock;

 

   

the satisfaction or waiver of other conditions to MRAC’s obligations to consummate the Merger, including, among others, (i) the consummation of the PIPE investment, (ii) the consummation of certain other transactions with respect to Enjoy’s outstanding securities, including (x) settlement of certain outstanding warrants, (y) conversion of all outstanding notes and (z) conversion of all outstanding preferred stock and (iii) no material adverse effect having occurred with respect to Enjoy;

 

   

the satisfaction or waiver of other conditions to Enjoy’s obligations to consummate the Merger, including, among others, that as of the Closing, (i) the completion of the Domestication and (ii) the amount of cash available in (x) the trust account, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their rights to redeem their MRAC Class A Ordinary Shares pursuant to the Cayman Constitutional Documents (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of MRAC or its affiliates) plus (y) the PIPE Investment Amount (as defined below), being equal to at least $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million);

 

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the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the projected financial information, anticipated growth rate, and market opportunity of New Enjoy;

 

   

the ability to obtain or maintain the listing of New Enjoy common stock and New Enjoy warrants on Nasdaq following the Business Combination;

 

   

our public securities’ potential liquidity and trading;

 

   

our ability to raise financing in the future;

 

   

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination;

 

   

MRAC officers and directors allocating their time to other businesses and potentially having conflicts of interest with MRAC’s business or in approving the Business Combination;

 

   

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

   

the impact of the regulatory environment and complexities with compliance related to such environment;

 

   

factors relating to the business, operations and financial performance of Enjoy and its subsidiaries, including:

 

   

the impact of the COVID-19 pandemic;

 

   

the ability of Enjoy to evaluate future prospects of its strategy for delivering products and services

 

   

the ability of Enjoy to develop and maintain an effective system of internal controls over financial reporting;

 

   

the ability of Enjoy to grow market share in its existing markets or any new markets it may enter;

 

   

the ability of Enjoy 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 Enjoy’s assets and increased competition in the global mobile retail market;

 

   

the ability of Enjoy to manage its growth effectively;

 

   

the ability of Enjoy to achieve and maintain profitability in the future;

 

   

the ability of Enjoy to maintain existing commercial relationships and successfully enter into new commercial relationships;

 

   

the ability of Enjoy to access sources of capital, including debt financing and securitization funding to finance its leased warehouses and inventories and other sources of capital to finance operations and growth;

 

   

the ability of Enjoy to maintain and enhance its products and brand, and to attract Consumers;

 

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the ability of Enjoy to maintain or enhance current Customer and Consumer satisfaction and trust levels;

 

   

the ability of Enjoy to manage, develop and refine its technology platform, including its Mobile Store;

 

   

the ability of Enjoy 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 forward-looking statements contained in this proxy statement/prospectus and in any document incorporated by reference in this proxy statement/prospectus are based on current expectations and beliefs concerning future developments and their potential effects on us or Enjoy. There can be no assurance that future developments affecting us or Enjoy will be those that MRAC or Enjoy have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond MRAC’s control or the control of Enjoy) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” beginning on page 23 of this proxy statement/prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. MRAC and Enjoy undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any MRAC shareholder grants its proxy or instructs how its vote should be cast or votes on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect us.

 

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QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF MRAC

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to MRAC’s shareholders. MRAC urges shareholders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting, which will be held virtually via live webcast at [] a.m., Eastern Time, on [], 2021. To participate in the extraordinary general meeting, visit www.[].com and enter the 12 digit control number included on your proxy card. You may register for the meeting as early as [] p.m., Eastern Time, on [], 2021. If you hold your shares through a bank, broker or other nominee, you will need to take additional steps to participate in the meeting, as described in this proxy statement.

 

Q:

How do I attend a virtual meeting?

 

A:

As a registered shareholder, along with this proxy statement/prospectus, you received a proxy card from Continental Stock Transfer & Trust Company, our transfer agent, which contains instructions on how to attend the virtual extraordinary general meeting, including the URL address and your control number. You will need your control number for access. If you do not have your control number, please contact Continental Stock Transfer & Trust Company at (917) 262-2373, or via email at proxy@continentalstock.com.

You can pre-register to attend the virtual meeting starting on [●], 2021 (five business days prior to the meeting). Enter the following URL address into your browser (www.[●].com), then enter your control number, name and email address. Once you pre-register, you can vote [or enter questions in the chat box]. At the start of the extraordinary general meeting, you will need to log in again using the same control number and, if you want to vote during the meeting, you will be prompted to enter your control number again.

Beneficial owners who own their investments through a bank or broker, will need to contact Continental Stock Transfer & Trust Company to receive a control number. If you plan to vote at the extraordinary general meeting, you will need to have a legal proxy from your bank or broker, or if you would like to join and not vote Continental can issue you a guest control number with proof of ownership. Either way, you must contact Continental for specific instructions on how to receive the control number, at the number or email address above. Please allow up to 72 hours prior to the meeting for processing your control number.

If you do not have internet capabilities, you can listen only to the extraordinary general meeting by dialing [xxx-xxx-xxxx] and when prompted enter the pin #[xxxxxxxx]. This is listen only, so you will not be able to vote or enter questions during the extraordinary general meeting.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

MRAC shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Enjoy, with Enjoy surviving the merger as a wholly owned subsidiary of MRAC, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. See the section entitled “Business Combination Proposal” for more detail.

A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and you are encouraged to read it in its entirety.

As a condition to the Merger, MRAC will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Islands Companies Law and a domestication under Section 388 of the

 

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DGCL, pursuant to which MRAC’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. As a result of and upon the effective time of the Domestication, (1) each then issued and outstanding MRAC Class A Ordinary Share will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock; (2) each then issued and outstanding redeemable MRAC Warrant will convert automatically into a New Enjoy Warrant, pursuant to the Warrant Agreement, dated as of December 17, 2020, between MRAC and Continental Stock Transfer & Trust Company (the “Warrant Agreement”); and (3) each then issued and outstanding unit of MRAC will be separated and converted automatically into one share of New Enjoy Common Stock and one fourth of one New Enjoy Warrant. See “Domestication Proposal” for additional information.

The provisions of the Proposed Organizational Documents will differ materially from the Cayman Constitutional Documents. Please see “What amendments will be made to the current constitutional documents of MRAC?” below.

THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES AND THE ACCOMPANYING FINANCIAL STATEMENTS OF MRAC AND ENJOY, CAREFULLY AND IN ITS ENTIRETY.

 

Q:

What proposals are shareholders of MRAC being asked to vote upon?

 

A:

At the extraordinary general meeting, MRAC is asking holders of ordinary shares to consider and vote upon:

 

   

a proposal to approve by ordinary resolution and adopt the Merger Agreement;

 

   

a proposal to approve by special resolution the Domestication;

 

   

a proposal to approve by special resolution and adopt the proposed new certificate of incorporation and the proposed new bylaws of MRAC;

 

   

proposal to approve, on a non-binding advisory basis, certain material differences between MRAC’s Amended and Restated Memorandum and Articles of Association and the Proposed Certificate of Incorporation and Proposed Bylaws;

 

   

a proposal to approve by ordinary resolution the election of nine directors to serve staggered terms, who, upon consummation of the Business Combination, will be the directors of New Enjoy;

 

   

a proposal to approve by ordinary resolution, for the purposes of complying with the applicable listing rules of Nasdaq, the issuance of shares of New Enjoy Common Stock to (a) the PIPE Investors pursuant to the PIPE Investment (each as defined in this proxy statement/prospectus) and (b) Enjoy’s stockholders pursuant to the Merger Agreement;

 

   

a proposal to approve by ordinary resolution the Enjoy Technology, Inc. 2021 Incentive Award Plan;

 

   

a proposal to approve by ordinary resolution the Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan; and

 

   

a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.

If MRAC’s shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. See “Business Combination Proposal,” “Domestication Proposal,” “Organizational Documents Proposal,” “Governance Proposal,” “Director Election Proposal,” “Stock Issuance Proposal,” “Incentive Award Plan Proposal,” “ESPP Proposal” and “Adjournment Proposal.”

 

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MRAC will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of MRAC should read it carefully.

After careful consideration, MRAC’s board of directors has determined that the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Governance Proposal, the Director Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal are in the best interests of MRAC and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination ProposalInterests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

Are the proposals conditioned on one another?

 

A:

Yes. Each of the Condition Precedent Proposals is cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals

 

Q:

Why is MRAC proposing the Business Combination?

 

A:

MRAC was organized to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, with one or more businesses or entities.

Enjoy is a technology-powered platform reinventing “Commerce-at-Home” to bring the best of the store directly to the Consumer. Enjoy has formed multi-year commercial relationships with some of the world’s leading consumer brands to bring the products, services and subscriptions their customers love through the door directly in the comfort and convenience of their homes. Co-founded by Apple retail legend, Ron Johnson, Enjoy has pioneered a new retail experience that can do everything a traditional retail experience offers, but better, through its Mobile Stores. Enjoy currently operates in the United States, Canada and the United Kingdom and is leading the reinvention of “Commerce-at-Home.”

Based on its due diligence investigations of Enjoy and the industry in which it operates, including the financial and other information provided by Enjoy in the course of MRAC’s due diligence investigations, the MRAC board of directors believes that the Business Combination with Enjoy is in the best interests of MRAC and its shareholders and presents an opportunity to increase shareholder value. However, there is no assurance of this. See “Business Combination ProposalMRAC’s Board of Directors’ Reasons for the Business Combination” for additional information.

Although MRAC’s board of directors believes that the Business Combination with Enjoy presents a unique business combination opportunity and is in the best interests of MRAC and its shareholders, the board of directors did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the section entitled “Business Combination ProposalMRAC’s Board of Directors’

 

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Reasons for the Business Combination,” as well as in the sections entitled “Risk FactorsRisks Related to Enjoy’s Business and Industry.”

 

Q:

What will Enjoy Stockholders receive in return for MRAC’s acquisition of all of the issued and outstanding equity interests of Enjoy?

 

A:

The total number of shares of New Enjoy Common Stock to be received by Enjoy’s stockholders or reserved for issuance pursuant to the New Enjoy equity awards into which Enjoy Awards are converted and the Enjoy Warrants assumed by New Enjoy will be equal to an aggregate number of shares of New Enjoy Common Stock equal to the quotient obtained by dividing (x) the sum of (i) the Base Purchase Price (as defined below), plus (ii) the aggregate exercise price of each outstanding option to purchase common stock of Enjoy, plus (iii) the aggregate exercise price of each outstanding warrant of Enjoy, by (y) $10.00 (the “Aggregate Merger Consideration”). For further details, see “Business Combination Proposal—The Merger AgreementConsiderationAggregate Merger Consideration.”

In addition, all (i) Enjoy Options and (ii) Enjoy Restricted Stock Awards, in each case, that are outstanding as of immediately prior to the Merger, will be converted into (a) New Enjoy Options, (b) New Enjoy Restricted Stock Awards, respectively. All Enjoy Warrants that remain outstanding and unexercised as of immediately prior to the Merger will automatically be assumed by MRAC in accordance with their respective terms (including as to vesting and exercisability). For further details, see “Business Combination Proposal – Consideration, Treatment of Enjoy Options, Enjoy Restricted Stock Awards and Enjoy Warrants.

 

Q:

What equity stake will current MRAC shareholders and Enjoy Stockholders hold in New Enjoy immediately after the consummation of the Business Combination?

 

A:

As of the date of this proxy statement/prospectus, there are 46,718,750 ordinary shares issued and outstanding, which includes the 9,343,750 founder shares held by the Sponsor (including MRAC’s independent directors) and the 37,375,000 public shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 15,660,417 MRAC Warrants, which includes the 6,316,667 MRAC Private Placement Warrants held by the Sponsor and the 9,343,750 MRAC Public Warrants. Each whole warrant entitles the holder thereof to purchase one MRAC Class A Ordinary Share and, following the Domestication, will entitle the holder thereof to purchase one share of New Enjoy Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination), the MRAC fully diluted share capital would be 62,379,167.

It is anticipated that, following the Business Combination, (1) MRAC’s public shareholders are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock, (2) Enjoy securityholders (without taking into account any public shares held by Enjoy securityholders prior to the consummation of the Business Combination) are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock, (3) the Sponsor and related parties are expected to collectively own approximately [●]% of the outstanding shares of New Enjoy Common Stock and (4) the PIPE Investors are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock. These percentages (i) assume (a) that no public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Enjoy issues [●] shares of New Enjoy Common Stock to former securityholders of Enjoy as of immediately prior to the Effective Time, (c) that New Enjoy issues 8 million shares of New Enjoy Common Stock to the PIPE Investors pursuant to the PIPE Investment and (d) the amount of the Excluded Financing is equal to $60 million, (ii) exclude all New Enjoy Options that may be exercisable for shares of New Enjoy Common Stock and New Enjoy Restricted Stock Awards, (iii) include the Sponsor Earnout Shares, (iv) exclude the impact of any New Enjoy Warrants that will be outstanding following the Business Combination and Enjoy Warrants that will be assumed in connection with the Business Combination, (v) assume that no holder of vested Enjoy Options exercises such Enjoy Options after the date hereof and (vi) account for interest accrued on the principal amount of Enjoy’s convertible notes through July 31, 2021. If the actual facts are different from these assumptions, the percentage ownership of New Enjoy held by such constituencies will be different.

 

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The following table illustrates varying ownership levels in New Enjoy immediately following the consummation of the Business Combination based on the assumptions above and, alternatively (as set forth under “Maximum Redemptions” below), based on the assumption that [●] MRAC Class A Ordinary Shares are redeemed in connection with the Business Combination at approximately $10.00 per share.

 

     Share Ownership in New Enjoy  
     No Redemptions     Maximum Redemptions(1)  
     Number
of
Shares
     Percentage
of
Outstanding
Shares
    Number of
Shares
     Percentage of
Outstanding
Shares
 

Enjoy stockholders(2)

     [●      [● ]%      [●      [● ]% 

MRAC’s public shareholders

     [●      [● ]%      [●      [● ]% 

Sponsor & related parties(3)

     [●      [● ]%      [●      [● ]% 

PIPE Investors

     [●      [● ]%      [●      [● ]% 
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

         [●      100.0     [●      100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Assumes redemptions of [●] MRAC Class A Ordinary Shares in connection with the Business Combination at approximately $10.00 per share based on trust account figures as of [●], 2021.

(2)

Excludes [●] shares of New Enjoy Common Stock expected to be reserved for issuance pursuant to the terms of existing Enjoy Options, Enjoy Restricted Stock Awards and certain Enjoy Warrants.

(3)

Includes 75,000 shares held by the independent directors of MRAC. Includes the Sponsor Earnout Shares.

For further details, see “Business Combination ProposalThe Merger AgreementConsiderationAggregate Merger Consideration.”

 

Q:

How has the announcement of the Business Combination affected the trading price of the MRAC Class A Ordinary Shares?

 

A:

On April 27, 2021, the trading date before the public announcement of the Business Combination, MRAC’s public units, Class A Ordinary Shares and Warrants closed at $10.07, $9.92 and $0.88, respectively. On [●], 2021, the most recent practicable date prior to the date of this proxy statement/prospectus, Enjoy’s public units, Class A ordinary shares and warrants closed at $[●], $[●] and $[●], respectively.

 

Q:

Will New Enjoy obtain new financing in connection with the Business Combination?

 

A:

Yes. The PIPE Investors have agreed to purchase in the aggregate approximately 8 million shares of New Enjoy Common Stock, for approximately $80 million of gross proceeds, in the PIPE Investment. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. See “Business Combination Proposal – Related Agreements—Subscription Agreements.”

 

Q:

Why is MRAC proposing the Domestication?

 

A:

Our board of directors believes that there are significant advantages to us that will arise as a result of a change of MRAC’s domicile to Delaware. Further, MRAC’s board of directors believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. MRAC’s board of directors believes that there are several reasons why a reincorporation in Delaware is in the best interests of Enjoy and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section entitled “Domestication ProposalReasons for the Domestication.”

 

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To effect the Domestication, MRAC will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which MRAC will be domesticated and continue as a Delaware corporation.

The approval of the Domestication Proposal is a condition to the closing of the Merger under the Merger Agreement. The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Abstentions, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting. Broker non-votes will not be counted toward the quorum requirement and will not count as votes cast at the extraordinary general meeting.

 

Q:

What amendments will be made to the current constitutional documents of MRAC?

 

A:

The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, MRAC’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and to approve the replacement MRAC’s Cayman Constitutional Documents under the Cayman Islands Companies Law with the Proposed Organizational Documents under the DGCL, which will be materially modified from the Cayman Constitutional Documents in the following respects:

 

   

change the purpose of New Enjoy to engage in “any lawful act or activity for which a corporation may be organized under the DGCL;

 

   

provide that the affirmative vote of the holders of at least 66 2/3% of the voting power of all then-outstanding New Enjoy Common Stock entitled to vote generally in the election of directors, voting together as a single class, is required to adopt, amend or repeal the Proposed Bylaws and the provisions in the Proposed Certificate of Incorporation related to Directors, Indemnification and Limitation on Liability of Directors, Forum Selection and Amendments;

 

   

change the name of MRAC to “Enjoy Technology, Inc.” and delete the provisions relating to MRAC’s status as a blank check company and retain the default of perpetual existence under the DGCL;

 

   

change the authorized shares of all classes of capital stock to [●] shares, consisting of [●] shares of New Enjoy Common Stock and [●] shares of preferred stock;

 

   

adopt Delaware as the exclusive forum for certain stockholder litigation;

 

   

provide for transfer restrictions with respect to shares of New Enjoy Common Stock issued (i) as consideration to stockholders of Enjoy in connection with the Merger and (ii) to directors, officers and employees of New Enjoy upon the settlement or exercise of equity awards outstanding immediately following the Closing in respect of Enjoy Awards outstanding immediately prior to the Closing;

 

   

classify the New Enjoy board of directors into three classes, with only one class of directors being elected in each year and each class serving a three-year term.

See “Organizational Documents Proposal” for additional information.

 

Q:

How will the Domestication affect my ordinary shares, warrants and units?

 

A:

As a result of and upon the effective time of the Domestication, (1) each then issued and outstanding MRAC Class A Ordinary Share will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock, (2) each then issued and outstanding MRAC Class B Ordinary Share will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock; (3) each then issued and outstanding MRAC warrant will convert automatically into a New Enjoy Warrant, pursuant to the Warrant

 

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  Agreement and (4) each then issued and outstanding unit of MRAC that has not been previously separated into the underlying MRAC Class A Ordinary Share and underlying fractional MRAC Warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Enjoy Common Stock and one-fourth of one New Enjoy Warrant. See “Domestication Proposal” for additional information.

 

Q:

What are the U.S. federal income tax consequences of the Domestication?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations,” it is intended that the Domestication will constitute a reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the Domestication so qualifies, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) will be subject to Section 367(b) of the Code and, as a result:

 

   

A U.S. Holder whose MRAC Class A Ordinary Shares have a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of MRAC’s earnings in income;

 

   

A U.S. Holder whose MRAC Class A Ordinary Shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) less than 10% of the total combined voting power of all classes of MRAC shares entitled to vote and less than 10% of the total value of all classes of MRAC shares generally will recognize gain (but not loss) on the exchange of MRAC Class A Ordinary Shares for New Enjoy Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to its MRAC Class A Ordinary Shares provided certain other requirements are satisfied; and

 

   

A U.S. Holder whose MRAC Class A Ordinary Shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of MRAC shares entitled to vote or 10% or more of the total value of all classes of MRAC shares generally will be required to include in income as a deemed dividend all earnings and profits amount attributable to its MRAC Class A Ordinary Shares.

MRAC does not expect to have significant cumulative earnings and profits, if any, on the date of the Domestication.

If MRAC were to be treated as a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes, certain U.S. holders may be subject to adverse tax consequences as a result of the Domestication. However, provided the Domestication is completed in 2021, MRAC believes that, although subject to uncertainty, it is likely that it will not be classified as a PFIC for 2021 and, may not be classified as a PFIC for 2020 because it will qualify in 2021 for an exception to the PFIC rules known as the “ start-up exception.” The applicability of the start-up exception is subject to substantial uncertainty and U.S. Holders are urged to consult their own tax advisors in this regard. The requirements to qualify for the start-up exception and the potential application of the PFIC rules to the Domestication are discussed more fully under “U.S. Federal Income Tax Considerations—PFIC Consequences.”

Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) to become subject to U.S. federal income withholding taxes on any amounts treated as dividends paid in respect of such non-U.S. Holder’s New Enjoy Common Stock after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor regarding the tax consequences to them of the

 

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Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “U.S. Federal Income Tax Considerations.”

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of how they vote in respect of the Business Combination Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor has agreed to waive its redemption rights with respect to all of the founder shares in connection with the consummation of the Business Combination. The founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your MRAC Class A Ordinary Shares for or against or abstain from voting on the Business Combination Proposal. As a result, the Business Combination can be approved by shareholders who will redeem their shares and no longer remain shareholders.

 

Q:

How do I exercise my redemption rights?

 

A:

If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, MRAC’s transfer agent, that New Enjoy redeem all or a portion of your public shares for cash; and

 

  (iii)

deliver your public shares to Continental, MRAC’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on [●], 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

The address of Continental, MRAC’s transfer agent, is listed under the question “Who can help answer my questions?” below.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a

 

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brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, MRAC’s transfer agent, directly and instruct them to do so.

Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account calculated as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of [●], 2021 this would have amounted to approximately $10.00 per issued and outstanding public share. However, the proceeds deposited in the trust account could become subject to the claims of MRAC’s creditors, if any, which could have priority over the claims of the public shareholders, regardless of whether such public shareholder votes or, if they do vote, irrespective of if they vote for or against the Business Combination Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote, irrespective of how you vote on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, MRAC’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that MRAC’s transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, MRAC’s transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, MRAC’s transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, MRAC’s agent, at least two business days prior to the vote at the extraordinary general meeting.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, New Enjoy will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination. The redemption will take place following the Domestication and, accordingly, it is shares of New Enjoy Common Stock that will be redeemed immediately after consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

 

Q:

If I am a holder of units, can I exercise redemption rights with respect to my units?

 

A:

No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, MRAC’s transfer agent, directly and instruct them to do so. You are requested to cause your public shares to be separated and delivered to Continental, MRAC’s transfer agent, by [●] p.m., Eastern Time, on [●], 2021 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.

 

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Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

It is expected that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations”) that exercises its redemption rights to receive cash from the trust account in exchange for its New Enjoy Common Stock generally will be treated as selling such New Enjoy Common Stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances, however, in which the redemption may be treated as a distribution for U.S. federal income tax purposes, depending on the amount of New Enjoy Common Stock that such U.S. Holder owns or is deemed to own (including through the ownership of warrants). For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.”

Additionally, because the Domestication will occur immediately prior to the redemption of any shareholder, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code as well as potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of Section 367 of the Code and the PFIC rules are discussed more fully below under “U.S. Federal Income Tax Considerations.”

All holders considering exercising redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.

 

Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A:

Following the closing of MRAC’s initial public offering, an amount equal to $373,750,000 ($10.00 per unit) of the net proceeds from MRAC’s initial public offering and the sale of the MRAC Private Placement Warrants was placed in the trust account. As of [●], 2021, funds in the trust account totaled at least $373,750,000 and were comprised entirely of cash, U.S. government treasury obligations with a maturity of 185 days or less or of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the Closing), (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Cayman Constitutional Documents to modify the substance or timing of MRAC’s obligation to redeem 100% of the public shares if it does not complete a business combination by December 17, 2022 and (3) the redemption of all of the public shares if MRAC is unable to complete a business combination by December 17, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), subject to applicable law.

Upon consummation of the Business Combination, the funds deposited in the trust account will be released to pay holders of MRAC public shares who properly exercise their redemption rights, to pay transaction fees and expenses associated with the Business Combination and for working capital and general corporate purposes of New Enjoy following the Business Combination. See “Summary of the Proxy Statement/ProspectusSources and Uses of Funds for the Business Combination.”

 

Q:

What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A:

Our public shareholders may vote in favor of the Business Combination and exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.

 

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However, the Merger Agreement provides that the obligations of Enjoy to consummate the Merger are conditioned on, among other things, that as of the Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their rights to redeem their public shares pursuant to the Cayman Constitutional Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Enjoy or MRAC) plus the PIPE Investment Amount actually received by MRAC at or prior to the Closing Date, is at least equal to $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million). If such condition is not met, and such condition is not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. The Merger Agreement also provides that the obligations of MRAC to consummate the Merger are conditioned on, among other things, that as of the Closing, the PIPE Investment shall have been consummated. If such condition is not met, and such condition is not waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Transaction may not be consummated.

In addition, with fewer public shares and public shareholders, the trading market for our Class A Ordinary Share may be less liquid than the market for our Class A Ordinary Share was prior to the Closing and we may not be able to continue to meet the listing standards for Nasdaq. With less funds available from the trust account, the working capital infusion from the trust account into MRAC’s business will be reduced. Further, in no event will we redeem public shares in an amount that would cause New Enjoy’s net tangible assets (as determined in accordance with Rule 3a5 1-1 (g)(1) of the Exchange Act) to be less than $5,000,001.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of MRAC and Enjoy, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (iii) expiration or termination of the waiting period under the HSR Act, (iv) receipt of approval for listing on Nasdaq the shares of New Enjoy Common Stock to be issued in connection with the Merger, (v) that MRAC have at least $5,000,001 of net tangible assets upon Closing, (vi) the absence of any injunction, order, statute, rule, or regulation enjoining or prohibiting the consummation of the Merger and (vii) that, in the event Enjoy determines to change the structure of the Business Combination in accordance with the terms of the Merger Agreement in order to preserve the intended tax treatment of the transaction and is unable to obtain certain consents that would be required from contractual counterparties, appraisal rights have been properly exercised in respect of no more than 20% of the outstanding shares of Enjoy’s capital stock.

In addition, MRAC’s obligations to consummate the Merger are subject to the satisfaction or waiver of certain conditions, including, among others, (i) the consummation of the PIPE investment, (ii) the consummation of certain other transactions with respect to Enjoy’s outstanding securities, including (x) settlement of certain outstanding warrants, (y) conversion of all outstanding notes and (z) conversion of all outstanding preferred stock and (iii) no material adverse effect having occurred with respect to Enjoy.

In addition, Enjoy’s obligations to consummate the Merger are subject to the satisfaction or waiver of certain conditions, including, among others, (i) the completion of the Domestication and (ii) the amount of cash available in (x) the trust account, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their rights to redeem their MRAC Class A Ordinary Shares pursuant to the Cayman Constitutional Documents (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of MRAC or its affiliates) plus (y) the PIPE Investment Amount (as defined below), being equal to at least $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million).

For more information about conditions to the consummation of the Business Combination, see “Business Combination ProposalThe Merger Agreement.”

 

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Q:

When do you expect the Business Combination to be completed?

 

A:

It is currently expected that the Business Combination will be consummated in the third quarter of 2021. This date depends, among other things, on the approval of the proposals to be put to MRAC shareholders at the extraordinary general meeting. However, such meeting could be adjourned if the Adjournment Proposal is adopted by MRAC’s shareholders at the extraordinary general meeting, and MRAC elects to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see “Business Combination ProposalThe Merger Agreement.”

 

Q:

What happens if the Business Combination is not consummated?

 

A:

MRAC will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If MRAC is not able to complete the Business Combination with Enjoy by December 17, 2022 and is not able to complete another business combination by such date, in each case, as such date may be extended pursuant to the Cayman Constitutional Documents, MRAC will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board, dissolve and liquidate, subject in each case to our obligations under the Cayman Islands Companies Law to provide for claims of creditors and the requirements of other applicable law.

 

Q:

Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?

 

A:

Neither MRAC’s shareholders nor MRAC’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

 

Q:

What do I need to do now?

 

A:

MRAC urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder or warrant holder. MRAC’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q:

How do I vote?

 

A:

The extraordinary general meeting will be held via live webcast at [●] a.m. Eastern Time, on [●], 2021. The extraordinary general meeting can be accessed by visiting www.[●].com, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the extraordinary general meeting by means of remote communication.

 

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If you are a holder of record of ordinary shares on the record date for the extraordinary general meeting, you may vote at the extraordinary general meeting via the virtual meeting platform or by submitting a proxy for the extraordinary general meeting, in any of the following ways, if available:

 

   

Vote by Mail: by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope. By signing the proxy card and returning it in the enclosed prepaid envelope to the foregoing address, you are authorizing the individuals named on the proxy card to vote your shares at the extraordinary general meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the extraordinary general meeting so that your shares will be voted if you are unable to attend the extraordinary general meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. If you sign and return the proxy card but do not give instructions on how to vote your shares, your ordinary shares will be voted as recommended by the board of directors of MRAC.

 

   

Vote by Internet: visit [●], 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on [●], 2021 (have your proxy card in hand when you visit the website);

 

   

Vote by Phone: by calling toll-free (within the U.S. or Canada) [●] (have your proxy card in hand when you call); or

 

   

Vote at the Extraordinary General Meeting: you can attend the extraordinary general meeting via the virtual meeting platform and vote during the meeting by following the instructions on your proxy card. You can access the extraordinary general meeting by visiting the website www.[●].com. You will need your control number for access. If you do not have a control number, please contact Continental Stock Transfer. Instructions on how to attend and participate at the extraordinary general meeting are available at [●].

If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a valid proxy from your broker, bank or nominee. In most cases you may vote by telephone or over the Internet as instructed.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on

 

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  which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Broker non-votes will not be counted toward the quorum requirement and will not count as votes cast at the extraordinary general meeting.

 

Q:

When and where will the extraordinary general meeting be held?

 

A:

The extraordinary general meeting will be held via a live webcast at www.[●].com, on [●], 2021 at [●] a.m., Eastern Time. To participate in the virtual meeting, an MRAC shareholder of record will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. The extraordinary general meeting webcast will begin promptly at [●] a.m., Eastern Time. MRAC shareholders are encouraged to access the MRAC extraordinary general meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

 

Q:

Who is entitled to vote at the extraordinary general meeting?

 

A:

MRAC has fixed [●], 2021 as the record date for the extraordinary general meeting. If you were a shareholder of MRAC at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.

 

Q:

How many votes do I have?

 

A:

MRAC shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 46,718,750 ordinary shares issued and outstanding, of which 37,375,000 were issued and outstanding public shares.

 

Q:

What constitutes a quorum?

 

A:

A quorum of MRAC shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. As of the record date for the extraordinary general meeting, 23,359,376 ordinary shares would be required to achieve a quorum.

 

Q:

What vote is required to approve each proposal at the extraordinary general meeting?

 

A:

The following votes are required for each proposal at the extraordinary general meeting:

 

  (i)

Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (ii)

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (iii)

Organizational Documents Proposal: The approval of the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

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  (iv)

Governance Proposal: The Governance Proposal is constituted of non-binding advisory proposals, and the approval thereof would require ordinary resolutions under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (v)

Director Election Proposal: The approval of the Director Election Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (vi)

Stock Issuance Proposal: The approval of the Stock Issuance Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (vii)

Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (viii)

ESPP Proposal: The approval of the ESPP Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (viv)

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

Q:

What are the recommendations of MRAC’s board of directors?

 

A:

MRAC’s board of directors believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of MRAC’s shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Organizational Documents Proposal, “FOR” the Governance Proposal, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination ProposalInterests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

How does the Sponsor intend to vote its shares?

 

A:

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor has agreed to vote all the founder shares and any other public shares purchased during or after MRAC’s initial public offering in favor of the Business Combination. As of the date of this proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

 

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The Sponsor and MRAC’s directors, officers, advisors or their respective affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. However, they have no current commitments, plans or intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of MRAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

In the event that the Sponsor or MRAC’s directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.

The purpose of such purchases would be to (i) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii) to increase the likelihood of satisfaction of the Minimum Cash Condition or ensure that MRAC’s net tangible assets are at least $5,000,001, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the Business Combination. Any such purchases of our securities may result in the completion of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of MRAC Class A Ordinary Shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

The Sponsor and MRAC’s officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom the Sponsor or MRAC’s officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with the Business Combination. To the extent that the Sponsor or MRAC’s officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the Business Combination but only if such shares have not already been voted at the extraordinary general meeting. The Sponsor and MRAC’s officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by the Sponsor or MRAC’s officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. The Sponsor and MRAC’s officers, directors and/or their affiliates will not make purchases of MRAC Class A Ordinary Shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled

 

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Business Combination ProposalInterests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

What happens if I sell my MRAC ordinary shares before the extraordinary general meeting?

 

A:

The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting but the transferee, and not you, will have the ability to redeem such shares (if time permits).

 

Q:

May I change my vote after I have delivered my signed proxy card or voting instruction card?

 

A:

Yes. If you are a stockholder of record of MRAC ordinary shares as of the close of business on the record date, you can change or revoke your proxy before it is voted at the meeting in one of the following ways:

 

   

Submit a new proxy card bearing a later date; or

 

   

Vote electronically at the extraordinary general meeting by visiting www.[●].com and entering the control number found on your proxy card, voting instruction form or notice you previously received. Please note that your attendance at the extraordinary general meeting will not alone serve to revoke your proxy.

 

Q:

What happens if I fail to take any action with respect to the extraordinary general meeting?

 

A:

If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder or warrant holder of New Enjoy. If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder or warrant holder of MRAC. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits).

 

Q:

What happens if I attend the extraordinary general meeting virtually and abstain or do not vote?

 

A:

For purposes of the MRAC extraordinary general meeting, an abstention occurs when a shareholder is present virtually at the MRAC extraordinary general meeting webcast and does not vote or returns a proxy with an “abstain” vote.

If you are a MRAC shareholder that attends the MRAC extraordinary general meeting webcast virtually and fails to vote on the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Governance Proposal, the Director Election Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal or the Adjournment Proposal, or if you respond to such proposals with an “abstain” vote, your failure to vote or your “abstain” vote, in each case, will have no effect on the vote count for such proposals.

 

Q:

What should I do with my share certificates, warrant certificates or unit certificates?

 

A:

Our shareholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates to Continental, MRAC’s transfer agent, prior to the extraordinary general meeting.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on [●], 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

 

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Our warrant holders should not submit the certificates relating to their warrants. Public shareholders who do not elect to have their public shares redeemed for the pro rata share of the trust account should not submit the certificates relating to their public shares.

Upon the Domestication, holders of MRAC units, Class A ordinary shares, Class B ordinary shares and warrants will receive shares of New Enjoy Common Stock and warrants, as the case may be, without needing to take any action and, accordingly, such holders should not submit any certificates relating to their units, Class A ordinary shares (unless such holder elects to redeem the public shares in accordance with the procedures set forth above), Class B ordinary shares or warrants.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?

 

A:

MRAC will pay the cost of soliciting proxies for the extraordinary general meeting. MRAC has engaged D.F. King & Co., Inc. (“D.F. King”) to assist in the solicitation of proxies for the extraordinary general meeting. MRAC has agreed to pay D.F. King a fee of $25,000, plus disbursements (to be paid with non-trust account funds). MRAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of MRAC Class A Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of MRAC Class A Ordinary Shares and in obtaining voting instructions from those owners. MRAC’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Where can I find the voting results of the extraordinary general meeting?

 

A:

The preliminary voting results will be expected to be announced at the extraordinary general meeting. MRAC will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus, any document incorporated by reference in this proxy statement/prospectus or the enclosed proxy card, you should contact:

D.F. King & Co, Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Call Toll-Free: (877) 536-1561

Banks and Brokers Call: (212) 269-5550

MRAC@dfking.com

You also may obtain additional information about MRAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information; Incorporation by Reference.” If

 

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you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (either physically or electronically) to Continental, MRAC’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on [], 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street, 30th floor

New York, NY 10004

Attention: Mark Zimkind

E-Mail: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, you should read this proxy statement/prospectus, including the Annexes and other documents referred to herein, carefully and in their entirety. The Merger Agreement is the primary legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Merger Agreement is also described in detail in this proxy statement/prospectus in the section entitled “Business Combination Proposal - The Merger Agreement.”

Unless otherwise specified, all share calculations (1) assume no exercise of redemption rights by the public shareholders in connection with the Business Combination and (2) do not include any shares issuable upon the exercise of the warrants.

Combined Business Summary

The Parties to the Business Combination

MRAC

Marquee Raine Acquisition Corp. is a blank check company incorporated on October 16, 2020 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. MRAC has neither engaged in any operations nor generated any revenue to date. Based on MRAC’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

On December 17, 2020, MRAC consummated its initial public offering of 37,375,000 units, including the issuance of 4,875,000 units as a result of the underwriter’s exercise in full of its over-allotment option, with each unit consisting of one MRAC Class A Ordinary Share and one-fourth of one redeemable MRAC Warrant. Substantially concurrently with the closing of the initial public offering, MRAC completed the private sale of 6,316,667 MRAC Private Placement Warrants, at a purchase price of $1.50 per MRAC Private Placement Warrant, to the Sponsor generating gross proceeds to us of approximately $9,475,000. The MRAC Private Placement Warrants are identical to the MRAC Warrants sold as part of the units in MRAC’s initial public offering except that, so long as they are held by the Sponsor or its permitted transferees: (1) they will not be redeemable by MRAC; (2) they (including the shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of MRAC’s initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares issuable upon exercise of these warrants) are entitled to registration rights.

Following the closing of MRAC’s initial public offering, a total of $373,750,000, comprised of $366,275,000 of the proceeds from the IPO, including approximately $13,081,250 of the underwriter’s deferred discount, and $7,475,000 of the proceeds of the sale of the MRAC Private Placement Warrants, was placed in a trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. As of [●], 2021, funds in the trust account totaled at least $373,750,000. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the closing of the Business Combination), (2) the redemption of any public shares properly tendered in



 

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connection with a shareholder vote to amend MRAC’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) to modify the substance or timing of MRAC’s obligation to redeem 100% of the public shares if it does not complete a business combination by December 17, 2022, and (3) the redemption of all of the public shares if MRAC is unable to complete a business combination by December 17, 2022, subject to applicable law.

The MRAC Units, MRAC Class A Ordinary Shares and MRAC Warrants are currently listed on the Nasdaq under the symbols “MRACU,” “MRAC” and “MRACW,” respectively.

MRAC’s principal executive office is located at 65 East 55th Street, 24th Floor, New York, NY 10022. Its telephone number is (212) 603-5500.

Merger Sub

MRAC Merger Sub Corp. (“Merger Sub”) is a Delaware corporation and a wholly owned subsidiary of MRAC. The Merger Sub does not own any material assets or operate any business.

Enjoy

Enjoy is a technology-powered platform reinventing “Commerce-at-Home” to bring the best of the store directly to the Consumer. Enjoy has formed multi-year commercial relationships with the world’s leading consumer brands to bring the products, services and subscriptions their customers love through the door directly in the comfort and convenience of their homes. Co-founded by Apple retail legend, Ron Johnson, Enjoy has pioneered a new retail experience that can do everything a traditional retail experience offers, but better, through its Mobile Stores. Enjoy currently operates in the United States, Canada and the United Kingdom. Enjoy is a Delaware corporation and its principal executive office is located at 3240 Hillview Avenue, Palo Alto, CA 94304. Their telephone number is 1-888-463-6569.

Proposals to be Put to the Shareholders of MRAC at the Extraordinary General Meeting

The following is a summary of the proposals to be put to the extraordinary general meeting of MRAC and certain transactions contemplated by the Merger Agreement. Each of the Condition Precedent Proposals is cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.

Business Combination Proposal

As discussed in this proxy statement/prospectus, MRAC is asking its shareholders to approve by ordinary resolution the Merger Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A. The Merger Agreement provides for, among other things, following the Domestication of MRAC to Delaware as described below, the merger of Merger Sub with and into Enjoy (the “Merger”), with Enjoy surviving the merger as a wholly owned subsidiary of New Enjoy, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. After consideration of the factors identified and discussed in the section entitled “Business Combination Proposal - MRAC’s Board of Directors’ Reasons for the Business Combination,” MRAC’s board of directors concluded that the Business Combination met all of the requirements disclosed in the prospectus for MRAC’s



 

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initial public offering, including that the business of Enjoy and its subsidiaries had a fair market value equal to at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust). For more information about the transactions contemplated by the Merger Agreement, see “Business Combination Proposal.”

Aggregate Merger Consideration

The total number of shares of New Enjoy Common Stock to be received by Enjoy’s stockholders or reserved for issuance pursuant to the New Enjoy equity awards into which Enjoy Awards are converted and the Enjoy Warrants assumed by New Enjoy will be equal to the quotient obtained by dividing (x) the sum of (i) the Base Purchase Price (as defined below), plus (ii) the aggregate exercise price of each outstanding option to purchase common stock of Enjoy, plus (iii) the aggregate exercise price of each outstanding warrant of Enjoy, by (y) $10.00 (the “Aggregate Merger Consideration”). The “Base Purchase Price” means the sum of (a) $1,028,738,000, plus (b) 125% of the aggregate amount actually funded prior to the Closing (as defined below) in connection with an Excluded Financing (as defined below), up to a maximum aggregate amount equal to $60 million, plus (c) the aggregate amount actually funded prior to the Closing in connection with an Excluded Financing (to the extent in excess of the amounts set forth in clause (b) above), up to a maximum aggregate amount equal to $15 million. “Excluded Financing” means the capital raising transactions that Enjoy may enter into prior to the Closing in the form of equity and/or convertible debt, subject to certain conditions, in an aggregate amount not to exceed $75 million, as further set forth in this proxy statement/prospectus. For further details, see “Business Combination Proposal - The Merger Agreement - Consideration - Aggregate Merger Consideration.”

In addition, all (i) options to purchase shares of Enjoy Common Stock (“Enjoy Options”) and (ii) restricted share awards with respect to Enjoy Common Stock (“Enjoy Restricted Stock Awards” and, together with the Enjoy Options, the “Enjoy Awards”), in each case, that are outstanding as of immediately prior to the Merger, will be converted into (a) options to purchase shares of New Enjoy Common Stock (“New Enjoy Options”) and (b) rights to receive restricted shares of New Enjoy Common Stock (“New Enjoy Restricted Stock Awards”). All warrants to purchase Enjoy capital stock (“Enjoy Warrants”) that remain outstanding and unexercised as of immediately prior to the Merger will automatically be assumed by MRAC in accordance with their respective terms (including as to vesting and exercisability). For further details, see “Business Combination Proposal – Consideration, Treatment of Enjoy Options, Enjoy Restricted Stock Awards and Enjoy Warrants.

An additional approximately 8 million shares of New Enjoy Common Stock will be purchased (at a price of $10.00 per share) at the Closing by certain third-party investors (the “PIPE Investors”), for a total aggregate purchase price of approximately $80 million (the “PIPE Investment”). The proceeds of the PIPE Investment, together with the amounts remaining in MRAC’s trust account as of immediately following the effective time of the Merger, will be retained by New Enjoy following the Closing. For additional information on the Merger Agreement, see “Business Combination Proposal -  Related Agreements - Subscription Agreements.”

Closing Conditions

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of MRAC and Enjoy, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (iii) expiration or termination of the waiting period under the HSR Act, (iv) receipt of approval for listing on Nasdaq the shares of New Enjoy Common Stock to be issued in connection with the Merger, (v) that MRAC have at least $5,000,001 of net tangible assets upon Closing, (vi) the absence of any injunction, order, statute, rule, or regulation enjoining or prohibiting the consummation of the Merger and (vii) that, in the event Enjoy determines to change the structure of the Business Combination in accordance with



 

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the terms of the Merger Agreement in order to preserve the intended tax treatment of the transaction and is unable to obtain certain consents that would be required from contractual counterparties, appraisal rights have been properly exercised in respect of no more than 20% of the outstanding shares of Enjoy’s capital stock.

Other conditions to MRAC’s obligations to consummate the Merger are subject to the satisfaction or waiver of certain conditions, including, among others, (i) the consummation of the PIPE investment, (ii) the consummation of certain other transactions with respect to Enjoy’s outstanding securities, including (x) settlement of certain outstanding warrants, (y) conversion of all outstanding notes and (z) conversion of all outstanding preferred stock and (iii) no material adverse effect having occurred with respect to Enjoy.

In addition, Enjoy’s obligations to consummate the Merger are subject to the satisfaction or waiver of certain conditions, including, among others, (i) the completion of the Domestication and (ii) the amount of cash available in (x) the trust account, after deducting the amount required to satisfy MRAC’s obligations to its shareholders (if any) that exercise their rights to redeem their MRAC Class A Ordinary Shares pursuant to the Cayman Constitutional Documents (but prior to payment of (a) any deferred underwriting commissions being held in the Trust Account and (b) any transaction expenses of MRAC or its affiliates) plus (y) the PIPE Investment Amount, being equal to at least $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million).

For further details, see “Business Combination Proposal - The Merger Agreement.

Domestication Proposal

As discussed in this proxy statement/prospectus, if the Business Combination Proposal is approved, then MRAC will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Merger Agreement, the board of directors of MRAC has unanimously approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of MRAC’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while MRAC is currently governed by the Cayman Islands Companies Law, upon the Domestication, New Enjoy will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the Cayman Constitutional Documents and the Proposed Organizational Documents. Accordingly, MRAC encourages shareholders to carefully review the information in “Comparison of Corporate Governance and Shareholder Rights.”

As a result of and upon the effective time of the Domestication, (1) each then issued and outstanding MRAC Class A Ordinary Share will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock, (2) each then issued and outstanding MRAC Class B Ordinary Share will convert automatically, on a one-for-one basis, into a share of New Enjoy Common Stock, (3) each then issued and outstanding MRAC Warrant will convert automatically into a warrant to acquire one share of New Enjoy Common Stock, pursuant to the Warrant Agreement and (4) each then issued and outstanding MRAC Unit will separate and convert automatically into one share of New Enjoy Common Stock and one-fourth of one New Enjoy Warrant.

For further details, see “Domestication Proposal.”

Organizational Documents Proposal

If the Business Combination Proposal and the Domestication Proposal are approved, MRAC will ask its shareholders to approve by special resolution the Organizational Documents Proposal in connection with the replacement of the Cayman Constitutional Documents, under the Cayman Islands Companies Law, with the Proposed Certificate of Incorporation and the Proposed Bylaws, under the DGCL. MRAC’s board has



 

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unanimously approved the Organizational Documents Proposal and believes such proposal is necessary to adequately address the needs of New Enjoy after the Business Combination. Approval of the Organizational Documents Proposal is a condition to the consummation of the Business Combination.

Governance Proposal

Assuming the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, MRAC’s shareholders are also being asked to consider and vote upon by ordinary resolutions, on a non-binding advisory basis, certain material differences between MRAC’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the Proposed Certificate of Incorporation and Proposed Bylaws, presented separately in accordance with the United States Securities and Exchange Commission requirements.

The Proposed Organizational Documents differ in certain material respects from the Cayman Constitutional Documents and MRAC encourages shareholders to carefully review the information set out in the sections entitled “Organizational Documents Proposal,” “Governance Proposal,” the Cayman Constitutional Documents of MRAC, attached hereto as Annex H and the Proposed Organizational Documents of New Enjoy, attached hereto as Annex I and Annex J.

Director Election Proposal

Assuming the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, MRAC’s shareholders are also being asked to approve by ordinary resolution the Director Election Proposal. Upon the consummation of the Business Combination, the Board will consist of nine directors. For additional information on the proposed directors, see “Director Election Proposal.”

Stock Issuance Proposal

Assuming the Business Combination Proposal, the Domestication Proposal and the Organizational Documents Proposal are approved, MRAC’s shareholders are also being asked to approve by ordinary resolution the Stock Issuance Proposal. For additional information, see “Stock Issuance Proposal.”

Incentive Award Plan Proposal

Assuming the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, MRAC’s shareholders are also being asked to approve by ordinary resolution the Incentive Award Plan Proposal. For additional information, see “Incentive Award Plan Proposal.”

ESPP Proposal

Assuming the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal and the Stock Issuance Proposal are approved, MRAC’s shareholders are also being asked to approve by ordinary resolution the ESPP Proposal. For additional information, see “ESPP Proposal.”

Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize MRAC to consummate the Business Combination (because any of the Condition Precedent



 

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Proposals have not been approved (including as a result of the failure of any other cross-conditioned Condition Precedent Proposals to be approved)), MRAC’s board of directors may submit a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies. For additional information, see “Adjournment Proposal.”

MRAC’s Board of Directors’ Reasons for the Business Combination

MRAC was organized for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

In evaluating the Business Combination, the MRAC Board consulted with MRAC’s management and financial, legal and other advisors and considered a number of factors. In particular, the MRAC Board considered, among other things, the following factors, although not weighted or in any order of significance:

 

   

Enjoy has strong partner relationships. Enjoy has long-term partnerships with global brands. The exclusivity arrangements with respect to certain partner relationships strengthen Enjoy’s long-term positioning as it seeks to enter its next phase of growth.

 

   

Strong market tailwinds driven by shift to online commerce and the reduction of physical retail stores. The total addressable market that Enjoy seeks to serve continues to expand due to both ongoing market shifts toward commerce online and a consumer desire for convenience and a positive customer service experience. These trends have been accelerated by the COVID-19 pandemic.

 

   

Experienced and proven management team. Enjoy has a strong and experienced management team, and its senior management team intends to remain with New Enjoy in the capacity of officers and/or directors, which will provide helpful continuity in advancing New Enjoy’s strategic goals.

 

   

Attractive growth profile. The MRAC Board considered the growing demand for Enjoy’s services, including incremental business opportunities, anticipated growth in revenue per mobile store, geographic and partnership expansion and new category expansion.

 

   

Attractive financial profile. The MRAC Board also considered factors such as Enjoy’s outlook, financial plan and debt structure, including that Enjoy has almost zero Consumer acquisition cost, an asset light approach that can enable rapid scalability and an opportunity to leverage its existing infrastructure. Enjoy’s strong growth and unit economics indicate that Enjoy has a visible path to profitability.

 

   

PIPE Investment. The third-party investor interest in the PIPE Investment served as a validation of the valuation and opportunity presented by the Business Combination.

 

   

Lock-Up. The shareholders of Enjoy immediately prior to the Closing will be subject to a 6-month lock-up in respect of the shares of New Enjoy Common Stock issued to them as consideration in the Business Combination (subject to (i) certain limited, customary exceptions with respect to permitted transfers and (ii) earlier release with respect to certain former noteholders of Enjoy in the event that, prior to the expiration of such 6-month period, the SEC declares effective New Enjoy’s resale Form S-1 registration statement that will be filed following the Closing), which will provide important stability to New Enjoy.

 

   

Due Diligence. MRAC conducted a diligence review of Enjoy and its business, including review of relevant documentation and discussions with Enjoy’s management and Enjoy’s financial, legal and other advisors.

 

   

Opinion of MRAC’s Financial Advisor. The MRAC Board took into account the financial analysis reviewed by, Houlihan Lokey Capital, Inc. (“Houlihan Lokey”) with the MRAC Board as well as the



 

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oral opinion of Houlihan Lokey rendered to the MRAC Board on April 27, 2021 (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the MRAC Board dated April 27, 2021), as to the fairness, from a financial point of view, to MRAC of the Aggregate Merger Consideration to be issued by MRAC in the Merger pursuant to the Merger Agreement.

 

   

Other Alternatives. After a review of other business combination opportunities reasonably available to MRAC, the MRAC Board believes that the proposed Business Combination represents the best potential business combination for MRAC and the most attractive opportunity for MRAC’s shareholders based upon the process utilized to evaluate and assess other potential acquisition targets, and that such process has not presented a better alternative.

 

   

Negotiated Transaction. The financial and other terms and condition of the Merger Agreement are reasonable and were the product of arm’s length negotiations between MRAC and Enjoy.

For a more complete description of the MRAC board of directors’ reasons for approving the Business Combination, including other factors and risks considered by the MRAC board of directors, see the section entitled “Business Combination Proposal - MRAC’s Board of Directors’ Reasons for the Business Combination.”

Opinion of MRAC’s Financial Advisor

On April 27, 2021, Houlihan Lokey orally rendered its opinion to the MRAC Board (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the MRAC Board dated April 27, 2021), as to the fairness, from a financial point of view, to MRAC of the Aggregate Merger Consideration to be issued by MRAC in the Merger pursuant to the Merger Agreement.

Houlihan Lokey’s opinion was directed to the MRAC Board (in its capacity as such) and only addressed the fairness, from a financial point of view, to MRAC of the Aggregate Merger Consideration to be issued by MRAC in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex J to this proxy statement/prospectus and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, advice or a recommendation to the MRAC Board, any security holder or any other person as to how to act or vote or make any election with respect to any matter relating to the Merger or otherwise, including, without limitation, whether holders of MRAC Class A Ordinary Shares should redeem their shares or whether any party should participate in the PIPE Investment.

Related Agreements

This section describes certain additional agreements entered into or to be entered into pursuant to the Merger Agreement. For additional information, see “Business Combination Proposal - Related Agreements.”

Sponsor Agreement

On April 28, 2021, concurrently with the execution of the Merger Agreement, MRAC entered into the Sponsor Agreement with the Sponsor, pursuant to which, among other things, in connection with the Closing, the Sponsor agreed to (i) waive certain anti-dilution rights set forth in Section 17 of MRAC’s amended and restated



 

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memorandum and articles of association that may result from the Business Combination and (ii) subject 1,121,250 founder shares to forfeiture unless the volume-weighted average closing price of New Enjoy Common Stock equals or exceeds $15.00 on 20 out of any 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 New Enjoy at or above such share price during such period). For additional information, see “Business Combination Proposal - Related Agreements - Sponsor Agreement.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, New Enjoy, Enjoy, Sponsor, the independent directors of MRAC and certain former stockholders of Enjoy (the “Existing Holders”) and certain new holders of Enjoy (the “New Holders”), will enter into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which New Enjoy will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of New Enjoy Common Stock and other equity securities of New Enjoy that are held by the parties thereto from time to time. Additionally, the Registration Rights Agreement will contain certain restrictions on transfer with respect to the securities of New Enjoy held by the Sponsor, the independent directors of MRAC and the former stockholders of Enjoy party thereto immediately following the Closing. For additional information, see “Business Combination Proposal - Related Agreements - Registration Rights Agreement.

Subscription Agreements

In connection with the execution of the Merger Agreement, MRAC entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, in the aggregate, approximately 8 million shares of New Enjoy Common Stock at $10.00 per share for an aggregate commitment amount of approximately $80 million. The closings under the Subscription Agreements will occur substantially concurrently with the Closing. For additional information, see “Business Combination Proposal - Related Agreements - Subscription Agreements.

Ownership of New Enjoy following Business Combination

As of the date of this proxy statement/prospectus, there are 46,718,750 ordinary shares of MRAC issued and outstanding, which includes the 9,343,750 founder shares held by the Sponsor and related parties and the 37,375,500 public shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 15,660,417 MRAC Warrants, which includes the 6,316,667 MRAC Private Placement Warrants held by the Sponsor and the 9,343,750 MRAC Public Warrants. Each whole warrant entitles the holder thereof to purchase one MRAC Class A Ordinary Share and, following the Domestication, will entitle the holder thereof to purchase one share of New Enjoy Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination), the MRAC fully diluted share capital would be 62,379,167.

It is anticipated that, following the Business Combination, (1) MRAC’s public shareholders are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock, (2) Enjoy securityholders (without taking into account any public shares held by Enjoy securityholders prior to the consummation of the Business Combination) are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock, (3) the Sponsor and related parties are expected to collectively own approximately [●]% of the outstanding shares of New Enjoy Common Stock and (4) the PIPE Investors are expected to own approximately [●]% of the shares of outstanding New Enjoy Common Stock. These percentages (i) assume (a) that no public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Enjoy issues [●] shares of New Enjoy Common Stock to former securityholders of Enjoy as of immediately prior to the Effective Time, (c) that New Enjoy issues 8 million shares of New Enjoy Common Stock to the PIPE Investors



 

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pursuant to the PIPE Investment and (d) the amount of the Excluded Financing is equal to $60 million, (ii) exclude all New Enjoy Options that may be exercisable for shares of New Enjoy Common Stock and New Enjoy Restricted Stock Awards, (iii) include the Sponsor Earnout Shares, (iv) exclude the impact of any New Enjoy Warrants that will be outstanding following the Business Combination and Enjoy Warrants that will be assumed in connection with the Business Combination, (v) assume that no holder of vested Enjoy Options exercises such Enjoy Options after the date hereof and (vi) account for interest accrued on the principal amount of Enjoy’s convertible notes through July 31, 2021. If the actual facts are different from these assumptions, the percentage ownership of New Enjoy held by such constituencies will be different.

The following table illustrates varying ownership levels in New Enjoy immediately following the consummation of the Business Combination based on the assumptions above and, alternatively (as set forth under “Maximum Redemptions” below), based on the assumption that [●] MRAC Class A Ordinary Shares are redeemed in connection with the Business Combination at approximately $10.00 per share.

 

     Share Ownership in New Enjoy  
     No Redemptions     Maximum Redemptions(1)  
     Number of
Shares
     Percentage of
Outstanding
Shares
    Number of
Shares
     Percentage of
Outstanding
Shares
 

Enjoy Stockholders(2)

     [●      [● ]%      [●      [● ]% 

MRAC’s public shareholders

     [●      [● ]%      [●      [● ]% 

Sponsor & related parties(3)

     [●      [● ]%      [●      [● ]% 

PIPE Investors

     [●      [● ]%      [●      [● ]% 
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

     [●      100.0     [●      100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Assumes redemptions of [●] MRAC Class A Ordinary Shares in connection with the Business Combination at approximately $10.00 per share based on trust account figures as of [●], 2021.

(2)

Excludes [●] shares of New Enjoy Common Stock expected to be reserved for issuance pursuant to the terms of existing Enjoy Options, Enjoy Restricted Stock Awards and certain Enjoy Warrants.

(3)

Includes 75,000 shares held by the independent directors of MRAC. Includes the Sponsor Earnout Shares.

Date, Time and Place of Extraordinary General Meeting of MRAC’s Shareholders

The extraordinary general meeting of the shareholders of MRAC will be held at [●] a.m., Eastern Time, on [●], 2021, virtually via live webcast at www.[●].com, to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.

Voting Power; Record Date

MRAC shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on [●], 2021, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. MRAC Warrants do not have voting rights. As of the close of business on the record date, there were 46,718,750 ordinary shares issued and outstanding, of which 37,375,000 were issued and outstanding public shares.



 

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Quorum and Vote of MRAC Shareholders

A quorum of MRAC shareholders is necessary to hold a valid meeting. A quorum will be present at the MRAC extraordinary general meeting if a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. Abstentions, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting. Broker non-votes will not be counted toward the quorum requirement and will not count as votes cast at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 23,359,376 ordinary shares would be required to achieve a quorum.

The Sponsor has agreed to vote all of its ordinary shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

The proposals presented at the extraordinary general meeting require the following votes:

 

   

Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

Organizational Documents Proposal: The approval the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

Governance Proposal: The Governance Proposal is constituted of non-binding advisory proposals, and the approval thereof requires ordinary resolutions under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

Director Election Proposal: The approval of the Director Election Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

Stock Issuance Proposal: The approval of the Stock Issuance Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

   

ESPP Proposal: The approval of the ESPP Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.



 

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Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

Redemption Rights

Pursuant to the Cayman Constitutional Documents, a public shareholder may request of MRAC that New Enjoy redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

   

(a) hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

   

submit a written request to Continental Stock Transfer & Trust Company (“Continental”), MRAC’s transfer agent, that New Enjoy redeem all or a portion of your public shares for cash; and

 

   

deliver your public shares to Continental, MRAC’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on [], 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, MRAC’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, MRAC’s transfer agent, New Enjoy will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of [●], 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of New Enjoy Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of MRAC - Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.



 

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The Sponsor has agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby. As of the date of this proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

Holders of the warrants will not have redemption rights with respect to the warrants.

Appraisal Rights

Neither MRAC shareholders nor MRAC warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. MRAC has engaged D.F. King to assist in the solicitation of proxies.

If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of MRAC - Revoking Your Proxy.”

Interests of MRAC’s Directors and Executive Officers in the Business Combination

When you consider the recommendation of MRAC’s board of directors in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor and MRAC’s directors and executive officers have interests in such proposal that are different from, or in addition to, those of MRAC shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

   

Prior to MRAC’s initial public offering, the Sponsor purchased 10,062,500 Class B Ordinary Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share, and the Sponsor later surrendered 718,750 Class B Ordinary Shares to MRAC for no consideration, resulting in an aggregate 9,343,750 Class B Ordinary Shares issued and outstanding, 9,268,750 of which are held by the Sponsor, and 25,000 of which are held by each of our independent directors (Thomas Freston, Matthew Maloney and Assia Grazioli-Venier). If MRAC does not consummate a business combination by December 17, 2022 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Law to provide for the claims of creditors and the requirements of other applicable law. In such event, the 9,343,750 MRAC Class B Ordinary Shares collectively owned by the Sponsor and three independent directors (Thomas Freston, Matthew Maloney and Assia Grazioli-Venier) would be worthless because following the redemption of the public shares, MRAC would likely have few, if any, net assets and because the Sponsor and MRAC’s directors and officers have agreed to waive their respective rights to liquidating dissolutions from the trust account in respect of any MRAC Class A Ordinary Shares and MRAC Class B Ordinary Shares held by them, as applicable, if MRAC fails to complete a business combination within the required period. Additionally, in such event, the 6,316,667 MRAC Private Placement Warrants purchased by the Sponsor simultaneously with the consummation of MRAC’s initial public offering for an aggregate purchase price of $9.5 million will also expire worthless.



 

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The 9,343,750 shares of New Enjoy Common Stock into which the 9,343,750 MRAC Class B Ordinary Shares collectively held by the Sponsor, Thomas Freston, Matthew Maloney and Assia Grazioli-Venier will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradeable, would have had an aggregate market value of $[●] based upon the closing price of $[●] per MRAC Class A Ordinary Share on the Nasdaq on [●], 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such shares of New Enjoy Common Stock will be subject to certain restrictions, including those described above, MRAC believes that such shares have less value. The 6,316,667 New Enjoy warrants into which the 6,316,667 MRAC Private Placement Warrants held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradeable, would have had an aggregate market value of $[●] based upon the closing price of $[●] per MRAC Warrant on Nasdaq on [●], 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

 

   

Thomas Ricketts, the Co-Chairman and Director of MRAC, and Brett Varsov, Co-Chief Executive Officer of MRAC, are expected to be directors of New Enjoy after the consummation of the Business Combination. As such, in the future, Thomas Ricketts and Brett Varsov may receive fees for their service as directors, which may consist of cash or stock-based awards, and any other remuneration that New Enjoy’s board of directors determines to pay to its non-employee directors.

 

   

MRAC’s executive officers and directors, or any of their respective affiliates, including Ricketts SPAC Investment LLC and Raine Securities LLC and other entities affiliated with Marquee and The Raine Group, will be reimbursed for any reasonable fees and out-of-pocket expenses incurred in connection with activities on MRAC’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations (including the Business Combination).

 

   

MRAC will pay Raine Securities LLC (“Raine Securities”), an affiliate of the Sponsor, a placement fee equal to 1.5% of the gross proceeds of the PIPE Investment actually received by MRAC. Raine Securities is also serving as MRAC’s financial advisor in connection with the Business Combination. As such, Raine Securities has a financial interest in the Business Combination in addition to the financial interest of the Sponsor.

 

   

MRAC will pay Raine Advisors LLC (“Raine Advisors”), an affiliate of the Sponsor, a fee in an amount equal to $309,825 for consulting services, including support and advice to MRAC in connection with the execution of the Business Combination, the payment of which is contingent upon the consummation of the Business Combination for no additional fees and expense reimbursement. As such, Raine Advisors has a financial interest in the Business Combination in addition to the financial interest of the Sponsor.

 

   

MRAC will pay Marquee Sports Holdings SPAC I, LLC (“Marquee Sports Holdings”), an affiliate of the Sponsor, a fee in an amount equal to $309,825 for consulting services, including support and advice to MRAC in connection with the execution of the Business Combination, the payment of which is contingent upon the consummation of the Business Combination. As such, Marquee Sports Holdings has a financial interest in the Business Combination in addition to the financial interest of the Sponsor.

 

   

ET Investment, LLC is a participant in an Excluded Financing pursuant to which it has purchased convertible notes of Enjoy for an aggregate amount equal to $5,000,000, which are anticipated to be exchanged for shares of New Enjoy Common Stock in connection with the consummation of the Business Combination. Thomas Ricketts has an indirect pecuniary interest in such entity, and Crane H. Kenney has a pecuniary interest in such entity.

 

   

Pursuant to the underwriting agreement entered into in connection with MRAC’s initial public offering, up to 30% of the deferred discount thereunder (i.e., approximately $3,924,375) may be paid at the sole discretion of MRAC’s management to the underwriter and/or to third parties not participating as



 

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underwriters in the initial public offering that assisted MRAC in consummating its business combination, in allocations determined by MRAC’s management. In accordance with the foregoing terms, MRAC’s management has elected to direct the payment of $1,024,875 of the deferred discount upon the consummation of the Business Combination to Marquee Sports Holdings and $2,899,500 of the deferred discount upon the consummation of the Business Combination to Raine Securities. The audit committee of the MRAC Board approved such payments on May 13, 2021.

 

   

In addition to the foregoing fees to be paid to Raine Securities, Raine Advisors and Marquee Sports Holdings, Crane H. Kenney, our Co-Chief Executive Officer, Alexander D. Sugarman, our Executive Vice President, Jason Sondag, our Vice President, and Thomas Ricketts, our co-Chairman and Director, are currently associated with affiliates of Marquee. In addition, Brett Varsov, our Co-Chief Executive Officer, Joseph Beyrouty, our Chief Financial Officer, Evan Ellsworth, our Vice President and Brandon Gardner, our co-Chairman and Director, are currently associated with The Raine Group. The engagement of each of Raine Securities, Raine Advisors and Marquee Sports Holdings and the payment of the fees described above have been reviewed and approved by MRAC’s audit committee in accordance with MRAC’s policies and procedures relating to transactions that may present conflicts of interest. The Sponsor (including its representatives and affiliates) and MRAC’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to MRAC. The Sponsor and MRAC’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to MRAC completing its initial business combination. Moreover, certain of MRAC’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. MRAC’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to MRAC, and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in MRAC’s favor and such potential business opportunities may be presented to other entities prior to their presentation to MRAC, subject to applicable fiduciary duties under the Cayman Islands Companies Law. MRAC’s Cayman Constitutional Documents provide that MRAC renounces its interest in any corporate opportunity offered to any director or officer of MRAC unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of MRAC and it is an opportunity that MRAC is able to complete on a reasonable basis.

 

   

MRAC’s existing directors and officers will be eligible for continued indemnification and continued coverage under MRAC’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement.

 

   

In the event that MRAC fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, MRAC will be required to provide for payment of claims of creditors that were not waived that may be brought against MRAC within the ten years following such redemption. In order to protect the amounts held in MRAC’s trust account, the Sponsor has agreed that it will be liable to MRAC if and to the extent any claims by a third party (other than MRAC’s independent auditors) for services rendered or products sold to MRAC, or a prospective target business with which MRAC has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of MRAC’s initial public offering against certain liabilities, including liabilities under the Securities Act.



 

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The Sponsor, or an affiliate of the Sponsor, or certain of MRAC’s officers and directors has advanced funds to MRAC for working capital purposes, including $128,000 as of December 17, 2020. These outstanding advances have been documented in a promissory note, dated October 28, 2020 (the “Promissory Note”) issued by MRAC to the Sponsor, pursuant to which MRAC may borrow up to $300,000 from the Sponsor (including those amounts which are currently outstanding). The Promissory Note is non-interest bearing, unsecured and due and payable in full on the earlier of June 30, 2021 and the date MRAC consummates its initial business combination. If MRAC does not complete its initial business combination within the required period, it may use a portion of its working capital held outside the trust account to repay such advances and any other working capital advances made to MRAC, but no proceeds held in the trust account would be used to repay such advances and any other working capital advances made to MRAC, and such related party may not be able to recover the value it has loaned to MRAC and any other working capital advances it may make.

 

   

Pursuant to the Registration Rights Agreement, the Sponsor and certain related parties will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Enjoy Common Stock and warrants held by such parties following the consummation of the Business Combination. See “Certain Relationships and Related Person Transactions – Registration Rights”.

The Sponsor has agreed to vote all the founder shares and any other public shares purchased during or after MRAC’s initial public offering in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby. As of the date of this proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

The Sponsor and MRAC’s directors, officers, advisors or their respective affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. However, they have no current commitments, plans or intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of MRAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

In the event that the Sponsor or MRAC’s directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.

The purpose of such purchases would be to (i) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii) to increase the likelihood of satisfaction of the Minimum Cash Condition or ensure that MRAC’s net tangible assets are at least $5,000,001, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the Business Combination. Any such purchases of our securities may result in the completion of the Business Combination that may not otherwise have been possible.



 

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In addition, if such purchases are made, the public “float” of MRAC Class A Ordinary Shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

The Sponsor and MRAC’s officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom the Sponsor or MRAC’s officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with the Business Combination. To the extent that the Sponsor or MRAC’s officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the Business Combination but only if such shares have not already been voted at the extraordinary general meeting. The Sponsor and MRAC’s officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by the Sponsor or MRAC’s officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. The Sponsor and MRAC’s officers, directors and/or their affiliates will not make purchases of MRAC Class A Ordinary Shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal - Interests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Recommendation to Shareholders of MRAC

MRAC’s board of directors believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of MRAC’s shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Governance Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Organizational Documents Proposal, “FOR” the Director Election Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal - Interests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.



 

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Sources and Uses of Funds for the Business Combination

The following table summarizes the sources and uses for funding the Business Combination. These figures assume (a) that no public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Enjoy issues 102,239,312 shares of New Enjoy Common Stock to former securityholders of Enjoy as of immediately prior to the Effective Time, (c) that New Enjoy issues 8 million shares of New Enjoy Common Stock to the PIPE Investors pursuant to the PIPE Investment and (d) the amount of the Excluded Financing is equal to $60 million. If the actual facts are different from these assumptions, the percentage ownership of New Enjoy held by such constituencies will be different.

 

Sources

    

Uses

 
($ in millions)                   

Enjoy rollover equity(1)

   $ 1,104      Enjoy rollover equity(1)    $ 1,104  

Cash and investments held in trust account(2)

     374      Cash to balance sheet      460  

PIPE Investment(3)

     80      Debt Payoff(4)      47  

Enjoy balance sheet cash(4)

     103      Transaction expenses(5)      50  
  

 

 

       

 

 

 

Total sources

   $ 1,660      Total uses    $ 1,660  

 

(1) 

Equity rollover includes (i) shares of New Enjoy Common Stock issued to Enjoy securityholders and (ii) shares of New Enjoy Common Stock reserved for issuance in respect of the conversion of Enjoy Options and Enjoy Restricted Stock Awards and assumption of Enjoy Warrants in connection with the Business Combination.

(2) 

Calculated as of [●].

(3) 

Shares issued in the PIPE Investment are at a deemed value of $10.00 per share.

(4) 

Estimated as of March 31, 2021.

(5) 

Includes deferred underwriting commission of $13,081,250 and estimated transaction expenses.

U.S. Federal Income Tax Considerations

For a discussion summarizing the U.S. federal income tax considerations of the Domestication and exercise of redemption rights, please see “U.S. Federal Income Tax Considerations.”

Expected Accounting Treatment

The Domestication

The Domestication is being proposed solely for the purpose of changing the legal domicile of MRAC. There will be no accounting effect or change in the carrying amount of the assets and liabilities of MRAC as a result of the Domestication. The business, capitalization, assets and liabilities and financial statements of New Enjoy immediately following the Domestication will be the same as those of MRAC immediately prior to the Domestication.

The Business Combination

The Business Combination will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, although New Enjoy will issue shares for outstanding equity interests of Enjoy in the Business Combination, MRAC will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Enjoy issuing stock for the net assets of MRAC, accompanied by a recapitalization. The net assets of MRAC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Enjoy.



 

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Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration or early termination of a 30-day waiting period following the filing of the required Notification and Report Form by each Party with the Antitrust Division and the FTC. If the FTC or the Antitrust Division issues a Request for Additional Information and Document Materials (a “Second Request”) within the initial 30-day waiting period, the waiting period with respect to the Transactions will be extended for an additional period of 30 calendar days, which will begin on the date on which the filing parties each certify compliance with the Second Request. On May 11, 2021, MRAC and Enjoy made their respective filings required under the HSR Act with respect to the Business Combination with the Antitrust Division and the FTC, and requested early termination.

At any time before or after consummation of the Business Combination, notwithstanding termination of the respective waiting periods under the HSR Act, the Department of Justice or the FTC, or any state or foreign governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of assets, subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. MRAC cannot assure you that the Antitrust Division, the FTC, a state attorney general or another government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, MRAC cannot assure you as to its result.

Neither MRAC nor Enjoy is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. If any additional regulatory approvals or actions are determined to be required and are sought, there can be no assurance that such additional approvals or actions will be obtained.

Emerging Growth Company

MRAC is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in MRAC’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. MRAC has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, MRAC, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make



 

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comparison of MRAC’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of MRAC’s initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Risk Factors

In evaluating the proposals to be presented at the MRAC extraordinary general meeting, shareholders should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.”

Below is a summary of some of the principal risks faced by Enjoy, MRAC and New Enjoy:

 

   

The COVID-19 pandemic may continue to impact Enjoy’s key metrics and results of operations.

 

   

Enjoy has a limited operating history with a new model and strategy in an evolving industry and Enjoy may fail to achieve the market acceptance necessary for success.

 

   

A number of factors may cause Enjoy’s results of operations to fluctuate.

 

   

Enjoy relies on consumer discretionary spending.

 

   

The loss of key senior management personnel could harm Enjoy’s business.

 

   

If the mobile retail store market does not continue to grow Enjoy’s results of operations could be adversely affected.

 

   

Risks associated with Enjoy’s commercial relationships could adversely affect its financial performance, reputation and commercial relationships.

 

   

Enjoy relies on third-party background check providers.

 

   

Enjoy identified material weaknesses in its internal control over financial reporting.

 

   

Enjoy may face difficulties as it expands its operations into new local markets.

 

   

Enjoy’s global operations involve additional risks.

 

   

Two of Enjoy’s Business Partners account for a significant portion of Enjoy’s revenue.

 

   

Enjoy’s operating results are subject to the seasonal nature of consumer behavior patterns.

 

   

Enjoy’s business will require significant amounts of capital to sustain operations.

 

   

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how MRAC’s public shareholders vote.

 

   

The Sponsor and MRAC’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders.

 

   

We and Enjoy will incur significant costs in connection with the Business Combination.

 

   

The Business Combination could disrupt New Enjoy’s commercial relationships.



 

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Consummation of the Business Combination may expose us to unknown or contingent liabilities.

 

   

New Enjoy’s actual financial position may be different than the historical financial results of Enjoy and unaudited pro forma financial information included elsewhere in this proxy statement/prospectus.

 

   

Following the consummation of the Business Combination, our only significant asset will be our ownership interest in Enjoy.

 

   

Our maximum redemption threshold may make it more difficult for us to complete the Business Combination as contemplated.

 

   

The Sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares or warrants from public shareholders prior to the consummation of the Business Combination.

 

   

We are not registering the shares of New Enjoy Common Stock issuable upon exercise of the warrants under any federal or state securities laws at this time.

 

   

If third parties bring claims against us, the proceeds held in the trust account could be reduced.

 

   

If, after we distribute the proceeds in the trust account, we file a winding-up or bankruptcy petition or a similar petition is filed against us, a bankruptcy court may seek to recover such proceeds.

 

   

If, before distributing the proceeds in the trust account, we file a winding-up or bankruptcy petition or a similar petition is filed against us, the claims of creditors may have priority over the claims of our shareholders.

 

   

Our shareholders may be held liable for claims by third parties against us.

 

   

The public shareholders will experience immediate dilution as a consequence of the issuance of New Enjoy Common Stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the 2021 Plan.

 

   

MRAC warrants are accounted for as liabilities.

 

   

We have identified a material weakness in our internal control over financial reporting as of December 31, 2020.

 

   

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

 

   

Warrants will become exercisable for New Enjoy Common Stock, which would result in dilution to our shareholders.

 

   

Even if the Business Combination is consummated, the public warrants may never be in the money.

 

   

We may redeem your unexpired warrants prior to their exercise.

 

   

Nasdaq may not list New Enjoy’s securities on its exchange.

 

   

The COVID-19 pandemic may influence MRAC’s and Enjoy’s ability to consummate the Business Combination and the operations of New Enjoy.

 

   

Because the market price of shares of MRAC Class A Ordinary Shares will fluctuate, the security holders of Enjoy cannot be sure of the value of the Business Combination consideration they will receive.

 

   

Factors affecting the market price of shares of New Enjoy Common Stock after the Business Combination may differ from those affecting the price of MRAC shares.

 

   

The Business Combination’s benefits may not meet the expectations of financial analysts.

 

   

Regulatory approvals may not be received or may take longer than expected.



 

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MRAC may waive one or more of the conditions to the Business Combination.

 

   

Termination of the Merger Agreement could negatively impact MRAC.

 

   

The Business Combination will result in changes to New Enjoy’s board of directors.

 

   

Neither MRAC nor its shareholders will have the protection of any indemnification, escrow or purchase price adjustment to the consideration payable in the Business Combination.

 

   

We currently intend to only complete one Business Combination with the proceeds of our IPO, which will cause us to be solely dependent on New Enjoy’s business.

 

   

Below is a summary of some of the principal risks related to the redemption:

 

   

Public shareholders who wish to redeem their public shares must comply with specific requirements for redemption.

 

   

Public shares will not be redeemable if a public shareholder does not receive our offer or there is noncompliance with the procedures for tendering shares.

 

   

If you or a “group” of shareholders hold an aggregate of more than 15% of the public shares, you will lose the ability to redeem such excess public shares.

 

   

There is no guarantee that a shareholder’s decision whether to redeem its shares will put the shareholder in a better economic position.

 

   

MRAC directors may decide not to enforce the indemnification obligation of the Sponsor.

 

   

The Domestication may result in adverse tax consequences for holders of MRAC Class A Ordinary Shares and Warrants.

 

   

The rights of holders of New Enjoy Common Stock will differ from and may be less favorable to the rights of holders of MRAC Class A Ordinary Shares.

 

   

Delaware law and New Enjoy’s Proposed Organizational Documents contain certain provisions that discourage or limit the ability of shareholders to take certain actions.

 

   

The proposed certificate of incorporation contains an exclusive forum provision for certain types of lawsuits.



 

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MARKET PRICE AND DIVIDEND INFORMATION

MRAC units, MRAC Class A Ordinary Shares and MRAC Public Warrants are currently listed on Nasdaq under the symbols “MRAC.U” and “MRAC” and “MRACW,” respectively.

The closing price of the MRAC units, MRAC Class A Ordinary Shares and MRAC Public Warrants as of April 27, 2021, the last trading day before announcement of the execution of the Merger Agreement, was $10.07, $9.92 and $0.88, respectively. As of [●], 2021, the record date for the extraordinary general meeting, the most recent closing price for the MRAC units, MRAC Class A Ordinary Shares and MRAC Public Warrants was $[●], $[●] and $[●], respectively.

Holders of the MRAC units, MRAC Class A Ordinary Shares and MRAC Public Warrants should obtain current market quotations for their securities. The market price of MRAC’s securities could vary at any time before the Business Combination.

Holders

As of the date of this proxy statement/prospectus there were [●] holders of record of MRAC Class A Ordinary Shares, [●] holders of record of MRAC Class B Ordinary Shares, one holder of record of MRAC units and [●] holders of record of MRAC Warrants. See “Beneficial Ownership of Securities.”

Dividend Policy

MRAC has not paid any cash dividends on its Class A Ordinary Shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon the revenues and earnings, if any, capital requirements and general financial condition of New Enjoy subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of New Enjoy’s board of directors. MRAC’s board of directors is not currently contemplating and does not anticipate declaring stock dividends nor is it currently expected that New Enjoy’s board of directors will declare any dividends in the foreseeable future. Further, the ability of New Enjoy to declare dividends may be limited by the terms of financing or other agreements entered into by New Enjoy or its subsidiaries from time to time.

Price Range of Enjoy’s Securities

Historical market price information regarding Enjoy is not provided because there is no public market for Enjoy’s securities. For information regarding Enjoy’s liquidity and capital resources, see “Enjoy’s Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.”

 

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RISK FACTORS

Shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus. The following risk factors apply to MRAC, the business and operations of Enjoy and its consolidated subsidiaries and will also apply to the business and operations of New Enjoy following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of New Enjoy. You should also carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements.” MRAC, Enjoy and/or New Enjoy may face additional risks and uncertainties that are not presently known to MRAC, Enjoy and/or New Enjoy, or that MRAC, Enjoy and/or New Enjoy currently deem immaterial, which may also impair MRAC’s, Enjoy’s and/or New Enjoy’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

Risks Related to Enjoy’s Business and Operations

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to Enjoy prior to the consummation of the Business Combination.

The COVID-19 pandemic is unprecedented and has impacted, and may continue to impact, our key metrics and results of operations in numerous ways that remain volatile and unpredictable.

The impact of the ongoing COVID-19 pandemic is severe, widespread, and continues to evolve. The pandemic and related government and private sector responsive actions have already affected the broader economies and financial markets, triggering an economic downturn, which has at points adversely affected, and could again adversely affect demand for our services. It is impossible to predict all effects and the ultimate impact of the COVID-19 pandemic, as the situation continues to rapidly evolve. The COVID-19 pandemic has disrupted the global supply chain and the preventative and protective measures currently in place, or which may be instituted or re-instituted in the future, such as quarantines, business limitations and shutdowns, and travel restrictions, may interfere with the ability to deliver services to Consumers. If our ability to provide services are restricted or shut down, our revenue could be negatively impacted.

As a result of the COVID-19 pandemic, our employees continue to work remotely, and it is possible that this could have a negative impact on the execution of our business plans and operations. If a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. Further, as the COVID-19 pandemic continues and as certain businesses return to on-site operations, we may experience disruptions if our employees or third-party service providers’ employees become ill and are unable to perform their duties, and our operations, internet, or mobile networks, or the operations of one or more of our third-party service providers, is impacted. The increase in remote working may also result in consumer privacy, IT security, and fraud concerns.

Our results of operations may be materially affected by adverse conditions in the capital markets and the economy generally, both in the United States and internationally, as a result of the COVID-19 pandemic. Uncertainty in the economy could adversely impact consumer purchases of discretionary items across the consumer electronics market. We have also seen significant and rapid shifts in consumer purchasing behavior as this pandemic has evolved, particularly as it relates to what may be perceived as “essential” versus “non-essential items.” Our business was materially impacted by COVID-19 in several ways. Typically, Consumer interactions occur within the Consumer’s home. Social distancing protocols changed the way we interact with the Consumer

 

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and our in-home visits fell to zero in the early stages of the pandemic. Depending on the geography, during certain periods we had no in-home visits and these visits remained significantly below pre-COVID levels throughout the pandemic. In addition, the Company furloughed employees in the U.K. beginning in April 2020 through August 2020.    These factors negatively impacted both Daily Mobile Store counts and Daily Revenue per Mobile store. To protect our employees and Consumers we implemented a variety of programs to provide masks, cleaning supplies and other protocols that remain in place. The Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on our financial condition and operations. The full impact of the COVID-19 outbreak on management estimates and the financial performance of the Company may depend on future developments, including the duration and spread of the outbreak and related governmental advisories and restrictions. In addition, the Company could see some limitations on employee resources that would otherwise be focused on operations, including but not limited to sickness of employees or their families, desire for employees to avoid contact with groups of people, and increased reliance on working from home. It is also difficult to predict how our business might be impacted by changing consumer spending patterns as a result of the COVID-19 pandemic. Factors that could affect consumers’ willingness to make discretionary purchases include, among others: general business conditions, levels of employment, interest rates, tax rates, the availability of consumer credit, consumer confidence in future economic conditions and stimulus checks and risks, or the public perception of risks related to epidemics or pandemics like COVID-19. In the event of a prolonged economic downturn or acute recession, consumer spending habits could be adversely affected, and we could experience lower than expected revenue, net income, and Adjusted EBITDA.

The uncertainty around the duration of business disruptions and the extent of the spread of the virus in the United States and other areas of the world will likely continue to adversely impact the national or global economy and negatively impact consumer spending. The full extent of COVID-19’s impact on our operations, key metrics, and financial performance depends on future developments that are uncertain and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets, and any new information that may emerge concerning the severity of the virus, its spread to other regions, as well as the actions taken to contain it, among others. Any of these outcomes could have an adverse impact on our business, financial condition, operating results, and ability to execute and capitalize on our strategies.

We have a limited operating history with a new model and strategy for delivering product and services in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

We launched operations in 2015 and our business and service model are new and untested, without a proven precedent, and we may fail to achieve the degree of market acceptance by Business Partners and Consumers necessary for commercial success and meeting our financial forecast. This limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter. These risks and challenges include our ability to:

 

   

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;

 

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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.

If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business, financial condition, and results of operations could be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more predictable market. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition, and results of operations could be adversely affected.

Our operating results are subject to the seasonal nature of our Business Partners’ businesses and consumer behavior patterns.

Our business is highly dependent on consumer behavior patterns that we have observed over time. A portion of our Business Partners experience seasonal slowdowns. We have historically experienced higher revenue in the third and fourth calendar quarters as compared to other quarters in our fiscal year due in part to seasonal holiday demand. Additionally, new product and service introductions, as well as the timing of such product and service introductions, can significantly impact revenue and operating expenses. Other seasonality trends may develop and the existing seasonality and consumer behavior that we experience may change or become more significant. As a result, analysts and investors may inaccurately estimate the effects of seasonality on our operating results in one or more future quarters and, consequently, our operating results may fall below expectations.

We may not succeed in promoting and sustaining our brand or commercial relationships, which could have an adverse effect on our reputation and harm our business.

A critical component of our future growth is our ability to promote and sustain our brand and commercial relationships, which we believe can be achieved by providing a high-quality Consumer experience. An important element of our brand promotion strategy is establishing a relationship of trust with our Business Partners and Consumers. In order to provide a high-quality Customer and Consumer experience, we have invested and intend to continue to invest substantial amounts of resources in the development and functionality of our website, technology infrastructure, customer service operations, and personnel development. Our ability to provide a high-quality experience for Consumers and Customers is also highly dependent on external factors over which we may have little or no control, including, without limitation, suppliers and third-party carriers. If Consumers are dissatisfied with the quality of the products they have been sold or the service they receive and their overall experience, or if we or our Business Partners cannot deliver products to Consumers in a timely manner or at all, our Business Partners and Consumers may stop using our services.

Our failure to provide our Business Partners and Consumers with high-quality services for any reason could substantially harm our reputation and adversely impact our efforts to develop Enjoy as a trusted brand and business partner, which could have an adverse effect on our business, results of operations, financial condition and prospects.

There is also increased focus, including by consumers, investors, employees and other stakeholders, as well as by governmental and non-governmental organizations, on social, environmental and sustainability matters.

 

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Our reputation could be damaged if we or our Business Partners do not (or are perceived not to) act responsibly regarding social, environmental and sustainability standards or, if we fail to appropriately respond to concerns raised by Consumers, investors and other interested persons, which could have an adverse effect on our business, financial condition and results of operations.

If we fail to manage our growth effectively, our commercial relationships, results of operations and business could be harmed.

We have experienced rapid growth in our headcount and operations, both through organic growth and recent commercial relationships. This growth places substantial demands on management and our operational infrastructure. Many of our employees have been with us for fewer than 18 months. We have made, and intend to continue to make, substantial investments in our technology, customer care, sales and marketing infrastructure. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees, while maintaining the beneficial aspects of our company culture. We may not be able to manage growth effectively. If we do not manage the growth of our business and operations effectively, the quality of our services and the efficiency of our operations could suffer, which could harm our commercial relationships, business and results of operations.

We identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price.

In connection with the preparation of our financial statements, material weaknesses in our internal control over financial reporting were identified as of December 31, 2020. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses are as follows:

 

   

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.

These material weaknesses contributed to the following additional material weaknesses:    

 

   

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

 

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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.

The material weaknesses described above did not result in a misstatement to our annual or interim consolidated financial statements. However, each of these material weaknesses could result in a misstatement of our financial statement accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

We will take certain measures to remediate the material weaknesses described above, including the following:

 

   

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.

We have begun to hire additional finance, accounting and IT personnel, including the hiring of a new chief financial officer in January 2021. The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are effective.

We are working to remediate the material weaknesses as efficiently and effectively as possible and expect full remediation could potentially go beyond fiscal year 2022. At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, will result in us incurring significant costs, and will place significant demands on our financial and operational resources.

While we believe these efforts will remediate the material weaknesses, we may not be able to complete our evaluation, testing or any required remediation in a timely fashion, or at all. We cannot assure you that the

 

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measures we have taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. Any failure to design or maintain effective internal control over financial reporting or any difficulties encountered in the implementation or improvement could increase compliance costs, negatively impact share trading prices, or otherwise harm our operating results or cause us to fail to meet our reporting obligations.

We may not timely and effectively scale and adapt our existing technology and business to meet the expectations of our Business Partners, which would adversely affect our business, reputation, financial performance, financial condition. cash flows and results of operations.

We expect to continue to make significant investments to maintain and improve the availability of our services. However, it may become increasingly difficult to meet our Business Partners’ expectations and maintain, improve and scale our platform and services due to factors beyond our control. If our services are unavailable when Business Partners and Consumers attempt to access them, or if we fail to meet their expectations, Business Partners and Consumers may seek other service providers, and may not return to our platform as often in the future, or at all. This would adversely affect our ability to attract Business Partners, Consumers, and Experts, and decrease the frequency with which Business Partners and Consumers use our services. To the extent that we do not effectively address capacity constraints, upgrade our services as needed, or continually develop our logistics systems to accommodate actual and anticipated changes in technology, our business, reputation, financial condition, and results of operations would be adversely affected.

We rely on consumer discretionary spending, which is adversely affected by economic downturns, including economic recession or depression, and other macroeconomic conditions or trends.

Our business and operating results are subject to global economic conditions and their impact on consumer discretionary spending, particularly in the consumer electronics market. One of the factors that may negatively influence consumer spending on consumer electronics is economic downturns, including economic recessions or depressions, high levels of unemployment, higher consumer debt levels, reductions in net worth, and declines in asset values and related market uncertainty, home foreclosures and reductions in home values, fluctuating interest rates and credit availability, fluctuating fuel and other energy costs, fluctuating commodity prices and general uncertainty regarding the overall future political and economic environment. Many of these factors have occurred, and may continue to become more prevalent, as a result of the COVID-19 pandemic. Economic conditions in certain regions may also be affected by natural disasters, such as earthquakes, hurricanes, wildfires, and threats to public health, such as the current outbreak of COVID-19 pandemic. Consumer purchases of new electronics may decline during periods of economic uncertainty, when disposable income is reduced or when there is a reduction in consumer confidence.

We depend on our highly skilled employees to grow and operate our business, and if we are unable to hire, retain, manage, compensate appropriately, train and motivate our employees, or if our new employees do not perform as we anticipate, we may not be able to grow effectively and our business, financial condition and results of operations could be adversely affected.

Our future success will depend in part on the continued service of our founders, senior management team, key technical employees, and other highly skilled employees, including Ron Johnson, our co-founder and Chief Executive Officer, and on our ability to continue to identify, hire, develop, motivate, compensate appropriately, train and retain talented employees. We may not be able to retain the services of any of our employees or other members of senior management in the future. Also, all of our U.S.-based employees, including our senior management team and Mr. Johnson, work for us on an at-will basis, and there is no assurance that any such employee will remain with us. Our competitors may be successful in recruiting and hiring members of our

 

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management team or other key employees, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all. If we are unable to attract and retain the necessary employees, particularly in critical areas of our business, we may not achieve our strategic goals. In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team fails to work together effectively and to execute its plans and strategies, our business, financial condition, and results of operations could be adversely affected.

We face intense competition for highly skilled employees, especially in the Palo Alto Area where we have a substantial presence and need for highly skilled employees. To attract and retain top talent, we have had to offer, and we believe we will need to continue to offer, competitive compensation and benefits packages. Job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. The trading price of New Enjoy Common Stock following the Business Combination is likely to be volatile and could be subject to fluctuations in response to various factors and may not appreciate. If the perceived value of our equity awards declines for this or other reasons, it may adversely affect our ability to attract and retain highly qualified employees. Certain of our employees have received significant proceeds from sales of our equity in private transactions and many of our employees may receive significant proceeds from sales of our equity in the public markets following the Business Combination, which may reduce their motivation to continue to work for us. We may need to invest significant amounts of cash and equity to attract and retain new employees and expend significant time and resources to identify, recruit, train, and integrate such employees, and we may never realize returns on these investments. If we are unable to effectively manage our hiring needs or successfully integrate new hires, our efficiency, ability to meet forecasts, and employee morale, productivity, and engagement could suffer, which could adversely affect our business, financial condition, and results of operations.

The market for the Mobile Store is still in relatively early stages of growth, and if this market does not continue to grow, grows slower than we expect, or fails to grow as large as we expect, our business, financial condition, and results of operations could be adversely affected.

The Mobile Store market has grown rapidly since our inception in 2014, but it is still relatively new, and it is uncertain to what extent market acceptance will continue to grow, if at all. Our success will depend to a substantial extent on the willingness of people to widely adopt the Mobile Store experience and the services that we offer. If the public does not perceive these services as beneficial, or chooses not to adopt them as a result of concerns regarding safety, affordability, or for other reasons, whether as a result of incidents related to our Business Partners’ products and services or at the point of delivery or otherwise, or instead adopts alternative solutions that may arise, then the market for our services may not further develop, may develop slower than we expect, or may not achieve the growth potential we expect, any of which could adversely affect our business, financial condition, and results of operations.

If we do not continue to innovate and further develop our services, we fail to perform our services effectively and keep up with product life cycles or consumer upgrade behavior, or we are not able to keep pace with technological developments, we may not remain competitive and our business and results of operations could suffer.

Our success depends in part on our ability to continue to innovate and further develop our services. To remain competitive, we must continuously enhance and improve our services. If we fail to expand the suite of services that we offer, or if we fail to continuously enhance and improve our existing services to keep up with product life cycles or consumer upgrade behavior, our ability to retain and acquire Consumers and Business Partners could be adversely affected. Our future success could depend on our ability to expand our product mix and respond to technological advances and emerging industry standards and practices in a cost-effective and timely manner.

We have scaled our business rapidly, and significant new features and services have in the past resulted in, and in the future may continue to result in, operational challenges affecting our business. Developing and

 

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launching enhancements to our services may involve significant technical risks and upfront capital investments that may not generate return on investment. We may use new technologies ineffectively, or we may fail to adapt to emerging industry standards. If we face material delays in introducing new or enhanced services or if our recently introduced offerings do not perform in accordance with our expectations, our Business Partners and Consumers that utilize our services may forego the use of our services in favor of those of our competitors.

We are involved in and may pursue additional strategic relationships. We may have limited control over such relationships, and these relationships may not provide the anticipated benefits.

We are involved in various strategic relationships, including with Apple, AT&T, BT Group, including EE, and Rogers Communications, which we expect will benefit our business and help us to achieve growth in the U.S., the U.K. and Canada, respectively. Two of our Business Partners account for a significant portion of our revenue, and a loss of or reduction in business from, or consolidation of, these or any other major Business Partners could have an adverse effect on our business, financial condition, financial performance and prospects.

We also may pursue and enter into additional strategic relationships in the future. Such relationships involve risks, including but not limited to: maintaining good working relationships with the other party; any economic or business interests of the other party that are inconsistent with ours; the other party’s failure to fund its share of capital for operations or to fulfill its other commitments, including providing accurate and timely accounting and financial information to us, which could negatively impact our operating results; loss of key personnel; actions taken by our commercial relationships that may not be compliant with applicable rules, regulations and laws; reputational concerns regarding our Business Partners or our leadership; bankruptcy, requiring us to assume all risks and capital requirements related to the relationship, and the related bankruptcy proceedings potentially having an adverse impact on the relationship; and any actions arising out of the relationship that may result in reputational harm or legal exposure to us. Further, these relationships may not deliver the benefits that were originally anticipated. Any of these factors may have an adverse effect on our business, results of operations, financial condition and prospects.

We are committed to expanding our service offerings and enhancing the Mobile Store experience, which will require significant operating expenditures, may not maximize short-term financial results and may yield results that conflict with the market’s expectations, which could result in our stock price being adversely affected.    

We are passionate about expanding our services and continually enhancing the Mobile Store experience, with a focus on driving long-term engagement through innovation, the expansion of our services, and providing high-quality support, which may not necessarily maximize short-term financial results. We frequently make business decisions that may reduce our short-term financial results if we believe that the decisions are consistent with our goals to improve the Mobile Store experience, which we believe will improve our financial results over the long term. These decisions may not be consistent with the short-term expectations of our stockholders and may not produce the long-term benefits that we expect, in which case our growth, business, financial condition, and results of operations could be adversely affected.

We face intense indirect competition in attracting Consumers, and if we are unable to compete effectively, our business, financial condition, and results of operations would be adversely affected.

The markets in which we operate are intensely competitive and are characterized by shifting user preferences, fragmentation, and frequent introductions of new services and offerings. Our Business Partners do not currently depend on a local, in-home sales team, and the development of their own sales team, rather than their reliance on Enjoy, could negatively affect our business. As we continue to expand our presence internationally, we will also face competition in these markets. In addition, we compete with traditional brick and mortar retailers with regard to capturing consumer attention. Changing traditional retail habits is difficult, and if Business Partners and consumers do not embrace the transition to local, in-home delivery as we expect, our business, financial condition, and results of operations could be adversely affected.

 

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Our future competitors may have competitive advantages, such as greater name recognition, longer operating histories, greater category share in certain markets, established relationships with Customers and larger existing user bases in certain markets, more successful marketing capabilities, and substantially greater financial, technical and other resources than we have. Greater financial resources, technical expertise and sales tactics may allow these competitors to respond more quickly to new or emerging technologies and changes in consumer preferences that may render our services less attractive or obsolete. If we fail to attract certain partners in a specific geographic market, or if partners choose to engage exclusively with our competitors, we may lack a sufficient variety and supply of product offerings or lack access to the most popular products, such that our offering would become less appealing to consumers. Our competitors may also make acquisitions or establish cooperative or other strategic relationships among themselves or with others, including electronics manufacturers. Our competitors could also introduce new offerings with competitive price and performance characteristics or undertake more aggressive marketing campaigns than ours. Such competitive pressures may lead us to maintain or lower our rates and fees or maintain or increase our incentives, discounts and promotions in order to remain competitive, particularly in markets where we do not have a leading position. Such efforts may negatively affect our financial performance, and there is no guarantee that such efforts will be successful.

For all of these reasons, we may not be able to compete successfully. If we lose existing Business Partners, Consumers, or Experts that utilize or provide our services, fail to attract new Business Partners, Consumers, or Experts, or are forced to make pricing concessions as a result of increased competition, our business, financial condition, and results of operations would be adversely affected.

Risks associated with our product mix and our current and future Business Partners for whom we provide services and deliver product could adversely affect our financial performance as well as our reputation and commercial relationships.

Our financial performance is affected by the mix of products we deliver during a given period. There can be no guarantee that we will be able to successfully alter or expand our product mix to include higher gross margin products. Our financial forecasts and guidance may include assumptions about product sales mixes. If actual results vary from this projected product mix of sales, our results of operations and financial condition could be adversely affected.

We also depend on our ability to provide Consumers with a wide range of services related to products provided from qualified Business Partners and suppliers in a timely and efficient manner. Our inability to obtain products from suppliers in sufficient quantities, or at all, could adversely affect our product offerings and our business and impact our financial forecasts and guidance. Political and economic instability, global or regional adverse conditions, such as pandemics or other disease outbreaks or natural disasters, the financial stability of suppliers, suppliers’ ability to meet our standards, labor problems experienced by suppliers, the availability or cost of raw materials, merchandise quality issues, currency exchange rates, trade tariff developments, transport availability and cost, including import-related taxes, transport security, inflation and other factors relating to our suppliers are beyond our control. As an example, the ongoing COVID-19 pandemic could adversely impact supplier facilities and operations due to factory closures and risks of labor shortages, among other things, which may adversely affect our business, financial condition and results of operations.

There can be no assurance that we will be able to establish new or otherwise extend current commercial relationships on acceptable commercial terms. Our ability to develop and maintain relationships with our Business Partners and offer their high quality merchandise to Consumers is critical to our success. If we are unable to develop and maintain relationships with Business Partners that would allow us to offer a sufficient amount and variety of quality merchandise on acceptable commercial terms, our ability to satisfy Consumers’ needs, and therefore our long-term growth prospects, would be adversely affected.

Further, we rely on our Business Partners’ representations of product quality, safety and compliance with applicable laws and standards. If our Business Partners, suppliers or other vendors violate applicable laws,

 

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regulations or our supplier code of conduct, or implement practices regarded as unethical, unsafe, or hazardous to the environment, it could damage our reputation and negatively affect our operating results. Further, concerns regarding the safety and quality of products provided by our Business Partners could cause Consumers to avoid purchasing those products, or avoid using our services altogether, even if the basis for the concern is outside of our control. As such, any issue, or perceived issue, regarding the quality and safety of any items we sell, regardless of the cause, could adversely affect our commercial relationships, reputation, operations and financial results.

We also are unable to predict whether any of the countries in which our Business Partners’ products are currently manufactured or may be manufactured in the future will be subject to new, different, or additional trade restrictions imposed by the U.S. or foreign governments or the likelihood, type or effect of any such restrictions. Any event causing a disruption or delay of imports from suppliers with international manufacturing operations, including the imposition of additional import restrictions, restrictions on the transfer of funds or increased tariffs or quotas, could increase the cost or reduce the supply of merchandise available to Consumers and adversely affect our financial performance as well as our reputation and commercial relationships. Furthermore, some or all of our Business Partners’ foreign operations may be adversely affected by political and financial instability, resulting in the disruption of trade from exporting countries, restrictions on the transfer of funds or other trade disruptions.

In addition, our business with foreign Customers and suppliers, may be affected by changes in the value of the U.S. dollar relative to other foreign currencies. For example, any movement by any other foreign currency against the U.S. dollar may result in higher costs to consumers for those goods, thus decreasing the need for our services or impairing our ability to deliver our services at their current cost. Declines in foreign currencies and currency exchange rates might negatively affect the profitability and business prospects of one or more of our foreign suppliers. This, in turn, might cause such foreign suppliers to demand higher prices for merchandise in their effort to offset any lost profits associated with any currency devaluation, delay merchandise shipments, or discontinue selling with us altogether, any of which could ultimately reduce our sales or increase our costs.

We depend on our Business Partners to perform certain services regarding the products that we offer.

Our Business Partners are often responsible for conducting a number of traditional retail operations with respect to their respective products, including maintaining inventory and preparing merchandise for shipment to Consumers. In these instances, we may be unable to ensure that our Business Partners will perform these services to Consumers’ satisfaction in a manner that provides Consumers with a unified brand experience or on commercially reasonable terms.

Moreover, we carry our Business Partners’ products on consignment. This inventory is either manufactured or procured by our Business Partners and delivered to our warehouses. We cannot guarantee with certainty that we will have adequate inventory at all times to support our business. At times our business can face disruptions stemming from inventory shortages driven by new product releases with high consumer demand, supply constraints and political, environmental or other factors. If Consumers become dissatisfied with the products and/or services provided by our Business Partners, our business, reputation and commercial relationships could suffer.

We rely on third-party background check providers to screen potential employees, including Experts, and if such providers fail to provide accurate information or we do not maintain business relationships with them, our business, financial condition, and results of operations could be adversely affected.    

We rely on third-party background check providers to provide the civil and criminal records of potential employees, including Experts, to help identify those that are not qualified to join our team pursuant to applicable law or our internal standards, and our business may be adversely affected to the extent such providers do not meet their contractual obligations, our expectations, or the requirements of applicable law or regulations.

 

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If any of our third-party background check providers terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we may need to find an alternate provider and may not be able to secure similar terms or replace such partners in an acceptable timeframe. In the United States, Canada and the U.K., we rely on a single third-party background check provider for these jurisdictions. If we cannot find alternate third-party background check providers on terms acceptable to us, we may not be able to timely onboard potential Experts, and as a result, our platform may be less attractive to potential Experts and we may have difficulty finding enough Experts to meet consumer demand. Further, if the background checks conducted by our third-party background check providers are inaccurate or do not otherwise meet our expectations, qualified Experts may be inadvertently excluded from our platform and unqualified Experts may be permitted to make deliveries, and as a result, we may be unable to adequately protect or provide a safe environment for Consumers. In addition, if the background checks conducted by our third-party background check providers do not meet the requirements under applicable laws and regulations, we could face legal liability or negative publicity.

We are also subject to a number of laws and regulations applicable to background checks for potential and existing Experts that utilize our platform. If we or our third-party background check providers fail to comply with applicable laws, rules, and legislation, our reputation, business, financial condition, and results of operations could be adversely affected, and we could face legal action, including class, collective or other representative actions. In addition, background check qualification processes may be limited in certain jurisdictions based on national and local laws, and our third-party service providers may fail to conduct such background checks adequately or disclose information that could be relevant to a determination of employment eligibility.

In jurisdictions where our industry does not have regulations establishing standards for background checks, we decide on the scope of our background checks and the cadence with which we conduct such background checks. By choosing background checks that are less thorough in scope than we are permitted to conduct under applicable law or regulation, or by failing to run additional background checks after Experts are on-boarded, we may face negative publicity or become subject to litigation in the future.

Any negative publicity related to any of our third-party background check providers, including publicity related to safety incidents or actual or perceived privacy or data security breaches or other security incidents, could adversely affect our reputation and commercial relationships, and could potentially lead to increased regulatory or litigation exposure. Any of the foregoing risks could adversely affect our business, financial condition and results of operations.

Our policies, procedures and programs to safeguard the health, safety and security of our team members, Consumers and others may not be adequate and any actual or alleged improper conduct by our team members, including as a result of motor vehicle accidents or the improper conduct of Experts that have in the past resulted in inquiries, legal proceedings and/or damages, may in the future expose us to legal risk and damage our reputation.

As of March 25, 2021, we have 2,128 team members working in over 85 location across the United States, Canada and the United Kingdom. We have implemented what we believe to be the best practices to safeguard the health, safety and security of our team members, independent contractors, Consumers and others at our in-home visits. If these policies, procedures and programs are not adequate, or team members do not receive related adequate training or do not follow these policies, procedures and programs for any reason, the consequences may be harmful to us, which could impair our operations and cause us to incur significant legal liability or fines, as well as reputational damage, and negatively impact the engagement of our team members. Our insurance may not cover, or may be insufficient to cover, any legal liability or fines that we incur for health, safety or security incidents.

 

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If our insurance coverage is insufficient or our insurers are unable to meet their obligations, our insurance may not mitigate the risks facing our business.

Our insurance policies cover a number of risks and potential liabilities, such as general liability, property coverage, tech errors and omissions liability, employment liability, business interruptions, crime, auto and directors’ and officers’ liability. For certain types of business risk, we may not be able to, or may choose not to, acquire insurance or insurance may not be available to us on economically reasonable terms. In addition, the scope of coverage offered to us by insurers may be limited, and may not include some of our risks or liabilities. In addition, our insurance may not adequately mitigate the risks we face, or we may have to pay high premiums and/or deductibles for the coverage we do obtain. Additionally, if any of our insurers becomes insolvent, such insurers would be unable to pay any claims that we make.

Without obtaining adequate capital funding or improving our financial performance, we may not be able to continue as a going concern.

Our recurring losses from operations and negative cash flows raise substantial doubt about our ability to continue as a going concern without additional capital raising activities such as the Business Combination. As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern. Similarly, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of, and for the year ended, December 31, 2020, describing the existence of substantial doubt about our ability to continue as a going concern. We believe that the successful completion of the Business Combination will enable us to fund our expansion plans, realize our business objectives and to continue as a going concern; however, if we are unable to raise sufficient capital in the Business Combination, or if we are unable to grow our revenue substantially to achieve and sustain profitability, we may need to obtain alternative financing or significantly modify our operational plans for us to continue as a going concern.

Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could inhibit our growth.

In the future, we could be required to or may decide to raise capital through public or private financings or other arrangements. Such financings or arrangements may not be available on acceptable terms, or at all, and our failure to raise capital when needed or desired could harm our business. Our ability to raise additional capital, if and when required, will depend on, among other factors, investor demand, our operating performance, our credit rating, and the condition of the capital markets. We may sell common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, holders of our common stock, including holders of any common stock issued upon conversion of our convertible notes, may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our common stock. Debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.

Our recent growth rates may not be sustainable or indicative of our future growth.

Our historical growth rates may not be sustainable or indicative of future growth. We believe that our continued revenue growth will depend upon, among other factors, our ability to:

 

   

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;

 

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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.

We cannot assure you we will be able to achieve any of the foregoing. Our Consumer base may not continue to grow or may decline as a result of increased competition and the maturation of our business. Failure to continue our revenue growth rates could have an adverse effect on our financial condition and results of operations. You should not rely on our historical rate of revenue growth as an indication of our future performance.

We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to maintain or increase profitability in the future.    

We have incurred net losses in each year since our founding, we anticipate increasing expenses in the future, and we may not be able to maintain or increase profitability in the future. During the years ended December 31, 2020 and 2019 the Company incurred net losses of $157.8 million and $89.7 million, respectively and cash outflows from operations of $95.3 million and $90.3 million, respectively. As of December 31, 2020, and 2019, the Company had accumulated deficits of approximately $421.9 million and $264.3 million, respectively. We expect our costs will increase over time and our losses to continue as we expect to invest significant additional funds towards growing our business and operating as a public company. We have expended, and expect to continue to expend, substantial financial and other resources on developing our platform, including expanding our platform offerings, developing or acquiring new platform features and services, expanding into new markets and geographies, and increasing our sales and marketing efforts. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from maintaining or increasing profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, and results of operations could be adversely affected.

Following the consummation of the proposed Business Combination, the stock-based compensation expense related to our RSUs and other outstanding equity awards will result in increases in our expenses in future periods, in particular, in the quarter in which the proposed Business Combination is completed. Additionally, we may expend substantial funds in connection with the tax withholding and remittance obligations that arise upon the initial settlement of certain of our RSUs.

If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to maintain or increase profitability.

We may face difficulties as we expand our operations into new local markets in which we have limited or no prior operating experience.

Our capacity for continued growth depends in part on our ability to expand our operations into, and compete effectively in, new local markets. It may be difficult for us to understand and accurately predict consumer preferences and purchasing habits in these new local markets. In addition, each market has unique regulatory dynamics. These include laws and regulations that can directly or indirectly affect our ability to operate, and our costs associated with insurance, support, fraud and onboarding new Experts. In addition, each market is subject to distinct competitive and operational dynamics. These include our ability to offer more attractive services than alternative options and our ability to efficiently attract and retain Business Partners, Consumers and Experts, all of which affect our sales, results of operations and key business metrics. As a result, we may experience fluctuations in our results of operations due to the changing dynamics in the local markets where we operate. If we invest substantial time and resources to expand our operations and are unable to manage these risks effectively, our business, financial condition and results of operations could be adversely affected.

 

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Risks Related to Enjoy’s International Operations

Our global operations involve additional risks, and our exposure to these risks will increase as our business continues to expand.

We operate in a number of jurisdictions and intend to continue to expand our global presence, including in emerging markets. We face complex, dynamic and varied risk landscapes in the markets in which we operate. As we enter countries and markets that are new to us, we must tailor our services and business model to the unique circumstances of such countries and markets, which can be complex, difficult, costly and divert management and personnel resources. In addition, we may face competition in other countries from companies that may have more experience with operations in such countries or with global operations in general. Laws and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses or our failure to adapt our practices, systems, processes and business models effectively to the consumer and supplier preferences of each country into which we expand, could slow our growth. Certain markets in which we operate have, or certain new markets in which we may operate in the future may have, lower margins than our more mature markets, which could have a negative impact on our overall margins as our revenue from these markets grow over time.

In addition to the risks outlined elsewhere in this section, our global operations are subject to a number of other risks, including:

 

   

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.

Fluctuations in currency exchange rates could adversely affect our financial performance and our reported results of operations.

Because we generate net revenue in the local currencies of our international business, our financial results are impacted by fluctuations in currency exchange rates. The results of operations of our international business is exposed to currency exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency to U.S. dollars for financial reporting purposes. Our financial statements are denominated

 

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in U.S. dollars and, as a result, fluctuations in currency exchange rates may adversely affect our results of operations or financial results. If the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated net revenues or expenses will result in increased U.S. dollar denominated net revenues and expenses. Similarly, if the U.S. dollar strengthens against foreign currencies, particularly the Euro, the British pound, or the Canadian dollar, our translation of foreign currency denominated net revenues or expenses will result in lower U.S. dollar denominated net revenues and expenses. To date, we have not entered into any currency hedging contracts. As a result, fluctuations in foreign exchange rates could significantly impact our financial results.

Risks Related to Enjoy’s Intellectual Property

Failure to adequately protect, maintain or enforce our intellectual property rights could substantially harm our business and results of operations.

We rely on a combination of trademark, copyright, confidential information, trade secrets, and contractual restrictions to protect our intellectual property. The protection offered by these has its limitations. Despite our efforts to protect and enforce our proprietary rights, unauthorized parties have used, and may in the future use, our trademarks or similar trademarks.

We do not have comprehensive registered protection for all of our intellectual property in all jurisdictions around the world. There is no guarantee that we will be the first to submit trademark applications in all territories and/or classes for our brands. In addition, there is no guarantee that our pending trademark applications for any mark will proceed to registration, our pending applications may be opposed by a third party prior to registration, and even those trademarks that are registered could be challenged by a third party, including by way of revocation or invalidity actions. For example, our applications to register the name “Enjoy” and our ENJOY & Design logo as trademarks in Canada were successfully opposed by a third party. Our competitors may adopt service names similar to ours, thereby impeding our ability to build brand identity and possibly diluting our brand and leading to brand dilution or consumer confusion. Third parties may apply to register our trademarks or other trademarks similar to our trademarks in jurisdictions before us, thereby creating risks relating to our ability to use and register our trademarks in those jurisdictions. In addition, there could be potential trade name or trademark ownership or infringement claims brought by owners of other rights, including registered trademarks, in our marks or marks similar to ours. Any claims of infringement, brand dilution or consumer confusion related to our brand (including our trademarks) or any failure to renew key license agreements on acceptable terms could damage our reputation and brand identity and substantially harm our business and results of operations.

Domain names generally are regulated by internet regulatory bodies, and the regulation of domain names is subject to change. Regulatory bodies have and may continue to establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. We may not be able to, or it may not be cost effective to, acquire or maintain all domain names that utilize the name “Enjoy” in all of the countries in which we currently conduct or intend to conduct business. If we lose the ability to use a domain name, we could incur significant additional expenses to market our products within that country, including the development of new branding. This could substantially harm our business, results of operations, financial condition and prospects.

Litigation or similar proceedings have been necessary in the past and may be necessary in the future to protect, register and enforce our intellectual property rights, to protect our trade secrets and domain names and to determine the validity and scope of the proprietary rights of others. Further, any changes in law or interpretation of any such laws, particularly intellectual property laws, may impact our ability to protect, register or enforce our intellectual property rights. Any litigation or adverse priority proceeding could result in substantial costs and diversion of resources and could substantially harm our business, results of operations, financial condition and prospects.

 

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Assertions by third parties of infringement or misappropriation by us of their intellectual property rights or confidential know how could result in significant costs and substantially harm our business and results of operations.

Third parties may in the future assert that we have infringed or misappropriated their trademarks, copyrights, confidential know how, trade secrets, patents or other intellectual property rights. We cannot predict whether any such assertions or claims arising from such assertions will substantially harm our business and results of operations, whether or not they are successful. If we are forced to defend against any infringement or other claims relating to the trademarks, copyright, confidential know how, trade secrets, patents or other intellectual property rights of third parties, whether they are with or without merit or are determined in our favor, we may face costly litigation or diversion of technical and management personnel. Furthermore, the outcome of a dispute may be that we would need to cease use of some portion of our technology or trademarks, develop non-infringing technology, engage in re-branding. pay damages, costs or monetary settlements or enter into royalty or licensing agreements. Royalty or licensing agreements, if required, may be unavailable on terms acceptable to us, or at all. Any such assertions or litigation could adversely affect our business, results of operations, financial condition and prospects.

Our platform utilizes open source software, and any failure to comply with the terms of these open source licenses could negatively affect our business.

We use open source software in our platform and expect to use open source software in the future. The terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market our platform. By the terms of certain open source licenses, we could be required to release the source code of our proprietary software and to make our proprietary software available under open source licenses if we combine our proprietary software with open source software in a certain manner. In the event that portions of our proprietary software are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, to re-engineer all or a portion of our technologies, or otherwise to be limited in the use or licensing of our technologies, each of which could reduce or eliminate the value of our technologies and services. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of commercial software, as open source licensors generally do not provide warranties or controls on the origin of the software. Many of the risks associated with usage of open source software cannot be eliminated and could negatively affect our business and operating results.

Defects, errors or vulnerabilities in our applications, backend systems or other technology systems and those of third-party technology providers, including our logistics systems and procedures, could harm our reputation and commercial relationships and adversely impact our business, financial condition and results of operations.

The software underlying our platform is highly complex and may contain undetected errors or vulnerabilities, some of which may only be discovered after the code has been released. Our practice is to effect frequent releases of software updates, sometimes multiple times per day. The third-party software, including our SaaS platform, that we incorporate into our platform may also be subject to errors or vulnerabilities and could render our platform inoperable. Any errors or vulnerabilities discovered in our code or from third-party software after release could result in negative publicity, a loss of users or loss of revenue and access or other performance issues. Such vulnerabilities could also be exploited by malicious actors and result in exposure of data of users on our platform, or otherwise result in a security breach or other security incident. We may need to expend significant financial and development resources to analyze, correct, eliminate or work around errors or defects or to address and eliminate vulnerabilities. Any failure to timely and effectively resolve any such errors, defects or vulnerabilities could adversely affect our business, reputation, commercial relationships, financial condition and results of operations.

 

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Use of social media, emails and text messages may adversely impact our reputation or subject us to fines or other penalties.

We use social media, emails, push notifications and text messages as part of our omni-channel approach to marketing. As laws and regulations evolve to govern the use of these channels, the failure by us, our employees or third parties acting at our direction to comply with applicable laws and regulations in the use of these channels could adversely affect our reputation or subject us to fines or other penalties. In addition, our employees or third parties acting at our direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of intellectual property, as well as the public disclosure of proprietary, confidential or sensitive personal information of our business, employees, Consumers or others. Information concerning us or our Business Partners, whether accurate or not, may be posted on social media platforms at any time and may have an adverse impact on our commercial relationships, reputation or business. The harm may be immediate without affording us an opportunity for redress or correction and could have an adverse effect on our reputation, business, operating results, financial condition and prospects.

Risks Related to Enjoy’s Legal and Regulatory Environment

Our business is subject to a variety of laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business or results of operations.

The “Commerce-at-Home” experience is in our view a nascent industry model and developing. We are subject to a wide range of evolving federal, state, and local laws and regulations, many of which may have limited to no interpretation precedent as it relates to our business model.

In addition, we may be subject to foreign data protection, privacy and other laws and regulations, including without limitation the EU General Data Protection Regulation (“GDPR”) and the Personal Information Protection and Electronic Documents Act (Canada), which can be more restrictive than those in the United States and could impact our ability to transfer, process and/or receive transnational data. The regulatory framework for privacy and security issues is evolving and may remain in flux for some period of time. It is difficult to ascertain whether this will impact our business in the United Kingdom and Canada. It is also likely that if our business grows and evolves and our services are used in a greater number of geographies, we will become subject to laws and regulations in additional jurisdictions. It is difficult to predict how existing laws will be applied to our business and the new laws to which we may become subject.

If we are not able to comply with these laws or regulations or if we become liable under these laws or regulations, we could be harmed, and we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to discontinue certain products or features, which would negatively affect our business. In addition, the increased attention focused upon potential sources of liability as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred to prevent or mitigate this potential liability could also harm our business and results of operations.

We may be subject to general litigation, regulatory disputes and government inquiries.

As a growing company with expanding operations, we have in the past faced, and may in the future increasingly face the risk of claims, lawsuits, government investigations and other proceedings concerning, among other things, our failure to promote and sustain our brand or commercial relationships, competition and antitrust, intellectual property, privacy, consumer protection, accessibility claims (including those relating to our compliance with the Americans with Disabilities Act of 1990), securities, tax, labor and employment, commercial disputes, and services. The number and significance of these disputes and inquiries have increased as the political and regulatory landscape changes, as we have grown larger and expanded in scope and geographic reach, and as our services have increased in complexity. For example, we are currently subject to, and may in the

 

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future be subject to, various employment-related claims filed against us in state courts, and with federal and state agencies, and tribunals in the United Kingdom.

It is often challenging to predict the commencement or outcome of such disputes and inquiries with certainty. Regardless of the outcome, these can have an adverse impact on our business due to legal costs, diversion of management resources, and other factors. Determining reserves for any litigation is a complex and fact-intensive process that is subject to judgment calls. It is possible that a resolution of one or more such proceedings could require us to make substantial payments to satisfy judgments, fines or penalties or to settle claims or proceedings, any of which could harm our business. These proceedings could also result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain products or services, requiring a change in our business practices in costly ways or requiring development of non-infringing or otherwise altered products or technologies. Litigation and other claims and regulatory proceedings against us could result in unexpected expenses and liabilities, which could have an adverse effect on our business, results of operations, financial condition and prospects.

Government regulation of the Internet and e-commerce is evolving, and unfavorable changes could substantially harm our business and results of operations.

We are subject to general business regulations and laws as well as federal and state regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services. These regulations and laws may cover sweepstakes, taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the Internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations.

Our use and processing of personal information and other data is subject to laws and obligations relating to privacy, data security and data protection, and the actual or perceived failure by us or our vendors to comply with such laws and obligations could harm our business.

Numerous local, state, federal and foreign laws, rules and regulations govern privacy, data security, data protection and our collection, use, disclosure and other processing of personal information and other types of data. These laws, rules and regulations are constantly evolving, and we expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the United Kingdom, Canada, and other jurisdictions.

Among the most stringent of these laws is the GDPR, which went into effect in the European Union in May 2018 and also has been transposed into the domestic law of the U.K., where we operate. The GDPR requires organizations, among other things, to give detailed notices about processing of personal information; impose contractual data protection requirements on vendors and partners entrusted with personal information; meet extensive data protection governance requirements; give data breach notifications; and honor individuals’ data access, deletion, and correction requests. Companies that violate the GDPR can face private litigation, bans on data processing, fines of up to the greater of 20 million Euros or 4% of their worldwide annual revenue and other administrative penalties.

We also operate in Canada, where the Personal Information Protection and Electronic Documents Act (“PIPEDA”), and various provincial laws require that companies give detailed privacy notices to consumers, obtain consent to use personal information, with limited exceptions, allow individuals to access and correct their personal information, and report certain data breaches. In addition, Canada’s Anti-Spam Legislation (“CASL”) prohibits email marketing without the recipient’s consent, with limited exceptions. Canada is also considering

 

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legislation to strengthen its data protection legislation and more closely align it with the GDPR. Failure to comply with Canada’s federal or provincial privacy or data protection laws can result in significant fines and penalties or possible damage awards.

Data protection laws in the U.K. and EU member states also impose restrictions on direct marketing communications and require opt-in consent to use certain cookies and similar technologies online, which have become the focus of increasing enforcement activity. A new regulation proposed in the EU called the e-Privacy Regulation may make such restrictions more stringent.

Transferring data across borders is also subject to increasing restrictions under foreign privacy laws. For example, in July 2020, the Court of Justice of the European Union (“CJEU”), invalidated the EU-US Privacy Shield Framework (“Privacy Shield”), under which personal data could be transferred from the European Economic Area (“EEA”), to US entities who had self-certified under the Privacy Shield scheme. While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on the Standard Contractual Clauses alone may not be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be implemented. As such, there is significant uncertainty about what compliance with these requirements entails and whether similar requirements will be enforced in the U.K. Further, while the U.K. has transposed the GDPR into U.K. domestic law, the U.K.’s exit from the EU may result in transfers of personal data from the EEA to the U.K. becoming subject to the same restrictions that hinder transfers of personal data to the U.S. if the European Commission does not adopt an ‘adequacy decision’ with respect to the U.K. prior to the expiration of a post-Brexit transition period that ends no later than June 30, 2021.

If our efforts to comply with the highly dynamic data protection and cross-border data transfer requirements in the U.K. and EEA are not successful, we will face increased risk of substantial fines and data processing bans by regulators in the U.K., as well as in EEA member states in which we may establish operations or market our services in the future. These requirements may also result in reduced demand for our services from partners subject to the GDPR and require us to increase our data processing capabilities in the U.K. and EEA at significant expense.

Domestic privacy and data security laws are also complex and changing rapidly. Many states have enacted laws regulating the online collection, use and disclosure of personal information and requiring companies to implement reasonable data security measures. Laws in all states and U.S. territories also require businesses to notify affected individuals and/or governmental entities of certain security breaches affecting personal information. These laws are not consistent, and compliance with them in the event of a widespread data breach is complex and costly. States are also beginning to implement comprehensive privacy laws with similarities to the GDPR. For example, California enacted the California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020 and emulates the GDPR’s requirements regarding privacy notices and honoring California residents’ requests to access or delete personal information. California residents may also opt out of certain sharing of their personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for statutory damages in connection with certain data breaches, which is expected to increase the volume and success of class action data breach lawsuits. Further, in November 2020, California voters passed the California Privacy Rights Act (“CPRA”), which will substantially expand the CCPA when it takes effect on January 1, 2023. Among other provisions, the CPRA will introduce data minimization and storage limitation requirements, grant California residents the right to correct their personal information and expanded rights to opt out of sharing personal information, and create a new regulatory agency to implement and enforce the law. Virginia has similarly enacted a comprehensive privacy law, the Consumer Data Protection Act, which also emulates the GDPR, CCPA and CPRA in many respects. Legislative proposals to adopt comprehensive privacy laws in other states are under consideration. The CCPA, CPRA, CDPA and other laws may require us to modify

 

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our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. In addition to facing risks posed by new privacy laws, we could be subject to claims alleging violations of long-established privacy and consumer protection laws, such as the Telephone Consumer Protection Act (“TCPA”), a federal law that restricts sending text messages or making calls to mobile telephone numbers without the prior consent of the person being contacted. The TCPA provides for substantial statutory damages for violations, which has generated extensive class-action litigation. In addition, class-action plaintiffs in the United States are employing novel legal theories to allege that federal and state eavesdropping/wiretapping laws and state constitutional privacy rights prohibit the use of analytics technologies widely employed by website and mobile app operators to understand how their users interact with their services. Despite our compliance efforts, our use of text messaging communications on behalf of our Business Partners or use of analytics technologies on our website could expose us to costly litigation, government enforcement actions, damages and penalties, which could adversely affect our business, financial condition and results of operations. 

Furthermore, compliance with legal and contractual obligations requires us to make public statements about our privacy and data security practices, including the statements we make in our online privacy policy. Although we endeavor to comply with these statements, should they prove to be untrue or be perceived as untrue, even through circumstances beyond our reasonable control, we may face litigation, claims, investigations, inquiries or other proceedings by the U.S. Federal Trade Commission, state attorneys general, and other federal, state and foreign regulators, and private litigants alleging violations of privacy or consumer protection laws.

We cannot yet fully determine the impact these or future laws, rules, regulations and standards may have on our business or operations. They may be inconsistent from one jurisdiction to another, subject to differing interpretations and courts or regulators may deem our efforts to comply with these laws, rules, regulations and standards insufficient. Additionally, we may be bound by contractual requirements applicable to our collection, use, processing and disclosure of various types of data, including personal information, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters.

Like our legal obligations, the demands our Business Partners place on us relating to privacy, data protection and data security are becoming more stringent. Privacy and data protection laws increasingly require companies to impose specific contractual restrictions on service providers entrusted with personal information and to subject them to more rigorous privacy and data security due diligence. Our Business Partners’ increasing privacy and data security standards also increase the cost and complexity of ensuring that the third parties we rely on to operate our business and deliver our services can meet these standards. If we or our vendors are unable to meet our Business Partners’ demands or comply with the increasingly stringent contractual requirements they impose on us relating to privacy and data security, we may face increased legal liability, contract terminations and reduced demand for our services.

Any failure or perceived failure by us or any third parties with which we do business to comply with these laws, rules, regulations and standards, or with other obligations to which we or such third parties are or may become subject, may result in actions against us by governmental entities, private claims and litigation, the expenditure of legal and other costs and of substantial time and resources, and fines, penalties or other liabilities. Any such action would be expensive to defend, may require the expenditure of substantial legal and other costs and substantial time and resources and likely would damage our reputation.

Further, in view of new or modified local, state, federal, or foreign laws and regulations, industry standards, contractual obligations and other legal obligations, or any changes in their interpretation, we may find it necessary or desirable to fundamentally change our business activities and practices or to expend significant resources to modify our product and otherwise adapt to these changes. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to offer our products and services in certain jurisdictions (especially in certain foreign markets) or develop new products and services could be limited, which could reduce demand for them. Any of the foregoing developments could have an adverse effect on our business, financial condition, and results of operations.

 

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We may be subject to cybersecurity attacks. Any actual or perceived security or privacy breach could interrupt our operations, harm our brand, and adversely affect our reputation, brand, business, financial condition and results of operations.

Our business involves the collection, storage, processing, and transmission of personal information and potentially other sensitive and proprietary information of Business Partners, Experts and Consumers. Additionally, we maintain sensitive and proprietary information relating to our business, such as our own proprietary information and personal information relating to our employees.    An increasing number of organizations have disclosed breaches of their information security systems and other information security incidents, some of which have involved sophisticated and highly targeted attacks. In addition, these incidents can originate on our Business Partners’ websites, which can then be leveraged to access our website, further preventing our ability to successfully identify and mitigate the attack.

Additionally, due to the ongoing COVID-19 pandemic, certain functional areas of our workforce remain in a remote work environment and outside of our corporate network security protection boundaries, which imposes additional risks to our business, including increased risk of industrial espionage, phishing and other cybersecurity attacks, and unauthorized dissemination of proprietary or confidential information.

Because techniques used to obtain unauthorized access to or to sabotage information systems change frequently and may not be known until launched against us, we may be unable to anticipate or prevent these attacks, react in a timely manner, or implement adequate preventive measures, and we may face delays in our detection or remediation of, or other responses to, security breaches and other privacy- and security-related incidents. Unauthorized parties may in the future gain access to systems or facilities used in our business through various means, including gaining unauthorized access into our systems or facilities or those of Business Partners and Experts that utilize our services, attempting to fraudulently induce our employees, Business Partners, Experts, or others into disclosing user names, passwords, payment card information, or other sensitive information, which may in turn be used to access our IT systems, or attempting to fraudulently induce our employees, Business Partners, or others into manipulating payment information, resulting in the fraudulent transfer of funds to bad actors.

In addition, users of our services could have vulnerabilities on their own devices that are entirely unrelated to our systems and platform but could mistakenly attribute their own vulnerabilities to us. Further, breaches experienced by other companies may also be leveraged against us. For example, credential stuffing attacks are becoming increasingly common and sophisticated actors can mask their attacks, making them increasingly difficult to identify and prevent. Certain efforts may be state-sponsored or supported by significant financial and technological resources, making them even more difficult to detect, remediate, and otherwise respond to.

Although we have developed systems and processes that are designed to protect the data of Business Partners, Experts, and Consumers that utilize our platform, protect our systems, prevent data loss, and prevent other security breaches and security incidents, these security measures may not fully protect our systems and we cannot guarantee the security of our systems or the information we handle. The IT and infrastructure used in our business or by the third parties we work with may be vulnerable to or compromised by cyberattacks or security breaches, computer malware, viruses, phishing and other social engineering, ransomware, credential stuffing attacks, hacking and other efforts by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations or nation-states. Such incidents could result in unauthorized parties accessing data, including personal information and other sensitive and proprietary information of Business Partners, Experts, and Consumers; our employees’ personal information; or our other sensitive and proprietary data, accessible through those systems. Employee error, malfeasance or other errors in the storage, use, or transmission of any of these types of data could result in an actual or perceived privacy or security breach or other security incident. Although we have policies restricting the access to the personal information we store, there is a risk that these policies may not be effective in all cases.

 

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Any actual or perceived breach of privacy, or any actual or perceived security breach or other incidents, could interrupt our operations, result in our platform being unavailable, result in loss or improper access to, or acquisition or disclosure of, data, result in fraudulent transfer of funds, harm our reputation, commercial relationships, and competitive position, damage our relationships with third-party partners, or result in claims, regulatory investigations and proceedings and significant legal, regulatory, and financial exposure, including ongoing monitoring by regulators, and any such incidents or any perception that our security measures are inadequate could lead to loss of Business Partners, Expert or Consumer confidence in, or decreased use of, our platform, any of which could have an adverse effect our business, financial condition, and results of operations. Any actual or perceived breach of privacy or security, or other security incident, impacting any entities with which we share or disclose data (including, for example, our third-party technology providers) could have similar effects. Further, any cyberattacks or actual or perceived security and privacy breaches and other incidents directed at, or suffered by, our competitors could reduce confidence in our industry as a whole and, as a result, reduce confidence in us. We also expect to incur significant costs in an effort to detect and prevent privacy and security breaches and other privacy- and security-related incidents, and we may face increased costs and requirements to expend substantial resources in the event of an actual or perceived privacy or security breach or other incident.

Additionally, defending against claims or litigation based on any security breach or incident, regardless of their merit, could be costly and divert management’s attention. We cannot be certain that our insurance coverage will be adequate for data handling or data security costs or liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our reputation, commercial relationships, business, financial condition, and results of operations.

We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations which can harm our business.

We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct business. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other partners from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. We may engage third parties to sell our products and services or to obtain necessary permits, licenses, patent registrations and other regulatory approvals outside the United States. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors and other partners, even if we do not explicitly authorize or have actual knowledge of such activities. Any violation of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.

Our reported results of operations may be adversely affected by changes in generally accepted accounting principles.

Generally accepted accounting principles are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our

 

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reported results of operations and could affect the reporting of transactions completed before the announcement of a change. It is difficult to predict the impact of future changes to accounting principles or our accounting policies, any of which could negatively affect our reported results of operations.

We could be required to collect additional sales, use, value-added and other indirect taxes, or be subject to other tax liabilities in various jurisdictions, which could adversely affect our results of operations.

The application of indirect taxes, such as sales and use, value-added tax, provincial, goods and services, business, digital services and gross receipts taxes, to businesses like ours and to our Business Partners is a complex and evolving issue. Significant judgment is required to evaluate applicable tax obligations and, as a result, amounts recorded are estimates and are subject to adjustments. In many cases, the ultimate tax determination is uncertain because it is not clear when and how new and existing statutes might apply to our business or to our Customers’ businesses. If we are found to have not adequately addressed our tax obligations, our business could be adversely impacted.

Various jurisdictions (including the U.S. states and EU member states) are seeking to, or have recently imposed additional reporting, record-keeping, or indirect tax collection and remittance obligations on businesses like ours that facilitate online commerce. For example, taxing authorities in the United States and other countries have required e-commerce platforms to calculate, collect and remit indirect taxes for transactions taking place over the Internet. A majority of U.S. state jurisdictions have enacted laws requiring marketplaces to report user activity or collect and remit taxes on certain items sold on the marketplace. If requirements like these become applicable in additional jurisdictions, our business, collectively with our Customers’ businesses, could be harmed. Additionally, this legislation could require us or our Business Partners to incur substantial costs in order to comply, including costs associated with tax calculation, collection, remittance, and audit requirements, which could make selling in our marketplaces less attractive. Furthermore, the U.S. Supreme Court held in South Dakota v. Wayfair that a U.S. state may require an online retailer to collect sales taxes imposed by the state in which the buyer is located, even if the retailer has no physical presence in that state, thus permitting a wider enforcement of such sales tax collection requirements. If our calculation, collection, and remittance of taxes in the jurisdictions in which we do business were determined to be deficient, our business and results of operations could be adversely impacted. If we are treated as an agent for retailers on our platform under U.S. state tax law, we may be primarily responsible for collecting and remitting sales taxes directly to certain states. It is possible that one or more states could seek to impose sales, use or other tax collection obligations on us with regard to sales or orders on our platform. These taxes may be applicable to past sales. A successful assertion by a taxing authority that we should collect additional sales, use or other taxes or remit such taxes directly to states could result in substantial tax liabilities for past sales and additional administrative expenses, which could seriously harm our business.

Changes in our effective tax rate or tax liability may have an adverse effect on our business and operating results.

Our effective tax rate could increase due to several factors, including:

 

   

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.

Many of the underlying laws, rules and regulations imposing taxes and other obligations were established before the growth of the Internet and ecommerce. Taxing authorities in various jurisdictions are currently reviewing the

 

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appropriate treatment of companies engaged in Internet commerce and may make changes to existing tax or other laws that could result in additional taxes relating to our activities, and/or impose obligations on us to collect such taxes. New tax laws or regulations could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws and regulations could be interpreted, modified or applied adversely to us.

Our ability to use our net operating loss carryforwards and certain other tax attributes to offset taxable income or reduce our taxes may be limited.

As of December 31, 2020, we had accumulated $373.7 million and $309.5 million of federal and state net operating loss carryforwards (“NOLs”), respectively, available to reduce future taxable income, portions of which will begin to expire in 2034 for federal and 2034 for state tax purposes. It is possible that we will not generate taxable income in time to use certain of our NOLs before their expiration, or at all. Net operating losses incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal net operating losses in taxable years beginning after December 31, 2020 is limited to 80% of current year taxable income. Under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and other tax attributes, including R&D tax credits, to offset its post-change income or taxes may be limited. In general, an “ownership change” occurs if there is a cumulative change in our ownership by “5 percent stockholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Our ability to use NOLs and other tax attributes to reduce future taxable income and liabilities may be subject to annual limitations as a result of prior ownership changes and ownership changes that may occur in the future, including as a result of the Business Combination. In addition, for state income tax purposes, the extent to which states will conform to the federal laws is uncertain and there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. For example, California imposed limits on the usability of California state net operating losses and tax credits in tax years beginning after 2019 and before 2023.

Risks Related to Regulatory Compliance and Legal Matters

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated by the Merger Agreement can be completed, filings must be made and waiting periods under the HSR Act must be terminated or expire. In reviewing the transaction, the relevant governmental authorities will consider a variety of factors, including the effect of the Business Combination on competition within their relevant jurisdiction. MRAC and Enjoy believe that the Business Combination should not raise significant regulatory concerns and that MRAC and Enjoy will be able to obtain all requisite regulatory approvals in a timely manner. However, MRAC and Enjoy cannot be certain when or if regulatory approvals will be obtained, or, if obtained, the conditions that may be imposed. In addition, neither MRAC nor Enjoy can provide assurance that any such conditions, terms, obligations or restrictions will not result in delay. See “The Business Combination—Regulatory Matters” beginning on page 17 of this proxy statement/prospectus.

Risks Related to the Business Combination and MRAC

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to MRAC prior to the consummation of the Business Combination.

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how MRAC’s public shareholders vote.

Unlike some other blank check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial

 

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business combination, the Sponsor and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby. As of the date of this proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

Since the Sponsor and MRAC’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Enjoy is appropriate as our initial business combination. Such interests include that Sponsor will lose its entire investment in us if our business combination is not completed.

When you consider the recommendation of MRAC’s board of directors in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor and MRAC’s directors and officers have interests in such proposal that are different from, or in addition to, those of MRAC shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

Prior to MRAC’s initial public offering, the Sponsor purchased 10,062,500 MRAC Class B Ordinary Shares for an aggregate purchase price of $25,000, and MRAC later surrendered 718,750 MRAC Class B Ordinary Shares to MRAC for no consideration, resulting in an aggregate 9,343,750 Class B Ordinary Shares issued and outstanding, 9,268,750 of which are held by the Sponsor, and 25,000 of which are held by each of our independent directors. If MRAC does not consummate a business combination by December 17, 2022 (or if such date is extended at a duly called extraordinary general meeting, such later date), it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Law to provide for claims of creditors and the requirements of other applicable law. In such event, the 9,343,750 MRAC Class B Ordinary Shares collectively owned by the Sponsor and three members of MRAC’s board of directors (Thomas Freston, Matthew Maloney and Assia Grazioli-Venier) would be worthless because following the redemption of the public shares, MRAC would likely have few, if any, net assets and because the Sponsor and MRAC’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of any MRAC Class A Ordinary Shares and MRAC Class B Ordinary Shares held by it or them, as applicable, if MRAC fails to complete a business combination within the required period. Additionally, in such event, the 6,316,667 MRAC Private Placement Warrants purchased by the Sponsor simultaneously with the consummation of MRAC’s initial public offering for an aggregate purchase price of $9.5 million, will also expire worthless.

The 9,343,750 shares of New Enjoy Common Stock into which the 9,343,750 MRAC Class B Ordinary Shares collectively held by the Sponsor, Thomas Freston, Matthew Maloney and Assia Grazioli-Venier will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $[●] million based upon the closing price of $[●] per public share on Nasdaq on [●], 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such shares of New Enjoy Common Stock will be subject to certain restrictions, including those described above, MRAC believes such shares have less value. The 6,316,667 New Enjoy Warrants into which the 6,316,667 MRAC Private Placement Warrants held by the Sponsor will automatically convert in connection with the Merger (including after giving effect to the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $[●] million based upon the closing price of $[●] per public warrant on Nasdaq on [●], 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

Thomas Ricketts, the Co-Chairman and Director of MRAC, and Brett Varsov, Co-Chief Executive Officer of MRAC, are expected to be directors of New Enjoy after the consummation of the Business Combination. As such, in the future, Thomas Ricketts and Brett Varsov may receive fees for their service as directors, which may

 

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consist of cash or stock-based awards, and any other remuneration that New Enjoy’s board of directors determines to pay to its non-employee directors.

MRAC will pay Raine Securities LLC (“Raine Securities”), an affiliate of the Sponsor, a placement fee equal to 1.5% of the gross proceeds of the PIPE Investment actually received by MRAC. Raine Securities is also serving as MRAC’s financial advisor in connection with the Business Combination. As such, Raine Securities has a financial interest in the Business Combination in addition to the financial interest of the Sponsor.

MRAC will pay Raine Advisors LLC (“Raine Advisors”), an affiliate of the Sponsor, a fee in an amount equal to $309,825 for consulting services, including support and advice to MRAC in connection with the execution of the Business Combination, the payment of which is contingent upon the consummation of the Business Combination for no additional fees and expense reimbursement. As such, Raine Advisors has a financial interest in the Business Combination in addition to the financial interest of the Sponsor.

MRAC will pay Marquee Sports Holdings SPAC I, LLC (“Marquee Sports Holdings”), an affiliate of the Sponsor, a fee in an amount equal to $309,825 for consulting services, including support and advice to MRAC in connection with the execution of the Business Combination, the payment of which is contingent upon the consummation of the Business Combination. As such, Marquee Sports Holdings has a financial interest in the Business Combination in addition to the financial interest of the Sponsor.

ET Investment, LLC is a participant in an Excluded Financing pursuant to which it has purchased convertible notes of Enjoy for an aggregate amount equal to $5,000,000, which are anticipated to be exchanged for shares of New Enjoy Common Stock in connection with the consummation of the Business Combination. Thomas Ricketts has an indirect pecuniary interest in such entity, and Crane H. Kenney has a pecuniary interest in such entity.

Pursuant to the underwriting agreement entered into in connection with MRAC’s initial public offering, up to 30% of the deferred discount thereunder (i.e., approximately $3,924,375) may be paid at the sole discretion of MRAC’s management to the underwriter and/or to third parties not participating as underwriters in the initial public offering that assisted MRAC in consummating its business combination, in allocations determined by MRAC’s management. In accordance with the foregoing terms, MRAC’s management has elected to direct the payment of $1,024,875 of the deferred discount upon the consummation of the Business Combination to Marquee Sports Holdings and $2,899,500 of the deferred discount upon the consummation of the Business Combination to Raine Securities. The audit committee of the MRAC Board approved such payments on May 13, 2021.

The Sponsor (including its representatives and affiliates) and MRAC’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to MRAC. The Sponsor and MRAC’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to MRAC completing its initial business combination. Moreover, certain of MRAC’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. MRAC’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to MRAC, and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in MRAC’s favor and such potential business opportunities may be presented to other entities prior to their presentation to MRAC, subject to applicable fiduciary duties under the Cayman Islands Companies Law. MRAC’s Cayman Constitutional Documents provide that MRAC renounces its interest in any corporate opportunity offered to any director or officer of MRAC unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of MRAC and it is an opportunity that MRAC is able to complete on a reasonable basis. In addition to the foregoing fees to be paid to Raine Securities, Raine Advisors and Marquee Sports Holdings, Crane H. Kenney, our Co-Chief Executive Officer, Alexander D. Sugarman, our Executive Vice President, Jason Sondag, our Vice President, and Thomas Ricketts, our co-Chairman and Director, are currently associated with affiliates of Marquee. In addition, Brett Varsov, our Co-Chief Executive

 

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Officer, Joseph Beyrouty, our Chief Financial Officer, Evan Ellsworth, our Vice President and Brandon Gardner, our co-Chairman and Director, are currently associated with The Raine Group. The engagement of each of Raine Securities, Raine Advisors and Marquee Sports Holdings and the payment of the fees described above have been reviewed and approved by MRAC’s audit committee in accordance with MRAC’s policies and procedures relating to transactions that may present conflicts of interest.

MRAC’s existing directors and officers will be eligible for continued indemnification and continued coverage under MRAC’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement.

In the event that MRAC fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, MRAC will be required to provide for payment of claims of creditors that were not waived that may be brought against MRAC within the ten years following such redemption. In order to protect the amounts held in MRAC’s trust account, the Sponsor has agreed that it will be liable to MRAC if and to the extent any claims by a third party (other than MRAC’s independent registered public accounting firm) for services rendered or products sold to MRAC, or a prospective target business with which MRAC has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share or (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of MRAC’s initial public offering against certain liabilities, including liabilities under the Securities Act.

In connection with MRAC’s initial public offering, the underwriters of MRAC’s initial public offering agreed to reimburse approximately $3.0 million to MRAC to cover for expenses in connection with the Initial Public Offering. Commencing on the effective date of the prospectus filed in connection with our initial public offering, we agreed to reimburse our Sponsor for out-of-pocket expenses through the completion of the Business Combination or MRAC’s liquidation.

The Sponsor, or an affiliate of the Sponsor, or certain of MRAC’s officers and directors has advanced funds to MRAC for working capital purposes, including $128,000 as of December 17, 2020. These outstanding advances have been documented in a promissory note, dated October 28, 2020 (the “Promissory Note”) issued by MRAC to the Sponsor, pursuant to which MRAC may borrow up to $300,000 from the Sponsor (including those amounts which are currently outstanding). The Promissory Note is non-interest bearing, unsecured and due and payable in full on the earlier of June 30, 2021 and the date MRAC consummates its initial business combination. If MRAC does not complete its initial business combination within the required period, it may use a portion of its working capital held outside the trust account to repay such advances and any other working capital advances made to MRAC, but no proceeds held in the trust account would be used to repay such advances and any other working capital advances made to MRAC, and such related party may not be able to recover the value it has loaned to MRAC and any other working capital advances it may make.

In addition, MRAC’s executive officers and directors, or any of their respective affiliates, including Ricketts SPAC Investment LLC and Raine Securities LLC and other entities affiliated with Marquee Sports Holdings SPAC I LLC and the Raine Group LLC, are entitled to reimbursement of any reasonable fees and out-of-pocket expenses incurred by them in connection with certain activities on MRAC’s behalf, such as identifying and investigating possible business targets and business combinations. However, if MRAC fails to consummate a business combination by December 17, 2022, they will not have any claim against the trust account for reimbursement. MRAC’s officers and directors, and their affiliates, expect to incur (or guaranty) significant transaction expenses (excluding the deferred underwriting commissions being held in the trust account). Accordingly, MRAC may not be able to reimburse these expenses if the Business Combination or another business combination, is not completed by such date.

 

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Pursuant to the Registration Rights Agreement, the Sponsor will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Enjoy Common Stock and warrants held by such parties following the consummation of the Business Combination.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

The personal and financial interests of the Sponsor as well as MRAC’s directors and officers may have influenced their motivation in identifying and selecting Enjoy as a business combination target, completing an initial business combination with Enjoy and influencing the operation of the business following the initial business combination. In considering the recommendations of MRAC’s board of directors to vote for the proposals, its shareholders should consider these interests.

The exercise of MRAC’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in MRAC’s shareholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Merger Agreement, would require MRAC to agree to amend the Merger Agreement, to consent to certain actions taken by Enjoy or to waive rights that MRAC is entitled to under the Merger Agreement. Such events could arise because of changes in the course of Enjoy’s business or a request by Enjoy to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement. In any of such circumstances, it would be at MRAC’s discretion, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors (and described elsewhere in this proxy statement/prospectus) may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, MRAC does not believe there will be any changes or waivers that MRAC’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, MRAC will circulate a new or amended proxy statement/prospectus and resolicit MRAC’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

We and Enjoy will incur significant transaction and transition costs in connection with the Business Combination.

We and Enjoy have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. We and Enjoy may also incur additional costs to retain key employees. Certain transaction expenses incurred in connection with the Merger Agreement (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be paid by New Enjoy following the closing of the Business Combination.

 

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The announcement of the proposed Business Combination could disrupt New Enjoy’s relationships with Consumers, suppliers, Business Partners and others, as well as its operating results and business generally.

Whether or not the Business Combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the Business Combination on New Enjoy’s business include the following:

 

   

its employees may experience uncertainty about their future roles, which might adversely affect New Enjoy’s ability to retain and hire key personnel and other employees;

 

   

Consumers, suppliers, Business Partners and other parties with which New Enjoy maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with New Enjoy or fail to extend an existing relationship with New Enjoy; and

 

   

New Enjoy has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact New Enjoy’s results of operations and cash available to fund its business.

Subsequent to consummation of the Business Combination, we may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Enjoy has identified all material issues or risks associated with Enjoy, its business or the industry in which it competes.

Furthermore, we cannot assure you that factors outside of Enjoy’s and our control will not later arise. As a result of these factors, we may be exposed to liabilities and incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or New Enjoy. Additionally, we have no indemnification rights against the Enjoy Stockholders under the Merger Agreement and all of the purchase price consideration will be delivered at the Closing.

Accordingly, any shareholders or warrant holders of MRAC who choose to remain New Enjoy stockholders or warrant holders following the Business Combination could suffer a reduction in the value of their shares, warrants and units. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

The historical financial results of Enjoy and unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what New Enjoy’s actual financial position or results of operations would have been.

The historical financial results of Enjoy included in this proxy statement/prospectus do not reflect the financial condition, results of operations or cash flows they would have achieved as a standalone company during the periods presented or those New Enjoy will achieve in the future. This is primarily the result of the following

 

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factors: (i) New Enjoy will incur additional ongoing costs as a result of the Business Combination, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act; and (ii) New Enjoy’s capital structure will be different from that reflected in Enjoy’s historical financial statements. New Enjoy’s financial condition and future results of operations could be materially different from amounts reflected in its historical financial statements included elsewhere in this proxy statement/prospectus, so it may be difficult for investors to compare New Enjoy’s future results to historical results or to evaluate its relative performance or trends in its business.

Similarly, the unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, MRAC being treated as the “acquired” company for financial reporting purposes in the Business Combination, the total debt obligations and the cash and cash equivalents of Enjoy on the Closing Date and the number of MRAC Class A Ordinary Shares that are redeemed in connection with the Business Combination. Accordingly, such pro forma financial information may not be indicative of New Enjoy’s future operating or financial performance and New Enjoy’s actual financial condition and results of operations may vary materially from New Enjoy’s pro forma results of operations and balance sheet contained elsewhere in this proxy statement/prospectus, including as a result of such assumptions not being accurate. See “Unaudited Pro Forma Condensed Combined Financial Information.”

Following the consummation of the Business Combination, our only significant asset will be our ownership interest in Enjoy and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on New Enjoy Common Stock or satisfy our other financial obligations.

Following the consummation of the Business Combination, we will have no direct operations and no significant assets other than our ownership of Enjoy. Our investors, the PIPE Investors and the Enjoy Stockholders immediately prior to the Business Combination will become stockholders of New Enjoy. We will depend on Enjoy for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company and to pay any dividends with respect to New Enjoy Common Stock. The financial condition and operating requirements of Enjoy may limit our ability to obtain cash from Enjoy. The earnings from, or other available assets of, Enjoy may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on New Enjoy Common Stock or satisfy our other financial obligations.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our Business Combination.

We have a specified maximum redemption threshold. This redemption threshold may make it more difficult for us to complete the Business Combination as contemplated.

The Merger Agreement provides that Enjoy’s obligation to consummate the Business Combination is conditioned on, among other things, that as of the Closing, (i) the amount of cash available in (x) the trust account into which a total of $373,750,000, comprised of $366,275,000 of the proceeds from the initial public offering, including approximately $13,081,250 of the underwriter’s deferred discount, and $7,475,000 of the proceeds of the sale of the MRAC Private Placement Warrants, was placed in the trust account, after deducting the amount required to satisfy our obligations to our shareholders (if any) that exercise their rights to redeem their MRAC Class A Ordinary Shares pursuant to the Cayman Constitutional Documents (but prior to payment of (a) any deferred underwriting commissions being held in the trust account and (b) any transaction expenses of MRAC or its affiliates) (the “Trust Amount”) plus (y) the PIPE Investment, is at least equal to or greater than $250.0 million minus the amount of any Excluded Financing (not to exceed $60.0 million) (the “Minimum Cash Condition”).

 

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If the Trust Amount when added to the PIPE Investment (such aggregate amount, the “Available Cash”) is equal to or greater than the Minimum Available Cash Amount, then this condition will be deemed to have been satisfied (such condition, the “Minimum Cash Condition”). This condition is for the sole benefit of Enjoy. If such condition is not met, and such condition is not waived under the terms of the Merger Agreement, then the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will MRAC redeem public shares in an amount that would cause New Enjoy’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

There can be no assurance that Enjoy would waive the Minimum Cash Condition. Furthermore, as provided in the Cayman Constitutional Documents, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If such conditions are not met, and such conditions are not or cannot be waived under the terms of the Merger Agreement, then the proposed Business Combination may not be consummated.

If such conditions are waived and the Business Combination is consummated with less than the Minimum Available Cash Amount in the trust account, the cash held by New Enjoy and its subsidiaries (including Enjoy) in the aggregate, after the Closing may not be sufficient to allow us to operate and pay our bills as they become due. Furthermore, our affiliates and the Sponsor are not obligated to make loans to us in the future, however they may provide us loans in order to finance transaction costs in connection with a business combination). The additional exercise of redemption rights with respect to a large number of our public shareholders may make us unable to take such actions as may be desirable in order to optimize the capital structure of New Enjoy after consummation of the Business Combination and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses and liabilities after the Closing. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

The Sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares or warrants from public shareholders prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our securities.

The Sponsor and MRAC’s directors, officers, advisors or their respective affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. However, they have no current commitments, plans or intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of MRAC’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

In the event that the Sponsor or MRAC’s directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.

The purpose of such purchases would be to (i) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii) to increase the likelihood of satisfaction of the Minimum Cash Condition or ensure that MRAC’s net tangible assets are at least $5,000,001, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the Business Combination. Any such purchases of our securities may result in the completion of the Business Combination that may not otherwise have been possible.

 

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In addition, if such purchases are made, the public “float” of MRAC Class A Ordinary Shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

The Sponsor and MRAC’s officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom the Sponsor or MRAC’s officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with the Business Combination. To the extent that the Sponsor or MRAC’s officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the Business Combination but only if such shares have not already been voted at the extraordinary general meeting. The Sponsor and MRAC’s officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by the Sponsor or MRAC’s officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. The Sponsor and MRAC’s officers, directors and/or their affiliates will not make purchases of MRAC Class A Ordinary Shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

We are not registering the shares of New Enjoy Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

We are not registering the shares of New Enjoy Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of New Enjoy Common Stock until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the shares of New Enjoy Common Stock that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.3611 shares of New Enjoy Common Stock per warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if New Enjoy’s Common Stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws

 

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to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of New Enjoy Common Stock included in the units. There may be a circumstance where an exemption from registration exists for holders of our MRAC Private Placement Warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants. In such an instance, the Sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of New Enjoy Common Stock for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price per unit in our initial public offering).

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our business combination within the required time period, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the

 

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interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of our company. The Sponsor may not have sufficient funds available to satisfy those obligations. We have not asked the Sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our directors or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

If, after we distribute the proceeds in the trust account to our public shareholders, MRAC files a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board of directors may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance. As a result, a liquidator could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

If, before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete the trust account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to

 

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addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

The public shareholders will experience immediate dilution as a consequence of the issuance of New Enjoy Common Stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the 2021 Plan. Having a minority share position may reduce the influence that our current stockholders have on the management of New Enjoy.

It is anticipated that, following the Business Combination, (1) MRAC’s public shareholders are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock, (2) Enjoy securityholders (without taking into account any public shares held by Enjoy securityholders prior to the consummation of the Business Combination) are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock, (3) the Sponsor and related parties are expected to collectively own approximately [●]% of the outstanding shares of New Enjoy Common Stock and (4) the PIPE Investors are expected to own approximately [●]% of the outstanding shares of New Enjoy Common Stock. These percentages (i) assume (a) that no public shareholders exercise their redemption rights in connection with the Business Combination, (b) that New Enjoy issues [●] shares of New Enjoy Common Stock to former securityholders of Enjoy as of immediately prior to the Effective Time, (c) that New Enjoy issues 8 million shares of New Enjoy Common Stock to the PIPE Investors pursuant to the PIPE Investment and (d) the amount of the Excluded Financing is equal to $60 million, (ii) exclude all New Enjoy Options that may be exercisable for shares of New Enjoy Common Stock and New Enjoy Restricted Stock Awards, (iii) include the Sponsor Earnout Shares, (iv) exclude the impact of any New Enjoy Warrants that will be outstanding following the Business Combination and Enjoy Warrants that will be assumed in connection with the Business Combination, (v) assume that no holder of vested Enjoy Options exercises such Enjoy Options after the date hereof and (vi) account for interest accrued on the principal amount of Enjoy’s convertible notes through July 31, 2021. If the actual facts are different from these assumptions, the percentage ownership of New Enjoy held by such constituencies will be different.

In addition, Enjoy employees and consultants hold, and after Business Combination, are expected to be granted, equity awards under the 2021 Plan and purchase rights under the ESPP. You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of New Enjoy Common Stock.

The issuance of additional common stock will significantly dilute the equity interests of existing holders of MRAC securities and may adversely affect prevailing market prices for our public shares or public warrants.

Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.

We are subject to complex securities laws and regulations and accounting principles and interpretations. The preparation of our financial statements requires us to interpret accounting principles and guidance and to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. We base our interpretations, estimates and judgments on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for the preparation of our financial statements. GAAP presentation is subject to interpretation by the SEC, the Financial Accounting Standards Board and various other bodies formed to interpret and create appropriate accounting principles and guidance. If one of these bodies disagrees with our accounting recognition, measurement or disclosure or any of our accounting interpretations, estimates or assumptions, it may have a significant effect on our reported results and may retroactively affect previously reported results.

On April 12, 2021, the staff (the “SEC Staff”) of the SEC issued a statement entitled “Staff Statement on Accounting and Reporting Considerations for warrants Issued by Special Purpose Acquisition Companies

 

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(“SPACs”) (the “SEC Staff Statement”).” In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance on December 17, 2020, the outstanding warrants were accounted for as equity within our balance sheet. After discussion and evaluation, including with our independent registered public accounting firm and the audit committee of the MRAC board of directors (the “Audit Committee”), and taking into consideration the SEC Staff Statement, we reevaluated the accounting treatment of our 9,343,750 public warrants and 6,316,667 private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

As a result of the foregoing, on May 11, 2021, the Audit Committee concluded, in consultation with our management, that its previously issued financial statements for the periods beginning with the period from October 16, 2020 (date of inception) through December 31, 2020 should be restated (the “Restatement”) because of a misapplication of the guidance around accounting for the warrants and should no longer be relied upon.

As a result, included on our consolidated balance sheet as of December 31, 2020 contained elsewhere in this proxy statement/prospectus are derivative liabilities related to embedded features contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging, provides for the re-measurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our consolidated financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.

No assurance can be given that additional guidance or new regulations or accounting principles and interpretations will not be released that would require us to reclassify our warrants as liabilities measured at fair value, with changes in fair value reported each period in earnings and/or require a restatement of our financial statements with respect to treatment of the warrants.

Any restatement of our financial results could, among other potential adverse effects:

 

   

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.

We have identified a material weakness in our internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system of internal control over financial reporting, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Following the issuance of the SEC Statement, on May 11, 2021, after consultation with our independent registered public accounting firm, our management and the Audit Committee concluded that, in light of the SEC

 

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Statement, it was appropriate to initiate the Restatement. See “—Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.” As part of such process, we identified a material weakness in our internal controls over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

As a result of the material weakness we identified in our internal controls over financial reporting (see above), the Restatement, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, the Financial Accounting Standards Board and various other bodies formed to interpret and create appropriate accounting principles and guidance we and, following the Business Combination, New Enjoy, face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this proxy statement/prospectus, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete the Business Combination.

Warrants will become exercisable for New Enjoy Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Outstanding warrants to purchase an aggregate of 15,660,417 shares of New Enjoy Common Stock will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. These warrants will become exercisable at any time commencing on the later of 30 days after the completion of the Business Combination and 12 months from the closing of our initial public offering. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of New Enjoy Common Stock will be issued, which will result in dilution to the holders of New Enjoy Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of New Enjoy Common Stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “- Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment.”

 

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Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment.

The warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and MRAC. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of New Enjoy Common Stock purchasable upon exercise of a warrant.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the last reported sale price of New Enjoy’s Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants as described above could force you to: (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants. None of the MRAC Private Placement Warrants will be redeemable by us (subject to limited exceptions) so long as they are held by our Sponsor or its permitted transferees. New Enjoy does not intend to pay cash dividends for the foreseeable future.

In addition, we have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the last reported sale price of our New Enjoy Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). In such a case, the holders will be able to exercise their warrants prior to redemption for a number of shares of New Enjoy Common Stock determined based on the redemption date and the fair market value of our New Enjoy Common Stock. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.3611 shares of New Enjoy Common Stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.

Following the Business Combination, New Enjoy currently intends to retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of New Enjoy’s board of

 

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directors and will depend on its financial condition, results of operations, capital requirements and future agreements and financing instruments, business prospects and such other factors as its board of directors deems relevant.

Nasdaq may not list New Enjoy’s securities on its exchange, which could limit investors’ ability to make transactions in New Enjoy’s securities and subject New Enjoy to additional trading restrictions.

In connection with the Business Combination, in order to continue to maintain the listing of our securities on Nasdaq, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements. We will apply to have New Enjoy’s securities listed on Nasdaq upon consummation of the Business Combination. We cannot assure you that we will be able to meet all initial listing requirements. Even if New Enjoy’s securities are listed on Nasdaq, New Enjoy may be unable to maintain the listing of its securities in the future.

If New Enjoy fails to meet the initial listing requirements and Nasdaq does not list its securities on its exchange, neither we nor Enjoy would be required to consummate the Business Combination. In the event that we and Enjoy elected to waive this condition, and the Business Combination was consummated without New Enjoy’s securities being listed on Nasdaq or on another national securities exchange, New Enjoy could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for New Enjoy’s securities;

 

   

reduced liquidity for New Enjoy’s securities;

 

   

a determination that New Enjoy Common Stock is a “penny stock” which will require brokers trading in New Enjoy Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New Enjoy’s securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New Enjoy’s securities were not listed on Nasdaq, such securities would not qualify as covered securities and we would be subject to regulation in each state in which we offer our securities because states are not preempted from regulating the sale of securities that are not covered securities.

MRAC’s and Enjoy’s ability to consummate the Business Combination, and the operations of New Enjoy following the Business Combination, may be materially adversely affected by the recent coronavirus (COVID-19) pandemic.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, the U.S. Department of Health and Human Services declared a public health emergency for the United States to aid the U.S., and on March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a “pandemic.”

The COVID-19 pandemic has resulted, and other infectious diseases could result, in a widespread health crisis that has and could continue to adversely affect the economies and financial markets worldwide, which may delay or prevent the consummation of the Business Combination, and the business of Enjoy or New Enjoy following the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information

 

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which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. While vaccines for COVID-19 are being, and have been developed, there is no guarantee that any such vaccine will be durable and effective consistent with current expectations and we expect it will take significant time before the vaccines are available and accepted on a significant scale. In addition, if any treatment of vaccine for the COVID-19 is ineffective or underutilized, any impact on Enjoy or New Enjoy may be prolonged.

The parties will be required to consummate the Business Combination even if Enjoy, its business, financial condition and results of operations are materially affected by COVID-19. The disruptions posed by COVID-19 have continued, and other matters of global concern may continue, for an extensive period of time, and if Enjoy is unable to recover from business disruptions due to COVID-19 or other matters of global concern on a timely basis, Enjoy’s ability to consummate the Business Combination and New Enjoy’s financial condition and results of operations following the Business Combination may be materially adversely affected. Each of Enjoy and New Enjoy may also incur additional costs due to delays caused by COVID-19, which could adversely affect New Enjoy’s financial condition and results of operations.

Because the market price of shares of MRAC Class A Ordinary Shares will fluctuate, the security holders of Enjoy cannot be sure of the value of the Business Combination consideration they will receive.

Upon completion of the Business Combination, the market value of MRAC securities at the effective time of the Business Combination may vary significantly from their respective values on the date the Merger Agreement was executed or at other dates. Because the exchange ratio with respect to the shares of New Enjoy Common Stock to be issued in the Business Combination is fixed and will not be adjusted to reflect any changes in the market value of shares of MRAC Class A Ordinary Shares, the market value of the shares of New Enjoy Common Stock issued in connection with the Business Combination may be higher or lower than the values of those shares on earlier dates, and may be higher or lower than the value used to determine the exchange ratio. Stock price changes may result from a variety of factors, including changes in the business, operations or prospects of MRAC, regulatory considerations, and general business, market, industry or economic conditions. Many of these factors are outside of the control of MRAC.

The market price of shares of New Enjoy Common Stock after the Business Combination may be affected by factors different from those currently affecting the price of shares of MRAC.

Upon completion of the Business Combination, Enjoy’s security holders will become holders of shares of New Enjoy Common Stock. Prior to the Business Combination, MRAC has had limited operations. Upon completion of the Business Combination, New Enjoy’s results of operations will depend upon the performance of Enjoy’s business, which is affected by factors that are different from those currently affecting the results of operations of MRAC.

If the Business Combination’s benefits do not meet the expectations of financial analysts, the market price of New Enjoy Common Stock may decline.

The market price of the New Enjoy Common Stock may decline as a result of the Business Combination if New Enjoy does not achieve the perceived benefits of the Business Combination as rapidly, or to the extent anticipated by, financial analysts or the effect of the Business Combination on New Enjoy’s financial results is not consistent with the expectations of financial analysts. Accordingly, holders of MRAC securities may experience a loss as a result of a decline in the market price of New Enjoy Common Stock. In addition, a decline in the market price of New Enjoy Common Stock could adversely affect New Enjoy’s ability to issue additional securities and to obtain additional financing in the future.

 

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Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated by the Merger Agreement can be completed, filings must be made under the HSR Act and waiting periods required by the HSR Act must be terminated or expire. In reviewing the transaction the relevant governmental authorities will consider a variety of factors, including the effect of the Business Combination on competition within their relevant jurisdiction. MRAC and Enjoy believe that the Business Combination should not raise significant regulatory concerns and that MRAC and Enjoy will be able to obtain all requisite regulatory approvals in a timely manner. However, MRAC and Enjoy cannot be certain when or if regulatory approvals will be obtained or, if obtained, the conditions that may be imposed. In addition, neither MRAC nor Enjoy can provide assurance that any such conditions, terms, obligations or restrictions will not result in delay. See “The Business Combination—Regulatory Matters” beginning on page 17 of this proxy statement/prospectus.

MRAC may waive one or more of the conditions to the Business Combination.

MRAC may agree to waive, in whole or in part, one or more of the conditions to MRAC’s obligations to complete the Business Combination, to the extent permitted by MRAC’s current certificate of incorporation and bylaws and applicable laws. For example, it is a condition to MRAC’s obligations to close the Business Combination that Enjoy have performed and complied in all material respects with the obligations required to be performed or complied with by Enjoy under the Merger Agreement. However, if the MRAC Board determines that a breach of this obligation is not material, then the MRAC Board may elect to waive that condition and close the Business Combination. Please see the section entitled “The Merger Agreement— Closing Conditions” beginning on page 98 of this proxy statement/prospectus for additional information.

Termination of the Merger Agreement could negatively impact MRAC.

If the Business Combination is not completed for any reason, including as a result of MRAC shareholders declining to approve the proposals required to effect the Business Combination, the ongoing businesses of MRAC may be adversely impacted and, without realizing any of the anticipated benefits of completing the Business Combination, MRAC would be subject to a number of risks, including the following:

 

   

MRAC may experience negative reactions from the financial markets, including negative impacts on its share price (including to the extent that the current market price reflects a market assumption that the Business Combination will be completed);

 

   

MRAC will have incurred substantial expenses and will be required to pay certain costs relating to the Business Combination, whether or not the Business Combination is completed; and

 

   

since the Merger Agreement restricts the conduct of MRAC’s businesses prior to completion of the Business Combination, MRAC may not have been able to take certain actions during the pendency of the Business Combination that would have benefitted it as an independent company, and the opportunity to take such actions may no longer be available (see the section entitled “The Merger Agreement—Covenants and Agreements” beginning on page 89 of this proxy statement/prospectus for a description of the restrictive covenants applicable to MRAC).

 

   

If the Merger Agreement is terminated and MRAC’s board of directors seeks another business combination target, MRAC shareholders cannot be certain that MRAC will be able to find another acquisition target that would constitute a business combination or that such other business combination will be completed. See “The Merger Agreement—Termination, Effectiveness” beginning on page 100 of this proxy statement/prospectus.

Enjoy will be subject to business uncertainties and contractual restrictions while the Business Combination is pending. Uncertainty about the effect of the Business Combination on employees and other business participants

 

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may have an adverse effect on Enjoy and consequently on MRAC. These uncertainties may impair Enjoy’s ability to attract, retain and motivate key personnel until the Business Combination is completed, and could cause others that deal with Enjoy to seek to change existing business relationships with Enjoy. Retention of certain employees may be challenging during the pendency of the Business Combination, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty or a desire not to remain with the business, New Enjoy’s business following the Business Combination could be negatively impacted. In addition, the Merger Agreement restricts Enjoy from making certain expenditures and taking other specified actions without the consent of MRAC until the Business Combination occurs. These restrictions may prevent Enjoy from pursuing attractive business opportunities that may arise prior to the completion of the Business Combination. See “The Merger Agreement—Covenants and Agreements” beginning on page 89 of this proxy statement/prospectus.

The Business Combination will result in changes to the board of directors of New Enjoy that may affect the strategy of New Enjoy.

If the parties complete the Business Combination, the composition of New Enjoy Board will change from the current MRAC Board. The board of directors of New Enjoy will consist of nine directors, as more fully set forth in this proxy statement / prospectus. The composition of the New Enjoy board of directors may affect the business strategy and operating decisions of New Enjoy upon the completion of the Business Combination.

Neither MRAC nor its shareholders will have the protection of any indemnification, escrow, purchase price adjustment or other provisions that allow for a post-closing adjustment to be made to the consideration that is payable in the Merger in the event that any of the representations and warranties made by Enjoy in the Merger Agreement ultimately proves to be inaccurate or incorrect.

The representations and warranties contained in the Merger Agreement will not survive the completion of the Business Combination, and only the covenants and agreements that by their terms survive such time will do so. As a result, MRAC and its shareholders will not have the protection of any indemnification, escrow, purchase price adjustment or other provisions that allow for a post-closing adjustment to be made to the consideration that is payable in the Merger if any representation or warranty made by Enjoy in the Merger Agreement proves to be inaccurate or incorrect. Accordingly, to the extent such representations or warranties are incorrect, our financial condition or results of operations could be adversely affected.

We currently intend to only complete one Business Combination with the proceeds of our IPO, which will cause us to be solely dependent on New Enjoy’s business. This lack of diversification may negatively impact our operations and profitability.

We currently intend to only complete one Business Combination with the proceeds of our IPO. By completing our Business Combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success will be solely dependent upon the business and financial performance of Enjoy.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to the Business Combination. See “ — Risks Related to the Business and Industry of New Enjoy” for risks we may face as a result of consummating the Business Combination with New Enjoy.

 

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Risks Related to Redemption

Public shareholders who wish to redeem their public shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the Trust Account.

A public shareholder will be entitled to receive cash for any public shares to be redeemed only if such public shareholder: (1)(a) holds public shares, or (b) if the public shareholder holds public shares through units, the public shareholder elects to separate its units into the underlying public shares and warrants prior to exercising its redemption rights with respect to the public shares; (2) prior to [●] p.m. Eastern Time on [●], 2021 (two business days before the scheduled date of the extraordinary general meeting) submits a written request to Continental Stock Transfer & Trust Company, our transfer agent, that we redeem all or a portion of your public shares for cash, affirmatively certifying in your request if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other shareholder with respect to shares of our common stock; and (3) delivers its public shares to our transfer agent physically or electronically through DTC. In order to obtain a physical share certificate, a shareholder’s broker or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that shareholders should generally allot at least two weeks to obtain physical certificates from our transfer agent. However, because we do not have any control over this process or over DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, public shareholders who wish to redeem their public shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

If a public shareholder fails to receive notice of our offer to redeem public shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

If, despite our compliance with the proxy rules, a public shareholder fails to receive our proxy materials, such public shareholder may not become aware of the opportunity to redeem his, her or its public shares. In addition, the proxy materials that we are furnishing to holders of public shares in connection with the Business Combination describe the various procedures that must be complied with in order to validly redeem the public shares. In the event that a public shareholder fails to comply with these procedures, its public shares may not be redeemed. Please see the section entitled “Extraordinary General Meeting of MRAC — Redemption Rights” for additional information on how to exercise your redemption rights.

If you or a “group” of shareholders of which you are a part are deemed to hold an aggregate of more than 15% of the public shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the public shares.

A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15%of the public shares. In order to determine whether a shareholder is acting in concert or as a group with another shareholder, we will require each public shareholder seeking to exercise redemption rights to certify to us whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to stock ownership available to us at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which we make the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over our ability to consummate the Business Combination and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if we consummate the Business Combination. As a result, you will continue to hold

 

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that number of shares aggregating to more than 15% of the public shares and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. We cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of the public shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders may challenge our determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

However, our shareholders’ ability to vote all of their shares (including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.

There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the shareholder in a better future economic position.

We can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the Closing or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a shareholder of MRAC might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A shareholder should consult the shareholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

MRAC directors may decide not to enforce the indemnification obligation of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to public shareholders.

In the event that the proceeds in the Trust Account are reduced below (i) $10.00 per share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, MRAC’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While MRAC currently expects that its independent directors would take legal action on MRAC’s behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that MRAC’s independent directors in exercising their business judgment and subject to MRAC’s fiduciary duties may choose not to do so in any particular instance. If MRAC’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to public shareholders may be reduced below $10.00 per share.

Additional Risks Related to Ownership of Enjoy Common Stock Following the Business Combination and Enjoy Operating as a Public Company

The price of New Enjoy Common Stock and New Enjoy Warrants may be volatile.

Upon consummation of the Business Combination, the price of New Enjoy Common Stock, as well as New Enjoy Warrants, may fluctuate due to a variety of factors, including:

 

   

changes in the industries in which New Enjoy and its Business Partners operate;

 

   

developments involving New Enjoy’s competitors;

 

   

changes in laws and regulations affecting its business;

 

   

variations in its operating performance and the performance of its competitors in general;

 

   

actual or anticipated fluctuations in New Enjoy’s quarterly or annual operating results;

 

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publication of research reports by securities analysts about New Enjoy or its competitors or its industry;

 

   

the public’s reaction to New Enjoy’s press releases, its other public announcements and its filings with the SEC;

 

   

actions by stockholders, including the sale by the PIPE Investors of any of their shares of New Enjoy Common Stock;

 

   

additions and departures of key personnel;

 

   

commencement of, or involvement in, litigation involving the combined company;

 

   

changes in its capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of New Enjoy 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.

These market and industry factors may materially reduce the market price of New Enjoy Common Stock and New Enjoy Warrants regardless of the operating performance of New Enjoy.

New Enjoy does not intend to pay cash dividends for the foreseeable future.

Following the Business Combination, New Enjoy currently intends to retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of New Enjoy’s board of directors and will depend on its financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as its board of directors deems relevant.

The Proposed Certificate of Incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

New Enjoy’s Proposed Certificate of Incorporation provides that, unless New Enjoy consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (A) any derivative action or proceeding brought on behalf of New Enjoy; (B) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of New Enjoy or any stockholder to New Enjoy or New Enjoy’s stockholders; (C) any action or proceeding asserting a claim against New Enjoy or any current or former director, officer or other employee of New Enjoy or any stockholder arising pursuant to any provision of the DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws (as each may be amended from time to time); (D) any action or proceeding to interpret, apply, enforce or determine the validity of the Proposed Certificate of Incorporation or the Proposed Bylaws (including any right, obligation or remedy thereunder); (E) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (F) any action asserting a claim against New Enjoy or any director, officer or other employee of New Enjoy or any stockholder, governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. However, this provision will not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934 or any other claim for which the federal courts have exclusive jurisdiction.

 

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Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Proposed Certificate of Incorporation provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the Proposed Certificate of Incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provision will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive-forum provision in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.Future resales of common stock after the consummation of the proposed Business Combination may cause the market price of New Enjoy’s securities to drop significantly, even if New Enjoy’s business is doing well.

Pursuant to the Registration Rights Agreement and the Proposed Bylaws, after the consummation of the Business Combination and subject to certain exceptions, the Sponsor and the Enjoy Stockholders will be contractually restricted from selling or transferring any of its shares of common stock (not including the shares of New Enjoy Common Stock to be issued in the PIPE Investment pursuant to the terms of the Subscription Agreements) (the “Lock-up Shares”). Such restrictions begin at the Closing and end (i) for certain holders of New Enjoy Common Stock, the date that is 180 days after the Closing, provided, however, that such restrictions will lapse with respect to shares of New Enjoy Common Stock issued to certain holders of Enjoy Convertible Notes, if earlier than 180 days after the Closing, on the date that the SEC declares effective New Enjoy’s resale Form S-1 registration statement, (ii) for holders of MRAC Private Placement Warrants, the date that is 30 days after Closing and (iii) for the founder shares, the date on which the last reported sale price of New Enjoy Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days from Closing.

Following the expiration of such lockup periods, the Sponsor and the Enjoy Stockholders will not be restricted from selling shares of New Enjoy’s Common Stock held by them, other than by applicable securities laws. Additionally, the PIPE Investors will not be restricted from selling any of their shares of New Enjoy Common Stock following the closing of the Business Combination, other than by applicable securities laws. As such, sales of a substantial number of shares of New Enjoy Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New Enjoy Common Stock.

The shares held by the Sponsor and the Enjoy Stockholders may be sold after the expiration of the applicable lock-up period under the Registration Rights Agreement and Proposed Bylaws. As restrictions on resale end and registration statements (filed after the Closing to provide for the resale of such shares from time to time) are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in the market price of New Enjoy Common Stock, which price could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

 

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New Enjoy will incur substantial costs as a result of operating as a public company, and its management will devote substantial time to new compliance initiatives. In addition, key members of our management team have limited experience managing a public company.

As a public company, New Enjoy will incur substantial legal, accounting, and other expenses that it did not incur as a private company. For example, New Enjoy will be subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations of the SEC and the listing standards of the Nasdaq. The Exchange Act requires, among other things, that New Enjoy file annual, quarterly, and current reports with respect to its business, financial condition and results of operations. Compliance with these rules and regulations will increase New Enjoy’s legal and financial compliance costs and increase demand on New Enjoy’s systems, particularly after it is no longer an emerging growth company. In addition, as a public company, New Enjoy may be subject to shareholder activism, which can lead to additional substantial costs, distract management and impact the manner in which New Enjoy operates its business in ways New Enjoy cannot currently anticipate. As a result of disclosure of information in this prospectus and in filings required of a public company, New Enjoy’s business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors.

Certain members of New Enjoy’s management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. New Enjoy’s management team may not successfully or efficiently manage the transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from New Enjoy’s senior management and could divert their attention away from the day-to-day management of the business, which could adversely affect New Enjoy’s business, financial condition, and results of operations.

Compliance obligations under the Sarbanes-Oxley Act will require substantial financial and management resources and increase the time and costs of completing the Business Combination.

The fact that MRAC is a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because Enjoy is not currently subject to Section 404 of the Sarbanes-Oxley Act. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act are significantly more stringent than those required of privately held companies like Enjoy. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to Enjoy after the Business Combination. If we are not able to implement the requirements of Section 404, including any additional requirements once we are no longer an emerging growth company, in a timely manner or with adequate compliance, we may not be able to assess whether its internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of New Enjoy Common Stock. Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

We are currently an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and to the extent we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are currently an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are

 

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applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used. We expect to maintain our status as an “emerging growth company” and “smaller reporting company” following the consummation of the Business Combination.

General Risk Factors

We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

Our results of operations have historically varied from period to period, and we expect that our results of operations will continue to vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are outside of our control. As a result, comparing our results of operations on a period-to-period basis may not be meaningful. In addition to other risk factors described elsewhere in this “Risk Factors” section, factors that may contribute to the variability of our quarterly and annual results include:

 

   

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;

 

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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 variability and unpredictability of our results of operations could result in our failure to meet our expectations or those of analysts that cover us or investors with respect to revenue or other results of operations for a particular period. If we fail to meet or exceed such expectations, the market price of New Enjoy Common Stock could fall substantially, and we could face costly lawsuits, including securities class action suits.

New Enjoy may be subject to securities litigation, which is expensive and could divert management attention.

The market price of New Enjoy Common Stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. New Enjoy may be the target of this type of litigation in the future. Securities litigation against New Enjoy could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business.

If analysts do not publish research about New Enjoy’s business or if they publish inaccurate or unfavorable research, New Enjoy’s stock price and trading volume could decline.

The trading market for New Enjoy Common Stock will depend in part on the research and reports that analysts publish about New Enjoy’s business. New Enjoy does not have any control over these analysts, or any research such analysts may publish. If one or more of the analysts who cover New Enjoy downgrade its common stock or publish inaccurate or unfavorable research about its business, the price of its common stock would likely decline. If few analysts cover New Enjoy, demand for its common stock could decrease and its common stock price and trading volume may decline. Similar results may occur if one or more of these analysts stop covering New Enjoy in the future or fail to publish reports on it regularly.

 

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Risks Related to the Consummation of the Domestication

The Domestication may result in adverse tax consequences for holders of MRAC Class A Ordinary Shares and Warrants.

U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) may be subject to U.S. federal income tax as a result of the Domestication. Because the Domestication will occur immediately prior to the redemption of MRAC Class A Ordinary Shares, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations” below) may become subject to withholding tax on any amounts treated as dividends paid on New Enjoy Common Stock after the Domestication.

As discussed more fully under “U.S. Federal Income Tax Considerations”, the Domestication generally should constitute a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as MRAC, this result is not entirely clear. Accordingly, due to the absence of such guidance, it is not possible to predict whether the IRS or a court considering the issue would take a contrary position. If the Domestication fails to qualify as a reorganization under Section 368(a)(1)(F) of the Code, subject to the PFIC rules described in further detail below, a U.S. Holder generally would recognize gain or loss with respect to its MRAC Class A Ordinary Shares or MRAC Warrants in an amount equal to the difference, if any, between the fair market value of the corresponding shares of New Enjoy Common Stock or New Enjoy Warrants received in the Domestication and the U.S. Holder’s adjusted tax basis in its MRAC Class A Ordinary Shares and MRAC Warrants surrendered in exchange therefor.

If the Domestication qualifies as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, subject to the PFIC rules described in further detail below, U.S. Holders will be subject to Section 367(b) of the Code and, as a result: a U.S. Holder who on the day of the Domestication beneficially owns (actually and constructively) MRAC Class A Ordinary Shares with a fair market value of less than $50,000 on the date of the Domestication generally will not recognize any gain or loss and will not be required to include any part of MRAC’s earnings in income in respect of the Domestication; a U.S. Holder who on the day of the Domestication beneficially owns (actually and constructively) MRAC Class A Ordinary Shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of MRAC shares entitled to vote and less than 10% or more of the total value of all classes of MRAC shares, generally will recognize gain (but not loss) in respect of the Domestication as if such U.S. Holder exchanged its MRAC Class A Ordinary Shares for New Enjoy Common Stock in a taxable transaction, unless such U.S. Holder elects in accordance with applicable Treasury Regulations to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to the public shares held directly by such U.S. Holder; and a U.S. Holder who on the day of the Domestication beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of MRAC shares entitled to vote or 10% or more of the total value of all classes of MRAC shares, generally will be required to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations) attributable to the MRAC Class A Ordinary Shares held directly by such U.S. Holder; however, any such U.S. Holder that is a corporation may, under certain circumstances, be able to claim the dividends received deduction for foreign-sourced dividends of foreign corporations under Section 245A of the Code.

Additionally, if MRAC were to be treated as a PFIC for U.S. federal income tax purposes, certain U.S. Holders may be subject to adverse tax consequences as a result of the Domestication. Because MRAC is a blank check company with no current active business, based upon the composition of its income and assets, and upon a review of its financial statements, MRAC believes that it likely would be considered a PFIC, unless the PFIC start-up exception is available. Application of the start-up exception is subject to substantial uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no

 

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assurances with respect to our status as a PFIC for any taxable year. The potential application of the PFIC rules to the Domestication are discussed more fully under “U.S. Federal Income Tax Considerations – PFIC Consequences.”

Upon consummation of the Business Combination, the rights of holders of New Enjoy Common Stock arising under the DGCL as well as Proposed Organizational Documents will differ from and may be less favorable to the rights of holders of MRAC Class A Ordinary Shares arising under the Cayman Islands Companies Law as well as our current memorandum and articles of association.

Upon consummation of the Business Combination, the rights of holders of New Enjoy Common Stock will arise under the Proposed Organizational Documents as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in our current memorandum and articles of association and the Cayman Islands Companies Law and, therefore, some rights of holders of New Enjoy Common Stock could differ from the rights that holders of MRAC Class A Ordinary Shares currently possess. For instance, while class actions are generally not available to shareholders under the Cayman Islands Companies Law, such actions are generally available under the DGCL. This change could increase the likelihood that New Enjoy becomes involved in costly litigation, which could have a material adverse effect on New Enjoy.

In addition, there are differences between the new organizational documents of New Enjoy and the current constitutional documents of MRAC. For a more detailed description of the rights of holders of New Enjoy Common Stock and how they may differ from the rights of holders of MRAC Class A Ordinary Shares, please see “Comparison of Corporate Governance and Shareholder Rights.” The forms of the Proposed Certificate of Incorporation and the Proposed Bylaws of New Enjoy are attached as Annex H and Annex I, respectively, to this proxy statement/prospectus and we urge you to read them.

Delaware law and New Enjoy’s Proposed Organizational Documents contain certain provisions, including anti-takeover provisions that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.

The Proposed Organizational Documents that will be in effect upon consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, and therefore depress the trading price of New Enjoy Common Stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of New Enjoy’s board of directors or taking other corporate actions, including effecting changes in our management. Among other things, the Proposed Organizational Documents include provisions regarding:

 

   

providing for a classified board of directors with staggered, three-year terms;

 

   

the ability of New Enjoy’s board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

   

the New Enjoy proposed certificate of incorporation will prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

   

the limitation of the liability of, and the indemnification of, New Enjoy’s directors and officers;

 

   

the ability of New Enjoy’s board of directors to amend the bylaws, which may allow New Enjoy’s board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and

 

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advance notice procedures with which stockholders must comply to nominate candidates to New Enjoy’s board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in New Enjoy’s Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of New Enjoy;

 

   

providing that New Enjoy’s board of directors is expressly authorized to make, alter or repeal New Enjoy’s bylaws;

 

   

the removal of the directors of New Enjoy by its stockholders only for cause;

 

   

the ability of New Enjoy’s board of directors to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director in certain circumstances;

 

   

the New Enjoy proposed certificate of incorporation will prohibit, subject to the rights of the holders of shares of preferred stock permitting the holders of such series of preferred stock to call a special meeting of the holders of such series the New Enjoy stockholders to call a special meeting of the stockholders;

 

   

the New Enjoy proposed certificate of incorporation will prohibit, subject to the rights of the holders of shares of preferred stock to act by written consent, any stockholders from taking any action by written consent;

 

   

that certain provisions may be amended only by the affirmative vote of holders of at least 66 2/3% of the shares of the outstanding capital stock entitled to vote generally in the election of New Enjoy directors;

 

   

Pursuant to Section 203 of the DGCL, New Enjoy will be prevented, under certain circumstances, from engaging in a “business combination” with (i) a stockholder who owns 15% or more of New Enjoy’s outstanding voting stock (otherwise known as an “interested stockholder”), (ii) an affiliate of an interested stockholder or (iii) an associate of an interested stockholder, in each case, for three years following the date that such stockholder became an interested stockholder (in each case, subject to certain exceptions);

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in New Enjoy’s board of directors or management.

The provisions of the proposed certificate of incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

New Enjoy’s Proposed Certificate of Incorporation provides that, unless New Enjoy consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (A) any derivative action or proceeding brought on behalf of New Enjoy; (B) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of New Enjoy or any stockholder to New Enjoy or New Enjoy’s stockholders; (C) any action or proceeding asserting a claim against New Enjoy or any current or former director, officer or other employee of New Enjoy or any stockholder arising pursuant to any provision of the DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws (as each may be amended from time to time); (D) any action or proceeding to interpret, apply, enforce or determine the validity of the Proposed Certificate of Incorporation or the Proposed Bylaws (including any right, obligation or remedy thereunder); (E) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (F) any action asserting a claim against New Enjoy or any director, officer or other employee of New Enjoy or any stockholder, governed by the internal

 

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affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. However, this provision will not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934 or any other claim for which the federal courts have exclusive jurisdiction. In addition, unless New Enjoy consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant named in such complaint.

These provisions may have the effect of discouraging lawsuits against New Enjoy’s directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against New Enjoy, a court could find the choice of forum provisions contained in the proposed certificate of incorporation to be inapplicable or unenforceable in such action.

Risks if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination and the Domestication, our board of directors will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated.

Our board of directors is seeking approval to adjourn the extraordinary general meeting to a later date or dates if, at the extraordinary general meeting, based upon the tabulated votes, there are insufficient votes to approve each of the Condition Precedent Proposals. If the Adjournment Proposal is not approved, our board of directors will not have the ability to adjourn the extraordinary general meeting to a later date and, therefore, will not have more time to solicit votes to approve the Condition Precedent Proposals. In such events, the Business Combination would not be completed.

Risks if the Domestication and the Business Combination are not Consummated

If we are not able to complete the Business Combination with Enjoy by December 17, 2022 nor able to complete another business combination by such date, in each case, as such date may be further extended pursuant to the Cayman Constitutional Documents, we would cease all operations except for the purpose of winding up and we would redeem our Class A Ordinary Shares and liquidate the trust account, in which case our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If MRAC is not able to complete the Business Combination with Enjoy by December 17, 2022, nor able to complete another business combination by such date, in each case, as such date may be extended pursuant to MRAC’s Cayman Constitutional Documents MRAC will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of MRAC’s remaining shareholders and its board, dissolve and liquidate, subject in each case to its obligations under the Cayman Islands Companies Law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

 

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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or public warrants, potentially at a loss.

Our public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of (1) our completion of an initial business combination (including the Closing), and then only in connection with those public shares that such public shareholder properly elected to redeem, subject to certain limitations; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Cayman Constitutional Documents to (A) modify the substance and timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of the public shares if we do not complete a business combination by December 17, 2022 or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of the public shares if we have not completed an initial business combination by December 17, 2022, subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of public warrants will not have any right to the proceeds held in the trust account with respect to the public warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares and/or public warrants, potentially at a loss.

If we have not completed our initial business combination, our public shareholders may be forced to wait until after December 17, 2022 before redemption from the trust account.

If we have not completed our initial business combination by December 17, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), we will distribute the aggregate amount then on deposit in the trust account (less up to $100,000 of the net interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described in this proxy statement/prospectus. Any redemption of public shareholders from the trust account shall be affected automatically by function of the Cayman Constitutional Documents prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Cayman Islands Companies Law. In that case, investors may be forced to wait beyond December 17, 2022 (or if such date is further extended at a duly called extraordinary general meeting, such later date), before the redemption proceeds of the trust account become available to them, and they receive the return of their pro rata portion of the proceeds from the trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our Cayman Constitutional Documents and only then in cases where investors have properly sought to redeem their public shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend certain provisions of our Cayman Constitutional Documents prior thereto.

If the net proceeds of our initial public offering not being held in the trust account are insufficient to allow us to operate through to December 17, 2022 and we are unable to obtain additional capital, we may be unable to complete our initial business combination, in which case our public shareholders may only receive $10.00 per share, and our warrants will expire worthless.

As of December 31, 2020, MRAC had cash of $2,266,049 held outside the trust account, which is available for use by us to cover the costs associated with identifying a target business and negotiating a business combination and other general corporate uses. In addition, as of December 31, 2020, MRAC had total current liabilities of $1,067,726.

The funds available to us outside of the trust account may not be sufficient to allow us to operate until December 17, 2022, assuming that our initial business combination is not completed during that time. Of the

 

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funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

If we are required to seek additional capital, we would need to borrow funds from Sponsor, members of our management team or other third parties to operate or may be forced to liquidate. Neither the members of our management team nor any of their affiliates is under any further obligation to advance funds to MRAC in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to obtain additional financing, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive approximately $10.00 per share on our redemption of the public shares and the public warrants will expire worthless.

 

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EXTRAORDINARY GENERAL MEETING OF MRAC

General

MRAC is furnishing this proxy statement/prospectus to our shareholders as part of the solicitation of proxies by our board of directors for use at the extraordinary general meeting of MRAC to be held on [●], 2021, and at any adjournment thereof. This proxy statement/prospectus is first being furnished to our shareholders on or about                , 2021 in connection with the vote on the proposals described in this proxy statement/prospectus. This proxy statement/prospectus provides our shareholders with information they need to know to be able to vote or instruct their vote to be cast at the extraordinary general meeting.

Date, Time and Place

The extraordinary general meeting will be held on [●], 2021, at [●] a.m. Eastern Time, via live webcast at www.[●].com, or such other date, time and place to which such meeting may be adjourned or virtually postponed, to consider and vote upon the proposals.

Purpose of the MRAC Extraordinary General Meeting

At the extraordinary general meeting, MRAC is asking holders of ordinary shares to:

 

   

consider and vote upon a proposal to approve by ordinary resolution and adopt the Merger Agreement attached to this proxy statement/prospectus as Annex A, pursuant to which, among other things, following the Domestication of MRAC to Delaware, the Merger of Merger Sub with and into Enjoy, with Enjoy surviving the merger as a wholly owned subsidiary of New Enjoy in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Business Combination Proposal”);

 

   

consider and vote upon a proposal to approve by special resolution, assuming the Business Combination Proposal is approved and adopted, the change of MRAC’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication Proposal”);

 

   

consider and vote upon a proposal to approve by special resolution and adopt the proposed new certificate of incorporation and the proposed new bylaws of New Enjoy a corporation incorporated in the State of Delaware (the “Organizational Documents Proposal”);

 

   

consider and vote upon, on a non-binding advisory basis, certain material differences between MRAC’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the Proposed Certificate of Incorporation and Proposed Bylaws, presented separately in accordance with the United States Securities and Exchange Commission requirements (the “Governance Proposal”);

 

   

consider and vote upon a proposal to approve by ordinary resolution, to elect nine directors who, upon consummation of the Business Combination, will be the directors of New Enjoy (the “Director Election Proposal”);

 

   

consider and vote upon a proposal to approve by ordinary resolution for the purposes of complying with the applicable provisions of Nasdaq Rule 5635 the issuance of New Enjoy Common Stock to (a) the PIPE Investors pursuant to the PIPE Investment and (b) Enjoy’s stockholders pursuant to the Merger Agreement (the “Stock Issuance Proposal” and together, with the Business Combination Proposal, the Domestication Proposal and the Organizational Documents Proposal, the “Condition Precedent Proposals”);

 

   

consider and vote upon a proposal to approve by ordinary resolution, the Enjoy Technology, Inc. 2021 Incentive Award Plan (the “Incentive Award Plan Proposal”);

 

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consider and vote upon a proposal to approve by ordinary resolution, the Enjoy Technology, Inc. 2021 Employee Stock Purchase Plan (the “ESPP Proposal”); and

 

   

consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).

The Business Combination Proposal, The Domestication Proposal, The Organizational Documents Proposal and the Stock Issuance Proposal (the “Condition Precedent Proposals”) are each cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.

Recommendation of MRAC Board of Directors

MRAC’s board of directors believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of MRAC’s shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” the Organizational Documents Proposal, “FOR” the Governance Proposal, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of MRAC’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of MRAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, MRAC’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal - Interests of MRAC’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Record Date; Who is Entitled to Vote

MRAC shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on [●], 2021, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. MRAC warrants do not have voting rights. As of the close of business on the record date, there were 46,718,750 ordinary shares issued and outstanding, of which 37,375,000 were issued and outstanding public shares.

The Sponsor and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

Quorum

A quorum of MRAC shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled

 

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to vote at the extraordinary general meeting are represented in person or by proxy. As of the record date for the extraordinary general meeting, 23,359,376 ordinary shares would be required to achieve a quorum.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to MRAC but marked by brokers as “not voted” will be treated as shares present for purposes of determining the presence of a quorum on all matters, but they will not be treated as shares voted on the matter. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction.

Vote Required for Approval

The approval of the Business Combination Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The approval the Organizational Documents Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Governance Proposal requires, on a non-binding advisory basis, ordinary resolutions under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented virtually or by proxy and entitled to vote thereon.

The approval of the Director Election Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Stock Issuance Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented virtually or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Incentive Award Plan Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the ESPP Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Adjournment Proposal requires an ordinary resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The Condition Precedent Proposals are each cross-conditioned on the approval of the others. The Director Election Proposal, the Incentive Award Plan Proposal and the ESPP Proposal are conditioned on the approval of

 

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the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The Governance Proposal is constituted of non-binding advisory proposals.

Voting Your Shares — Stockholders of Record

If you are a holder of record of ordinary shares, you may vote by mail or in person at the extraordinary general meeting. Each ordinary share that you own in your name entitles you to one vote on each of the proposals for the extraordinary general meeting. Your one or more proxy cards show the number of ordinary shares that you own.

There are four ways to vote your ordinary shares at the extraordinary general meeting:

 

   

Vote by Mail: by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope. By signing the proxy card and returning it in the enclosed prepaid envelope to the foregoing address, you are authorizing the individuals named on the proxy card to vote your shares at the extraordinary general meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the extraordinary general meeting so that your shares will be voted if you are unable to attend the extraordinary general meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. If you sign and return the proxy card but do not give instructions on how to vote your shares, your ordinary shares will be voted as recommended by the board of directors of MRAC.

 

   

Vote by Internet: visit [●], 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on [●], 2021 (have your proxy card in hand when you visit the website);

 

   

Vote by Phone: by calling toll-free (within the U.S. or Canada) [●] (have your proxy card in hand when you call); or

 

   

Vote at the Extraordinary General Meeting: you can attend the extraordinary general meeting via the virtual meeting platform and vote during the meeting by following the instructions on your proxy card. You can access the extraordinary general meeting by visiting the website www.[●].com. You will need your control number for access. If you do not have a control number, please contact Continental Stock Transfer. Instructions on how to attend and participate at the extraordinary general meeting are available at [●].

Voting Your Shares — Beneficial Owners

If your ordinary shares are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of ordinary shares held in “street name” and this proxy statement/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the stockholder of record for purposes of voting at the extraordinary general meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the ordinary shares in your account by following the instructions that the broker, bank or other nominee provides you along with this proxy statement/prospectus, in most cases you may do this by telephone or over the Internet as instructed. As a beneficial owner, if you wish to vote at the extraordinary general meeting, you will need to bring to the extraordinary general meeting a legal proxy from your broker, bank or other nominee authorizing you to vote those ordinary shares.

 

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Revoking Your Proxy

If you are a MRAC shareholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify MRAC’s Secretary in writing before the extraordinary general meeting that you have revoked your proxy; or

 

   

you may virtually attend the extraordinary general meeting, revoke your proxy, and vote online, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you are a shareholder and have any questions about how to vote or direct a vote in respect of your ordinary shares, you may call D.F. King, MRAC’s proxy solicitor, by calling (877) 536-1561, or banks and brokers can call collect at (212) 269-5550 or by emailing MRAC@dfking.com.

Redemption Rights

Pursuant to the Cayman Constitutional Documents, a public shareholder may request of MRAC that New Enjoy redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

   

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

   

submit a written request to Continental, MRAC’s transfer agent, that New Enjoy redeem all or a portion of your public shares for cash; and

 

   

deliver your public shares to Continental, MRAC’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on [], 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Therefore, the election to exercise redemption rights occurs prior to the Domestication and the redemption is with respect to the New Enjoy public shares that an electing public shareholder holds after the Domestication. For the purposes of Article 49.5 of MRAC’s memorandum and articles of association and the Cayman Islands Companies Law, the exercise of redemption rights shall be treated as an election to have such public shares redeemed for cash, and references in this proxy statement/prospectus to “redemption” or “redeeming” shall be interpreted accordingly. Immediately following the Domestication and the consummation of the Business Combination, New Enjoy shall satisfy the exercise of redemption rights by redeeming the corresponding public shares issued to the public shareholders that validly exercised their redemption rights.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, MRAC’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them, regardless of how they vote in respect of the Business Combination Proposal. If the Business Combination is not

 

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consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, MRAC’s transfer agent, New Enjoy will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of [●], 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of New Enjoy Common Stock that will be redeemed immediately after consummation of the Business Combination.

If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. New Enjoy public shares that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through DTC’s DWAC (deposit withdrawal at custodian) system. The transfer agent will typically charge the tendering broker $80 and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the proposed Business Combination is not consummated this may result in an additional cost to shareholders for the return of their shares.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, MRAC’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that MRAC’s transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, MRAC’s transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, MRAC’s transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, MRAC’s agent, at least two business days prior to the vote at the extraordinary general meeting.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor and each director of MRAC have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the Sponsor (including MRAC’s independent directors) owns 20% of the issued and outstanding ordinary shares.

Holders of the warrants will not have redemption rights with respect to the warrants.

The closing price of public shares on [●], 2021, the most recent practicable date prior to the date of this proxy statement/prospectus, was $[●]. As of [●], 2021, funds in the trust account totaled $373,750,000 and were comprised entirely of cash, U.S. government treasury obligations with a maturity of 185 days or less or of money

 

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market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, or approximately $10.00 per issued and outstanding public share.

Prior to exercising redemption rights, public shareholders should verify the market price of the public shares as they may receive higher proceeds from the sale of their public shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. MRAC cannot assure its shareholders that they will be able to sell their public shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares.

Appraisal Rights

Neither MRAC’s shareholders nor MRAC’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

Proxy Solicitation Costs

MRAC is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. MRAC and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. MRAC will bear the cost of the solicitation.

MRAC has hired D.F. King to assist in the proxy solicitation process. MRAC will pay that firm a fee of $25,000 plus disbursements. Such fee will be paid with non-trust account funds.

MRAC will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. MRAC will reimburse them for their reasonable expenses.

MRAC Initial Shareholders

As of the date of this proxy statement/prospectus, there are 46,718,750 ordinary shares issued and outstanding, which includes the 9,343,750 founder shares held by the Sponsor and related parties and the 37,375,000 public shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 15,660,417 MRAC Warrants, which includes the 6,316,667 MRAC Private Placement Warrants held by the Sponsor and the 9,343,750 MRAC Public Warrants.

The Sponsor and MRAC’s directors, officers, advisors or their respective affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. However, they have no current commitments, plans or intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase shares or warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.

Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of MRAC public shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

In the event that the Sponsor or MRAC’s directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.

 

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The purpose of such purchases would be to (i) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or (ii) to increase the likelihood of satisfaction of the Minimum Cash Condition in the Merger Agreement, where it appears that such condition would otherwise not be met. The purpose of any such purchases of warrants could be to reduce the number of warrants outstanding. Any such purchases of MRAC securities may result in the completion of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of MRAC Class A Ordinary Shares may be reduced and the number of beneficial holders of MRAC securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of MRAC securities on a national securities exchange.

The Sponsor and MRAC’s officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom the Sponsor or MRAC’s officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting MRAC directly or by MRAC’s receipt of redemption requests submitted by shareholders (in the case of MRAC Class A Ordinary Shares) following the mailing of proxy materials in connection with the Business Combination. To the extent that the Sponsor or MRAC’s officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account or vote against the Business Combination but only if such shares have not already been voted at the general meeting related to the Business Combination. The Sponsor and MRAC’s officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by the Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. The Sponsor and MRAC”s officers, directors and/or their affiliates will not make purchases of MRAC Class A Ordinary Shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

 

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SHAREHOLDER PROPOSAL NO. 1 – THE BUSINESS COMBINATION PROPOSAL

MRAC is asking its shareholders to approve by ordinary resolution and adopt the Merger Agreement. MRAC shareholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. Please see the subsection entitled “The Merger Agreement” below for additional information and a summary of certain terms of the Merger Agreement. You are urged to read carefully the Merger Agreement in its entirety before voting on this proposal.

Because MRAC is holding a shareholder vote on the Merger, MRAC may consummate the Merger only if it is approved by the affirmative vote of the holders of a majority of ordinary shares that are voted at the extraordinary general meeting.

The Merger Agreement

This subsection of the proxy statement/prospectus describes the material provisions of the Merger Agreement, but does not purport to describe all of the terms of the Merger Agreement. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. You are urged to read the Merger Agreement in its entirety because it is the primary legal document that governs the Merger.

The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement. The representations, warranties and covenants in the Merger Agreement are also modified in part by the underlying disclosure letters (the “disclosure letters”), which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that the disclosure letters contain information that is material to an investment decision. Additionally, the representations and warranties of the parties to the Merger Agreement may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement/prospectus. Accordingly, no person should rely on the representations and warranties in the Merger Agreement or the summaries thereof in this proxy statement/prospectus as characterizations of the actual state of facts about MRAC, Enjoy or any other matter.

Structure of the Merger

On April 28, 2021, MRAC entered into the Merger Agreement with Merger Sub and Enjoy, pursuant to which, among other things, following the Domestication, (i) Merger Sub will merge with and into Enjoy, the separate corporate existence of Merger Sub will cease and Enjoy will be the surviving corporation and a wholly owned subsidiary of MRAC and (ii) MRAC will change its name to Enjoy Technology, Inc.

Prior to and as a condition of the Merger, pursuant to the Domestication, MRAC will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Islands Companies Law and a domestication under Section 388 of the DGCL, pursuant to which MRAC’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. For more information, see “The Domestication Proposal.”

Immediately prior to the effective time of the Merger, (a) each share of Enjoy Preferred Stock will convert into one share of Enjoy Common Stock (the “Enjoy Preferred Conversion”), (b) each Enjoy Convertible Note will be converted into shares of Enjoy Capital Stock in accordance with the terms of the applicable note purchase

 

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agreement (the “Enjoy Note Conversion”) and (c) other than the Enjoy Warrants assumed by New Enjoy, all of the outstanding Enjoy Warrants will be exercised in full in accordance with their respective terms (the “Enjoy Warrant Settlement”).

Consideration

Aggregate Merger Consideration

The total number of shares of New Enjoy Common Stock to be received by Enjoy’s stockholders or reserved for issuance pursuant to the New Enjoy equity awards into which Enjoy Awards are converted and the Enjoy Warrants assumed by New Enjoy will be equal to the quotient obtained by dividing (x) the sum of (i) the Base Purchase Price, plus (ii) the aggregate exercise price of each outstanding option to purchase common stock of Enjoy, plus (iii) the aggregate exercise price of each outstanding warrant of Enjoy, by (y) $10.00. The “Base Purchase Price” means the sum of (a) $1,028,738,000, plus (b) 125% of the aggregate amount actually funded prior to the Closing (as defined below) in connection with an Excluded Financing, up to a maximum aggregate amount equal to $60 million, plus (c) the aggregate amount actually funded prior to the Closing in connection with an Excluded Financing (to the extent in excess of the amounts set forth in clause (b) above), up to a maximum aggregate amount equal to $15 million.

Treatment of Enjoy Options, Enjoy Restricted Stock Awards and Enjoy Warrants

As a result of and upon the Closing, among other things, all (i) Enjoy Options and (ii) Enjoy Restricted Stock Awards, in each case, that are outstanding as of immediately prior to the Merger (together, the “Enjoy Awards”) will be converted into (a) New Enjoy Options and (b) New Enjoy Restricted Shares, respectively. All Enjoy Warrants that remain outstanding and unexercised as of immediately prior to the Merger will automatically be assumed by MRAC in accordance with their respective terms (including as to vesting and exercisability).

Subject to the terms of the Merger Agreement, each New Enjoy Option will relate to the number of whole shares of New Enjoy Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Enjoy Common Stock subject to the applicable Enjoy Option multiplied by (ii) the Exchange Ratio. The exercise price for each New Enjoy Option will equal (a) the exercise price of the applicable Enjoy Option divided by (b) the Exchange Ratio. Subject to the terms of the Merger Agreement, each New Enjoy Restricted Stock Award will relate to the number of whole shares of New Enjoy Common Stock (rounded down to the nearest whole share) equal to (x) the number of shares of Enjoy Common Stock subject to the applicable Enjoy Restricted Stock Award, respectively, multiplied by (y) the Exchange Ratio.

Closing

In accordance with the terms and subject to the conditions of the Merger Agreement, the closing of the Merger (the “Closing”) will take place at 10:00 a.m., New York Time, on the date that is two (2) business days after the satisfaction or, to the extent legally permissible, waiver of the conditions set forth in the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent legally permissible, waiver of those conditions), unless another time or date is mutually agreed to in writing by the parties. The date on which the Closing actually occurs is referred to as the “Closing Date.”

Representations and Warranties

The Merger Agreement contains representations and warranties of MRAC, Merger Sub and Enjoy, certain of which are qualified by materiality and material adverse effect (as defined below) and may be further modified and limited by the disclosure letters. See “Business Combination Proposal—Material Adverse Effect” below. The

 

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representations and warranties of MRAC are also qualified by information included in MRAC’s public filings filed or submitted to the SEC on or prior to the date of the Merger Agreement (subject to certain exceptions contemplated by the Merger Agreement).

Representations and Warranties of Enjoy

Enjoy has made representations and warranties relating to, among other things, company organization, subsidiaries, due authorization, no conflict, governmental authorities and consents, capitalization of Enjoy and its subsidiaries, financial statements, undisclosed liabilities, litigation and proceedings, legal compliance, contracts and no defaults, Enjoy benefit plans, employment and labor relations, taxes, brokers’ fees, insurance, licenses, tangible personal property, real property, intellectual property, privacy and cybersecurity, environmental matters, absence of changes, anti-corruption compliance, sanctions and international trade compliance, information supplied, vendors, customers, government contracts and no additional representations or warranties.

The representations and warranties of Enjoy identified as fundamental under the terms of the Merger Agreement are those made pursuant to: the first and second sentences of Section 4.1 of the Merger Agreement (Company Organization), the first and second sentences of Section 4.2 of the Merger Agreement (Subsidiaries), Section 4.3 of the Merger Agreement (Due Authorization), Section 4.6 of the Merger Agreement (Capitalization of the Company), Section 4.7 of the Merger Agreement (Capitalization of Subsidiaries) and Section 4.16 of the Merger Agreement (Brokers’ Fees) (collectively, the “Enjoy Fundamental Representations”).

Representations and Warranties of MRAC and Merger Sub

MRAC and Merger Sub have made representations and warranties relating to, among other things, company organization, no substantial government ownership interest, due authorization, no conflict, litigation and proceedings, SEC filings, internal controls, listing, financial statements, governmental authorities and consents, trust account, Investment Company Act and JOBS Act, absence of changes, no undisclosed liabilities, capitalization, brokers’ fees, indebtedness, taxes, business activities, stock market quotation, proxy statement/registration statement/prospectus, no outside reliance and no additional representations or warranties.

The representations and warranties of MRAC identified as fundamental under the terms of the Merger Agreement are those made pursuant to the first and second sentences of Section 5.1 of the Merger Agreement (Company Organization), Section 5.3(a) of the Merger Agreement (Due Authorization) and Section 5.14 of the Merger Agreement (Brokers’ Fees) (collectively, the “MRAC Fundamental Representations”).

Survival of Representations and Warranties

Except in the case of claims against a person in respect of such person’s actual fraud, the representations and warranties of the respective parties to the Merger Agreement generally will not survive the Closing.

Material Adverse Effect

Under the Merger Agreement, certain representations and warranties of Enjoy are qualified in whole or in part by a material adverse effect standard for purposes of determining whether a breach of such representations and warranties has occurred. Under the Merger Agreement, certain representations and warranties of MRAC are qualified in whole or in part by a material adverse effect on the ability of MRAC to enter into and perform its obligations under the Merger Agreement standard for purposes of determining whether a breach of such representations and warranties has occurred.

Pursuant to the Merger Agreement, a material adverse effect with respect to Enjoy (“Enjoy Material Adverse Effect”) means any change, event, state of facts, development, circumstance, occurrence or effect (collectively, “Events”) that (i) has had, or would reasonably be expected to have, individually or in the

 

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aggregate, a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Enjoy and its subsidiaries, taken as a whole or (ii) does or would reasonably be expected to, individually or in the aggregate, prevent or materially delay the ability of Enjoy to consummate the Merger.

However, in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, an “Enjoy Material Adverse Effect” pursuant to clause (i) above:

 

  (a)

any change in applicable laws or GAAP or any interpretation thereof following the date of the Merger Agreement;

 

  (b)

any change in interest rates or economic, political, business or financial market conditions generally;

 

  (c)

the taking of any action required by the Merger Agreement;

 

  (d)

any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic (including, for the avoidance of doubt, COVID-19) or change in climate (including any effect directly resulting from, directly arising from or otherwise directly related to such natural disaster, pandemic, or change in climate);

 

  (e)

any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions;

 

  (f)

any failure of Enjoy to meet any projections or forecasts (provided that this clause will not prevent any Event not otherwise excluded from this definition of Enjoy Material Adverse Effect underlying such failure to meet projections or forecasts from being taken into account in determining if an Enjoy Material Adverse Effect has occurred);

 

  (g)

any Events generally applicable to the industries or markets in which Enjoy and its subsidiaries operate (including increases in the cost of products, supplies, materials or other goods purchased from third party suppliers);

 

  (h)

the announcement of the Merger Agreement and consummation of the transactions contemplated thereby, including any termination of, reduction in the scope of, or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of Enjoy and its subsidiaries (it being understood that this clause will be disregarded for purposes of the representation and warranties in Section 4.4 of the Merger Agreement and the corresponding condition to Closing); or