PRER14A 1 tm2024222-3_prer14a.htm PRER14A tm2024222-3_prer14a - block - 84.202452s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 2)
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Soliciting Material Pursuant to §240.14a-12
LANDCADIA HOLDINGS II, INC.
(Name of Registrant as Specified In Its Charter)
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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION,
DATED OCTOBER 9, 2020
LANDCADIA HOLDINGS II, INC.
1510 West Loop South
Houston, Texas 77027
Dear Landcadia Holdings II, Inc. Stockholder:
We cordially invite you to attend a special meeting in lieu of the 2020 annual meeting of the stockholders of Landcadia Holdings II, Inc., a Delaware corporation (“we,” “us,” “our” or the “Company”), which will be held on       , 2020, at 10:00 a.m., Eastern time at https://www.cstproxy.com/landcadiaholdingsii/sm2020 (the “special meeting”). In light of ongoing developments related to the novel coronavirus (“COVID-19”), after careful consideration, the Company has determined that the special meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance and participation while safeguarding the health and safety of our stockholders, directors and management team. You or your proxyholder will be able to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting https://www.cstproxy.com/landcadiaholdingsii/sm2020 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement.
On June 28, 2020, the Company entered into a Purchase Agreement (as amended, the “Purchase Agreement”) with LHGN HoldCo, LLC, a Delaware limited liability company and newly formed, wholly-owned subsidiary of the Company (“Landcadia HoldCo”), Landry’s Fertitta, LLC, a Texas limited liability company (“LF LLC”), GNOG Holdings, LLC, a Delaware limited liability company and newly formed, wholly-owned subsidiary of LF LLC (“GNOG HoldCo”), and Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co.), a New Jersey corporation and wholly-owned subsidiary of LF LLC (“GNOG”), a U.S. online real money casino. Tilman J. Fertitta, one of our sponsors and our Co-Chairman and Chief Executive Officer, indirectly owns all of the equity interests in LF LLC, GNOG HoldCo and GNOG.
Pursuant to the Purchase Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, at the time of the closing of the transaction (the “Closing”), LF LLC will contribute all of the membership interests in GNOG HoldCo to Landcadia HoldCo (the “GNOG Contribution”), in exchange for (i) 31,350,625 Class B membership interests in Landcadia HoldCo (the “HoldCo Class B Units”), (ii) a corresponding number of shares of a new, non-economic Class B common stock, par value $0.0001 per share, of New GNOG (as defined below) (the “New GNOG Class B common stock”), which will entitle the holder to 10 votes per share, subject to the adjustments and limitations described below, (iii) cash consideration in an amount of $30.0 million (the “Closing Cash Consideration”) and (iv) the repayment of $150.0 million, representing one-half of the existing principal amount owed by GNOG under that certain Credit Agreement, dated as of April 28, 2020, by and among GNOG, LF LLC, Jefferies Finance LLC, Coöperatieve Rabobank U.A., New York Branch, Keybanc Capital Markets Inc., Citizens Bank, N.A., and the lenders party thereto, as amended from time to time (the “Credit Agreement”), and a related prepayment premium in an amount of approximately $24.0 million (together, the “Credit Agreement Payoff Amount”), as well as accrued and unpaid interest. A portion of the cash in the trust account (the “trust account”) that holds the proceeds (including interest) of our initial public offering that closed on May 9, 2019 (our “IPO”) and related private placement, after taking into account any redemptions of shares held by our public stockholders (as defined below) in connection with the Closing, will be used to pay the Closing Cash Consideration and the Credit Agreement Payoff Amount, and funds sufficient to ensure that GNOG LLC will hold at least $80 million in cash at Closing will be contributed down to GNOG LLC upon Closing. Prior to the Closing, GNOG will convert into a limited liability company by merging with and into Golden Nugget Online Gaming, LLC, a New Jersey limited liability company and newly formed, wholly-owned subsidiary of GNOG HoldCo (“GNOG LLC”), with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo. Upon consummation of the transaction contemplated by the Purchase Agreement, the Company will change its name to “Golden Nugget Online Gaming, Inc.” We refer to the
 

 
combined company following the Closing throughout this proxy statement as “New GNOG.” At the special meeting, our stockholders will be asked to consider and vote upon a proposal (the “Transaction Proposal”) to adopt the Purchase Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and approve the transaction contemplated by the Purchase Agreement, which is referred to herein as the “transaction.”
Upon the Closing, New GNOG will be organized in an umbrella partnership C-corporation, or “Up-C” structure, in which substantially all of the assets of New GNOG will be held indirectly through GNOG LLC and all of the business of New GNOG will be conducted through GNOG LLC. New GNOG’s only direct assets will consist of the Class A membership interests it holds of Landcadia HoldCo, and the number of Class A units of Landcadia HoldCo that will be issued to New GNOG at Closing will be equal to the number of shares of New GNOG Class A common stock outstanding at Closing. As a result, New GNOG is expected to own approximately 54.1% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 53.2% assuming the maximum number of redemptions of public shares), and in either event, New GNOG will control Landcadia HoldCo as the sole manager of Landcadia HoldCo in accordance with the terms of the Amended and Restated Limited Liability Company Agreement of Landcadia HoldCo to be entered into in connection with the Closing (the “A&R HoldCo LLC Agreement”). The remaining approximately 45.9% of the combined membership interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) will be held by LF LLC through HoldCo Class B Units, which will carry no voting rights. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, LF LLC, the holder of HoldCo Class B Units, will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock), on a one for-one basis, for either shares of Class A common stock, par value $0.0001 per share, of New GNOG (“New GNOG Class A common stock”), or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of New GNOG Class A common stock. For additional information, please see the sections entitled “Summary of this Proxy Statement — Economic Ownership Interests Upon Closing,” “Summary of this Proxy Statement — Voting Power Upon Closing”.
Subject to Stockholder Approval (as defined below), at the Closing, the Company will amend and restate its current charter (as defined below) to, among other things, adopt a dual class structure comparable to the one currently in effect, except that the shares of New GNOG Class A common stock will carry one vote per share and the New GNOG Class B common stock will carry 10 votes per share, subject to certain adjustments and limitations described in this proxy statement, and the shares of New GNOG Class B common stock will not have any economic rights. At the Closing, the currently issued and outstanding shares of the Company’s Class B common stock, par value $0.0001 per share (the “Company Class B common stock” or “founder shares”) will automatically convert, on a one-for-one basis, into shares of the Company’s Class A common stock, par value $0.0001 per share (the “Company Class A common stock”), in accordance with the terms of the current charter, and New GNOG will issue shares of New GNOG Class B common stock to LF LLC. Immediately following the Closing, LF LLC will be the only holder of shares of New GNOG Class B common stock and all of New GNOG’s other stockholders will hold only shares of New GNOG Class A common stock. Immediately following the Closing and, assuming none of the Company’s stockholders elect to redeem their shares of Company Class A common stock in connection with the Closing, by virtue of the holdings by Mr. Fertitta and his affiliates, including LF LLC, of shares of New GNOG Class A common stock and New GNOG Class B common stock, Mr. Fertitta is expected to beneficially own approximately 11.1% of the economic interests of New GNOG and 79.9% of the voting power of the capital stock of New GNOG (after the automatic downward adjustment of Mr. Fertitta and his affiliates’ voting power in accordance with the terms of the proposed charter). In addition, Mr. Fertitta and his affiliates are expected to beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) through LF LLC’s HoldCo Class B Units, which will carry no voting rights. In addition, Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC.
At the Closing, certain insiders of the Company, including Tilman J. Fertitta, Fertitta Entertainment, Inc., a Texas corporation wholly-owned by Mr. Fertitta (“FEI”), and Jefferies Financial Group Inc.
 

 
(f/k/a Leucadia National Corporation), a New York corporation (“JFG Sponsor” and, together with FEI, the “sponsors”), will enter into that certain amendment to the Letter Agreement entered into on May 6, 2019 in connection with the Company’s IPO (the “Lock-Up Amendment”), which will amend the Letter Agreement to add an additional acceleration event to the lock-up period contemplated under the Letter Agreement based on a price target of $15.00 per share of New GNOG Class A common stock following a period of 60 days after the Closing. The Letter Agreement and the lock-up period thereunder does not apply to the HoldCo Class B Units or shares of New GNOG Class B common stock to be received by LF LLC pursuant to the Purchase Agreement.
At the special meeting, our stockholders will be asked to adopt the Purchase Agreement and approve the transaction. In addition, you are being asked to consider and vote upon:
1.
a proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market (“Nasdaq”), (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock to LF LLC at the Closing, pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note (as defined in the proxy statement), as calculated pursuant to the terms of the A&R HoldCo LLC Agreement as described herein, and (3) shares of New GNOG Class A common stock to LF LLC in the future upon the exchange of a corresponding number of the HoldCo Class B Units and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the A&R HoldCo LLC Agreement, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules (the “Nasdaq Proposal”);
2.
a proposal to approve New GNOG’s proposed fourth amended and restated certificate of incorporation (the “proposed charter”), in the form attached to the accompanying proxy statement as Annex C, in connection with the transaction (the “Charter Proposal”);
3.
proposals to approve and adopt, on a non-binding advisory basis, certain differences between the Company’s third amended and restated certificate of incorporation (the “current charter”) and the proposed charter, which are being presented in accordance with the requirements of the U.S. Securities and Exchange Commission (the “SEC”) as ten separate sub-proposals (collectively, the “Advisory Charter Proposals”):
a.
New GNOG will have authorized capital stock of 271,000,000 shares, consisting of 220,000,000 shares of New GNOG Class A common stock, 50,000,000 shares of New GNOG Class B common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, as opposed to the Company having 221,000,000 shares, consisting of 200,000,000 shares of Company Class A common stock, 20,000,000 shares of Company Class B common stock and 1,000,000 shares of preferred stock (“Advisory Charter Proposal A”);
b.
each member of the board of directors of New GNOG will be elected at each annual meeting of stockholders (or special meeting in lieu thereof), as opposed to the Company having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term (“Advisory Charter Proposal B”);
c.
the number of directors will be fixed and may be modified either by (i) New GNOG’s board of directors or (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, as opposed to the number of directors being determined by the Company’s board of directors (“Advisory Charter Proposal C”);
 

 
d.
any action required or permitted to be taken by the stockholders of New GNOG may be taken by written consent until the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of the outstanding capital stock of New GNOG, as opposed to only holders of shares of Company Class B common stock having the ability to take stockholder action by written consent (“Advisory Charter Proposal D”);
e.
amendments to the proposed charter will require either the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New GNOG or the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, provided that for so long as there are shares of both New GNOG Class A common stock and New GNOG Class B common stock outstanding, New GNOG may not amend, alter or repeal any provision in the proposed charter that would adversely affect the relative rights of either class without the affirmative vote of the holders of such class of common stock whose relative rights are adversely affected, as opposed to amendments to certain provisions of the current charter requiring an amendment to be conducted in accordance with Delaware law, subject to certain exceptions (“Advisory Charter Proposal E”);
f.
the bylaws of New GNOG may be adopted, amended, altered or repealed by (x) the affirmative vote of a majority of New GNOG’s board of directors or (y) either (i) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG for so long as Mr. Fertitta and his affiliates beneficially own a majority of such voting power and (ii) the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New GNOG from and after the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of New GNOG, as opposed to the bylaws of the Company requiring the approval of a majority of the board of directors of the Company or the holders of a majority of the Company’s outstanding shares (“Advisory Charter Proposal F”);
g.
the proposed charter will include provisions intended to ensure compliance with gaming, gambling and related laws, including provisions (i) that provide New GNOG with certain rights to require the sale and transfer of New GNOG’s capital stock owned or controlled by any stockholders that fail to comply with applicable gaming laws or their affiliates, and otherwise prohibit the transfer of New GNOG’s capital stock to such persons, (ii) relating to the qualification of directors and officers by the New Jersey Commission Casino Control Commission (the “CCC”) and the removal of officers and resignation of directors in circumstances where the CCC determines that there is reasonable cause to believe that such individual may not be qualified to hold such position and (iii) incorporating all provisions of the New Jersey Casino Control Act (the “New Jersey Act”) into the proposed charter, to the extent required to be stated in the proposed charter for New GNOG or any of its subsidiaries to be eligible to apply for and maintain a casino license under the New Jersey Act, including a provision that to the extent that anything contained in the proposed charter or in the bylaws of New GNOG is inconsistent with any such provisions under the New Jersey Act, the provisions of the New Jersey Act shall govern, in each case as opposed to no such provision in the current charter (“Advisory Charter Proposal G”);
h.
for so long as Mr. Fertitta and his affiliates beneficially own 30% or more of the total number of (i) shares of New GNOG Class A common stock outstanding as of the Closing and (ii) shares of New GNOG Class A common stock that may be issued upon exchange of the HoldCo Class B Units held by Mr. Fertitta and his affiliates as of the Closing, holders of shares of New GNOG Class A common stock will be entitled to cast one vote per share of New GNOG Class A common stock and holders of shares of New GNOG Class B common stock will be entitled to cast 10 votes per share of New GNOG Class B common stock on each matter properly submitted to New GNOG’s stockholders entitled to vote, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New
 

 
GNOG common stock beneficially owned by Mr. Fertitta and his affiliates not to exceed 79.9%, as opposed to each share of the Company Class A common stock and Company Class B common stock being entitled to one vote per share on each matter properly submitted to the Company’s stockholders entitled to vote (“Advisory Charter Proposal H”);
i.
to elect not to be governed by Section 203 of the General Corporation Law of the State of Delaware (“DGCL”) until such time as Mr. Fertitta and his affiliates cease to beneficially own 10% of the voting power of the capital stock of New GNOG, at which point New GNOG will immediately and automatically become governed by Section 203 of the DGCL (“Advisory Charter Proposal I”);
j.
to provide that, unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for resolving complaints asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”) (“Advisory Charter Proposal J”);
4.
to consider and vote upon a proposal to elect six directors to serve on New GNOG’s board of directors, each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals (as defined below), including the Charter Proposal, are not approved and our board of directors remains classified, to elect two directors as Class I directors on the Company’s board of directors, each to serve for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal (the “Director Election Proposal”);
5.
a proposal to approve the Landcadia Holdings II, Inc. 2020 Incentive Award Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex I, including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” and, collectively with the Transaction Proposal, the Nasdaq Proposal and the Charter Proposal, the “condition precedent proposals”);
6.
the ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020 (the “Auditor Ratification Proposal”); and
7.
a proposal to approve the adjournment of the special 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, or otherwise in connection with, the approval of the condition precedent proposals (the “Adjournment Proposal”). The Adjournment Proposal will be presented at the special meeting only if there are not sufficient votes to approve the condition precedent proposals.
Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. The closing of the transaction under the Purchase Agreement is subject to the requisite Stockholder Approval of each of the condition precedent proposals.
Our publicly-traded common stock, units and warrants are currently listed on The Nasdaq Capital Market under the symbols “LCA,” “LCAHU” and “LCAHW,” respectively. Upon the Closing, we intend to change our name from “Landcadia Holdings II, Inc.” to “Golden Nugget Online Gaming, Inc.” We refer to the combined company following the Closing as “New GNOG” throughout the proxy statement. We intend to apply to list the shares of New GNOG Class A common stock and warrants on The Nasdaq Capital Market under the symbols “GNOG” and “GNOGW,” respectively, upon the Closing. Our units will automatically separate into the component securities upon consummation of the transaction and, as a result, will no longer trade as a separate security following the Closing.
Pursuant to our third amended and restated certificate of incorporation (our “current charter”), we are providing our holders of public shares, including our sponsors only to the extent our sponsors hold public shares (the “public stockholders”) with the opportunity to redeem, upon the Closing, shares of Company Class A common stock then held by them (“public shares”) for a per-share price, payable in cash, equal to the quotient obtained by dividing the aggregate amount then on deposit in the trust account as of two
 

 
business days prior to the consummation of the transaction, including interest not previously released to us to pay our taxes, by the total number of then outstanding public shares, subject to the limitations described herein. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission totaling approximately $11.1 million that we will pay to the underwriters of our IPO or transaction expenses incurred in connection with the transaction. For illustrative purposes, based on the fair value of marketable securities held in our trust account of approximately $321.2 million (less approximately $0.9 million of income taxes payable) as of June 30, 2020, the estimated per share redemption price would have been approximately $10.13. Public stockholders may elect to redeem their shares even if they vote for the transaction. Pursuant to our current charter, we are required to pay the redemption price to public stockholders who properly exercise their redemption rights as promptly as practical following the Closing. The Closing is subject to the satisfaction of a number of conditions, including receipt of certain regulatory approvals. There can be no assurance when or if such regulatory approvals will be obtained. Further, following the stockholder vote to approve the transaction, there could be a delay for a period of time, which period may be significant, in receiving the required regulatory approvals. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the special meeting and payment of the redemption price.
You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)
(a) hold public shares or (b) hold public shares through units and you elect to separate your units into the underlying public shares and warrants (the “public warrants”) prior to exercising your redemption rights with respect to the public shares; and
(ii)
prior to              , Eastern time, on            , 2020, (a) submit a written request to Continental Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through the Depository Trust Company.
Holders of units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
A public stockholder, 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 Securities Exchange Act of 1934, as amended), 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 shares of Company Class A common stock included in the units sold in our IPO without the prior consent of the Company. We have no specified maximum redemption threshold under our current charter, other than the aforementioned 15% threshold and the limitation that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Every share of Company Class A common stock that is redeemed by our public stockholders will reduce the amount in our trust account, which held marketable securities with a fair value of approximately $321.2 million as of June 30, 2020. The Purchase Agreement provides that LF LLC’s obligation to consummate the transaction is conditioned on the Company delivering evidence that GNOG LLC has no less than an aggregate amount of $80.0 million cash upon the Closing (following any redemptions of public shares and after payment of the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest). If, as a result of redemptions of public shares by our public stockholders and the payment of the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest, this condition is not met (or waived), LF LLC may elect not to consummate the transaction. Holders of our outstanding public warrants do not have redemption rights in connection with the transaction. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their public shares in connection with the Closing.
Our sponsors, as well as our officers and directors, including without limitation, Mr. Fertitta, have agreed to waive their redemption rights with respect to any founder shares and any public shares they may hold in connection with the consummation of the transaction, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, Mr. Fertitta and JFG
 

 
Sponsor beneficially own 20.0% of our issued and outstanding shares of common stock, including all of the founder shares. Our sponsors, directors and officers, including without limitation, Mr. Fertitta, have agreed to vote any shares of the Company’s common stock owned by them in favor of the transaction. The founder shares are subject to transfer restrictions. Our current charter includes a conversion adjustment which provides that the founder shares will automatically convert at the time of the transaction into a number of shares of Company Class A common stock at the Closing, in accordance with the terms of the current charter. In connection with the Closing, New GNOG will issue shares of New GNOG Class B common stock to LF LLC. In connection with the transaction, JFG Sponsor has agreed to forfeit certain of its founder shares such that as of the Closing, assuming none of the Company’s public stockholders elect to redeem their public shares in connection with the Closing, and without taking into account the shares of New GNOG Class B common stock to be issued to LF LLC, Mr. Fertitta and JFG Sponsor will beneficially own approximately 14.5% of the economic interests of New GNOG.
We are providing the accompanying proxy statement and accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Information about the special meeting, the transaction and other related business to be considered by the Company’s stockholders at the special meeting is included in the accompanying proxy statement. Whether or not you plan to attend the special meeting, we urge all of our stockholders to read the accompanying proxy statement, including the Annexes and the accompanying financials statements of the Company and GNOG, carefully and in their entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 60 of the accompanying proxy statement.
After careful consideration, the board of directors of the Company (the “Board”) unanimously approved the Purchase Agreement and the transaction, and unanimously recommends that our stockholders vote “FOR” the adoption of the Purchase Agreement and approval of the transaction, “FOR” each of the director nominees and “FOR” all of the other proposals presented to our stockholders in the accompanying proxy statement. In considering the recommendation of our Board to vote in favor of the transaction, stockholders should be aware that aside from their interests as stockholders, our sponsors and certain of their affiliates and certain members of our Board and officers, including without limitation, Mr. Fertitta, have interests in the transaction that are different from, or in addition to, those of our other stockholders. Stockholders should take these interests into account in deciding whether to approve the transaction. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Transaction.” In addition, Jefferies LLC, a Delaware limited liability company and an affiliate of JFG Sponsor (“Jefferies”), has a financial interest in the Company completing the transaction. See the section entitled “Proposal No. 1 —The Transaction Proposal — Interests of Certain Persons in the Transaction” for additional information.
In accordance with the terms of the Purchase Agreement, approval of the Transaction Proposal, the Nasdaq Proposal and the Incentive Plan Proposal requires the approval at the special meeting by (i) a majority of the shares of the Company’s common stock that are voted at the special meeting and (ii) a majority of the shares of Company Class A common stock outstanding and held by the stockholders of the Company other than those shares beneficially owned by Tilman J. Fertitta, JFG Sponsor and their respective affiliates (collectively, the “Disinterested Stockholders”). Approval of the Charter Proposal requires approval at the special meeting by (i) a majority of the shares of the Company’s common stock outstanding and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders. We refer to the requisite approvals of the proposals described above collectively as the “Stockholder Approval.” Approval of the Advisory Charter Proposals, each of which is a non-binding vote, the Auditor Ratification Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon.
The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. If the condition precedent proposals, including the Charter Proposal, are approved, we will elect six directors to New GNOG’s board of directors, each to serve a one-year term commencing at the Closing of the transaction. The terms of the Company’s current
 

 
Class I directors will expire at the special meeting; however, because the terms of the Company’s other directors serving in Class II and Class III will not expire at the special meeting, those directors have tendered their contingent resignations from their current terms, conditioned upon the approval of the condition precedent proposals, including the Charter Proposal, with the resignations to take effect immediately prior to the Closing. If the condition precedent proposals are not approved, two Class I directors will be elected to the Company’s board of directors, each to serve a three-year term.
A stockholder’s failure to vote by proxy or to vote in person at the special meeting (which would include voting at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions and broker non-votes will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal will have the same effect as a vote “AGAINST” any such proposal. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Advisory Charter Proposals, the Director Election Proposal, the Auditor Ratification Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal.
Your vote is very important.   Whether or not you plan to attend the special meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement to make sure that your shares are represented at the special 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 special meeting. Even if you have voted by proxy, you may still vote during the special meeting by visiting https://www.cstproxy.com/landcadiaholdingsii/sm2020. To participate in the special meeting, you will need the 12-digit control number assigned by Continental Stock Transfer & Trust Company included on your proxy card or obtained from them via email. The transaction will be consummated only if the condition precedent proposals are approved at the special meeting. Unless waived by the parties to the Purchase Agreement, the Closing is conditioned upon the approval of the condition precedent proposals. The election of six director nominees in the Director Election Proposal is conditioned on the approval of the condition precedent proposals, including the Charter Proposal. Each of the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned upon approval of the other condition precedent proposals. The Advisory Charter Proposals, the Auditor Ratification Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in the accompanying proxy statement.
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 special meeting. If you fail to return your proxy card, and do not attend the special meeting, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If you are a stockholder of record and you attend the special meeting and wish to vote during the special meeting, you may withdraw your proxy and vote at the special meeting.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE TRANSACTION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. 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 the Board, we would like to thank you for your support of Landcadia Holdings II, Inc. and look forward to a successful completion of the transaction.
           , 2020               Sincerely,
   
Tilman J. Fertitta
   
Richard Handler
Co-Chairman and Chief Executive Officer Co-Chairman and President
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
This proxy statement is dated            , 2020, and is expected to be first mailed to our stockholders on or about            , 2020.
 

 
NOTICE OF SPECIAL MEETING IN LIEU OF THE 2020 ANNUAL MEETING OF
STOCKHOLDERS OF LANDCADIA HOLDINGS II, INC.
TO BE HELD ON            , 2020
To the Stockholders of Landcadia Holdings II, Inc.:
NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2020 annual meeting of the stockholders of Landcadia Holdings II, Inc., a Delaware corporation (the “Company”), will be held on            , 2020, at 10:00 a.m., Eastern time at https://www.cstproxy.com/landcadiaholdingsii/sm2020 (the “special meeting”). You are cordially invited to attend the special meeting to conduct the following items of business:

Transaction Proposal — To consider and vote upon a proposal to approve and adopt the Purchase Agreement (as amended, the “Purchase Agreement”) by and among the Company, LHGN HoldCo, LLC, a Delaware limited liability company (“Landcadia HoldCo”), Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co.), a New Jersey corporation (“GNOG”), GNOG Holdings, LLC, a Delaware limited liability company (“GNOG HoldCo”), and Landry’s Fertitta, LLC, a Texas limited liability company (“LF LLC”), pursuant to which, subject to the satisfaction or waiver of certain conditions set forth therein, the Company is proposing to consummate the transaction with GNOG (the “transaction,” such proposal, the “Transaction Proposal,” and such combined entity after the consummation of the transaction, “New GNOG”);

Nasdaq Proposal — To approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market (“Nasdaq”), (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock (as defined herein) to LF LLC at the time of the closing of the transaction (the “Closing”), pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note (as defined in the proxy statement), as calculated pursuant to the terms of the Amended and Restated Limited Liability Company Agreement of Landcadia HoldCo as described herein, and (3) shares of New GNOG Class A common stock (as defined herein) to LF LLC in the future upon the exchange of a corresponding number of the Class B membership interests in Landcadia HoldCo (“HoldCo Class B Units”) and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the Amended and Restated Limited Liability Company Agreement of Landcadia HoldCo, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules (the “Nasdaq Proposal”);

Charter Proposal — To consider and vote upon a proposal to approve New GNOG’s proposed fourth amended and restated certificate of incorporation (the “proposed charter”), in the form attached to the accompanying proxy statement as Annex C, in connection with the transaction;

Advisory Charter Proposals — To approve and adopt, on a non-binding advisory basis, certain differences between the Company’s third amended and restated certificate of incorporation (the “current charter”) and the proposed charter, which are being presented in accordance with the requirements of the U.S. Securities and Exchange Commission (the “SEC”) as ten separate sub-proposals (collectively, the “Advisory Charter Proposals”):

Advisory Charter Proposal A — New GNOG will have authorized capital stock of 271,000,000 shares, consisting of 220,000,000 shares of Class A common stock, par value $0.0001 per share, of New GNOG (“New GNOG Class A common stock”), 50,000,000 shares of a new, non-economic Class B common stock, par value $0.0001 per share, of New GNOG (“New GNOG Class B common stock”) and 1,000,000 shares of preferred stock, par value $0.0001 per share, as opposed to the Company having 221,000,000 shares, consisting of 200,000,000 shares of the Company’s Class A common stock, par value $0.0001 per share (the “Company Class A common
 

 
stock”), 20,000,000 shares of the Company’s Class B common stock, par value $0.0001 per share (the “Company Class B common stock”), of the Company and 1,000,000 shares of preferred stock;

Advisory Charter Proposal B — Each member of the board of directors of New GNOG will be elected at each annual meeting of stockholders (or special meeting in lieu thereof), as opposed to the Company having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term;

Advisory Charter Proposal C — The number of directors will be fixed and may be modified either by (i) New GNOG’s board of directors or (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, as opposed to the number of directors being determined by the Company’s board of directors;

Advisory Charter Proposal D — Any action required or permitted to be taken by the stockholders of New GNOG may be taken by written consent until the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of the outstanding capital stock of New GNOG, as opposed to only holders of shares of Company Class B common stock having the ability to take stockholder action by written consent;

Advisory Charter Proposal E — Amendments to the proposed charter will require either the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New GNOG or the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, provided that for so long as there are shares of both New GNOG Class A common stock and New GNOG Class B common stock outstanding, New GNOG may not amend, alter or repeal any provision in the proposed charter that would adversely affect the relative rights of either class without the affirmative vote of the holders of such class of common stock whose relative rights are adversely affected, as opposed to amendments to certain provisions of the current charter requiring an amendment to be conducted in accordance with Delaware law, subject to certain exceptions;

Advisory Charter Proposal F — The bylaws of New GNOG may be adopted, amended, altered or repealed by (x) the affirmative vote of a majority of New GNOG’s board of directors or (y) either (i) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG for so long as Mr. Fertitta and his affiliates beneficially own a majority of such voting power and (ii) the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New GNOG from and after the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of New GNOG, as opposed to the bylaws of the Company requiring the approval of a majority of the board of directors of the Company or the holders of a majority of the Company’s outstanding shares;

Advisory Charter Proposal G —  The proposed charter will include provisions intended to ensure compliance with gaming, gambling and related laws, including provisions (i) that provide New GNOG with certain rights to require the sale and transfer of New GNOG’s capital stock owned or controlled by any stockholders that fail to comply with applicable gaming laws or their affiliates, and otherwise prohibit the transfer of New GNOG’s capital stock to such persons, (ii) relating to the qualification of directors and officers by the New Jersey Commission Casino Control Commission (the “CCC”) and the removal of officers and resignation of directors in circumstances where the CCC determines that there is reasonable cause to believe that such individual may not be qualified to hold such position and (iii) incorporating all provisions of the New Jersey Casino Control Act (the “New Jersey Act”) into the proposed charter, to the extent required to be stated in the proposed charter for New GNOG or any of its subsidiaries to be eligible to apply for and maintain a casino license under the New Jersey Act, including a provision that to the extent that anything contained in the proposed charter or in the bylaws of
 

 
New GNOG is inconsistent with any such provisions under the New Jersey Act, the provisions of the New Jersey Act shall govern, in each case as opposed to no such provision in the current charter;

Advisory Charter Proposal H — For so long as Mr. Fertitta and his affiliates beneficially own 30% or more of the total number of (i) shares of New GNOG Class A common stock outstanding as of the Closing and (ii) shares of New GNOG Class A common stock that may be issued upon exchange of the HoldCo Class B Units held by Mr. Fertitta and his affiliates as of the Closing, holders of shares of New GNOG Class A common stock will be entitled to cast one vote per share of New GNOG Class A common stock and holders of shares of New GNOG Class B common stock will be entitled to cast 10 votes per share of New GNOG Class B common stock on each matter properly submitted to New GNOG’s stockholders entitled to vote, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%, as opposed to each share of the Company Class A common stock and Company Class B common stock being entitled to one vote per share on each matter properly submitted to the Company’s stockholders entitled to vote;

Advisory Charter Proposal I — To elect not to be governed by Section 203 of the General Corporation Law of the State of Delaware (“DGCL”) until such time as Mr. Fertitta and his affiliates cease to beneficially own 10% of the voting power of the capital stock of New GNOG, at which point New GNOG will immediately and automatically become governed by Section 203 of the DGCL;

Advisory Charter Proposal J — To provide that, unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for resolving complaints asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”);

Director Election Proposal — To consider and vote upon a proposal to elect six directors to serve on New GNOG’s board of directors, each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals, including the Charter Proposal, are not approved and our board of directors (the “Board”) remains classified, to elect two directors to serve as Class I directors on the Board, each for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal;

Incentive Plan Proposal — To consider and vote upon a proposal to approve the Landcadia Holdings II, Inc. 2020 Incentive Award Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex I, including the authorization of the initial share reserve under the Incentive Plan (collectively with the Transaction Proposal, the Nasdaq Proposal and the Charter Proposal, the “condition precedent proposals”);

Auditor Ratification Proposal — The ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; and

Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special 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, or otherwise in connection with, the approval of the condition precedent proposals. The Adjournment Proposal will only be presented at the special meeting if there are not sufficient votes to approve the condition precedent proposals.
The above matters are more fully described in the accompanying proxy statement, which also includes, as Annex A, a copy of the Purchase Agreement. We urge you to read carefully the accompanying proxy statement in its entirety, including the Annexes and accompanying financial statements of the Company and GNOG.
 

 
In light of ongoing developments related to the novel coronavirus (“COVID-19”), after careful consideration, the Company has determined that the special meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance and participation while safeguarding the health and safety of our stockholders, directors and management team. You or your proxyholder will be able to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting https://www.cstproxy.com/landcadiaholdingsii/sm2020 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement. The record date for the special meeting is October 5, 2020. Only stockholders of record at the close of business on that date may vote at the special meeting or any adjournment thereof. A complete list of our stockholders of record entitled to vote at the special meeting will be available for 10 days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.
Pursuant to our third amended and restated certificate of incorporation (our “current charter”), we are providing our holders of public shares, including our sponsors only to the extent our sponsors hold public shares (the “public stockholders”) with the opportunity to redeem, upon the Closing, shares of Company Class A common stock then held by them (“public shares”) for a per-share price, payable in cash, equal to the quotient obtained by dividing the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the transaction, including interest not previously released to us to pay our taxes, by the total number of then outstanding public shares, subject to the limitations described herein. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission totaling approximately $11.1 million that we will pay to the underwriters of our initial public offering (“IPO”) or transaction expenses incurred in connection with the transaction. For illustrative purposes, based on the fair value of marketable securities held in our trust account of approximately $321.2 million (less approximately $0.9 million of income taxes payable) as of June 30, 2020, the estimated per share redemption price would have been approximately $10.13. Public stockholders may elect to redeem their shares even if they vote for the transaction. Pursuant to our current charter, we are required to pay the redemption price to public stockholders who properly exercise their redemption rights as promptly as practical following the Closing. The Closing is subject to the satisfaction of a number of conditions, including receipt of certain regulatory approvals. There can be no assurance when or if such regulatory approvals will be obtained. Further, following the stockholder vote to approve the transaction, there could be a delay for a period of time, which period may be significant, in receiving the required regulatory approvals. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the special meeting and payment of the redemption price.
You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)(a)   hold public shares or (b) hold public shares through units and you elect to separate your units into the underlying public shares and warrants (the “public warrants”) prior to exercising your redemption rights with respect to the public shares; and
(ii)   prior to            , Eastern time, on            , 2020, (a) submit a written request to Continental Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through the Depository Trust Company.
Holders of units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
A public stockholder, 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 Securities Exchange Act of 1934, as amended), 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 shares of Company Class A common stock included in the units
 

 
sold in our IPO without the prior consent of the Company. We have no specified maximum redemption threshold under our current charter, other than the aforementioned 15% threshold and the limitation that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Every share of Company Class A common stock that is redeemed by our public stockholders will reduce the amount in our trust account, which held marketable securities with a fair value of approximately $321.2 million as of June 30, 2020. The Purchase Agreement provides that LF LLC’s obligation to consummate the transaction is conditioned on the Company delivering evidence that GNOG LLC has no less than an aggregate amount of $80.0 million cash upon the Closing (following any redemptions of public shares and the payment of the cash consideration in an amount of $30.0 million (the “Closing Cash Consideration”) and the repayment of $150 million, representing one-half of the existing principal amount owed by GNOG under that certain Credit Agreement dated as of April 28, 2020, by and among GNOG, LF LLC, Jefferies Finance LLC, Coöperatieve Rabobank U.A., New York Branch, Keybanc Capital Markets Inc., Citizens Bank, N.A., and the lenders party thereto, as amended from time to time (the “Credit Agreement”), and a related prepayment premium in an amount of approximately $24.0 million (together, the ‘‘Credit Agreement Payoff Amount’’) as well as accrued and unpaid interest. If, as a result of redemptions of public shares by our public stockholders and the payment of the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest, this condition is not met (or waived), then LF LLC may elect not to consummate the transaction. Holders of our outstanding public warrants do not have redemption rights in connection with the transaction. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their public shares.
Fertitta Entertainment, Inc., a Texas corporation wholly-owned by Mr. Fertitta (“FEI”), and Jefferies Financial Group Inc. (f/k/a Leucadia National Corporation), a New York corporation (“JFG Sponsor” and, together with FEI, the “sponsors”), as well as our officers and directors, have agreed to waive their redemption rights with respect to any public shares they may hold in connection with the consummation of the transaction, and the Class B common stock, par value $0.0001 per share (the “founder shares”), will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, Mr. Fertitta and JFG Sponsor beneficially own 20.0% of our issued and outstanding shares of common stock, including all of the founder shares. Our sponsors, directors and officers, including without limitation, Mr. Fertitta, have agreed to vote any shares of the Company’s common stock owned by them in favor of the transaction. The founder shares are subject to transfer restrictions. Our current charter includes a conversion adjustment which provides that the founder shares will automatically convert at the time of the transaction into a number of shares of Company Class A common stock at the Closing, in accordance with the terms of the current charter. In connection with the Closing, New GNOG will issue shares of New GNOG Class B common stock to LF LLC. In connection with the transaction, JFG Sponsor has agreed to forfeit certain of its founder shares such that as of the Closing, assuming none of the Company’s public stockholders elect to redeem their public shares in connection with the Closing, and without taking into account the shares of New GNOG Class B common stock to be issued to LF LLC, Mr. Fertitta and JFG Sponsor will beneficially own approximately 14.5% of the economic interests of New GNOG.
At the Closing, certain insiders of the Company, including Tilman J. Fertitta, FEI and the JFG Sponsor will enter into that certain amendment to the Letter Agreement entered into on May 6, 2019 in connection with the Company’s IPO (the “Lock-Up Amendment”), which will amend the Letter Agreement to add an additional acceleration event to the lock-up period contemplated under the Letter Agreement based on a price target of $15.00 per share of New GNOG Class A common stock following a period of 60 days after the Closing. The Letter Agreement and the lock-up period thereunder does not apply to the HoldCo Class B Units or shares of New GNOG Class B common stock to be received by LF LLC pursuant to the Purchase Agreement.
The transaction is conditioned on the approval of the condition precedent proposals at the special meeting. The election of six directors to a one-year term as part of the Director Election Proposal is conditioned on the approval of the condition precedent proposals, including the Charter Proposal. Each of the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned upon approval of the other condition precedent proposals. The Advisory Charter Proposals, the Auditor Ratification Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in the accompanying proxy statement.
 

 
Approval of the Transaction Proposal, the Nasdaq Proposal and the Incentive Plan Proposal requires the approval at the special meeting by (i) a majority of the shares of the Company’s common stock that are voted at the special meeting and (ii) a majority of the shares of Company Class A common stock outstanding and held by the stockholders of the Company other than those shares beneficially owned by Tilman J. Fertitta, JFG Sponsor and their respective affiliates (collectively, the “Disinterested Stockholders”). Approval of the Charter Proposal requires approval at the special meeting by (i) a majority of the shares of the Company’s common stock outstanding and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders. We refer to the requisite approvals of the proposals described above collectively as the “Stockholder Approval.” Approval of the Advisory Charter Proposals, each of which is a non-binding vote, the Auditor Ratification Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon.
The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. The Company’s current directors, including those director nominees currently serving in Class II and Class III, have tendered their contingent resignations from their current terms, conditioned upon the approval of the condition precedent proposals, including the Charter Proposal. These resignations will take effect immediately prior to the Closing.
A stockholder’s failure to vote by proxy or to vote in person at the special meeting (which would include voting at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions and broker non-votes will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal will have the same effect as a vote “AGAINST” any such proposal. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Advisory Charter Proposals, the Director Election Proposal, the Auditor Ratification Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal.
The Board unanimously recommends that you vote “FOR” each of these proposals and “FOR” each of the director nominees.
           , 2020            By Order of the Board of Directors,
   
Tilman J. Fertitta
   
Richard Handler
Co-Chairman and Chief Executive Officer Co-Chairman and President
 

 
TABLE OF CONTENTS
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CERTAIN DEFINED TERMS
Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “the Company” refer to Landcadia Holdings II, Inc., and the term “New GNOG” refers to the Company following the consummation of the transaction.
In this proxy statement:
A&R HoldCo LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement of Landcadia HoldCo to be entered into at the Closing by Company, Landcadia HoldCo and LF LLC, substantially in the form attached to this proxy statement as Annex F.
A&R Intercompany Notes” means the First A&R Intercompany Note and the Second A&R Intercompany Note.
A&R Online Gaming Operations Agreement” means that certain amended and restated Online Gaming Operations Agreement to be entered into at Closing by GNOG LLC and GNAC.
A&R Registration Rights Agreement” means that certain amended and restated registration rights agreement to be entered into at the Closing by New GNOG, the sponsors, Tilman Fertitta and certain of his affiliates, substantially in the form attached to this proxy statement as Annex J, which will amend and restate the existing registration rights agreement in a form mutually agreed by the Company and LF LLC.
A&R Trademark License Agreement” means that certain amended and restated Trademark License Agreement expected to be entered into at Closing by GNOG LLC, Golden Nugget and GNLV.
Acquired GNOG Party” means each of GNOG HoldCo and GNOG LLC (as the successor to GNOG) and their respective subsidiaries.
Adjournment Proposal” means the proposal to approve the adjournment of the special 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, or otherwise in connection with, the approval of the condition precedent proposals.
Advisory Charter Proposal A” means the non-binding advisory proposal to approve a provision in the proposed charter stating that New GNOG will have authorized capital stock of 271,000,000 shares, consisting of 220,000,000 shares of New GNOG Class A common stock, 50,000,000 shares of New GNOG Class B common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, as opposed to the Company having 221,000,000 shares, consisting of 200,000,000 shares of Company Class A common stock, 20,000,000 shares of Company Class B common stock and 1,000,000 shares of preferred stock.
Advisory Charter Proposal B” means the non-binding advisory proposal to approve a provision in the proposed charter stating that each member of the board of directors of New GNOG will be elected at each annual meeting of stockholders (or special meeting in lieu thereof), as opposed to the Company having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term.
Advisory Charter Proposal C” means the non-binding advisory proposal to approve a provision in the proposed charter stating that the number of directors will be fixed and may be modified either by (i) New GNOG’s board of directors or (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, as opposed to the number of directors being determined by the Company’s board of directors.
Advisory Charter Proposal D” means the non-binding advisory proposal to approve a provision in the proposed charter stating that any action required or permitted to be taken by the stockholders of New GNOG may be taken by written consent until the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of the outstanding capital stock of New GNOG, as opposed to only holders of shares of Company Class B common stock having the ability to take stockholder action by written consent.
 
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Advisory Charter Proposal E” means the non-binding advisory proposal to approve a provision in the proposed charter stating that amendments to the proposed charter will require either the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New GNOG or the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, provided that for so long as there are shares of both New GNOG Class A common stock and New GNOG Class B common stock outstanding, New GNOG may not amend, alter or repeal any provision in the proposed charter that would adversely affect the relative rights of either class without the affirmative vote of the holders of such class of common stock whose relative rights are adversely affected, as opposed to amendments to certain provisions of the current charter requiring an amendment to be conducted in accordance with Delaware law, subject to certain exceptions.
Advisory Charter Proposal F” means the non-binding advisory proposal to approve a provision in the proposed charter stating that the bylaws of New GNOG may be adopted, amended, altered or repealed by (x) the affirmative vote of a majority of New GNOG’s board of directors or (y) either (i) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG for so long as Mr. Fertitta and his affiliates beneficially own a majority of such voting power and (ii) the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New GNOG from and after the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of New GNOG, as opposed to the bylaws of the Company requiring the approval of a majority of the board of directors of the Company or the holders of a majority of the Company’s outstanding shares.
Advisory Charter Proposal G” means the non-binding advisory proposal to approve provisions in the proposed charter intended to ensure compliance with gaming, gambling and related laws, including provisions (i) that provide New GNOG with certain rights to require the sale and transfer of New GNOG’s capital stock owned or controlled by any stockholders that fail to comply with applicable gaming laws or their affiliates, and otherwise prohibit the transfer of New GNOG’s capital stock to such persons, (ii) relating to the qualification of directors and officers by the CCC and the removal of officers and resignation of directors in circumstances where the CCC determines that there is reasonable cause to believe that such individual may not be qualified to hold such position and (iii) incorporating all provisions of the New Jersey Act into the proposed charter, to the extent required to be stated in the proposed charter for New GNOG or any of its subsidiaries to be eligible to apply for and maintain a casino license under the New Jersey Act, including a provision that to the extent that anything contained in the proposed charter or in the bylaws of New GNOG is inconsistent with any such provisions under the New Jersey Act, the provisions of the New Jersey Act shall govern, in each case as opposed to no such provision in the current charter.
Advisory Charter Proposal H” means the non-binding advisory proposal to approve a provision in the proposed charter stating that for so long as Mr. Fertitta and his affiliates beneficially own 30% or more of the total number of (i) shares of New GNOG Class A common stock outstanding as of the Closing and (ii) shares of New GNOG Class A common stock that may be issued upon exchange of the HoldCo Class B Units held by Mr. Fertitta and his affiliates as of the Closing, holders of shares of New GNOG Class A common stock will be entitled to cast one vote per share of New GNOG Class A common stock and holders of shares of New GNOG Class B common stock will be entitled to cast 10 votes per share of New GNOG Class B common stock on each matter properly submitted to New GNOG’s stockholders entitled to vote, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%, as opposed to each share of Company Class A common stock and Company Class B common stock being entitled to one vote per share on each matter properly submitted to the Company’s stockholders entitled to vote.
Advisory Charter Proposal I” means the non-binding advisory proposal to approve a provision in the proposed charter electing not to be governed by Section 203 of the DGCL until such time as Mr. Fertitta and his affiliates cease to beneficially own 10% of the voting power of the capital stock of New GNOG, at which point New GNOG will immediately and automatically become governed by Section 203 of the DGCL.
Advisory Charter Proposal J” means the non-binding advisory proposal to approve a provision in the proposed charter stating that, unless we consent in writing to an alternative forum, the federal district courts
 
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of the United States of America shall be the exclusive forum for resolving complaints asserting a cause of action arising under the Securities Act.
Advisory Charter Proposals” means the non-binding advisory proposals to approve and adopt certain differences between the current charter and the proposed charter, which are being presented in accordance with the requirements of the SEC as ten separate sub-proposals.
Ancillary Agreements” means the proposed charter, the proposed bylaws, the A&R Registration Rights Agreement, the A&R HoldCo LLC Agreement, the Lock-Up Amendment, the Tax Receivable Agreement, the Sponsor Forfeiture and Call-Option Agreement and the A&R Intercompany Notes.
Auditor Ratification Proposal” means the ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
Board” means the board of directors of the Company or New GNOG.
CCC” means the New Jersey Casino Control Commission.
Charter Proposal” means the proposal to approve New GNOG’s proposed charter, in the form attached to this proxy statement as Annex C, in connection with the transaction.
Closing” means the closing of the transaction.
Closing Cash Consideration” means a cash amount payable to LF LLC equal to $30,000,000.
Closing Date” means the closing date of the transaction.
Company Class A common stock” means the shares of Class A common stock, par value $0.0001 per share, of the Company.
Company Class B common stock” means the shares of Class B common stock, par value $0.0001 per share, of the Company.
condition precedent proposals” means the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal.
Code” means the Internal Revenue Code of 1986, as amended.
common stock” means the shares of common stock, par value $0.0001 per share, of the Company.
Company” means Landcadia Holdings II, Inc., a Delaware corporation.
Credit Agreement” means that certain Credit Agreement, dated as of April 28, 2020, by and among GNOG, LF LLC, Jefferies Finance LLC, Coöperatieve Rabobank U.A., New York Branch, Keybanc Capital Markets Inc., Citizens Bank, N.A., and the lenders party thereto, as amended from time to time.
Credit Agreement Payoff Amount” means the (i) repayment of $150.0 million, representing one-half of the existing principal amount owed by GNOG under the Credit Agreement, and (ii) related prepayment premium in an amount of approximately $24.0 million.
current bylaws” means the bylaws of the Company that are currently in effect.
current charter” means the third amended and restated certificate of incorporation, dated May 6, 2019, of the Company that is currently in effect, a copy of which is attached to this proxy statement as Annex B.
Director Election Proposal” means the proposal to elect six directors to serve on New GNOG’s board of directors, each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals, including the Charter Proposal, are not approved and our Board remains classified, to elect two directors to serve as Class I directors on the Company’s board of directors, each for a term of three years expiring at the annual meeting of stockholders
 
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to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal.
Disinterested Stockholders” means stockholders who are holders of outstanding shares of Company Class A common stock other than those shares beneficially owned by Tilman J. Fertitta, JFG Sponsor and their respective affiliates.
DGCL” means the General Corporation Law of the State of Delaware.
DTC” means the Depository Trust Company.
Employment Agreements” means the employment agreements that are expected to be entered into with certain members of New GNOG’s management in connection with the Closing.
Exchange Act” means the Securities Exchange Act of 1934, as amended.
FEI” means Fertitta Entertainment, Inc., a Texas corporation.
First A&R Intercompany Note” means that certain Amended and Restated Intercompany Promissory Note, to be entered into by LF LLC and GNOG LLC on or after the date of the GNOG Conversion and prior to the Closing, which will amend and restate the Original Intercompany Note to provide for future automatic dollar-for-dollar reductions of the principal amounts outstanding thereunder to reflect any further reductions of the principal amount outstanding under the Credit Agreement.
founder shares” means the 7,906,250 shares of Company Class B common stock that are currently beneficially owned by Mr. Fertitta and JFG Sponsor.
GAAP” means generally accepted accounting principles in the U.S.
GNAC” Golden Nugget Atlantic City, LLC, a New Jersey limited liability company, which is an indirect wholly-owned subsidiary of FEI.
GNLV” means GNLV, LLC, a Nevada limited liability company, which is a direct wholly-owned subsidiary of Golden Nugget.
GNOG” means Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co.), a New Jersey corporation.
GNOG Contribution” means the contribution by LF LLC of all of the membership interests in GNOG HoldCo to Landcadia HoldCo in exchange for (i) 31,350,625 HoldCo Class B Units and a corresponding number of shares of New GNOG Class B common stock, (ii) the Closing Cash Consideration and (iii) the Credit Agreement Payoff Amount.
GNOG Conversion” means the conversion of GNOG into a limited liability company by merging with and into GNOG LLC, with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo.
GNOG HoldCo” means GNOG Holdings, LLC, a Delaware limited liability company.
GNOG LLC” means Golden Nugget Online Gaming, LLC, a New Jersey limited liability company.
Golden Nugget” means Golden Nugget, LLC, a Nevada limited liability company, which is an indirect wholly-owned subsidiary of FEI.
High Voting Rights” means the 10 votes per share of New GNOG Class B common stock, subject to certain adjustments and limitations set forth in this proxy statement.
HoldCo Class B Units” means Class B membership interests in Landcadia HoldCo.
HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Incentive Plan” means the Landcadia Holdings II, Inc. 2020 Incentive Award Plan, the incentive compensation plan for eligible service providers of New GNOG and its affiliates that will be in place at the Closing, a copy of which is attached to this proxy statement as Annex I.
 
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Incentive Plan Proposal” means the proposal to approve the Incentive Plan, a copy of which is attached to this proxy statement as Annex I, including the authorization of the initial share reserve under the Incentive Plan.
Investment Company Act” means the Investment Company Act of 1940, as amended.
IPO” means the Company’s initial public offering, consummated on May 9, 2019, through the sale of 31,625,000 units at $10.00 per unit.
Jefferies” means Jefferies LLC, a Delaware limited liability company and an affiliate of JFG Sponsor.
JFG Sponsor” means Jefferies Financial Group Inc. (f/k/a Leucadia National Corporation), a New York corporation.
Landry’s LLC” means Landry’s, LLC, a Nevada limited liability company, which is a direct wholly-owned subsidiary of Golden Nugget.
Landcadia HoldCo” means LHGN HoldCo, LLC, a Delaware limited liability company.
Letter Agreement” means that certain letter agreement entered into on May 6, 2019 in connection with the IPO.
LF LLC” means Landry’s Fertitta, LLC, a Texas limited liability company, which is indirectly wholly- owned by Tilman J. Fertitta.
Lock-Up Amendment” means that certain amendment to the Letter Agreement, which adds an additional acceleration event to the lock-up period contemplated under the Letter Agreement based on a price target of $15.00 per share of New GNOG Class A common stock following a period of 60 days after the Closing, to be entered into at the Closing by certain insiders of the Company, including Tilman J. Fertitta, FEI and JFG Sponsor, substantially in the form attached to this proxy statement as Annex E.
Morrow” means Morrow Sodali, proxy solicitor to the Company.
Nasdaq” means the Nasdaq Stock Market.
Nasdaq Proposal” means the proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock to LF LLC at the Closing, pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note, as calculated pursuant to the terms of the A&R HoldCo LLC Agreement as described herein, and (3) shares of New GNOG Class A common stock to LF LLC in the future upon the exchange of a corresponding number of the HoldCo Class B Units and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the A&R HoldCo LLC Agreement, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules.
New GNOG” means Golden Nugget Online Gaming, Inc., a Delaware corporation and the combined company following the Closing of the transaction.
New GNOG Class A common stock” means the shares of Class A common stock, par value $0.0001 per share, of New GNOG.
New GNOG Class B common stock” means the new non-economic shares of Class B common stock, par value $0.0001 per share, of New GNOG.
New Jersey Act” means the New Jersey Casino Control Act.
 
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Office Leases” means the lease agreements to be entered into at Closing by GNOG LLC and (i) GNAC or its affiliate with respect to GNOG LLC’s use of GNAC’s office space in Atlantic City, New Jersey, and (ii) Golden Nugget or its affiliate with respect to GNOG LLC’s use of Golden Nugget’s office space in Houston, Texas.
Online Gaming Operations Agreement” means that certain Online Gaming Operations Agreement, dated as of April 27, 2020, by and between Landry’s Finance Acquisition Co. and GNAC.
Original Intercompany Note” means that certain Intercompany Promissory Note in the original principal amount of $300.0 million, dated April 28, 2020 executed by LF LLC and payable to the order of GNOG.
private placement warrants” means the 5,883,333 warrants held by Mr. Fertitta and JFG Sponsor that were issued to our sponsors concurrently with our IPO, each of which will become exercisable for one share of New GNOG Class A common stock after the Closing, in accordance with its terms.
proposed bylaws” means the proposed amended and restated bylaws of the Company, substantially in the form attached to this proxy statement as Annex D, which will become New GNOG’s bylaws upon the Closing.
proposed charter” means the proposed fourth amended and restated certificate of incorporation of the Company, in the form attached to this proxy statement as Annex C, which will become New GNOG’s certificate of incorporation upon the Closing, assuming the approval of the Charter Proposal.
public shares” means shares of Company Class A common stock included in the units issued in the IPO.
public stockholders” means holders of public shares, including our sponsors only to the extent our sponsors hold public shares.
public warrants” means the warrants included in the units issued in the IPO, each of which will become exercisable for one share of New GNOG Class A common stock after the Closing, in accordance with its terms.
Purchase Agreement” means that certain Purchase Agreement, dated as of June 28, 2020, by and among Landcadia HoldCo, GNOG, GNOG HoldCo, and LF LLC, as amended on September 17, 2020, and as may be further amended from time to time.
SEC” means the U.S. Securities and Exchange Commission.
Second A&R Intercompany Note” means that certain Second Amended and Restated Intercompany Note, to be entered into by LF LLC and GNOG LLC concurrently with the Closing, which will amend and restate the First A&R Intercompany Note to provide for, among other things, (i) a reduction in the principal amount outstanding under the First A&R Intercompany Note by $150.0 million, which reduction will occur at Closing through a non-cash distribution of capital to LF LLC, and (ii) a reduction of the amounts payable thereunder to 6% annually on the outstanding balance from day to day thereunder.
Securities Act” means the Securities Act of 1933, as amended.
Services Agreement” means the new services agreement to be entered into at Closing by GNOG LLC and Golden Nugget, which will provide for the performance of certain services from and after the Closing.
“special meeting” means the special meeting in lieu of the 2020 annual meeting of the stockholders of the Company that is the subject of this proxy statement.
Sponsor Forfeiture and Call-Option Agreement” means that certain agreement entered into in connection with the execution of the Purchase Agreement by JFG Sponsor and the Company, a copy of which is attached to this proxy statement as Annex G.
sponsors” means JFG Sponsor and FEI.
Stock Consideration” means the portion of the total consideration to be paid by the Company and Landcadia HoldCo in the transaction consisting of shares of New GNOG Class B common stock and HoldCo Class B Units.
 
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Stockholder Approval” means, collectively, the approval at the special meeting by (A) with respect to the Transaction Proposal, the Nasdaq Proposal and the Incentive Plan Proposal, (i) a majority of the shares of the Company’s common stock that are voted at the special meeting and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders and (B) with respect to the Charter Proposal, (i) a majority of the shares of the Company’s common stock outstanding and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders.
Tax Receivable Agreement” means that certain Tax Receivable Agreement to be entered into at the Closing by the Company and LF LLC, substantially in the form attached to this proxy statement as Annex K.
Trademark License Agreement” means that certain Trademark License Agreement, dated as of April 27, 2020, by and among Golden Nugget, GNLV and Landry’s Finance Acquisition Co (the predecessor-in-interest to GNOG).
transaction” means the acquisitions and transactions contemplated by the Purchase Agreement.
Transfer Agent” means Continental Stock Transfer & Trust Company.
trust account” means the trust account of the Company that holds the proceeds from the Company’s IPO and the private placement of the private placement warrants.
Trustee” means Continental Stock Transfer & Trust Company.
units” means the units of the Company, each consisting of one share of Company Class A common stock and one-third of one public warrant of the Company, whereby each whole public warrant entitles the holder thereof to purchase one share of Company Class A common stock at an exercise price of $11.50 per share of Company Class A common stock, sold in the IPO.
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our (or GNOG’s) business (as applicable), and the timing and ability for us to complete the transaction. Specifically, forward-looking statements may include statements relating to:

the benefits of the transaction;

the future financial performance of New GNOG following the transaction;

expansion plans and opportunities; and

other statements preceded by, followed by or that include the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.
These forward-looking statements are based on information available as of the date of this proxy statement and our management’s and GNOG’s management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our (or GNOG’s) views as of any subsequent date. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. For purposes of this section, “GNOG” refers to GNOG prior to the GNOG Conversion or GNOG LLC following the GNOG Conversion.
You should not place undue reliance on these forward-looking statements in deciding how your vote should be cast or in voting your shares on the proposals set forth in this proxy statement. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed in or implied by these forward-looking statements. Some factors that could cause actual results to differ include, among others:

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

the outcome of any legal proceedings that may be instituted against GNOG or the Company following the announcement of the transaction;

the inability to complete the transaction due to the failure to obtain approval of the stockholders of the Company, or other conditions to closing in the Purchase Agreement;

the Company’s inability to consummate another initial business combination if it is unable to consummate the transaction;

the inability to obtain or maintain the listing of New GNOG’s common stock on Nasdaq following the transaction;

the risk that the transaction disrupts current plans and operations as a result of the announcement and consummation of the transaction described herein;

the ability to recognize the anticipated benefits of the transaction, which may be affected by, among other things, competition, and the ability of the combined business to grow and manage growth profitably;

costs related to the transaction;

factors relating to the future business, operations and financial performance of GNOG, including:

GNOG’s inability to compete with other forms of entertainment for consumers’ discretionary time and income;

market conditions and global and economic factors beyond GNOG’s control, including the potential adverse effects of the ongoing global COVID-19 pandemic and reductions in discretionary consumer spending, among others;
 
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GNOG’s inability to attract and retain users;

GNOG’s inability to profitably expand into new markets;

changes in applicable laws or regulations;

the failure of third-party service providers to perform services and protect intellectual property rights required for the operation of GNOG’s business;

the possibility that the Company, GNOG or New GNOG may be adversely affected by other economic, business, and/or competitive factors; and

other risks and uncertainties indicated in this proxy statement, including those set forth in the section entitled “Risk Factors.”
 
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SUMMARY TERM SHEET
This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals for Stockholders” and “Summary of this Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the special meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Certain Defined Terms.”

Landcadia Holdings II, Inc., a Delaware corporation, which we refer to as “we,” “us,” “our,” or the “Company,” is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

There are currently 39,531,250 shares of common stock issued and outstanding, consisting of (i) 31,625,000 public shares and (ii) 7,906,250 founder shares beneficially held by Mr. Fertitta and JFG Sponsor. Pursuant to the terms of the Sponsor Forfeiture and Call-Option Agreement, JFG Sponsor will forfeit two thirds (or 2,543,750) of its founder shares in connection with the Closing. There are currently no shares of Company preferred stock issued and outstanding. In addition, we issued 10,541,667 public warrants to purchase common stock (originally sold as part of the units issued in our IPO) as part of our IPO along with 5,883,333 private placement warrants issued to our sponsors in a private placement concurrently with our IPO. Each warrant currently entitles its holder to purchase one share of Company Class A common stock at an exercise price of $11.50 per share. Following the Closing, each warrant will entitle its holder to purchase one share of New GNOG Class A common stock at an exercise price of $11.50 per share. The warrants will become exercisable 30 days after the completion of the transaction, and they will expire five years after the completion of the transaction or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the outstanding warrants at a price of $0.01 per warrant, if the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The private placement warrants, however, are non-redeemable so long as they are held by our sponsors or their permitted transferees. In addition, if our sponsors make any working capital loans to the Company, up to $1.5 million of such loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. For additional information regarding the Company’s warrants, please see the section entitled “Description of Securities.”

LF LLC is a holding company indirectly wholly-owned by Mr. Fertitta and headquartered in Houston, Texas.

GNOG is a U.S. online real money casino headquartered in Houston, Texas.

Pursuant to the Purchase Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, at the time of the Closing, LF LLC will make the GNOG Contribution in exchange for (i) 31,350,625 HoldCo Class B Units and a corresponding number of shares of New GNOG Class B common stock, each of which will entitle the holder to the High Voting Rights, (ii) the Closing Cash Consideration and (iii) the Credit Agreement Payoff Amount. A portion of the cash in the trust account that holds the proceeds (including interest) of our IPO and related private placement, after taking into account any redemptions of shares held by our public stockholders in connection with the Closing, will be used to pay the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest, and funds sufficient to ensure that GNOG LLC will hold at least $80 million in cash at Closing will be contributed down to GNOG LLC upon Closing.

The Purchase Agreement provides that LF LLC’s obligation to consummate the transaction is conditioned on the Company delivering evidence that GNOG LLC has no less than an aggregate amount of $80.0 million cash upon the Closing (following any redemptions of public shares and after payment of the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as
 
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accrued and unpaid interest). If, as a result of the redemption of public shares held by our public stockholders and the payment of the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest, this condition is not met (or waived), LF LLC may elect not to consummate the transaction.

Prior to the Closing, GNOG will convert into a limited liability company by merging with and into GNOG LLC, with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo. Upon the Closing, New GNOG will be organized in an umbrella partnership C-corporation, or “Up-C” structure, in which substantially all of the assets of New GNOG will be held indirectly through GNOG LLC and all of the business of New GNOG will be conducted through GNOG LLC. New GNOG’s only direct assets will consist of the Class A membership interests it holds of Landcadia HoldCo, and the number of Class A units of Landcadia HoldCo that will be issued to New GNOG at Closing will be equal to the number of shares of New GNOG Class A common stock outstanding at Closing. As a result, New GNOG is expected to own approximately 54.1% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 53.2% assuming the maximum number of redemptions of public shares), and in either event, New GNOG will control Landcadia HoldCo as the sole manager of Landcadia HoldCo in accordance with the terms of the A&R HoldCo LLC Agreement. The remaining approximately 45.9% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) will be held by LF LLC through HoldCo Class B Units, which will carry no voting rights. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock), on a one-for-one basis, for either shares of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of New GNOG Class A common stock. In addition, Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC. For additional information about the Purchase Agreement, please see the section entitled “Proposal No. 1— The Transaction Proposal —  The Purchase Agreement.”

It is anticipated that, upon completion of the transaction, (x) assuming no redemptions: (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will own approximately 85.5% of the economic interests of New GNOG (which will represent an indirect economic interest of less than 50% of GNOG LLC because Landcadia HoldCo will not be wholly-owned by New GNOG); (ii) Tilman J. Fertitta and his affiliates will beneficially own approximately 11.1% of the economic interests of New GNOG and approximately 45.9% of the economic interests of Landcadia HoldCo through the HoldCo Class B Units, which will carry no voting rights; and (iii) JFG Sponsor will own approximately 3.4% of the economic interests of New GNOG and (y) assuming holders of 1,417,414 public shares redeem their shares (the maximum redemption scenario): (i) the Company’s public stockholders (other than the sponsors and Mr. Fertitta) will own approximately 84.9% of the economic interests of New GNOG (which will represent an indirect economic interest of less than 50% of GNOG LLC because Landcadia HoldCo will not be wholly-owned by New GNOG); (ii) Tilman J. Fertitta and his affiliates will beneficially own approximately 11.5% of the economic interests of New GNOG and approximately 46.8% of the economic interests of Landcadia HoldCo through the HoldCo Class B Units; and (iii) JFG Sponsor will own approximately 3.6% of the economic interests of New GNOG.

In addition, upon completion of the transaction, (x) assuming no redemptions: (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will hold approximately 19.3% of the voting power of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own 79.9% of the voting power of New GNOG (after the automatic downward adjustment of Mr. Fertitta and his affiliates’ voting power in accordance with the terms of the proposed charter); and (iii) JFG Sponsor will hold approximately 0.8% of the voting power of New GNOG and (y) assuming holders of 1,417,414 public shares redeem their shares (the maximum redemption scenario): (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will hold approximately 19.3% of the voting power of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially hold
 
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79.9% of the voting power of New GNOG (after the automatic downward adjustment of Mr. Fertitta and his affiliates’ voting power in accordance with the terms of the proposed charter); and (iii) JFG Sponsor will hold approximately 0.8% of the voting power of New GNOG. For additional information, please see the sections entitled “Summary of this Proxy Statement — Economic Ownership Interests Upon Closing,” “Summary of this Proxy Statement — Voting Power Upon Closing” and “Unaudited Pro Forma Condensed Combined Financial Information.”

Our management, our Board and a committee of the independent members of our Board considered various factors in determining whether to approve the Purchase Agreement and the transaction. For additional information about our decision-making process, see the section entitled “Proposal No. 1 — The Transaction Proposal — Our Board’s Reasons for the Approval of the Transaction.”

Pursuant to our current charter, in connection with the transaction, holders of our public shares may elect to have their Class A common stock redeemed for cash at the applicable redemption price per share calculated in accordance with our current charter. As of June 30, 2020, this would have amounted to approximately $10.13 per share. If a holder exercises its redemption rights, then such holder will exchange its public shares for cash and will no longer own shares of New GNOG and will not participate in the future growth of New GNOG, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent at least two business days prior to the special meeting. Pursuant to our current charter, we are required to pay the redemption price to public stockholders who properly exercise their redemption rights as promptly as practical following the Closing. The Closing is subject to the satisfaction of a number of conditions, including receipt of certain regulatory approvals. There can be no assurance when or if such regulatory approvals will be obtained. Further, following the stockholder vote to approve the transaction, there could be a delay for a period of time, which period may be significant, in receiving the required regulatory approvals. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the special meeting and payment of the redemption price. For additional information, please see the section entitled “Special Meeting of Stockholders — Redemption Rights.”

In addition to voting on the Transaction Proposal, stockholders are being asked to vote on the following proposals at the special meeting:

Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock to LF LLC at the Closing, pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note, as calculated pursuant to the terms of the A&R HoldCo LLC Agreement as described herein, and (3) shares of New GNOG Class A common stock to LF LLC in the future upon the exchange of a corresponding number of the HoldCo Class B Units and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the A&R HoldCo LLC Agreement, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules;

Charter Proposal — To consider and vote upon a proposal to approve New GNOG’s proposed charter, in the form attached to this proxy statement as Annex C, in connection with the transaction;

Advisory Charter Proposals — To approve and adopt, on a non-binding advisory basis, certain differences between the current charter and the proposed charter, which are being presented in accordance with the requirements of the SEC as ten separate sub-proposals:

Advisory Charter Proposal A — New GNOG will have authorized capital stock of 271,000,000 shares, consisting of 220,000,000 shares of New GNOG Class A common stock, 50,000,000 shares
 
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of New GNOG Class B common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, as opposed to the Company having 221,000,000 shares, consisting of 200,000,000 shares of Company Class A common stock, 20,000,000 shares of Company Class B common stock and 1,000,000 shares of preferred stock;

Advisory Charter Proposal B — each member of the board of directors of New GNOG will be elected at each annual meeting of stockholders (or special meeting in lieu thereof), as opposed to the Company having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term;

Advisory Charter Proposal C — the number of directors will be fixed and may be modified either by (i) New GNOG’s board of directors or (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, as opposed to the number of directors being determined by the Company’s Board; and

Advisory Charter Proposal D — any action required or permitted to be taken by the stockholders of New GNOG may be taken by written consent until the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of the outstanding capital stock of New GNOG, as opposed to only holders of shares of Company Class B common stock having the ability to take stockholder action by written consent;

Advisory Charter Proposal E — amendments to the proposed charter will require either the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New GNOG or the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, provided that for so long as there are shares of both New GNOG Class A common stock and New GNOG Class B common stock outstanding, New GNOG may not amend, alter or repeal any provision in the proposed charter that would adversely affect the relative rights of either class without the affirmative vote of the holders of such class of common stock whose relative rights are adversely affected, as opposed to amendments to certain provisions of the current charter requiring an amendment to be conducted in accordance with Delaware law, subject to certain exceptions;

Advisory Charter Proposal F — the bylaws of New GNOG may be adopted, amended, altered or repealed by (x) the affirmative vote of a majority of New GNOG’s board of directors or (y) either (i) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG for so long as Mr. Fertitta and his affiliates beneficially own a majority of such voting power and (ii) the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New GNOG from and after the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of New GNOG , as opposed to the bylaws of the Company requiring the approval of a majority of the Board of the Company or the holders of a majority of the Company’s outstanding shares;

Advisory Charter Proposal G — the proposed charter will include provisions intended to ensure compliance with gaming, gambling and related laws, including provisions (i) that provide New GNOG with certain rights to require the sale and transfer of New GNOG’s capital stock owned or controlled by any stockholders that fail to comply with applicable gaming laws or their affiliates, and otherwise prohibit the transfer of New GNOG’s capital stock to such persons, (ii) relating to the qualification of directors and officers by the CCC and the removal of officers and resignation of directors in circumstances where the CCC determines that there is reasonable cause to believe that such individual may not be qualified to hold such position and (iii) incorporating all provisions of the New Jersey Act into the proposed charter, to the extent required to be stated in the proposed charter for New GNOG or any of its subsidiaries to be eligible to apply for and maintain a casino license under the New Jersey Act, including a provision that to the extent that anything contained in the proposed charter or in the bylaws of
 
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New GNOG is inconsistent with any such provisions under the New Jersey Act, the provisions of the New Jersey Act shall govern, in each case as opposed to no such provision in the current charter;

Advisory Charter Proposal H — for so long as Mr. Fertitta and his affiliates beneficially own 30% or more of the total number of (i) shares of New GNOG Class A common stock outstanding as of the Closing and (ii) shares of New GNOG Class A common stock that may be issued upon exchange of the HoldCo Class B Units held by Mr. Fertitta and his affiliates as of the Closing, holders of shares of New GNOG Class A common stock will be entitled to cast one vote per share of New GNOG Class A common stock and holders of shares of New GNOG Class B common stock will be entitled to cast 10 votes per share of New GNOG Class B common stock on each matter properly submitted to New GNOG’s stockholders entitled to vote, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%, as opposed to each share of the Company Class A common stock and Company Class B common stock being entitled to one vote per share on each matter properly submitted to the Company’s stockholders entitled to vote;

Advisory Charter Proposal I — to elect not to be governed by Section 203 of the DGCL until such time as Mr. Fertitta and his affiliates cease to beneficially own 10% of the voting power of the capital stock of New GNOG, at which point New GNOG will immediately and automatically become governed by Section 203 of the DGCL;

Advisory Charter Proposal J — to provide that, unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for resolving complaints asserting a cause of action arising under the Securities Act;

Director Election Proposal — To consider and vote upon a proposal to elect six directors to serve on New GNOG’s board of directors each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals, including the Charter Proposal, are not approved and our Board remains classified, to elect two directors to serve as Class I directors on the Company’s Board, each for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal;

Incentive Plan Proposal — To consider and vote upon a proposal to approve the Incentive Plan, a copy of which is attached to this proxy statement as Annex I, including the authorization of the initial share reserve under the Incentive Plan;

Auditor Ratification Proposal — The ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020;

Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special 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, or otherwise in connection with, the approval of the condition precedent proposals. The Adjournment Proposal will only be presented at the special meeting if there are not sufficient votes to approve the condition precedent proposals.
Please see the sections entitled “Proposal No. 1 — The Transaction Proposal,” “Proposal No. 2 — The Nasdaq Proposal,” “Proposal No. 3 — The Charter Proposal,” “Proposal No. 4 — The Advisory Charter Proposals,” “Proposal No. 5 — The Director Election Proposal,” “Proposal No. 6 — The Incentive Plan Proposal,” “Proposal No. 7 — The Auditor Ratification Proposal” and “Proposal No. 8 — The Adjournment Proposal.” The transaction is conditioned on the approval of condition precedent proposals at the special meeting. The election of six directors to a one-year term as part of the Director Election Proposal is conditioned on the approval of the condition precedent proposals, including the Charter Proposal. Each of the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned upon approval of the other condition precedent proposals. The
 
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Advisory Charter Proposals, the Auditor Ratification Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement.

Assuming that the Closing occurs, the size of our Board will be increased from five to six directors and each of our directors will serve a one-year term as a result of our Board becoming declassified. In addition, we expect that each individual currently serving on the Board, except for Richard Handler, will continue in office, and each of Richard H. Liem and Steven L. Scheinthal will join our Board.

Unless waived by the parties to the Purchase Agreement, and subject to applicable law, the Closing is subject to a number of conditions set forth in the Purchase Agreement including, among others, the receipt of certain stockholder approvals contemplated by this proxy statement. For additional information about the closing conditions to the transaction, please see the section entitled “Proposal No. 1 — The Transaction Proposal —  The Purchase Agreement — Conditions to Closing of the Transaction.”

The Purchase Agreement may be terminated at any time prior to the consummation of the transaction upon agreement of the parties thereto, or by the Company or LF LLC in specified circumstances. For additional information about the termination rights under the Purchase Agreement, please see the section entitled “Proposal No. 1 —  The Transaction Proposal — The Purchase Agreement — Termination.”

The transaction involves numerous risks. For additional information about these risks, please see the section entitled “Risk Factors.”

In considering the recommendation of our Board to vote for the proposals presented at the special meeting, including the Transaction Proposal, and for each of the director nominees, you should be aware that aside from their interests as stockholders, our sponsors and certain of their affiliates and certain members of our Board and officers, including without limitation, Mr. Fertitta, have interests in the transaction that are different from, or in addition to, the interests of our other stockholders. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transaction and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting, including the Transaction Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the special meeting, including the Transaction Proposal. These interests include, among other things:

the fact that Tilman J. Fertitta, one of our sponsors and our Co-Chairman and Chief Executive Officer, indirectly owns all of the equity interests in LF LLC, GNOG HoldCo and GNOG;

the fact that immediately following the Closing and, assuming none of the Company’s stockholders elect to redeem their shares of Company Class A common stock in connection with the Closing, by virtue of the holdings by Mr. Fertitta and his affiliates, including LF LLC, of shares of New GNOG Class A common stock and New GNOG Class B common stock, Mr. Fertitta is expected to beneficially own approximately 11.1% of the economic interests of New GNOG and 79.9% of the voting power of the capital stock of New GNOG (after the automatic downward adjustment of Mr. Fertitta and his affiliates’ voting power in accordance with the terms of the proposed charter);

the fact that, following the Closing, Mr. Fertitta and his affiliates are expected to beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) through LF LLC’s HoldCo Class B Units, which will carry no voting rights, and Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC;

the fact that, following the Closing and pursuant to the terms of the A&R HoldCo LLC Agreement, LF LLC, which is indirectly wholly-owned by Mr. Fertitta, will be issued additional HoldCo Class B Units and an equivalent number of shares of New GNOG Class B common stock in consideration of payments made by LF LLC to GNOG LLC pursuant to the terms of the Second A&R Intercompany Note. Pursuant to the terms of the A&R HoldCo LLC
 
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Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock) for either one share of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of one share of New GNOG Class A common stock;

the fact that following the Closing, GNOG LLC, on the one hand, and affiliates of Mr. Fertitta, on the other hand, will be parties to continuing agreements in connection with GNOG LLC’s operation of the online gaming business, including the A&R Trademark License Agreement, the Services Agreement, the A&R Online Gaming Operations Agreement and the Office Leases;

the fact that our sponsors and Mr. Fertitta have agreed not to redeem any of the founder shares in connection with a stockholder vote to approve the transaction;

the fact that our sponsors paid an aggregate of $25,000 for their 7,906,250 founder shares and (after giving effect to the forfeiture of 2,543,750 founder shares by JFG Sponsor at the time of the consummation of the transaction in accordance with the terms of the Sponsor Forfeiture and Call-Option Agreement) the remaining 5,362,500 founder shares will have a significantly higher value at the time of the transaction, which if unrestricted and freely tradable would be valued at approximately $      based on the closing price of Company Class A common stock on Nasdaq on           , 2020, but, given the restrictions on such shares, we believe such shares have less value;

the fact that our sponsors and Mr. Fertitta have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete an initial business combination by May 9, 2021;

the fact that our sponsors paid an aggregate of approximately $8.8 million for their 5,883,333 private placement warrants to purchase shares of Company Class A common stock and that such private placement warrants will expire worthless if the transaction is not consummated by May 9, 2021;

the fact that if the trust account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our sponsors have agreed that they will be jointly and severally liable to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which we have discussed entering into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if such target business or vendor has not executed a waiver of any and all rights to seek access to the trust account;

the fact that at the Closing, certain insiders of the Company, including Tilman J. Fertitta, FEI and JFG Sponsor will enter into the Lock-Up Amendment, which will amend the Letter Agreement to add an additional acceleration event to the lock-up period contemplated under the Letter Agreement based on a price target of $15.00 per share of New GNOG Class A common stock following a period of 60 days after the Closing. The Letter Agreement and the lock-up period thereunder does not apply to the HoldCo Class B Units or shares of New GNOG Class B common stock to be received by LF LLC pursuant to the Purchase Agreement;

the anticipated election of Tilman J. Fertitta, Richard H. Liem and Steven L. Scheinthal, each of whom is an officer and director of FEI and affiliates of FEI, as directors of New GNOG;

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the transaction;

the fact that our sponsors, officers and directors, including Mr. Fertitta, will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by May 9, 2021;
 
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the fact that at the Closing we will enter into an A&R Registration Rights Agreement, substantially in the form attached to this proxy statement as Annex J, which provides for registration rights for the sponsors, Tilman Fertitta and certain of his affiliates; and

the fact that Richard Handler, our Co-Chairman and President, is also the Chief Executive Officer and director of JFG Sponsor and chairman of the board of directors, Chief Executive Officer and President of JFG Sponsor’s largest subsidiary, Jefferies Group and its largest subsidiary, Jefferies, which will be entitled to receive deferred underwriting commission and financial and capital markets advisory fees upon completion of the transaction in addition to the repayment of approximately $2,000 due to an affiliate of Jefferies under GNOG’s Credit Agreement.
 
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS
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 special meeting, including with respect to the transaction. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the transaction and the voting procedures for the special meeting, which will be held on           , 2020, at 10:00 a.m., Eastern time, at https://www.cstproxy.com/landcadiaholdingsii/sm2020.
Q:
Why am I receiving this proxy statement?
A:
Our stockholders are being asked to consider and vote upon a proposal to adopt the Purchase Agreement and approve the transaction, among other proposals. We have entered into the Purchase Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions set forth therein, at the time of the Closing, LF LLC will make the GNOG Contribution in exchange for (i) 31,350,625 HoldCo Class B Units, (ii) 31,350,625 shares of New GNOG Class B common stock which will entitle the holder to 10 votes per share subject to the limitations described below, (iii) Closing Cash Consideration in an amount of $30.0 million and (iv) the repayment of the Credit Agreement Payoff Amount, as well as accrued and unpaid interest. A portion of the cash in the trust account that holds the proceeds (including interest) of our IPO and related private placement, after taking into account any redemptions of shares held by our public stockholders in connection with the Closing, will be used to pay the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest, and funds sufficient to ensure that GNOG LLC will hold at least $80 million in cash at Closing will be contributed down to GNOG LLC upon Closing. Prior to the Closing, GNOG will convert into a limited liability company by merging with and into GNOG LLC, with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo.
Upon the Closing, New GNOG will be organized in an umbrella partnership C-corporation, or “Up-C” structure in which substantially all of the assets of New GNOG will be held indirectly through GNOG LLC and all of the business of New GNOG will be conducted through GNOG LLC. New GNOG’s only direct assets will consist of the Class A membership interests it holds of Landcadia HoldCo, and the number of Class A units of Landcadia HoldCo that will be issued to New GNOG at Closing will be equal to the number of shares of New GNOG Class A common stock outstanding at Closing. As a result, New GNOG is expected to own approximately 54.1% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 53.2% assuming the maximum number of redemptions of public shares), and in either event, New GNOG will control Landcadia HoldCo as the sole manager of Landcadia HoldCo in accordance with the terms of the A&R HoldCo LLC Agreement. The remaining approximately 45.9% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) will be held by LF LLC through HoldCo Class B Units, which will carry no voting rights. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock), on a one-for-one basis, for either shares of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of New GNOG Class A common stock. In addition, Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC.
A copy of the Purchase Agreement is attached to this proxy statement as Annex A. This proxy statement and its Annexes contain important information about the transaction and the other matters to be acted upon at the special meeting. You should read this proxy statement and its Annexes carefully and in their entirety.
Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.
 
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Q:
When and where is the special meeting?
A:
The special meeting will be held on           , 2020, at 10:00 a.m., Eastern time at https://www.cstproxy.com/landcadiaholdingsii/sm2020.
In light of ongoing developments related to COVID-19, and the related protocols that governments have implemented, the Board determined that the special meeting will be a virtual meeting conducted exclusively via live webcast. The Board believes that this is the right choice for the Company and its stockholders at this time, as it permits stockholders to attend and participate in the special meeting while safeguarding the health and safety of the Company’s stockholders, directors and management team. You will be able to attend the special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit your questions during the special meeting by visiting https://www.cstproxy.com/landcadiaholdingsii/sm2020. To participate in the virtual meeting, you will need a 12-digit control number assigned by Continental Stock Transfer & Trust Company. The meeting webcast will begin promptly at 10:00 a.m., Eastern time. We encourage you to access the meeting prior to the start time and you should allow ample time for the check-in procedures. Because the special meeting will be a completely virtual meeting, there will be no physical location for stockholders to attend.
Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the special meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the special meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the meeting date in order to ensure access.
Q:
What are the specific proposals on which I am being asked to vote at the special meeting?
A:
The Company’s stockholders are being asked to approve the following proposals:

Transaction Proposal — To consider and vote upon a proposal to approve and adopt the Purchase Agreement, and approve the transaction;

Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock to LF LLC at the Closing, pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note, as calculated pursuant to the terms of the A&R HoldCo LLC Agreement as described herein, and (3) shares of New GNOG Class A common stock to LF LLC in the future upon the exchange of a corresponding number of the HoldCo Class B Units and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the A&R HoldCo LLC Agreement, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules;

Charter Proposal — To consider and vote upon a proposal to approve New GNOG’s proposed charter, in the form attached to this proxy statement as Annex C, in connection with the transaction;

Advisory Charter Proposals — To approve and adopt, on a non-binding advisory basis, certain differences between the current charter and the proposed charter, which are being presented in accordance with the requirements of the SEC as ten separate sub-proposals:
 
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Advisory Charter Proposal A — New GNOG will have authorized capital stock of 271,000,000 shares, consisting of 220,000,000 shares of New GNOG Class A common stock, 50,000,000 shares of New GNOG Class B common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, as opposed to the Company having 221,000,000 shares, consisting of 200,000,000 shares of Company Class A common stock, 20,000,000 shares of Company Class B common stock and 1,000,000 shares of preferred stock;

Advisory Charter Proposal B — Each member of the board of directors of New GNOG will be elected at each annual meeting of stockholders (or special meeting in lieu thereof), as opposed to the Company having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term;

Advisory Charter Proposal C — The number of directors will be fixed and may be modified either by (i) New GNOG’s board of directors or (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, as opposed to the number of directors being determined by the Company’s Board; and

Advisory Charter Proposal D — Any action required or permitted to be taken by the stockholders of New GNOG may be taken by written consent until the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of the outstanding capital stock of New GNOG, as opposed to only holders of shares of Company Class B common stock having the ability to take stockholder action by written consent;

Advisory Charter Proposal E — Amendments to the proposed charter will require either the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New GNOG or the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG, depending on the number of shares of New GNOG’s capital stock beneficially owned by Mr. Fertitta and his affiliates at such time, provided that for so long as there are shares of both New GNOG Class A common stock and New GNOG Class B common stock outstanding, New GNOG may not amend, alter or repeal any provision in the proposed charter that would adversely affect the relative rights of either class without the affirmative vote of the holders of such class of common stock whose relative rights are adversely affected, as opposed to amendments to certain provisions of the current charter requiring an amendment to be conducted in accordance with Delaware law, subject to certain exceptions;

Advisory Charter Proposal F — The bylaws of New GNOG may be adopted, amended, altered or repealed by (x) the affirmative vote of a majority of New GNOG’s board of directors or (y) either (i) the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New GNOG for so long as Mr. Fertitta and his affiliates beneficially own a majority of such voting power and (ii) the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New GNOG from and after the time that Mr. Fertitta and his affiliates no longer beneficially own a majority of the voting power of New GNOG, as opposed to the bylaws of the Company requiring the approval of a majority of the Board of the Company or the holders of a majority of the Company’s outstanding shares;

Advisory Charter Proposal G —  The proposed charter will include provisions intended to ensure compliance with gaming, gambling and related laws, including provisions (i) that provide New GNOG with certain rights to require the sale and transfer of New GNOG’s capital stock owned or controlled by any stockholders that fail to comply with applicable gaming laws or their affiliates, and otherwise prohibit the transfer of New GNOG’s capital stock to such persons, (ii) relating to the qualification of directors and officers by the CCC and the removal of officers and resignation of directors in circumstances where the CCC determines that there is reasonable cause to believe that such individual may not be qualified to hold such position and (iii) incorporating all provisions of the New Jersey Act into the proposed charter, to the extent required to be stated in the proposed charter for New GNOG or any of its subsidiaries to be
 
20

 
eligible to apply for and maintain a casino license under the New Jersey Act, including a provision that to the extent that anything contained in the proposed charter or in the bylaws of New GNOG is inconsistent with any such provisions under the New Jersey Act, the provisions of the New Jersey Act shall govern, in each case as opposed to no such provision in the current charter;

Advisory Charter Proposal H — For so long as Mr. Fertitta and his affiliates beneficially own 30% or more of the total number of (i) shares of New GNOG Class A common stock outstanding as of the Closing and (ii) shares of New GNOG Class A common stock that may be issued upon exchange of the HoldCo Class B Units held by Mr. Fertitta and his affiliates as of the Closing, holders of shares of New GNOG Class A common stock will be entitled to cast one vote per share of New GNOG Class A common stock and holders of shares of New GNOG Class B common stock will be entitled to cast 10 votes per share of New GNOG Class B common stock on each matter properly submitted to New GNOG’s stockholders entitled to vote, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%, as opposed to each share of the Company Class A common stock and Company Class B common stock being entitled to one vote per share on each matter properly submitted to the Company’s stockholders entitled to vote;

Advisory Charter Proposal I — To elect not to be governed by Section 203 of the DGCL until such time as Mr. Fertitta and his affiliates cease to beneficially own 10% of the voting power of the capital stock of New GNOG, at which point New GNOG will immediately and automatically become governed by Section 203 of the DGCL;

Advisory Charter Proposal J — To provide that, unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for resolving complaints asserting a cause of action arising under the Securities Act;

Director Election Proposal — To consider and vote upon a proposal to elect six directors to serve on New GNOG’s board of directors each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals, including the Charter Proposal, are not approved and our Board remains classified, to elect two directors to serve as Class I directors on the Company’s Board, each for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal;

Incentive Plan Proposal — To consider and vote upon a proposal to approve the Incentive Plan, a copy of which is attached to this proxy statement as Annex I, including the authorization of the initial share reserve under the Incentive Plan;

Auditor Ratification Proposal — the ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; and

Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special 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, or otherwise in connection with, the approval of the condition precedent proposals. The Adjournment Proposal will only be presented at the special meeting if there are not sufficient votes to approve the condition precedent proposals.
Q:
Are the proposals conditioned on one another?
A:
Yes. The transaction is conditioned on the approval of condition precedent proposals at the special meeting. The election of six directors to a one-year term in the Director Election Proposal is conditioned on the approval of the condition precedent proposals, including the Charter Proposal. Each of the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned upon approval of the other condition precedent proposals. The Advisory Charter Proposals, the Auditor Ratification
 
21

 
Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement. It is important for you to note that in the event that the condition precedent proposals do not receive the requisite vote for approval, then we will not consummate the transaction. If we do not consummate the transaction and fail to complete an initial business combination by May 9, 2021, we will be required to dissolve and liquidate our trust account by returning then remaining funds in such account to the public stockholders.
Q:
Why is the Company providing stockholders with the opportunity to vote on the transaction?
A:
Under our current charter, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Because we have elected to offer redemption in connection with a stockholder vote, the approval of the transaction by the holders of a majority of the shares of capital stock voted at the special meeting is required under our current charter. Therefore, we are seeking to obtain the approval of our stockholders of the Transaction Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the Closing. In addition, such approval is also a condition to the Closing under the Purchase Agreement.
Q:
What revenues and profits/losses has GNOG generated in the last two years and in the first half of 2020?
A:
For the fiscal years ended December 31, 2019 and 2018, GNOG generated revenue of approximately $55.4 million and $42.9 million, respectively, with net income of approximately $11.7 million and $7.2 million for those same periods. For the six months ended June 30, 2020, GNOG generated revenue of approximately $42.2 million, with net income of approximately $4.3 million.
For additional information, please see the sections entitled “Summary Historical Financial Information of GNOG” and “GNOG Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Q:
What will happen in the transaction?
A:
Pursuant to the Purchase Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, at the time of the Closing, LF LLC will make the GNOG Contribution in exchange for (i) 31,350,625 HoldCo Class B Units, (ii) 31,350,625 shares of New GNOG Class B common stock which will entitle the holder to 10 votes per share subject to the limitations described below, (iii) Closing Cash Consideration in an amount of $30.0 million and (iv) the repayment of the Credit Agreement Payoff Amount, as well as accrued and unpaid interest. A portion of the cash in the trust account that holds the proceeds (including interest) of our IPO and related private placement, after taking into account any redemptions of shares held by our public stockholders in connection with the Closing, will be used to pay the Closing Cash Consideration and the Credit Agreement Payoff Amount, and funds sufficient to ensure that GNOG LLC will hold at least $80 million in cash at Closing will be contributed down to GNOG LLC upon Closing. Prior to the Closing, GNOG will convert into a limited liability company by merging with and into GNOG LLC, with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo.
Upon the Closing, New GNOG will be organized in an umbrella partnership C-corporation, or “Up-C” structure, in which substantially all of the assets of New GNOG will be held indirectly through GNOG LLC and all of the business of New GNOG will be conducted through GNOG LLC. New GNOG’s only direct assets will consist of the Class A membership interests it holds of Landcadia HoldCo, and the number of Class A units of Landcadia HoldCo that will be issued to New GNOG at Closing will be equal to the number of shares of New GNOG Class A common stock outstanding at Closing. As a result, New GNOG is expected to own approximately 54.1% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 53.2% assuming the maximum number of redemptions of public shares), and in either event, New GNOG will control Landcadia HoldCo as the sole manager of Landcadia HoldCo in accordance with the terms of the A&R HoldCo LLC Agreement. The remaining approximately 45.9% of the combined membership interests
 
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in Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) will be held by LF LLC through HoldCo Class B Units, which will carry no voting rights. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock), on a one-for-one basis, for either shares of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of New GNOG Class A common stock. In addition, Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC.
In addition, at the Closing, the currently issued and outstanding shares of Company Class B common stock will automatically convert, on a one-for-one basis, into shares of Company Class A common stock in accordance with the terms of the current charter, and New GNOG will issue shares of New GNOG Class B common stock to LF LLC. Immediately following the Closing, LF LLC will be the only holder of shares of New GNOG Class B common stock and all of New GNOG’s other stockholders will hold only shares of New GNOG Class A common stock. Immediately following the Closing and, assuming none of the Company’s stockholders elect to redeem their shares of Company Class A common stock in connection with the Closing, by virtue of the holdings by Mr. Fertitta and his affiliates, including LF LLC, of shares of New GNOG Class A common stock and New GNOG Class B common stock, Mr. Fertitta is expected to beneficially own approximately 11.1% of the economic interests of New GNOG and 79.9% of the voting power of the capital stock of New GNOG (after the automatic downward adjustment of Mr. Fertitta and his affiliates’ voting power in accordance with the terms of the proposed charter). In addition, Mr. Fertitta and his affiliates are expected to beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) through LF LLC’s HoldCo Class B Units, which will carry no voting rights.
Q:
Following the transaction, will the Company’s securities continue to trade on a stock exchange?
A:
Yes. We intend to apply to list the shares of New GNOG Class A common stock and warrants on Nasdaq under the symbols “GNOG” and “GNOGW,” respectively, upon the Closing. Our units will automatically separate into the component securities upon consummation of the transaction and, as a result, will no longer trade as a separate security following the Closing.
Q:
How has the announcement of the transaction affected the trading price of Company Class A common stock?
A:
On June 26, 2020, the trading date before the public announcement of the transaction, the Company’s units, Class A common stock and warrants closed at $10.33, $10.09 and $0.93, respectively. On           , 2020, the trading date immediately prior to the date of this proxy statement, the Company’s units, Class A common stock and warrants closed at $      , $      and $      , respectively.
Q:
How will the transaction impact the shares of the Company outstanding after the transaction?
A:
At the Closing, the currently issued and outstanding shares of the Company Class B common stock will automatically convert, on a one-for-one basis, into shares of Company Class A common stock at the Closing, in accordance with the terms of the current charter. In connection with the Closing, New GNOG will issue shares of New GNOG Class B common stock to LF LLC. Immediately following the Closing, LF LLC will be the only holder of shares of New GNOG Class B common stock and all of New GNOG’s other stockholders will hold only shares of New GNOG Class A common stock. Immediately following the Closing and, assuming none of the Company’s stockholders elect to redeem their shares of Company Class A common stock in connection with the Closing, by virtue of the holdings by Mr. Fertitta and his affiliates, including LF LLC, of shares of New GNOG Class A common stock and New GNOG Class B common stock, Mr. Fertitta is expected to beneficially own approximately 11.1% of the economic interests of New GNOG and 79.9% of the voting power of the capital stock of New GNOG (after the automatic downward adjustment of Mr. Fertitta and his affiliates’
 
23

 
voting power in accordance with the terms of the proposed charter). In addition, Mr. Fertitta and his affiliates are expected to beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) through LF LLC’s HoldCo Class B Units, which will carry no voting rights, and Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC.
Following the Closing and pursuant to the terms of the A&R HoldCo LLC Agreement, LF LLC, which is indirectly wholly-owned by Mr. Fertitta, will be issued additional HoldCo Class B Units and an equivalent number of shares of New GNOG Class B common stock in consideration of payments made by LF LLC to GNOG LLC pursuant to the terms of the Second A&R Intercompany Note. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock) for either one share of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of one share of New GNOG Class A common stock.
Additional shares of common stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding, including the issuance of shares of common stock upon exercise of the public warrants, private placement warrants and pursuant to the Incentive Plan. The issuance and sale of such shares in the public market could adversely impact the market price of our common stock, even if our business is doing well.
Q:
Is the transaction the first step in a “going private” transaction?
A:
No. The Company does not intend for the transaction to be the first step in a “going private” transaction. One of the primary purposes of the transaction is to provide a platform for GNOG to access the U.S. public markets.
Q:
Will the management of New GNOG change in the transaction?
A:
We anticipate that Mr. Fertitta, Chairman and Chief Executive Officer of the Company, will continue to serve in such capacities for New GNOG. We expect that each of Richard Handler, Nicholas Daraviras, Richard H. Liem and Steven L. Scheinthal will resign from their positions as officers of the Company upon the Closing. Thomas Winter, who has served as Senior Vice President and General Manager of the online gaming division of Landry’s LLC, is expected to be the President of New GNOG upon the Closing. Michael Harwell, who has served as the controller of the online gaming division of Landry’s LLC, is expected to be Chief Financial Officer of New GNOG upon Closing (subject to obtaining necessary regulatory approvals from the New Jersey Division of Gaming Enforcement and the CCC). Warren Steven, who has served as Director, Product and Operations of the online gaming division of Landry’s LLC, is expected to be Vice President, Product & Operations of New GNOG upon Closing. Assuming that the Closing occurs, the size of our Board will be increased from five to six, with each of our directors serving a one-year term as a result of our Board becoming declassified. We expect that each of our directors currently serving on our Board will continue in office, except for Richard Handler. In addition, we have nominated each of Richard H. Liem and Steven L. Scheinthal as a director of New GNOG. For additional information, please see the sections entitled “Proposal No. 5 — The Director Election Proposal” and “Management after the Transaction.”
Q:
What economic stake will current stockholders of the Company hold in New GNOG after the Closing?
A:
It is anticipated that, upon completion of the transaction, the economic ownership interests in New GNOG will be as set forth in the table below:
Assuming No Redemptions of
Public Shares
Assuming Maximum
Redemptions of Public
Shares(1)
Company’s public stockholders(2)
85.5% 84.9%
Tilman J. Fertitta and his affiliates(3)
11.1% 11.5%
JFG Sponsor(4)
3.4% 3.6%
 
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(1)
Assumes that holders of 1,417,414 public shares exercise their redemption rights in connection with the Closing (based on approximately $321.2 million held in trust (less approximately $0.9 million of income taxes payable) as of June 30, 2020 and a redemption price of $10.13 per share).
(2)
Represents an indirect economic interest of less than 50% of GNOG LLC because Landcadia HoldCo will not be wholly-owned by New GNOG.
(3)
Economic interests relate solely to the shares of New GNOG Class A common stock that will be held at Closing. In addition to such shares, Mr. Fertitta and his affiliates will also own all of the issued and outstanding shares of New GNOG Class B common stock at Closing, each of which will have no economic rights, but will carry 10 votes per share, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%. See “What voting power will current stockholders of the Company hold in New GNOG after the Closing?” below for further information.
(4)
Reflects the forfeiture of 2,543,750 founder shares by JFG Sponsor immediately prior to the Closing under the Sponsor Forfeiture and Call-Option Agreement.
The ownership percentages set forth above assume that (i) none of the parties set forth in the table above purchases shares of Company Class A common stock in the open market and (ii) there are no other issuances of equity interests of the Company or its subsidiaries prior to or in connection with the Closing. In addition, the ownership percentages set forth above do not take into account, among others, (a) the fact that Mr. Fertitta and his affiliates are expected to beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) through LF LLC’s HoldCo Class B Units, which will carry no voting rights, (b) the public warrants and private placement warrants that will remain outstanding immediately following the transaction and may be exercised thereafter (commencing 30 days after the Closing) and the issuance of any shares of New GNOG Class A common stock that may be issued upon such exercise, (c) the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock), (d) the issuance of any HoldCo Class B Units (along with a corresponding number of shares of New GNOG Class B common stock) to LF LLC in exchange for payments made pursuant to the Second A&R Intercompany Note, and (e) the issuance of any shares of New GNOG Class A common stock following the Closing under the Incentive Plan. If the actual facts are different than the assumptions set forth above, the percentage ownership numbers set forth above will be different. For example, if taking into account the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of all of its HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock) following the expiration of a lock-up period of 180 days following the Closing pursuant to the A&R HoldCo LLC Agreement and assuming all the other conditions and assumptions described in the above do not change, (x) assuming no redemptions: (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will own approximately 46.3% of the economic interests of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own approximately 51.9% of the economic interests of New GNOG; and (iii) JFG Sponsor will own approximately 1.9% of the economic interests of New GNOG and (y) assuming holders of 1,417,414 public shares redeem their shares (the maximum redemption scenario): (i) the Company’s public stockholders (other than the sponsors and Mr. Fertitta) will own approximately 45.1% of the economic interests of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own approximately 53.0% of the economic interests of New GNOG; and (iii) JFG Sponsor will own approximately 1.9% of the economic interests of New GNOG.
Furthermore, there are currently outstanding an aggregate of 16,425,000 warrants to acquire shares of Company Class A common stock, which comprise 5,883,333 private placement warrants held by our initial stockholders and 10,541,667 public warrants. Each of our outstanding whole warrants is exercisable commencing 30 days following the Closing and will entitle the holder thereof to purchase one share of New GNOG Class A common stock at $11.50 per share. Therefore, as of the date of this proxy statement, if we assume that each outstanding whole warrant is exercised and one share of New
 
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GNOG Class A common stock is issued as a result of such exercise, with payment to New GNOG of the exercise price of $11.50 per whole warrant for one whole share, our fully-diluted share capital would increase by a total of 16,425,000 shares, with approximately $188.9 million paid to New GNOG to exercise the warrants.
For additional information, please see the sections entitled “Summary of this Proxy Statement — Economic Ownership Interests Upon Closing,” “Summary of this Proxy Statement — Voting Power Upon Closing” and “Unaudited Pro Forma Condensed Combined Financial Information.”
Q:
What voting power will current stockholders of the Company hold in New GNOG after the Closing?
A:
It is anticipated that, upon completion of the transaction, the voting power of New GNOG’s stockholders will be as set forth in the table below:
Assuming No Redemptions of
Public Shares
Assuming Maximum
Redemptions of Public
Shares(1)
Company’s public stockholders
19.3% 19.3%
Tilman J. Fertitta and his affiliates(2)
79.9% 79.9%
JFG Sponsor(3)
0.8% 0.8%
(1)
Assumes that holders of 1,417,414 public shares exercise their redemption rights in connection with the Closing (based on approximately $321.2 million held in trust (less approximately $0.9 million of income taxes payable) as of June 30, 2020 and a redemption price of $10.13 per share).
(2)
Represents the voting power of the shares of New GNOG Class B common stock held by Mr. Fertitta and his affiliates after the automatic downward adjustment of the voting power of such shares in accordance with the terms of the proposed charter. Immediately following the Closing, all of New GNOG’s stockholders will hold only shares of New GNOG Class A common stock except LF LLC, which will hold shares of New GNOG Class B common stock. Each share of New GNOG Class B common stock will carry 10 votes per share, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%.
(3)
Reflects the forfeiture of 2,543,750 founder shares by JFG Sponsor immediately prior to the Closing under the Sponsor Forfeiture and Call-Option Agreement.
The voting power percentages set forth above assume that (i)  none of the parties purchases shares of Company Class A common stock in the open market and (ii) there are no other issuances of equity interests of the Company or its subsidiaries prior to or in connection with the Closing. In addition, the voting power percentages set forth above do not take into account, among others, (a) the public warrants and private placement warrants that will remain outstanding immediately following the transaction and may be exercised thereafter (commencing 30 days after the Closing) and the issuance of any shares of New GNOG Class A common stock that may be issued upon such exercise, (b) the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock), (c) the issuance of any HoldCo Class B Units (along with a corresponding number of shares of New GNOG Class B common stock) to LF LLC in exchange for payments made pursuant to the Second A&R Intercompany Note, and (d) the issuance of any shares of New GNOG Class A common stock following the Closing under the Incentive Plan. If the actual facts are different than the assumptions set forth above, the percentages set forth above will be different. For example, if taking into account the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of all of its HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock) following the expiration of a lock-up period of 180 days following the Closing pursuant to the A&R HoldCo LLC Agreement and assuming all the other conditions and assumptions described in the above do not change, (x) assuming no redemptions: (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will hold approximately
 
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46.3% of the voting power of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own 51.9% of the voting power of New GNOG; and (iii) JFG Sponsor will hold approximately 1.9% of the voting power of New GNOG and (y) assuming holders of 1,417,414 public shares redeem their shares (the maximum redemption scenario): (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will hold approximately 45.1% of the voting power of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially hold 53.0% of the voting power of New GNOG; and (iii) JFG Sponsor will hold approximately 1.9% of the voting power of New GNOG.
Q:
What will happen to GNOG’s current indebtedness in connection with the transaction?
A:
Currently, GNOG has $300.0 million principal debt outstanding under the Credit Agreement. After giving effect to the Closing, including the Credit Agreement Payoff Amount, the aggregate principal amount of indebtedness under the Credit Agreement will be $150.0 million, with a maturity date of October 4, 2023. The debt under the Credit Agreement bears interest on the daily balance thereof, at the option of GNOG, at either (1) an adjusted LIBOR or (2) a base rate, in each case plus an applicable margin. The applicable margin is 12% with respect to LIBOR loans and 11% with respect to base rate loans. Following the Closing, a portion of the interest payable will be provided by payments made by LF LLC to GNOG LLC under the Second A&R Intercompany Note, which from and after the Closing will be in an amount equal to six percent (6%) annually on the outstanding balance from day to day thereunder.
As of the Closing, the obligations of GNOG LLC under the Credit Agreement will continue to be unconditionally guaranteed by the LF LLC, GNOG Holdco, and each existing and subsequently acquired or organized direct or indirect wholly-owned US organized restricted subsidiary of GNOG LLC (together with GNOG Holdco, the “Guarantors”). For additional information, please see the section entitled “Description of GNOG Indebtedness.”
Q:
What conditions must be satisfied to complete the transaction?
A:
There are a number of closing conditions in the Purchase Agreement, including the approval by the stockholders of the Company of the condition precedent proposals. For a summary of the conditions that must be satisfied or waived prior to completion of the transaction, please see the section entitled “Proposal No. 1 — The Transaction Proposal — The Purchase Agreement.”
Q:
Why is the Company proposing the Nasdaq Proposal?
A:
We are proposing the Nasdaq Proposal in order to comply with Nasdaq Listing Rules 5635(a), (b) and (d), which require stockholder approval of certain parts of the transaction that result in (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock to LF LLC at the Closing, pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note, as calculated pursuant to the terms of the A&R HoldCo LLC Agreement as described herein, and (3) shares of New GNOG Class A common stock to LF LLC in the future upon the exchange of a corresponding number of the HoldCo Class B Units and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the A&R HoldCo LLC Agreement, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules. For additional information, please see the section entitled “Proposal No. 2 — The Nasdaq Proposal.”
Q:
Why is the Company proposing the Charter Proposal?
A:
We are proposing the Charter Proposal in order to approve the proposed charter, in the form attached to this proxy statement as Annex C. In the judgment of the Board, the proposed charter is necessary to address the needs of New GNOG.
Pursuant to Delaware law and the Purchase Agreement, we are required to submit the Charter Proposal to the Company’s stockholders for approval. For additional information, please see the section entitled “Proposal No. 3 — The Charter Proposal.”
 
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Q:
Why is the Company proposing the Advisory Charter Proposals?
A:
We are requesting that our stockholders vote upon, on a non-binding advisory basis, separate proposals to approve certain amendments contained in the proposed charter that materially affect stockholder rights, which are those amendments that will be made to the current charter as reflected in the proposed charter if the Charter Proposal is approved.
These separate votes are not otherwise required by Delaware law separate and apart from the Charter Proposal, but pursuant to SEC guidance, the Company is required to submit these provisions to our stockholders separately for approval. By presenting these proposals separately, the Company intends to provide its stockholders a means to communicate their views on important governance provisions to the Board. For additional information, please see the section entitled “Proposal No. 4 — The Advisory Charter Proposals.”
Q:
Why is the Company proposing the Director Election Proposal?
A:
Upon consummation of the transaction, our Board anticipates increasing its initial size from five directors to six directors. Assuming the condition precedent proposals, including the Charter Proposal, are approved, upon the Closing, the board of directors will be declassified and each director will serve a one-year term. Our stockholders are being asked to elect six directors to serve on New GNOG’s board of directors each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals, including the Charter Proposal, are not approved and our Board remains classified, to elect two directors to serve as Class I directors on the Company’s Board, each for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal.
The Company’s directors currently serving in Class II and Class III have tendered their contingent resignations from their current terms, conditioned upon the approval of the condition precedent proposals, including the Charter Proposal. These resignations will take effect immediately prior to the Closing. The Company believes it is in the best interests of stockholders to allow stockholders to vote upon the election of newly appointed directors. For additional information, please see the section entitled “Proposal No. 5 — The Director Election Proposal.”
Q:
Why is the Company proposing the Incentive Plan Proposal?
A:
The purpose of the Incentive Plan is to further align the interests of the eligible participants with those of the stockholders by providing long-term incentive compensation opportunities, some of which will be tied to the performance of New GNOG. For additional information, please see the section entitled “Proposal No. 6 — The Incentive Plan Proposal.”
Q:
Why is the Company proposing the Auditor Ratification Proposal?
A:
Neither our bylaws nor other governing documents or law require stockholder ratification of the appointment of Marcum LLP as our independent registered public accounting firm. However, the Board is submitting the appointment of Marcum LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Company’s audit committee will reconsider whether or not to continue to retain that firm. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. For additional information, please see the section entitled “Proposal No. 7 — The Auditor Ratification Proposal.”
Q:
Why is the Company proposing the Adjournment Proposal?
A:
We are proposing the Adjournment Proposal to allow our Board to adjourn the special meeting to a later date or dates to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the condition precedent proposals. The Adjournment
 
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Proposal will only be presented at the special meeting if there are not sufficient votes to approve the condition precedent proposals. For additional information, please see the section entitled “Proposal No. 8 — The Adjournment Proposal.”
Q:
What happens if I sell my shares of Company Class A common stock before the special meeting?
A:
The record date for the special meeting is earlier than the date that the transaction is expected to be completed. If you transfer your shares of Company Class A common stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Company Class A common stock because you will no longer be able to deliver them for cancellation upon consummation of the transaction. If you transfer your shares of Company Class A common stock prior to the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in our trust account.
Q:
What vote is required to approve the proposals presented at the special meeting?
A:
Approval of the Transaction Proposal, the Nasdaq Proposal and the Incentive Plan Proposal requires the approval at the special meeting by (i) a majority of the shares of the Company’s common stock that are voted at the special meeting and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders. Approval of the Charter Proposal requires approval at the special meeting by (i) a majority of the shares of the Company’s common stock outstanding and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders. Approval of the Advisory Charter Proposals, each of which is a non-binding vote, the Auditor Ratification Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon.
The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors.
A stockholder’s failure to vote by proxy or to vote in person at the special meeting (which would include voting at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions and broker non-votes will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal will have the same effect as a vote “AGAINST” any such proposal. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Advisory Charter Proposals, the Director Election Proposal, the Auditor Ratification Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal.
Q:
What happens if the Transaction Proposal is not approved?
A:
If the Transaction Proposal is not approved and we do not consummate a business combination by May 9, 2021, the Company will be required to dissolve and liquidate its trust account.
Q:
May the Company, its sponsors or the Company’s directors or officers or their affiliates purchase shares in connection with the transaction?
A:
Our sponsors or the Company’s or GNOG’s directors, officers or advisors, including Tilman J. Fertitta, or any of their respective affiliates, may purchase public shares in privately negotiated transactions or in the open market prior to the special meeting, although they are under no obligation to do so. Any such purchases that are completed after the record date for the special meeting may include an agreement
 
29

 
with a selling stockholder that such stockholder, for so long as it remains the record holder of the shares in question, will vote in favor of the proposals presented at the special meeting and/or will not exercise its redemption rights with respect to the shares so purchased. The purpose of such share purchases and other transactions would be to increase the likelihood that the proposals to be voted upon at the special meeting are approved by the requisite number of votes. In the event that such purchases do occur, the purchasers may seek to purchase shares from stockholders who would otherwise have voted against the Transaction Proposal and elected to redeem their shares for a portion of the trust account. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per-share pro rata portion of the trust account. Any public shares held by or subsequently purchased by our affiliates may be voted in favor of the Transaction Proposal and the other proposals presented at the special meeting. None of the Company’s sponsors, directors, officers, advisors or their affiliates may make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act.
Q:
How many votes do I have at the special meeting?
A:
Our stockholders are entitled to one vote on each proposal presented at the special meeting for each share of common stock held of record as of October 5, 2020, the record date for the special meeting. As of the close of business on the record date, there were 39,531,250 outstanding shares of our common stock.
Q:
What constitutes a quorum at the special meeting?
A:
A majority of the issued and outstanding shares of the Company’s common stock entitled to vote as of the record date at the special meeting must be present, in person (which would include presence at the virtual special meeting) or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. Mr. Fertitta and JFG Sponsor, who currently beneficially own 20.0% of our issued and outstanding shares of common stock, will count towards this quorum. In the absence of a quorum, the chairman of the special meeting has the power to adjourn the special meeting. As of the record date for the special meeting, 19,765,626 shares of our common stock would be required to achieve a quorum.
Q:
How will the Company’s sponsors, directors and officers vote?
A:
Prior to our IPO, we entered into agreements with our sponsors and each of our directors and officers, including Tilman J. Fertitta, pursuant to which each agreed to vote any shares of common stock owned by them in favor of the Transaction Proposal. None of our sponsors, directors or officers has purchased any shares of our common stock during or after our IPO. As of the date of this proxy statement, neither we nor our sponsors, directors or officers have entered into any agreement, and are not currently in negotiations, to purchase shares prior to the consummation of the transaction. Currently, Mr. Fertitta and JFG Sponsor beneficially own 20.0% of our issued and outstanding shares of common stock, including all of the founder shares, and will be able to vote all such shares at the special meeting.
Q:
What interests do the sponsors and certain of their affiliates and certain members of the Company’s board of directors and officers have in the transaction?
A:
Our sponsors and certain of their affiliates and certain members of our Board and officers, including without limitation, Mr. Fertitta, have interests in the transaction that are different from, or in addition to, the interests of our other stockholders. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transaction and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting, including the Transaction Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the special meeting, including the Transaction Proposal. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Transaction.”
 
30

 
Q:
What is an “Up-C” Structure?
A:
Our corporate structure following the transaction, as described under the section entitled “Proposal No. 1 — The Transaction Proposal — General Description of the Purchase Agreement,” is commonly referred to as an “Up-C” structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering either directly or through a business combination with a special purpose acquisition company, such as the Company. The Up-C structure will allow LF LLC or certain of its beneficial owners to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity, for U.S. federal income (and certain state and local) tax purposes following the transaction. One of these benefits is that, for U.S. federal income (and certain state and local) tax purposes, future taxable income of Landcadia HoldCo that is allocated to LF LLC will be taxed on a flow-through basis, and therefore, will not be subject to corporate tax at the entity level prior to receipt by LF LLC or certain of its beneficial owners. Additionally, because LF LLC may exchange its HoldCo Class B Units for shares of New GNOG Class A common stock or, in certain cases, for cash, the Up-C structure also provides LF LLC with potential liquidity that is not generally available to holders of non-publicly traded limited liability companies treated as partnerships for U.S. federal income tax purposes. See the sections entitled “Proposal No. 1 — The Transaction Proposal” and “Description of Securities.”
Following the transaction, we will receive the same benefits as described above as a result of our ownership of equity interests in an entity treated as a partnership, or “pass-through” entity, for U.S. federal income (and certain state and local) tax purposes. As a result of the transaction, we expect to obtain an actual or effective step-up in tax basis, including with respect to certain assets treated as purchased with the Closing Cash Consideration and the exchange of LF LLC’s HoldCo Class B Units for New GNOG Class A common stock. This is intended to provide us with certain tax benefits, such as future depreciation and amortization deductions that can reduce the taxable income allocable to us. As described under “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — Tax Receivable Agreement,” we may be required to make payments in respect of such tax benefits.
Q:
Did the Company’s Board obtain a third-party fairness opinion in determining whether or not to proceed with the transaction?
A:
Yes. A committee of the Company’s Board consisting solely of independent directors received a fairness opinion from Houlihan Lokey as to the fairness, from a financial point of view, to the Company, of the consideration to be paid by the Company pursuant to the Purchase Agreement. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Opinion of the Financial Advisor to the Committee” and the opinion of Houlihan Lokey attached hereto as Annex H for additional information.
Q:
What happens if I vote against the Transaction Proposal?
A:
If you vote against the Transaction Proposal but the Transaction Proposal still obtains the requisite stockholder approval described in this proxy statement, then the Transaction Proposal will be approved and, assuming the approval of the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal and the satisfaction or waiver of the other conditions to closing, the transaction will be consummated in accordance with the terms of the Purchase Agreement.
If you vote against the Transaction Proposal and the Transaction Proposal does not obtain the requisite vote at the special meeting, then the Transaction Proposal will fail and we will not consummate the transaction. If we do not consummate the transaction, we may continue to try to complete a business combination with a different target business until May 9, 2021. If we fail to complete an initial business combination by May 9, 2021, then we will be required to dissolve and liquidate the trust account by returning then-remaining funds in such account to our public stockholders.
Q:
Do I have redemption rights?
A:
If you are a holder of public shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the transaction,
 
31

 
including interest not previously released to us to pay our taxes, by (ii) the total number of then-outstanding public shares; provided that the Company will not redeem any shares of Company Class A common stock issued in the IPO to the extent that such redemption would result in the Company having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. A public stockholder, 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 shares of Company Class A common stock included in the units sold in our IPO without the prior consent of the Company. Holders of our outstanding public warrants do not have redemption rights in connection with the transaction. Our sponsors, directors and officers, including Mr. Fertitta, have agreed to waive their redemption rights with respect to any public shares they may hold in connection with the consummation of the transaction, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the trust account of approximately $321.2 million (less approximately $0.9 million of income taxes payable) as of June 30, 2020, the estimated per share redemption price would have been approximately $10.13.
You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)(a) hold public shares or (b) hold public shares through units and 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; and
(ii) prior to           , Eastern time, on           , 2020, (a) submit a written request to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC.
Holders of units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
Additionally, shares properly tendered for redemption will only be redeemed if the transaction is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the trust account, including interest not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) in connection with the liquidation of the trust account, unless we complete an alternative business combination prior to May 9, 2021.
Pursuant to our current charter, we are required to pay the redemption price to public stockholders who properly exercise their redemption rights as promptly as practical following the Closing. The Closing is subject to the satisfaction of a number of conditions, including receipt of certain regulatory approvals. There can be no assurance when or if such regulatory approvals will be obtained. Further, following the stockholder vote to approve the transaction, there could be a delay for a period of time, which period may be significant, in receiving the required regulatory approvals. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the special meeting and payment of the redemption price.
Q:
Can the Company’s sponsors redeem their founder shares in connection with consummation of the transaction?
A:
No. Our sponsors, officers and directors, including Mr. Fertitta, have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the consummation of the transaction.
Q:
Is there a limit on the number of shares I may redeem?
A:
Yes. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 15% of
 
32

 
the shares sold in our IPO without the prior consent of the Company. Accordingly, all shares in excess of 15% owned by a holder will not be redeemed for cash without the prior consent of the Company. On the other hand, a public stockholder who holds less than 15% of the public shares of Company Class A common stock may redeem all of the public shares held by such stockholder for cash.
In no event is your ability to vote all of your shares (including those shares held by you in excess of 15% of the shares sold in our IPO) for or against our business combination restricted. We have no specified maximum redemption threshold under our current charter, other than the aforementioned 15% threshold. Every share of Company Class A common stock that is redeemed by our public stockholders will reduce the amount in our trust account, which held marketable securities with a fair value of approximately $321.2 million as of June 30, 2020. In no event will we redeem shares of our Company Class A common stock in an amount that would cause our net tangible assets to be less than $5,000,001.
Q:
Is there a limit on the total number of shares that may be redeemed?
A:
Yes. Our current charter provides that we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the Purchase Agreement. Other than this limitation, our current charter does not provide a specified maximum redemption threshold. In addition, the Purchase Agreement provides that LF LLC’s obligation to consummate the transaction is conditioned on the Company delivering evidence that GNOG LLC has no less than an aggregate amount of $80.0 million cash upon the Closing (following any redemptions of public shares and after payment of the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest). In the event the aggregate cash consideration we would be required to pay for all shares of Company Class A common stock that are validly submitted for redemption plus the amounts required to satisfy closing cash conditions pursuant to the terms of the Purchase Agreement exceeds the aggregate amount of cash available to us, we may not complete the transaction or redeem any shares, all shares of Company Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Q:
Will how I vote affect my ability to exercise redemption rights?
A:
No. You may exercise your redemption rights whether you vote your shares of common stock for or against, or whether you abstain from voting on the Transaction Proposal or any other proposal described by this proxy statement. As a result, the Transaction Proposal can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet Nasdaq rules.
Q:
How do I exercise my redemption rights?
A:
In order to exercise your redemption rights, you must (i)(a) hold public shares or (b) hold public shares through units and 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; and (ii) prior to           , Eastern time, on           , 2020, (a) submit a written request to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
The Transfer Agent’s address is as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
 
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Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of common stock. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the shares of Company Class A common stock included in the units sold in our IPO without the prior consent of the Company, which we refer to as the “15% threshold.” Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash without the prior consent of the Company.
Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.
Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their certificates to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the vote on the proposal to approve the transaction at the special meeting, or to deliver their shares to the Transfer Agent electronically using DTC’s Deposit/Withdrawal At Custodian (DWAC) system, at such stockholder’s option. The requirement for physical or electronic delivery prior to the special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the transaction is approved.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.
Q:
What are the U.S. federal income tax consequences of exercising my redemption rights?
A:
Whether the redemption is subject to U.S. federal income tax depends on the particular facts and circumstances. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Certain United States Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.
Q:
If I am a Company warrant holder, can I exercise redemption rights with respect to my public warrants?
A:
No. The holders of our public warrants have no redemption rights with respect to our public warrants.
Q:
Do I have appraisal rights if I object to the transaction?
A:
No. Appraisal rights are not available to holders of our common stock in connection with the transaction.
Q:
What happens to the funds held in the trust account upon consummation of the transaction?
A:
If the transaction is consummated, the funds held in the trust account will be used to: (i) pay the Closing Cash Consideration and the Credit Agreement Payoff Amount as well as accrued and unpaid interest; (ii) pay our stockholders who properly exercise their redemption rights; (iii) pay approximately $11.1 million in deferred underwriting commissions to the underwriters of our IPO, in connection with the transaction; (iv) pay the Company’s taxes; (v) pay certain other fees, costs and expenses (including regulatory fees, legal fees, trustee and transfer agent fees, accounting fees, printer fees and other professional fees) that were incurred by the Company in connection with the transaction; and
 
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(vi) contribute funds sufficient to ensure that GNOG LLC will hold at least $80 million in cash at Closing down to GNOG LLC upon Closing.
Q:
What happens if the transaction is not consummated?
A:
There are certain circumstances under which the Purchase Agreement may be terminated. For additional information regarding the parties’ specific termination rights, please see the section entitled “Proposal No. 1 — The Transaction Proposal — The Purchase Agreement.” If we do not consummate the transaction, we may continue to try to complete a business combination with a different target business until May 9, 2021. If we fail to complete an initial business combination by May 9, 2021, then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem our public shares, at a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the trust account, including interest not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), by (B) the total number of then outstanding public shares, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including trust account assets) will be less than the initial public offering price per unit in the IPO. For additional information, please see the section entitled “Risk Factors — Risks Related to the Transaction and New GNOG.”
Holders of our founder shares have waived any right to any liquidation distribution with respect to such shares and the underwriters of our IPO agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the required period. In addition, if we fail to complete a business combination by May 9, 2021, there will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire worthless.
Q:
When is the transaction expected to be completed?
A:
The Closing is expected to take place on the date that is two business days following the satisfaction or waiver of the conditions described below in the section entitled “Proposal No. 1 — The Transaction Proposal — The Purchase Agreement — Conditions to Closing of the Transaction.” The Closing is expected to occur in the fourth quarter of 2020. The Purchase Agreement may be terminated by the Company or LF LLC if the Closing has not occurred by January 30, 2021.
For a description of the conditions to the completion of the transaction, see the section entitled “Proposal No. 1 — The Transaction Proposal — The Purchase Agreement — Conditions to Closing of the Transaction.”
Q:
What do I need to do now?
A:
You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the transaction will affect you as a stockholder.
You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.
Q:
How do I vote?
A:
Voting of Shares by Holders of Record
If you were the record holder of shares of our common stock as of the record date, you may submit your proxy to vote such shares by mail or at the special meeting.
 
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Voting by Mail

To submit your proxy by mail, simply mark your proxy card, date and sign it and return it in the postage-paid envelope. 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 vote by mail, your proxy card must be received no later than           , 2020.
Please carefully consider the information contained in this proxy statement and, whether or not you plan to attend the special meeting, please vote by mail so that your shares will be voted in accordance with your wishes even if you later decide not to attend the special meeting.
Voting at the Special Meeting
We encourage you to vote by mail. If you attend the special meeting, you may also submit your vote at the special meeting via the special meeting website at http://www.cstproxy.com/landcadiaholdingsii/sm2020, in which case any votes that you previously submitted by mail will be superseded by the vote that you cast at the special meeting. If your proxy is properly completed and submitted, and if you do not revoke it prior to or at the special meeting, your shares will be voted at the special meeting in the manner set forth in proxy statement or as otherwise specified by you. Again, your paper proxy card must be received by mail no later than           , 2020.
Voting of Shares Held in Street Name
If your shares are held in an account at a broker, bank, or nominee (i.e., in “street name”), you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the broker, bank, or nominee. See the section entitled “Special Meeting of Stockholders — Voting Your Shares — Beneficial Owners” for more information.
Q:
What is the difference between a stockholder of record and a “street name” holder?
A:
If your shares are registered directly in your name with the Company’s Transfer Agent, you are considered the stockholder of record with respect to those shares, and the proxy materials are being provided directly to you. If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in “street name.” The proxy materials are being provided to you by your broker, bank or other nominee who is considered the stockholder of record with respect to those shares.
Q:
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A:
No. 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 that all of the proposals presented to the stockholders at this special meeting other than the Auditor Ratification Proposal will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting other than the Auditor Ratification Proposal. Accordingly, if your broker submits a proxy for your shares with respect to the Auditor Ratification Proposal but you do not provide instructions on the other proposals with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares on such other proposals; this indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will be counted for the purposes of determining the existence of a quorum. A broker non-vote will have the same effect as a vote “AGAINST” the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal. A broker non-vote will have no effect on the outcome of any of the Advisory Charter Proposals, the Director Election Proposal and
 
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the Adjournment Proposal. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.
Q:
What will happen if I abstain from voting or fail to vote at the special meeting?
A:
A stockholder’s failure to vote by proxy or to vote in person at the special meeting (which would include voting at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions and broker non-votes will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal will have the same effect as a vote “AGAINST” any such proposal. Each of the failure to vote by proxy or to vote in person (which would include voting at the virtual special meeting), an abstention from voting and a broker non-vote on any of the Advisory Charter Proposals, the Director Election Proposal, the Auditor Ratification Proposal and the Adjournment Proposal will have no effect on the outcome of any such proposal.
Q:
What will happen if I sign and return my proxy card without indicating how I wish to vote?
A:
Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders and “FOR” each of the director nominees. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.
Q:
How can I vote my shares without attending the special meeting?
A:
If you are a stockholder of record of our common stock as of the close of business on the record date, you can vote by proxy by mail by following the instructions provided in the enclosed proxy card or at the special meeting. Please note that if you are a beneficial owner of our common stock, you may vote by submitting voting instructions to your broker, bank or nominee, or otherwise by following instructions provided by your broker, bank or nominee. Telephone and internet voting may be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or nominee.
Q:
May I change my vote after I have returned my proxy card or voting instruction form?
A:
Yes. If you are a holder of record of our common stock as of the close of business on the record date, you can change or revoke your proxy before it is voted at the special meeting by:

delivering a signed written notice of revocation to our Secretary at Landcadia Holdings II, Inc. 1510 West Loop South, Houston, Texas 77027, bearing a date later than the date of the proxy, stating that the proxy is revoked;

signing and delivering a new proxy, relating to the same shares and bearing a later date; or

attending and voting at the special meeting and voting, although attendance at the special meeting will not, by itself, revoke a proxy.
If you are a beneficial owner of our common stock as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement 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 your vote with respect to all of your shares.
 
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Q:
Who will solicit and pay the cost of soliciting proxies for the special meeting?
A:
The Company will pay the cost of soliciting proxies for the special meeting. The Company has engaged Morrow to assist in the solicitation of proxies for the special meeting. The Company has agreed to pay Morrow a fee of $      , plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Company’s common stock for their expenses in forwarding soliciting materials to beneficial owners of the Company’s common stock and in obtaining voting instructions from those owners. Our directors, officers and employees 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:
Who can help answer my questions?
A:
If you have questions about the proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:
Landcadia Holdings II, Inc.
1510 West Loop South
Houston, Texas 77027
Telephone: (713) 850-1010
Attention: Steven L. Scheinthal
You may also contact our proxy solicitor at:
Morrow Sodali LLC
470 West Avenue
Stamford, CT 06902
Telephone: (800) 662-5200
(Banks and brokers can call: (203) 658-9400)
Email: LCA.info@investor.morrowsodali.com
To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.
You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”
If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
 
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SUMMARY OF THIS PROXY STATEMENT
This summary highlights selected information contained in this proxy statement and does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the Annexes and accompanying financial statements of the Company and GNOG, to fully understand the transaction (as described below) before voting on the proposals to be considered at the special meeting (as described below). Please see the section entitled “Where You Can Find More Information” beginning on page 276 of this proxy statement.
Unless otherwise specified, all share calculations assume (i) no exercise of redemption rights by the Company’s public stockholders; and (ii) no inclusion of any shares of Company Class A common stock issuable upon the exercise of the Company’s warrants.
Parties to the Transaction
The Company
The Company is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination with one or more businesses. The Company was formed as CAPS Holding LLC, a Delaware limited liability company on August 11, 2015 and converted into a Delaware corporation on February 4, 2019.
The Company’s securities are traded on Nasdaq under the ticker symbols “LCA,” “LCAHU” and “LCAHW.” New GNOG intends to apply to list the shares of New GNOG Class A common stock and warrants on Nasdaq under the symbols “GNOG” and “GNOGW,” respectively, upon the Closing. The Company’s units will automatically separate into the component securities upon consummation of the transaction and, as a result, will no longer trade as a separate security.
The mailing address of the Company’s principal executive office is 1510 West Loop South, Houston, Texas 77027.
Landcadia HoldCo
Landcadia HoldCo is a Delaware limited liability company and newly formed, wholly-owned subsidiary of the Company. Landcadia HoldCo was formed on June 25, 2020 solely for the purpose of effecting the transaction. Landcadia HoldCo owns no material assets and does not operate any business.
Landcadia HoldCo has the same mailing address as the Company.
LF LLC
LF LLC is a holding company indirectly wholly-owned by Mr. Fertitta and headquartered in Houston, Texas. LF LLC has the same mailing address as the Company.
GNOG
GNOG is a U.S. online real money casino headquartered in Houston, Texas. For additional information about GNOG, please see the sections entitled “Business of GNOG,” “GNOG Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management after the Transaction.”
GNOG has the same mailing address as the Company.
The Transaction Proposal
On June 28, 2020, the Company entered into the Purchase Agreement with Landcadia HoldCo, LF LLC, GNOG HoldCo, and GNOG. Tilman J. Fertitta, one of our sponsors and our Co-Chairman and Chief Executive Officer, indirectly owns all of the equity interests in LF LLC, GNOG HoldCo and GNOG.
 
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Pursuant to the Purchase Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, at the time of the Closing, LF LLC will make the GNOG Contribution in exchange for (i) 31,350,625 HoldCo Class B Units, (ii) 31,350,625 shares of New GNOG Class B common stock, which will have High Voting Rights, (iii) Closing Cash Consideration in an amount of $30.0 million and (iv) the repayment of the Credit Agreement Payoff Amount, as well as accrued and unpaid interest. The cash consideration and Credit Agreement payment will be paid with cash available to us from the trust account. Prior to the Closing, GNOG will convert into a limited liability company by merging with and into GNOG LLC, with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo. Upon consummation of the transaction contemplated by the Purchase Agreement, the Company will change its name to “Golden Nugget Online Gaming, Inc.”
Upon the Closing, New GNOG will be organized in an umbrella partnership C-corporation, or “Up-C” structure, in which substantially all of the assets of New GNOG will be held indirectly through GNOG LLC and all of the business of New GNOG will be conducted through GNOG LLC. New GNOG’s only direct assets will consist of the Class A membership interests it holds of Landcadia HoldCo, and the number of Class A units of Landcadia HoldCo that will be issued to New GNOG at Closing will be equal to the number of shares of New GNOG Class A common stock outstanding at Closing. As a result, New GNOG is expected to own approximately 54.1% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 53.2% assuming the maximum number of redemptions of public shares), and in either event, New GNOG will control Landcadia HoldCo as the sole manager of Landcadia HoldCo in accordance with the terms of the A&R HoldCo LLC Agreement. The remaining approximately 45.9% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) will be held by LF LLC through HoldCo Class B Units, which will carry no voting rights. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock), on a one-for-one basis, for either shares of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of New GNOG Class A common stock. In addition, Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC. For additional information about the transaction, please see the section entitled “Proposal No. 1 — The Transaction Proposal.” A copy of the Purchase Agreement is attached to this proxy statement as Annex A.
Ancillary Agreements
Tax Receivable Agreement
Concurrently with Closing, the Company and LF LLC will enter into the Tax Receivable Agreement substantially in the form attached to this proxy statement as Annex K. Subject to certain terms and conditions, the Tax Receivable Agreement will provide for payment by New GNOG to LF LLC in respect of 85% of the U.S. federal, state and local income tax savings allocable to New GNOG from Landcadia HoldCo and arising from certain transactions, including (a) certain transactions contemplated under the Purchase Agreement and (b) the exchange of LF LLC’s HoldCo Class B Units for New GNOG Class A common stock, as determined on a “with and without” basis, and for an early termination payment by New GNOG to LF LLC in the event of a termination with a majority vote of disinterested directors, a material breach of a material obligation, or a change of control, subject to certain limitations, including in connection with available cash flow and financing facilities. Assuming no redemption of the public shares and no exchange of LF LLC’s HoldCo Class B Units pursuant the A&R HoldCo LLC Agreement, the estimated TRA liability is $22.2 million, subject to adjustment as provided in the Tax Receivable Agreement. Assuming the maximum redemption of the public shares and no exchange of LF LLC’s HoldCo Class B Units pursuant the A&R HoldCo LLC Agreement, the estimated TRA liability is $21.8 million, subject to adjustment as provided in the Tax Receivable Agreement. Payments for such TRA liabilities will, subject to certain limitations, including in connection with available cash flow and financing facilities, be made annually in cash and are expected to be funded with tax distributions from Landcadia HoldCo. The Tax Receivable Agreement payments will commence in the year following New GNOG’s ability to realize tax savings provided through the transaction and, at this time, are expected to commence in 2025 (with respect
 
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to taxable periods ending in 2024). The amount and timing of such Tax Receivable Agreement payments may vary based upon a number of factors. The Tax Receivable Agreement also provides for an accelerated lump sum payment on the occurrence of certain events, including in the event of a change of control. Based upon certain assumptions, it is estimated that such early termination payment could range from $284.6 million, assuming no redemption of the public shares, to $287.0 million, assuming the maximum redemption of the public shares. It is anticipated that such early termination payments may be made from the proceeds of such change of control transaction; however, New GNOG may be required to fund such early termination payments from other sources and there can be no assurances that New GNOG will be able to finance such obligations in a manner that does not adversely affect its working capital or financial condition. Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — Tax Receivable Agreement.
A&R HoldCo LLC Agreement
At the Closing, the Company, Landcadia HoldCo and LF LLC will enter into the A&R HoldCo LLC Agreement, substantially in the form attached to this proxy statement as Annex F, which will provide, among other things, that beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock) for either one share of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of one share of New GNOG Class A common stock. In addition, the A&R HoldCo LLC Agreement provides for additional issuances of HoldCo Class B Units and the equivalent number of shares of New GNOG Class B common stock to LF LLC in consideration of payments to be made by LF LLC to GNOG LLC pursuant to the terms of the Second A&R Intercompany Note. The additional HoldCo Class B Units will be issued at then-current market price of the New GNOG Class A common stock calculated as set forth in the A&R HoldCo LLC Agreement. For additional information on the A&R HoldCo LLC Agreement, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — A&R HoldCo LLC Agreement.
Lock-Up Amendment
At the Closing, certain insiders of the Company, including Tilman J. Fertitta, FEI and JFG Sponsor will enter into the Lock-Up Amendment, which will amend the Letter Agreement to add an additional acceleration event to the lock-up period contemplated under the Letter Agreement based on a price target of $15.00 per share of New GNOG Class A common stock following a period of 60 days after the Closing. The Letter Agreement and the lock-up period thereunder does not apply to the HoldCo Class B Units or shares of New GNOG Class B common stock to be received by LF LLC pursuant to the Purchase Agreement. For additional information on the Lock-Up Amendment, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — Lock-Up Amendment.
A&R Registration Rights Agreement
At the Closing, New GNOG, the sponsors, Tilman Fertitta and certain of his affiliates will enter into the A&R Registration Rights Agreement, substantially in the form attached to this proxy statement as Annex J, which will amend and restate the existing registration rights agreement to include shares of New GNOG Class A common stock issuable pursuant to the Purchase Agreement and the A&R HoldCo LLC Agreement. For additional information on the A&R Registration Rights Agreement, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — A&R Registration Rights Agreement.
Sponsor Forfeiture and Call-Option Agreement
In connection with the execution of the Purchase Agreement, on June 28, 2020, the Company and JFG Sponsor entered into the Sponsor Forfeiture and Call-Option Agreement, pursuant to which, as of and contingent upon the Closing, JFG Sponsor will forfeit two thirds (or 2,543,750) of its founder shares. In addition, following and contingent upon the Closing, JFG Sponsor granted to New GNOG an option to repurchase any of the private placement warrants held by JFG Sponsor, to the extent that JFG Sponsor wishes to exercise or sell such warrants, subject to certain terms and conditions set forth in the Sponsor
 
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Forfeiture and Call-Option Agreement. For additional information on the Sponsor Forfeiture and Call-Option Agreement, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — Sponsor Forfeiture and Call-Option Agreement.
First A&R Intercompany Note
On or after the date of the GNOG Conversion and prior to the Closing, LF LLC and GNOG LLC will enter into the First A&R Intercompany Note to amend and restate the Original Intercompany Note to provide for future automatic dollar-for-dollar reductions of the principal amounts outstanding thereunder to reflect any further reductions of the principal amount outstanding under the Credit Agreement. For additional information on the First A&R Intercompany Note, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — First A&R Intercompany Note.
Second A&R Intercompany Note
Concurrently with the Closing, LF LLC and GNOG LLC will enter into the Second A&R Intercompany Note to provide for, among other things, (a) a reduction in the principal amount outstanding under the First A&R Intercompany Note by $150.0 million, which reduction will occur at Closing through a non-cash distribution of capital to LF LLC, and (b) a reduction in the amounts payable thereunder to 6% annually on the outstanding balance from day to day thereunder, provided, that LF LLC and GNOG LLC will not agree to any material deviations to the forms of First A&R Intercompany Note or Second A&R Intercompany Note (as compared to the forms previously reviewed by the Company on or prior to the date of the Purchase Agreement) without prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed). For additional information on the Second A&R Intercompany Note, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — Second A&R Intercompany Note.
Related Party Post-Closing Operational Agreements
A&R Trademark License Agreement
Concurrently with the Closing, GNOG LLC, Golden Nugget and GNLV will amend and restate the Trademark License Agreement. The A&R Trademark License Agreement is expected to provide for, among other things, the replacement of the current five-year period renewal option (held by GNOG) with a term of 20 years. Upon the tenth and fifteenth anniversary of the effective date of the A&R Trademark License Agreement, the monthly royalty amount payable to Golden Nugget would be adjusted to equal the greater of (i) 3% of net gaming revenue, as defined in the A&R Trademark License Agreement and (ii) the fair market value of the licenses (as determined by an independent appraiser, if necessary).
While the trademarks licensed under the A&R Trademark License Agreement generally will be exclusively licensed to GNOG LLC, in the event that (i) a new market or opportunity becomes available (e.g., pursuant to the legalization of online gaming in another jurisdiction), and (ii) GNOG LLC is unwilling, unable or otherwise fails to pursue such market or opportunity, Golden Nugget will be permitted to pursue such market or opportunity and utilize the trademarks covered by the A&R Trademark License Agreement with respect thereto. For the avoidance of doubt, nothing in the A&R Trademark License Agreement will restrict GNOG LLC (or Golden Nugget) from owning or operating an online-based casino using marks that are not covered by the Trademark License Agreement. For additional information on the A&R Trademark License Agreement, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Party Post-Closing Operational Agreements — A&R Trademark License Agreement.
A&R Online Gaming Operations Agreement
Concurrently with the Closing, GNOG LLC and GNAC will amend and restate the Online Gaming Operations Agreement. The A&R Online Gaming Operations Agreement will provide for, among other things, (a) minimum performance standards under which GNOG LLC will be required to operate the Golden Nugget online gaming business, and (b) an arms-length risk allocation framework (including with respect to insurance and indemnification obligations). For additional information on the A&R Online Gaming Operations Agreement, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Party Post-Closing Operational Agreements — A&R Online Gaming Operations Agreement.
 
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Services Agreement
Concurrently with the Closing, GNOG LLC and Golden Nugget will terminate their current shared services agreement and enter into the Services Agreement to provide for the performance of certain services from and after the Closing. The Services Agreement will contain substantially similar terms as the current shared services agreement, provided that the Services Agreement will require GNOG LLC to provide continued management, consulting and administrative services to Golden Nugget’s applicable subsidiary in connection with retail sports wagering conducted and such subsidiary’s brick-and-mortar casino. For additional information on the Services Agreement, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Party Post-Closing Operational Agreements — Services Agreement.
Lease Agreements
Concurrently with the Closing, GNOG LLC will enter into the Office Leases with GNAC and Golden Nugget, respectively, or their respective affiliates. The Office Leases provide for annual rent payments of $88,120 for the office space leased in Houston, Texas and $24,252 for the office space leased in Atlantic City, New Jersey, subject to an increase of 10% for any renewal term and market rent increases in the event that GNOG LLC requires the use of additional office space during the term thereof. However, any amounts actually paid by GNOG LLC under the A&R Trademark License Agreement and the A&R Online Gaming Operations Agreement will be credited against GNOG LLC’s rent obligations under the Office Leases. Each Office Lease will have a term of five years. In connection with any renewal of the term of the A&R Online Gaming Operations Agreement, GNOG LLC will have an option to renew each Office Lease for the lesser of (i) five years or (ii) the length of the renewed term of the A&R Online Gaming Operations Agreement. Each Office Lease may be terminated by GNOG LLC or the respective landlord upon six months’ notice. For additional information on the Office Leases, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Party Post-Closing Operational Agreements — Lease Agreements.
Indebtedness
At the Closing, GNOG LLC will continue to be liable for its remaining indebtedness under the Credit Agreement after the payment of the Credit Agreement Payoff Amount at Closing. For additional information, please see the section entitled “Description of GNOG Indebtedness.
Organizational Structure
Upon the Closing, New GNOG will be organized in an umbrella partnership C-corporation, or “Up-C” structure, in which substantially all of the assets of New GNOG will be held indirectly through GNOG LLC and all of the business of New GNOG will be conducted through GNOG LLC. New GNOG’s only direct assets will consist of the Class A membership interests it holds of Landcadia HoldCo, and the number of Class A units of Landcadia HoldCo that will be issued to New GNOG at Closing will be equal to the number of shares of New GNOG Class A common stock outstanding at Closing. As a result, New GNOG is expected to own approximately 54.1% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 53.2% assuming the maximum number of redemptions of public shares), and in either event, New GNOG will control Landcadia HoldCo as the sole manager of Landcadia HoldCo in accordance with the terms of the A&R HoldCo LLC Agreement. The remaining approximately 45.9% of the combined membership interests in Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) will be held by LF LLC through HoldCo Class B Units, which will carry no voting rights. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of New GNOG Class B common stock), on a one-for-one basis, for either shares of New GNOG Class A common stock, or at the election of New GNOG, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of New GNOG Class A common stock. In addition, Landcadia HoldCo will own all of the equity interests in GNOG HoldCo, which will own all of the equity interests in GNOG LLC.
The following diagrams, which are subject to change based upon any redemptions of shares held by the Company’s current public stockholders in connection with the transaction, illustrate the ownership structure
 
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of (i) the Company and GNOG LLC immediately prior to the Closing and (ii) New GNOG and GNOG LLC immediately following the Closing:
Prior to the Closing
[MISSING IMAGE: tm2024222d2-fc_prior4c.jpg]
Following the Closing
[MISSING IMAGE: tm2024222d3-fc_following4c.jpg]
(1)
Pursuant to the terms of the Purchase Agreement, prior to the Closing, GNOG will effect a reorganization whereby it will, among other things, merge with and into GNOG LLC, with GNOG LLC surviving as a direct, wholly-owned subsidiary of GNOG HoldCo.
(2)
The shares of New GNOG Class B common stock carry 10 votes per share, subject to an automatic
 
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downward adjustment to the extent necessary for the total voting power of all shares of common stock and preferred stock beneficially held by Mr. Fertitta and certain of his affiliates not to exceed 79.9%. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Ancillary Agreements — A&R HoldCo LLC Agreement.”
(3)
The A&R HoldCo LLC Agreement provides for additional issuances of HoldCo Class B Units and the equivalent number of shares of New GNOG Class B common stock to LF LLC in consideration of payments to be made by LF LLC to GNOG LLC pursuant to the terms of the Second A&R Intercompany Note.
(4)
The ownership and voting power percentages set forth above assume that (i) no public stockholders elect to have their shares of Company Class A common stock redeemed in connection with the Closing, (ii) none of the parties set forth in the diagrams purchases shares of Company Class A common stock in the open market and (iii) there are no other issuances of equity interests of the Company or its subsidiaries prior to or in connection with the Closing. The economic interests held by the public stockholders in New GNOG will represent an indirect economic interest of less than 50% of GNOG LLC because Landcadia HoldCo will not be wholly-owned by New GNOG. In addition, the ownership and voting power percentages set forth above do not take into account, among others, (a) the public warrants and private placement warrants that will remain outstanding immediately following the transaction and may be exercised thereafter (commencing 30 days after the Closing) and the issuance of any shares of New GNOG Class A common stock that may be issued upon such exercise, (b) the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock), (c) the issuance of any HoldCo Class B Units (along with a corresponding number of shares of New GNOG Class B common stock) to LF LLC in exchange for payments made pursuant to the Second A&R Intercompany Note, and (d) the issuance of any shares of New GNOG Class A common stock following the Closing under the Incentive Plan. If the actual facts are different than the assumptions set forth above, the percentage ownership numbers set forth above will be different.
Redemption Rights
Pursuant to our current charter, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the transaction, including interest not previously released to us to pay our taxes, by (ii) the total number of then-outstanding public shares. As of June 30, 2020, this would have amounted to approximately $10.13 per share.
You will be entitled to receive cash for any public shares to be redeemed only if you:
(i)(a)   hold public shares or (b) hold public shares through units and 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; and
(ii)   prior to            , Eastern time, on           , 2020, (a) submit a written request to the Transfer Agent that the Company redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC.
Holders of units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.
Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)-(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the shares of Company Class A common stock included in the units sold in our IPO without the prior consent of the Company.
If a holder exercises its redemption rights, then such holder will be exchanging its public shares for cash and will no longer own shares of New GNOG. Such a holder will be entitled to receive cash for its
 
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public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent in accordance with the procedures described herein. Pursuant to our current charter, we are required to pay the redemption price to public stockholders who properly exercise their redemption rights as promptly as practical following the Closing. The Closing is subject to the satisfaction of a number of conditions, including receipt of certain regulatory approvals. There can be no assurance when or if such regulatory approvals will be obtained. Further, following the stockholder vote to approve the transaction, there could be a delay for a period of time, which period may be significant, in receiving the required regulatory approvals. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the special meeting and payment of the redemption price. Please see the section entitled “Special Meeting of Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.
Economic Ownership Interests Upon Closing
It is anticipated that, upon completion of the transaction, the economic ownership interests in New GNOG will be as set forth in the table below:
Assuming No
Redemptions of
Public Shares
Assuming Maximum
Redemptions of
Public Shares(1)
Company’s public stockholders(2)
85.5% 84.9%
Tilman J. Fertitta and his affiliates(3)
11.1% 11.5%
JFG Sponsor(4)
3.4% 3.6%
(1)
Assumes that holders of 1,417,414 public shares exercise their redemption rights in connection with the Closing (based on approximately $321.2 million held in trust (less approximately $0.9 million of income taxes payable) as of June 30, 2020 and a redemption price of $10.13 per share).
(2)
Represents an indirect economic interest of less than 50% of GNOG LLC because Landcadia HoldCo will not be wholly-owned by New GNOG.
(3)
Economic interests relate solely to the shares of New GNOG Class A common stock to be held at Closing. In addition to such shares, Mr. Fertitta and his affiliates will also own all of the issued and outstanding shares of New GNOG Class B common stock at Closing, each of which will have no economic rights, but will carry 10 votes per share, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%. For additional information, please see the section entitled “— Voting Power Upon Closing.”
(4)
Reflects the forfeiture of 2,543,750 founder shares by JFG Sponsor immediately prior to the Closing under the Sponsor Forfeiture and Call-Option Agreement.
The ownership percentages set forth above assume that (i) none of the parties set forth in the table above purchases shares of Company Class A common stock in the open market and (ii) there are no other issuances of equity interests of the Company or its subsidiaries prior to or in connection with the Closing. In addition, the ownership percentages set forth above do not take into account, among others, (a) the fact that Mr. Fertitta and his affiliates are expected to beneficially own an approximately 45.9% of the economic interests of Landcadia HoldCo (assuming no redemptions of public shares, or 46.8% assuming the maximum number of redemptions of public shares) through LF LLC’s HoldCo Class B Units, which will carry no voting rights, (b) the public warrants and private placement warrants that will remain outstanding immediately following the transaction and may be exercised thereafter (commencing 30 days after the Closing) and the issuance of any shares of New GNOG Class A common stock that may be issued upon such exercise, (c) the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock), (d) the issuance of any HoldCo Class B Units (along with a corresponding number of shares of New GNOG Class B common stock) to LF LLC in exchange for payments made pursuant to the Second A&R Intercompany Note, and (e) the issuance of any shares of New GNOG Class A common stock following the Closing under the Incentive Plan. If the actual facts are different than the assumptions
 
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set forth above, the percentage ownership numbers set forth above will be different. For example, if taking into account the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of all of its HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock) following the expiration of a lock-up period of 180 days following the Closing pursuant to the A&R HoldCo LLC Agreement and assuming all the other conditions and assumptions described in the above do not change, (x) assuming no redemptions: (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will own approximately 46.3% of the economic interests of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own approximately 51.9% of the economic interests of New GNOG; and (iii) JFG Sponsor will own approximately 1.9% of the economic interests of New GNOG and (y) assuming holders of 1,417,414 public shares redeem their shares (the maximum redemption scenario): (i) the Company’s public stockholders (other than the sponsors and Mr. Fertitta) will own approximately 45.1% of the economic interests of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own approximately 53.0% of the economic interests of New GNOG; and (iii) JFG Sponsor will own approximately 1.9% of the economic interests of New GNOG.
Furthermore, there are currently outstanding an aggregate of 16,425,000 warrants to acquire shares of Company Class A common stock, which comprise 5,883,333 private placement warrants held by our initial stockholders and 10,541,667 public warrants. Each of our outstanding whole warrants is exercisable commencing 30 days following the Closing and will entitle the holder thereof to purchase one share of New GNOG Class A common stock at $11.50 per share. Therefore, as of the date of this proxy statement, if we assume that each outstanding whole warrant is exercised and one share of New GNOG Class A common stock is issued as a result of such exercise, with payment to New GNOG of the exercise price of $11.50 per whole warrant for one whole share, our fully-diluted share capital would increase by a total of 16,425,000 shares, with approximately $188.9 million paid to New GNOG to exercise the warrants.
For additional information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
Voting Power Upon Closing
It is anticipated that, upon completion of the transaction, the voting power of New GNOG’s stockholders will be as set forth in the table below:
Assuming No
Redemptions of
Public Shares
Assuming Maximum
Redemptions of
Public Shares(1)
Company’s public stockholders
19.3% 19.3%
Tilman J. Fertitta and his affiliates(2)
79.9% 79.9%
JFG Sponsor(3)
0.8% 0.8%
(1)
Assumes that holders of 1,417,414 public shares exercise their redemption rights in connection with the Closing (based on approximately $321.2 million held in trust (less approximately $0.9 million of income taxes payable) as of June 30, 2020 and a redemption price of $10.13 per share).
(2)
Represents the voting power of the shares of New GNOG Class B common stock held by Mr. Fertitta and his affiliates after the automatic downward adjustment of the voting power of such shares in accordance with the terms of the proposed charter. Immediately following the Closing, all of New GNOG’s stockholders will hold only shares of New GNOG Class A common stock except LF LLC, which will hold shares of New GNOG Class B common stock. Each share of New GNOG Class B common stock will carry 10 votes per share, provided that the voting power of the shares held by Mr. Fertitta and his affiliates will be subject to an automatic downward adjustment to the extent necessary for the total voting power of all shares of New GNOG common stock beneficially held by Mr. Fertitta and his affiliates not to exceed 79.9%.
(3)
Reflects the forfeiture of 2,543,750 founder shares by JFG Sponsor immediately prior to the Closing under the Sponsor Forfeiture and Call-Option Agreement.
The voting power percentages set forth above assume that (i) none of the parties set forth in the table above purchases shares of Company Class A common stock in the open market and (ii) there are no other
 
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issuances of equity interests of the Company or its subsidiaries prior to or in connection with the Closing. In addition, the voting power percentages set forth above do not take into account, among others, (a) the public warrants and private placement warrants that will remain outstanding immediately following the transaction and may be exercised thereafter (commencing 30 days after the Closing) and the issuance of any shares of New GNOG Class A common stock that may be issued upon such exercise, (b) the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock), (c) the issuance of any HoldCo Class B Units (along with a corresponding number of shares of New GNOG Class B common stock) to LF LLC in exchange for payments made pursuant to the Second A&R Intercompany Note, and (d) the issuance of any shares of New GNOG Class A common stock following the Closing under the Incentive Plan. If the actual facts are different than the assumptions set forth above, the percentages set forth above will be different. For example, if taking into account the issuance of any shares of New GNOG Class A common stock to LF LLC upon exchange of all of its HoldCo Class B Units (and the surrender of a corresponding number of shares of New GNOG Class B common stock) following the expiration of a lock-up period of 180 days following the Closing pursuant to the A&R HoldCo LLC Agreement and assuming all the other conditions and assumptions described in the above do not change, (x) assuming no redemptions: (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will hold approximately 46.3% of the voting power of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially own 51.9% of the voting power of New GNOG; and (iii) JFG Sponsor will hold approximately 1.9% of the voting power of New GNOG and (y) assuming holders of 1,417,414 public shares redeem their shares (the maximum redemption scenario): (i) the Company’s public stockholders (other than our sponsors and Mr. Fertitta) will hold approximately 45.1% of the voting power of New GNOG; (ii) Tilman J. Fertitta and his affiliates will beneficially hold 53.0% of the voting power of New GNOG; and (iii) JFG Sponsor will hold approximately 1.9% of the voting power of New GNOG.
Sources and Uses for the Transaction
The following tables summarize the sources and uses for funding the transaction (in millions):
No Redemption Scenario
Sources
Uses
Company Cash(1)
$ 322
Cash Consideration to an affiliate of Mr. Fertitta
$ 30
GNOG Rollover Equity(2)
314
GNOG Rollover Equity(2)
314
Landcadia II Sponsor Equity
54
Company Sponsor Equity
54
GNOG existing cash
9
Cash to GNOG’s balance sheet(3)
94
GNOG Debt Repayment(4)
150
Debt Repayment Fees and Accrued Interest
27
Transaction Fees and Other(5)
30
$ 699 $ 699
(1)
Assumes none of the public shares are redeemed in connection with the transaction. Represents cash held in the Company trust account of $321.2 million and cash held outside of the Company trust account of $1.1 million as of June 30, 2020.
(2)
Includes 31,350,625 HoldCo Class B Units and 31,350,625 shares of New GNOG Class B common stock that are redeemable for 31,250,625 shares of New GNOG Class A common stock.
(3)
Includes the existing cash on hand of GNOG and the Company of $9.4 million and $1.1 million as of June 30, 2020, respectively.
(4)
In connection with the GNOG Debt Repayment, an equal amount of principal outstanding on GNOG’s Second A&R Intercompany Note from LF LLC will be reduced through a non-cash capital distribution to LF LLC.
(5)
Consists of transaction fees of $20.0 million, which include approximately $11.1 million of deferred underwriting commission, and approximately $10.0 million of other fees including certain debt issuance
 
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costs and incentive compensation expenses.
 
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Maximum Redemptions Scenario
Sources
Uses
Company Cash(1)
$ 308
Cash Consideration to an affiliate Mr. Fertitta
$ 30
GNOG Rollover Equity(2)
314
GNOG Rollover Equity(2)
314
Company Sponsor Equity
54
Company Sponsor Equity
54
GNOG existing cash
9
Cash to GNOG’s balance sheet(3)
80
GNOG Debt Repayment(4)
150
Debt Repayment Fees and Accrued Interest
27
Transaction Fees and Other(5)
30
$ 685 $ 685
(1)
Assumes an aggregate of 1,417,414 public shares are redeemed in connection with the transaction at a price of $10.13 per share (based on $321.2 million held in the trust account and 31,625,000 public shares outstanding as of June 30, 2020). Also includes $1.1 million of cash held outside of the Company trust account as of June 30, 2020.
(2)
Includes 31,350,625 HoldCo Class B Units and 31,350,625 shares of New GNOG Class B common stock that are redeemable for 31,250,625 shares of New GNOG Class A common stock.
(3)
Includes the existing cash on hand of GNOG and the Company of $9.4 million and $1.1 million as of June 30, 2020, respectively.
(4)
In connection with the GNOG Debt Repayment, an equal amount of principal outstanding on GNOG’s Second A&R Intercompany Note from LF LLC will be reduced through a non-cash capital distribution to LF LLC.
(5)
Consists of transaction fees of $20.0 million, which include approximately $11.1 million of deferred underwriting commission, and approximately $10.0 million of other fees including certain debt issuance costs and incentive compensation expenses.
Board of Directors of New GNOG Following the Transaction
Assuming that the Closing occurs, the size of our Board will be increased from five to six directors, with each of our directors serving a one-year term as a result of our Board becoming declassified. We expect that each individual currently serving on the Board will continue in office, except for Richard Handler. In addition, we have nominated each of Richard H. Liem and Steven L. Scheinthal to serve as a director of New GNOG commencing upon the Closing. For additional information, please see the section entitled “Proposal No. 5 — The Director Election Proposal.”
Controlled Company Exemption
Upon the completion of the transaction, Mr. Fertitta and his affiliates will be the beneficial owner of all the outstanding shares of New GNOG Class B common stock and as such, will control the voting power of our outstanding capital stock, as a result of which Mr. Fertitta and his affiliates will have the power to elect a majority of our directors. Pursuant to Nasdaq rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company will qualify as a “controlled company.” Therefore, New GNOG will not be required to comply with certain Nasdaq rules that would otherwise require it to have: (i) a board of directors comprised of a majority of independent directors; (ii) compensation of its executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; (iii) a compensation committee charter which, among other things, provides the compensation committee with the authority and funding to retain compensation consultants and other advisors; and (iv) director nominees selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors.
The Proposals
At the special meeting the stockholders of the Company will be asked to vote on:
 
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A proposal to approve and adopt the Purchase Agreement and to approve the transaction;

A proposal to approve, for purposes of complying with applicable Nasdaq rules, (a) the issuance of (1) 31,350,625 shares of New GNOG Class B common stock to LF LLC at the Closing, pursuant to the terms of the Purchase Agreement, (2) from time to time, shares of New GNOG Class B common stock to LF LLC in an amount relating to the payments made by LF LLC pursuant to the terms of the Second A&R Intercompany Note, as calculated pursuant to the terms of the A&R HoldCo LLC Agreement as described herein, and (3) shares of New GNOG Class A common stock to LF LLC in the future upon the exchange of a corresponding number of the HoldCo Class B Units and shares of New GNOG Class B common stock held by LF LLC (which number of HoldCo Class B Units and shares of New GNOG Class B common stock will equal the number of shares of New GNOG Class B common stock issued and issuable to LF LLC in connection with subsections (1) and (2) above), in accordance with the terms of the A&R HoldCo LLC Agreement, and (b) the issuance of shares of New GNOG capital stock to Mr. Fertitta and his affiliates, including LF LLC, in connection with the transaction that will result in Mr. Fertitta and his affiliates owning more than 20% of New GNOG’s outstanding capital stock and more than 20% of the voting power of New GNOG, which could constitute a “change of control” under Nasdaq rules;

A proposal to approve New GNOG’s proposed charter, in the form attached to this proxy statement as Annex C;

A proposal to elect six directors to serve on New GNOG’s board of directors each for a term expiring at the 2021 annual meeting of stockholders or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal; alternatively, in the event the condition precedent proposals, including the Charter Proposal, are not approved and our Board remains classified, to elect two directors to serve as Class I directors on the Company’s Board, each for a term of three years expiring at the annual meeting of stockholders to be held in 2023 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal;

A proposal to approve the Incentive Plan, a copy of which is attached to this proxy statement as Annex I, including the authorization of the initial share reserve under the Incentive Plan;

The ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; and

A proposal to approve the adjournment of the special 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, or otherwise in connection with, the approval of the condition precedent proposals. This proposal will only be presented at the special meeting if there are not sufficient votes to approve the condition precedent proposals.
For additional information, please see the sections entitled “Proposal No. 2 — The Nasdaq Proposal,” “Proposal No. 3 — The Charter Proposal,” “Proposal No. 5 — The Director Election Proposal,” “Proposal No. 6 — The Incentive Plan Proposal,” “Proposal No. 7 — The Auditor Ratification Proposal” and “Proposal No. 8 — The Adjournment Proposal.”
The advisory charter proposals are being presented in accordance with SEC guidance and will be voted upon on an advisory basis, and are not binding on the Company. Upon the Closing and assuming the approval at the special meeting of the Charter Proposal, our current charter will be amended to reflect various differences between it and the proposed charter, including some that materially affect stockholder rights.
For additional information, please see the section entitled “Proposal No. 4 — The Advisory Charter Proposals.”
Date, Time and Place of Special Meeting
The special meeting will be a virtual meeting conducted exclusively via live webcast starting at 10:00 a.m., Eastern time, on           , 2020, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals. Stockholders may attend the special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit your
 
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questions during the special meeting by visiting https://www.cstproxy.com/landcadiaholdingsii/sm2020 and entering your 12-digit control number, which is either included on the proxy card you received or obtained through Continental Stock Transfer & Trust Company. Because the special meeting is completely virtual and being conducted via live webcast, stockholders will not be able to attend the meeting in person.
Registering for the Special Meeting
Pre-registration at https://www.cstproxy.com/landcadiaholdingsii/sm2020 is recommended but is not required in order to attend.
Any stockholder wishing to attend the virtual meeting should register for the meeting by           , 2020. To register for the special meeting, please follow these instructions as applicable to the nature of your ownership of our common stock:

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the online-only special meeting, go to https://www.cstproxy.com/landcadiaholdingsii/sm2020, enter the 12-digit control number included on your proxy card or notice of the meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the meeting you will need to log back into the meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the special meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five (5) business days prior to the meeting date in order to ensure access.
Voting Power; Record Date
Only stockholders of record at the close of business on October 5, 2020, the record date for the special meeting, will be entitled to vote at the special meeting. You are entitled to one vote for each share of common stock that you owned as of 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, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 39,531,250 shares of common stock outstanding and entitled to vote, of which 31,625,000 are shares of Company Class A common stock and 7,906,250 are shares of Company Class B common stock beneficially held by Mr. Fertitta and JFG Sponsor.
Accounting Treatment
The transaction will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the transaction will be treated as the equivalent of GNOG LLC issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or other intangible assets recorded.
Appraisal Rights
Appraisal rights are not available to our stockholders in connection with the transaction.
Proxy Solicitation
Proxies may be solicited by mail, telephone or in person. The Company has engaged Morrow to assist in the solicitation of proxies.
 
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If a stockholder grants a proxy, it may still vote its shares at the special meeting if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting of Stockholders — Revoking Your Proxy.”
Interests of Certain Persons in the Transaction
In considering the recommendation of our Board to vote in favor of the transaction, stockholders should be aware that aside from their interests as stockholders, our sponsors and certain of their affiliates and certain members of our Board and officers, including without limitation, Mr. Fertitta, have interests in the transaction that are different from, or in addition to, those of our other stockholders. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transaction and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting, including the Transaction Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the special meeting, including the Transaction Proposal. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Transaction.”
Certain Other Interests in the Transaction
In addition to the interests of certain members of our Board and officers, including without limitation, Mr. Fertitta, in the transaction that are different from, or in addition to, the interests of our other stockholders, you should keep in mind that Jefferies has financial interests that are different from, or in addition to, the interests of our other stockholders.
Jefferies was an underwriter in our IPO. Richard Handler, Chief Executive Officer and Director of JFG Sponsor and Chairman of the board of directors, Chief Executive Officer and President of JFG Sponsor’s largest subsidiary, Jefferies Group LLC (“Jefferies Group”), currently serves as Co-Chairman and President of the Company and will be resigning from such positions in connection with the Closing. Upon consummation of the transaction, the underwriters of the IPO are entitled to approximately $11.1 million of deferred underwriting commission. The underwriters of the IPO have agreed to waive their rights to the deferred underwriting commission held in the trust account in the event the Company does not complete an initial business combination within 24 months of the closing of the IPO. Accordingly, if the transaction with GNOG, or any other initial business combination, is not consummated by that time and the Company is therefore required to be liquidated, the underwriters of the IPO, including Jefferies, will not receive any of the deferred underwriting commission and such funds will be returned to the Company’s public stockholders upon its liquidation.
Furthermore, Jefferies is engaged by the Company as exclusive financial and capital markets advisor to the Company. The Company decided to retain Jefferies as its exclusive financial and capital markets advisor based primarily on (i) Jefferies’ extensive knowledge, strong market position and positive reputation in equity capital markets, (ii) Jefferies’ experienced and capable investment banking team and (iii) Jefferies’ long-standing relationship with and affiliation with the Company and the Sponsors. The Company agreed to pay Jefferies an aggregate fee of $2.5 million and $1.25 million in connection with its services as exclusive financial and capital markets advisor, respectively, all of which will become payable, and is contingent, upon the consummation of the transaction. In addition, under the terms of Jefferies’ engagement, the Company agreed to reimburse Jefferies for its reasonable expenses, including fees, disbursements and other charges of counsel, and to indemnify Jefferies and related parties against liabilities, including liabilities under federal securities laws, relating to, or arising out of, its engagement.
Jefferies therefore has a financial interest in the Company completing the transaction that will result in the payment of the deferred underwriting commission to the underwriters of the IPO, including Jefferies. In considering approval of the transaction, the Company’s stockholders should consider the roles of Jefferies in light of its financial interest in the transaction with GNOG being consummated.
Reasons for the Approval of the Transaction
We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We sought to do this by utilizing the networks and industry experience of our management team and our sponsors to identify,
 
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acquire and operate one or more businesses in the gaming industry. Our Board considered and evaluated several factors in evaluating and negotiating the transaction and the transaction agreements. For additional information relating to the Board’s evaluation of the transaction and the factors it considered in connection therewith, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Our Board’s Reasons for the Approval of the transaction.”
Regulatory Matters
Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (“FTC”), certain transaction 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. On August 4, 2020, the Company and Mr. Fertitta filed their respective HSR Notification and Reports with the FTC and the Antitrust Division. On August 20, 2020, the FTC granted early termination of the 30-day waiting period.
The Closing is also subject to the parties obtaining all licenses, permits or other authorizations from gaming regulatory authorities required to consummate the transactions and operate the businesses of the Acquired GNOG Parties following the Closing as currently conducted without the imposition of any material limitations or conditions. GNOG has applied to the CCC for the issuance of a casino license as an Internet Gaming Affiliate of GNAC and for qualification of the Company as a holding company of casino licensee GNOG. GNOG and the Company are also seeking qualification as financial sources of GNAC in connection with GNOG’s business.
Quorum and Required Vote for Proposals for the Special Meeting
A quorum of our stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting if a majority of the common stock outstanding and entitled to vote at the special meeting is represented in person or by proxy (which would include presence at the virtual special meeting).
Approval of the Transaction Proposal, the Nasdaq Proposal and the Incentive Plan Proposal requires the approval at the special meeting by (i) a majority of the shares of the Company’s common stock that are voted at the special meeting and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders. Approval of the Charter Proposal requires approval at the special meeting by (i) a majority of the shares of the Company’s common stock outstanding and (ii) a majority of the shares of Company Class A common stock outstanding and held by the Disinterested Stockholders. Approval of the Advisory Charter Proposals, each of which is a non-binding vote, the Auditor Ratification Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon.
The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors.
The Closing is conditioned on, among other things, the approval of the condition precedent proposals at the special meeting. The election of six directors to a one-year term as part of the Director Election Proposal is conditioned on the approval of the condition precedent proposals, including the Charter Proposal. Each of the Nasdaq Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned upon approval of the other condition precedent proposals. The Advisory Charter Proposals, the Auditor Ratification Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in this proxy statement. It is important for you to note that in the event that the condition precedent proposals do not receive the requisite vote for approval, we will not consummate the transaction. If we do not consummate the transaction and fail to complete an initial business combination by May 9, 2021, we will be required to dissolve and liquidate our trust account by returning then remaining funds in such account to our public stockholders.
Opinion of the Financial Advisor to the Committee
On June 28, 2020, Houlihan Lokey Capital, Inc., which we refer to as Houlihan Lokey, verbally rendered its opinion to a committee of the Company’s Board consisting solely of independent directors (the
 
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“committee”) (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the committee dated June 28, 2020), as to the fairness, from a financial point of view, to the Company of the Closing Cash Consideration, Stock Consideration and amounts payable under the Credit Agreement, consisting of $150,000,000 plus accrued and unpaid interest, prepayment penalties, premiums, costs and fees (together, the “Aggregate Consideration”) to be paid by the Company pursuant to the Purchase Agreement, pursuant to which, among other things, LF LLC will transfer all issued and outstanding membership interests of GNOG HoldCo to Landcadia HoldCo in exchange for the Aggregate Consideration, and GNOG LLC will become an indirect wholly-owned subsidiary of the Company.
Houlihan Lokey’s opinion was directed to the committee (in its capacity as such) and only addressed the fairness, from a financial point of view, to the Company of the Aggregate Consideration to be paid by the Company in the transaction pursuant to the Purchase Agreement and did not address any other aspect or implication of the transaction or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached to this proxy statement as Annex H 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 are intended to be, and do not constitute, advice or a recommendation to the committee, our Board, any security holder of the Company or any other person as to how to act or vote with respect to any matter relating to the transaction. See “Proposal No. 1 — The Transaction Proposal — Opinion of the Financial Advisor to the Committee.”
Recommendation to our Stockholders
Our Board believes that each of the Transaction Proposal, the Nasdaq Proposal, the Charter Proposal, the Advisory Charter Proposals, the Director Election Proposal, the Incentive Plan Proposal, the Auditor Ratification Proposal and the Adjournment Proposal to be presented at the special meeting is in the best interests of the Company and our stockholders and unanimously recommends that its stockholders vote “FOR” each of the proposals and “FOR” each of the director nominees.
In considering the recommendation of our Board to vote in favor of the transaction, stockholders should be aware that aside from their interests as stockholders, our sponsors and certain of their affiliates and certain members of our Board and officers, including without limitation, Mr. Fertitta, have interests in the transaction that are different from, or in addition to, those of our other stockholders. Stockholders should take these interests into account in deciding whether to approve the transaction. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transaction and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the special meeting, including the Transaction Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the special meeting, including the Transaction Proposal. For additional information, please see the section entitled “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Transaction.”
Risk Factors
In evaluating the transaction and the proposals to be considered and voted on at the special meeting, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page 60 of this proxy statement. The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of the Company and GNOG to complete the transaction, and (ii) the business, cash flows, financial condition and results of operations of New GNOG following consummation of the transaction.
 
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SUMMARY HISTORICAL FINANCIAL INFORMATION OF THE COMPANY
The following table contains summary historical financial data as of and for the six months ended June 30, 2020 and 2019 and as of and for the years ended December 31, 2019, 2018 and 2017. The statements of operations data for the years ended December 31, 2019, 2018 and 2017, and the balance sheet data as of December 31, 2019, 2018 and 2017, are derived from the audited financial statements of the Company, which are included elsewhere in this proxy statement. The statements of operations data for the six months ended June 30, 2020 and 2019, and the balance sheet data as of June 30, 2020 and 2019, are derived from our unaudited financial statements, which are included elsewhere in this proxy statement. The unaudited financial statements have been prepared in conformity with GAAP and are prepared on the same basis as the annual audited financial statements included elsewhere in this proxy statement. Results from interim periods are not necessarily indicative of results that may be expected for the entire year. The information below is only a summary and should be read in conjunction with the sections entitled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information About the Company” and in our financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement.
Six Months ended
June 30,
Year ended
December 31,
(in thousands, except per share amounts)
2020
2019
2019
2018
2017
Statement of Operations Data:
General and administrative expenses
$ 486 $ 124 $ 487 $    — $    —
Net Income (loss)
$ 810 $ 822 $ 2,500 $ $
Loss per share – basic and diluted
$ (0.03) $ (0.01) $ (0.02) $ $
Statement of Cash Flows:
Net cash used in operating activities
$ (639) $ (55) $ (317) $ $
Net cash provided by (used in) investing activities
$ 181 $ (316,250) $ (316,250) $ $
Net cash provided by financing activities
$ $ 318,164 $ 318,160 $ $
Balance Sheet:
Total cash
$ 1,136 $ 1,859 $ 1,593 $    — $    —
Total assets
$ 322,396 $ 319,277 $ 321,515 $ $
Total liabilities
$ 12,094 $ 11,463 $ 12,023 $ $
Class A common stock subject to possible redemption
$ 305,302 $ 302,814 $ 304,492 $ $
Total stockholders’ equity
$ 5,000 $ 5,000 $ 5,000 $ $
 
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SUMMARY HISTORICAL FINANCIAL INFORMATION OF GNOG
The following table contains summary historical financial data as of and for the six months ended June 30, 2020 and 2019, and as of and for the years ended December 31, 2019 and 2018. Such data for the years ended December 31, 2019 and 2018 have been derived from the audited financial statements of GNOG, which are included elsewhere in this proxy statement. The statement of operations data for the six months ended June 30, 2020 and 2019 and the balance sheet data as of June 30, 2020 and 2019, are derived from the unaudited financial statements of GNOG included elsewhere in this proxy statement. Results from interim periods are not necessarily indicative of results that may be expected for the entire year. The information presented below should be read in conjunction with “GNOG Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business of GNOG” and the financial statements and the notes related thereto, included elsewhere in this proxy statement.
Six Months ended
June 30,
Year ended
December 31,
(in thousands)
2020
2019
2019
2018
Statement of Operations Data:
Casino Gaming
$ 36,952 $ 22,871 $ 47,694 $ 38,827
Other
5,211 3,514 7,727 4,075
Total revenue
$ 42,163 $ 26,385 $ 55,421 $ 42,902
Net Income
$ 4,288 $ 5,575 $ 11,671 $ 7,159
Statement of Cash Flows:
Net cash provided by operating activities
$ 11,848 $ 11,103 $ 35,199 $ 26,362
Net cash used in investing activities
$ $ $ $ (73)
Net cash used in financing activities
$ (14,076) $ (4,607) $ (10,860) $ (14,921)
Balance Sheet Data:
Total cash(1)
$ 9,411 $ 240 $ 846 $ 42
Total assets
$ 55,279 $ 28,666 $ 47,205 $ 21,799
Total liabilities(1)
$ 354,474 $ 36,942 $ 55,590 $ 31,079
Total stockholder’s deficit
$ (299,195) $ (8,276) $ (8,385) $ (9,280)
(1)
On April 28, 2020, GNOG borrowed $300.0 million pursuant to the Credit Agreement. Proceeds from the borrowing were loaned to LF LLC in exchange for the Original Intercompany Note.
 
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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following summary unaudited pro forma condensed combined financial data (the “summary pro forma data”) gives effect to (1) the transaction contemplated by the Purchase Agreement and (2) the GNOG debt financing pursuant to the Credit Agreement. The transaction will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the transaction will be treated as the equivalent of GNOG issuing equity for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost. Operations prior to the transaction will be those of GNOG. The summary unaudited pro forma condensed combined balance sheet data as of June 30, 2020 gives effect to the transaction as if it had occurred on June 30, 2020. The summary unaudited pro forma condensed combined statement of operations data for the six months ended June 30, 2020 and year ended December 31, 2019 gives effect to the transaction as if it had occurred on January 1, 2019.
The summary pro forma data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of New GNOG appearing elsewhere in this proxy statement and the accompanying notes to the unaudited pro forma financial statements. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical consolidated financial statements and related notes of the Company and GNOG for the applicable periods included in this proxy statement. The summary pro forma data have been presented for informational purposes only and are not necessarily indicative of what New GNOG’s financial position or results of operations actually would have been had the transaction and the debt financing been completed as of the dates indicated. In addition, the summary pro forma data do not purport to project the future financial position or operating results of New GNOG.
The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption into cash of the Company’s common stock:

Assuming No Redemptions:   This presentation assumes that no public stockholders of the Company exercise redemption rights with respect to their public shares for a pro rata share of the funds in the Company’s trust account.

Assuming Maximum Redemptions:   This presentation assumes that stockholders holding 1,417,414 of the Company’s public shares exercise their redemption rights and that such shares are redeemed for their pro rata share ($10.13 per share) of the funds in the Company’s trust account.
 
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(in thousands, except share and per share amounts)
Assuming
No
Redemptions
Assuming
Maximum
Redemptions
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data
Six Months Ended June 30, 2020
Revenues $ 42,163 $ 42,163
Net income per share – basic
$ 0.02 $ 0.02
Net income per share – diluted
$ 0.02 $ 0.02
Weighted-average shares outstanding – basic
36,987 35,570
Weighted-average shares outstanding – diluted
68,338 66,921
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data
Year Ended December 31, 2019
Revenues
$ 55,421 $ 55,421
Net loss per share – basic
$ (0.08) $ (0.08)
Net loss per share – diluted
$ (0.08) $ (0.08)
Weighted-average shares outstanding – basic
36,987 35,570
Weighted-average shares outstanding – diluted
68,338 66,921
Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data as of June 30, 2020
Total assets
$ 166,585 $ 151,719
Total liabilities
$ 224,870 $ 224,438
Total stockholders’ deficit
$ (58,285) $ (72,719)
 
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RISK FACTORS
You should carefully review and consider the following risk factors and the other information contained in this proxy statement, including the financial statements and notes to the financial statements included herein, in evaluating the transaction and the proposals to be voted on at the special meeting. The following risk factors apply to the business and operations of GNOG and its consolidated subsidiaries and will also apply to the business and operations of New GNOG and GNOG LLC following the completion of the transaction. 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 transaction, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of New GNOG. You should carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein. For purposes of this section, “GNOG” generally refers to GNOG historically and in the present tense or GNOG LLC on a going-forward basis, following the GNOG Conversion.
Risks Related to GNOG’s Business and Industry
Competition within the gaming industry is intense and GNOG’s existing and potential users may be attracted to GNOG’s competitors’ offerings as well as competing forms of entertainment such as television, movies, sporting events, and other online/digital experiences. If GNOG’s offerings do not continue to be popular, GNOG’s business could be harmed.
GNOG operates in the national gaming industry, itself a subsector of the broader entertainment industry, with GNOG’s business-to-consumer offerings, including iGaming and online sports betting. GNOG users face a vast array of entertainment choices. Other forms of entertainment, such as television, movies, sporting events and land-based casinos, are more well established and may be perceived by GNOG’s users to offer a superior customer experience. GNOG competes with these other forms of entertainment for the discretionary time and income of GNOG’s existing and potential users. If GNOG is unable to sustain sufficient interest in GNOG’s product offerings in comparison to other forms of entertainment, including new forms of entertainment, GNOG’s business may suffer.
The specific industries in which GNOG operates are characterized by dynamic customer demand and technological advances, and there is intense competition among online gaming and interactive entertainment providers. Several established, well-financed companies producing online gaming and/or interactive entertainment products and services compete with GNOG’s offerings, and other well-capitalized companies may introduce competitive services. Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than GNOG’s, which could negatively impact its business. GNOG’s competitors may also develop products, features, or services that are similar to GNOG’s or that achieve greater market acceptance. Furthermore, new competitors, whether licensed or not, may enter the online gaming industry. There has also been considerable consolidation among competitors in the entertainment and gaming industries and such consolidation and future consolidation could result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain a larger market share, expand offerings and broaden their geographic scope of operations. If GNOG is not able to maintain or improve its market share, or if its offerings lose popularity, its business could suffer.
The COVID-19 pandemic could adversely impact GNOG’s business, results of operations and financial condition.
The global spread and unprecedented impact of COVID-19 are complex and rapidly evolving. The COVID-19 pandemic has led governments and other authorities around the world to impose or recommend measures intended to control its spread, including travel bans, business and school closures, quarantines,
 
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“stay-at-home” orders and implementation of other social distancing measures. GNOG faces several risks arising from the COVID-19 pandemic, including with respect to macroeconomic impacts and well as the potential direct impact of the virus on GNOG’s employees and operations.
Suspensions, postponements and cancellations of major sports seasons and sporting events during the COVID-19 pandemic have negatively impacted GNOG’s sports betting business. On the other hand, business closures or capacity limitations, stay-at-home orders and other measures imposed in light of the COVID-19 pandemic have resulted in a significant increase in GNOG’s iGaming business, as GNOG’s offering is well suited for the current environment and consumers’ other options for leisure and entertainment are limited. GNOG’s total iGaming revenues in New Jersey for the six months ended June 30, 2020 were $402 million, representing a 94% increase over the same period in 2019. If and when the threat of the COVID-19 pandemic diminishes, or businesses are otherwise able to return to operations at or near pre-pandemic levels, GNOG will face competition for consumers’ discretionary time and income from many more forms of entertainment that were unavailable, or available on a limited basis, during the COVID-19 pandemic. As a result, GNOG’s growth may slow as consumers, including incremental players acquired during the pandemic, have more choices for entertainment. GNOG’s accelerated growth during the first six months of 2020 may not continue, and its results for such period should not be considered a reliable indicator of its future results of operations.
The COVID-19 pandemic has also caused substantial uncertainty about the strength of the U.S. economy, which may currently be in a recession and has experienced rapid increases in unemployment rates. If the COVID-19 pandemic and economic consequences thereof, including high unemployment rates, persist for a prolonged period of time, the resulting reductions in consumers’ disposable income could have an adverse effect on GNOG’s business. GNOG expects that the longer the pandemic continues, and if repeat, resurgent or cyclical outbreaks of the virus beyond the one being currently experienced occur, the more likely it is that the pandemic may have an adverse effect on GNOG’s business and, consequently, its results of operations and financial condition.
Finally, if a high percentage of GNOG’s employees and/or a subset of its key employees and executives are infected or otherwise adversely impacted by COVID-19, GNOG’s ability to continue to operate effectively may be negatively impacted.
The ultimate severity of the COVID-19 pandemic is unforeseeable and GNOG cannot predict the full impact it may have on GNOG’s business, results of operations and financial condition; however, the effect on GNOG’s results could be material and adverse.
Economic downturns and adverse political and market conditions beyond GNOG’s control could adversely negatively affect its business, financial condition and results of operations.
GNOG’s financial performance is subject to global and U.S. economic conditions and their impact on levels of spending by users. Economic recessions have had, and may continue to have, far reaching adverse consequences across industries, including the global entertainment and gaming industries, which may adversely affect GNOG’s business and financial condition. As a result of the ongoing COVID-19 pandemic, there is substantial uncertainty about the strength of the U.S. economy, which may currently be in a recession and has experienced rapid increases in unemployment rates and uncertainty about the pace of potential recovery. An economic downturn or recession, or slowing or stalled recovery therefrom, may have a material adverse effect on GNOG’s business, financial condition, results of operations or prospects.
In addition, changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including fluctuation in stock markets resulting from, among other things, trends in the economy may reduce users’ disposable income. Any one of these changes could have a material adverse effect on GNOG’s business, financial condition, results of operations or prospects.
Reductions in discretionary consumer spending could have an adverse effect on GNOG’s business, financial condition, results of operations and prospects.
GNOG’s business is particularly sensitive to reductions in discretionary consumer spending. Demand for entertainment and leisure activities, including gaming and online gaming variants, can be affected by
 
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changes in the broader economy and consumer tastes, both of which are difficult to predict and unmanageable. Adverse changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce GNOG’s users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities including iGaming and online sports betting. As a result, GNOG cannot ensure that demand for its offerings will remain constant. Adverse developments affecting economies throughout the world, including a general tightening of availability of credit, decreased liquidity in financial markets, increased interest rates, foreign exchange volatility, increased energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment, significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a further reduction in discretionary spending on leisure activities, such as gaming.
For example, the recent outbreak of COVID-19 has negatively affected economic conditions in the U.S. as well as globally and has caused a reduction in consumer spending. At least initially, business closures or capacity limitations, stay-at-home orders and other measures imposed in light of the COVID-19 pandemic have resulted in a significant increase in GNOG’s business, as GNOG’s offering is well suited for the current environment and consumers’ other options for leisure and entertainment are limited. Nonetheless, in ordinary circumstances outside of the ongoing COVID-19 pandemic, any significant or prolonged decrease in consumer spending on entertainment or leisure activities could adversely affect the demand for GNOG’s offerings, reducing its cash flows and revenues, and thereby materially harming its business, financial condition, results of operations and prospects.
GNOG may experience fluctuations in its operating results, which make its future results difficult to predict and may cause its operating results to fall below expectations.
GNOG’s financial results have fluctuated in the past and it expects its financial results to fluctuate in the future. These fluctuations may be due to a variety of factors, some of which are outside of its control and may not fully reflect the underlying performance of its business.
GNOG’s financial results in any given period may be influenced by numerous factors, many of which it is unable to predict or are outside of its control, including the impact of seasonality, customer betting results, and the other risks and uncertainties set forth herein. Consumer engagement in GNOG’s iGaming and online sports betting services may decline or fluctuate as a result of a number of factors, including the user’s level of satisfaction with GNOG’s platforms, GNOG’s ability to improve and innovate, GNOG’s ability to adapt its platform, outages and disruptions of online services, the services offered by its competitors, its marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, among others. Any decline or fluctuation in the recurring portion of GNOG’s business may have a negative impact on its business, financial condition, results of operations or prospects.
In GNOG’s iGaming offering, operator losses can at times be limited per stake to a maximum payout, but there is content where the max win exposure is uncapped due to features in the game that can potentially trigger more significant wins. When looking at bets across a period of time, however, these losses can potentially be significant. GNOG’s financial results may also fluctuate based on whether it pays out any jackpots to its iGaming users during the relevant period. As part of GNOG’s iGaming offering, it offers progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the user is contributed to the jackpot for that specific game or group of games. Once a jackpot is won, the progressive jackpot is reset with a predetermined base amount. While GNOG maintains a provision for these progressive jackpots, the cost of the progressive jackpot payout would be a cash outflow for GNOG’s business in the period in which it is won with a potentially significant adverse effect on its financial condition and cash flows. Because winning is underpinned by a random algorithm, GNOG cannot predict with absolute certainty when a progressive jackpot payout will be incurred. In addition, GNOG does not insure against random outcomes or jackpot wins.
GNOG’s Projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations. As a result, its projected revenues, market share, expenses and profitability may differ materially from its expectations.
GNOG operates in a rapidly evolving and highly competitive industry and its Projections (as defined herein) are subject to the risks and assumptions made by management with respect to this industry. Operating
 
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results are difficult to forecast because they generally depend on GNOG’s assessment of factors that are inherently beyond its control and impossible to predict with certainty, such as the timing of adoption of future legislation and regulations by different states. Furthermore, if GNOG invests in the development of new products or distribution channels that do not achieve commercial success, whether because of competition or otherwise, it may not recover the often material “up front” costs of developing and marketing those products and distribution channels or recover the opportunity cost of diverting management and financial resources away from other products or distribution channels.
Additionally, as described above under “— Reductions in discretionary consumer spending could have an adverse effect on GNOG’s business, financial condition, results of operations and prospects,” GNOG’s business may be affected by reductions in consumer spending as a result numerous factors which may be difficult to predict. This may result in decreased revenue levels, and GNOG may be unable to adopt timely measures to compensate for any shortcomings in revenue and/or operating profitability. This inability could cause GNOG’s operating results in a given period to be higher or lower than budgeted.
The success, including win or hold rates, of existing or future iGaming and sports betting products depends on a variety of factors and is not entirely in GNOG’s control.
The iGaming and sports betting industries are characterized by an element of chance. Accordingly, GNOG employs theoretical win rates to estimate what a certain type of iGaming or sports bet, on average, will win or lose after a significant number of iterations. Net win is impacted by variations in the hold percentage (the ratio of net win to total amount wagered), or actual outcome, on GNOG’s iGaming and sports betting it offers to its users. GNOG uses the hold percentage as an indicator of an iGaming’s or sports bet’s performance against its expected outcome. Although each iGaming or sports bet generally performs within a defined statistical range of outcomes, actual outcomes may vary in accordance with statistical probability. In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond GNOG’s control, such as a user’s skill, experience and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent gambling. As a result of the variability in these factors, the actual win rates for GNOG’s iGaming offerings and sports betting wagers may differ materially from theoretical win rates GNOG has estimated and could result in the winnings exceeding its expectations based on statistical law. The variability of win rates (hold rates) also have the potential to negatively impact GNOG’s financial condition, cash flow and overall business operations.
GNOG’s success also depends in part on its ability to anticipate and satisfy user preferences in a timely and effective manner. As GNOG operates in a dynamic industry characterized by rapidly evolving legal standards and regulations, the scope of its potential product offerings is subject to rapid change, and as such its offerings will be subject to dynamic consumer preferences and expectations around said offerings that cannot be predicted with certainty. GNOG needs to continually introduce new offerings and identify future offerings that complement its existing platforms, respond to its users’ needs and improve and enhance its existing platforms to maintain or increase its user engagement and growth of its business.
GNOG relies on information technology and other systems and platforms, and any failures, errors, defects or disruptions in such systems or platforms could diminish its brand and reputation, subject GNOG to liability, disrupt its business, affect its ability to scale its technical infrastructure and adversely affect its operating results and growth prospects. GNOG’s online gaming offerings, software applications and systems, and the third-party platforms upon which they are made available could contain undetected errors.
GNOG’s technology infrastructure is provided by third party providers critical to the performance of its platform and offerings. For example, GNOG’s back-end platform, which is critical to the performance of GNOG’s platform and offering, is provided by NYX Digital Gaming (USA), LLC (“NYX”), a subsidiary of Scientific Games Corporation. GNOG’s agreement with NYX provides for an initial four-year term for each state in which GNOG conducts business, subject to optional one-year renewals thereafter unless either party elects to otherwise terminate. GNOG pays NYX a fee based on a percentage of net gaming revenue, plus certain fixed costs. Further, technology provided by Ezugi NJ LLC (“Ezugi”), an affiliate of Evolution Malta Limited (“Evolution”), is critical to the performance of GNOG’s Live Dealer offering. GNOG’s agreement with Ezugi provides for a term through August 2021, and upon expiration, GNOG has an
 
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agreement with Evolution to continue to obtain Live Dealer technology for an additional five years thereafter. Under both the Ezugi and Evolution agreements, GNOG pays a fee based on a percentage of net gaming revenue generated by GNOG’s own offering and, in some instances, generated by third parties utilizing GNOG’s live studio, plus certain fixed costs. These third party providers’ systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be detrimental to GNOG’s business. The third parties on which GNOG relies provide resources for network and data security to protect GNOG’s systems and data. GNOG cannot assure with certainty that the measures it and such third parties take to prevent or reduce the likelihood of cyber-attacks, protect their systems, data and user information, to prevent outages, to prevent data or information loss and fraud, and to prevent or detect security breaches, will provide absolute security. GNOG has experienced, and it may in the future experience, website disruptions, outages and other performance problems resulting from a variety of factors, including internet and application connection issues, infrastructure failure and changes, human or software errors and capacity constraints. Such disruptions have not had a material impact on GNOG to date; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with its computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect GNOG’s business, financial condition, results of operations and business prospects.
Some of GNOG’s third party platforms and systems are not fully redundant, and disaster recovery planning may not be sufficient for all eventualities. GNOG’s and its third-party service providers’ disaster recovery do not offer full offsite failover recovery, which could result in GNOG’s operations and offerings being offline for a period of time to sufficiently recover any impacted third-party infrastructure and recover the latest available data, as well as any time required to receive the required regulatory approvals.
GNOG’s live dealer studio connectivity and technical infrastructure is owned and operated by GNOG; however, the data center and key services such as security and access, surveillance, network and connectivity, electricity and cooling are provided by third parties. These third-party providers have experienced issues in the past and any such issues in the future could have a material impact on the ability of GNOG to provide live dealer services to GNOG and its partner customers. Any such material impact could result in a material effect to GNOG’s revenues and partner customer confidence in GNOG’s ability to provide reliable live dealer services. Any such loss of partner customer confidence could result in such partner customers moving to competitor live dealer services and studios.
GNOG relies on facilities, components, and services supplied by third parties, including data center facilities and cloud storage services. If these third parties cease to provide the facilities or services, experience operational interference or disruptions, breach their agreements with GNOG, fail to perform their obligations and meet GNOG’s expectations, or experience a cybersecurity incident, GNOG’s operations could be disrupted or otherwise negatively affected. Any such disruption or negative impact could result in an extensive interruption in GNOG’s operations and damage to GNOG’s reputation and brand, materially and adversely affecting GNOG’s business. GNOG does not carry business interruption insurance sufficient to compensate GNOG for all losses that may result from interruptions in GNOG’s service as a result of systems failures and other events.
Additionally, GNOG’s offerings may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch. If a particular offering is unavailable when users attempt to access it, or navigation through GNOG’s platforms is slower than they expect, users may be unable to place their iGaming or sports betting wagers in time and may be less likely to return to GNOG’s platforms as frequently, if at all. Furthermore, programming errors, defects and data corruption could disrupt GNOG’s operations, adversely affect the experience of its users, harm its brand perception, cause its users to stop utilizing GNOG’s platforms, divert its resources and delay market acceptance of its offerings, any of which could result in legal liability to it or harm its business, financial condition, results of operations and business prospects.
If GNOG’s user base and engagement continue to grow, and the amount and types of offerings continue to grow and evolve, it will need to allocate an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy its users’ needs. Such infrastructure expansion may be complex, and unanticipated delays in completing expansion projects may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the
 
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quality of its offerings. In addition, there may be issues related to this infrastructure that are not detected during the testing phases of design and implementation, which may only become evident after GNOG has started to fully use the underlying equipment or software, that could further degrade the user experience or increase GNOG’s costs. As such, GNOG could fail to continue to effectively scale and grow its technical infrastructure to accommodate increased demands.
GNOG believes that if its users have a negative experience with its offerings, or if its brand or reputation is negatively affected, users may be less inclined to continue utilizing its products or recommend its platform to other potential users. As such, a failure or significant interruption in its service would harm its brand’s reputation, business prospects and operating results.
Despite GNOG’s security measures, its information technology and infrastructure is vulnerable to attacks by hackers or breaches resulting from employee error, malfeasance or other disruptions. Any such breach could compromise GNOG’s networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disruption of GNOG’s operations and the services it provides to users, damage to its reputation, and a loss of confidence in its products and services, which could adversely affect its business.
The secure maintenance and transmission of user information is a critical element of GNOG’s operations. GNOG’s information technology and other systems that maintain and transmit user information, or those of its service providers or its business partners have been in the past, and may in the future be, compromised by a malicious third-party penetration of its network security, or impacted by intentional or unintentional actions or inactions by its employees, or employees of its third-party service providers or its business partners. As a result, GNOG’s users’ information may be lost, disclosed, accessed or taken without its guests’ consent.
The regulatory framework for the privacy and data security of GNOG’s user information and employee information is rapidly evolving and is likely to remain uncertain for the foreseeable future. Many federal, state and foreign government bodies and agencies, and industry associations, have adopted or are considering adopting laws, rules, regulations and standards regarding the collection, use, disclosure and security of personal information. In the United States, these include rules and regulations promulgated under the authority of the federal and state labor and employment laws, state data breach notification laws, state data security laws and state privacy laws. GNOG’s failure to comply with data security and privacy laws, rules, regulations and standards could result in regulatory scrutiny and increased exposure to the risk of litigation, contractual liability, or the imposition of consent orders or civil and criminal fines, penalties and assessments which could have an adverse effect on GNOG’s results of operations or financial condition. Moreover, allegations of non-compliance with privacy regulations, whether or not true, could be costly, time consuming, distracting to GNOG management, and cause reputational harm.
GNOG relies on encryption and authentication technology licensed from third parties designed to securely transmit confidential and sensitive information, including credit card numbers, in an attempt to reduce the probability of breaches. Advances in computing capabilities, new technological discoveries or other developments may result in whole or partial failure of this technology protecting transaction data or other confidential and sensitive information from being breached or compromised. In addition, websites are often attacked through compromised credentials, including those obtained through phishing and credential stuffing. GNOG’s security measures, and those of its third-party service providers, may not detect or prevent all attempts to breach GNOG’s systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by GNOG’s websites, networks and systems or that GNOG or such third parties otherwise maintain. A security breach of GNOG or its service providers’ payment card systems may subject GNOG to fines or higher transaction fees or limit or terminate GNOG’s access to certain payment methods. GNOG and its third-party service providers may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against GNOG or its third-party service providers.
 
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In addition, security breaches can also occur from non-technical issues, including intentional or inadvertent breaches by GNOG’s employees or third parties. The risks of these security breaches may increase over time as GNOG scales the business and the complexity and number of technical systems and applications GNOG uses increases. Breaches of GNOG’s security measures or those of GNOG’s third-party service providers could result in unauthorized access to GNOG’s sites, networks and systems; unauthorized access to and misappropriation of user information, including users’ personally identifiable information, or other confidential or proprietary information of GNOG or third parties; viruses, worms, spyware or other malware being served from GNOG’s sites, networks or systems; deletion or modification of content or the display of unauthorized content on GNOG’s sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; litigation, regulatory action and other potential liabilities.
In the past, GNOG and its third-party service providers have experienced social engineering, phishing, malware, threatened denial-of-service and similar attacks, none of which to date has been material to GNOG’s business; however, such attacks could in the future have a material adverse effect on GNOG’s operations and third-party service providers. If a future breach of security should occur and be material, GNOG’s brand’s reputation could be damaged, GNOG’s business may suffer, GNOG could be required to expend significant capital and other resources to alleviate problems caused by said breaches, and GNOG could be exposed to a risk of loss, litigation or regulatory action and possible liability. GNOG cannot guarantee that GNOG’s or its third-party service providers’ protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause GNOG to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
A party who manages to illicitly obtain a user’s account information could access the user’s transaction data or personal information, resulting in the perception that GNOG’s systems are insecure. Any compromise or breach of GNOG’s security measures, or those of GNOG’s third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in GNOG’s security measures, which could have a material adverse effect on GNOG’s business, financial condition, results of operations and business prospects. GNOG may need in the future to address problems caused by breaches, including notifying affected users and responding to any resulting litigation, which in turn, diverts resources from the growth and expansion of GNOG’s business.
GNOG relies on third-party providers to validate the identity and location of GNOG’s users, and if such providers fail to accurately confirm user information or GNOG does not maintain business relationships with them, GNOG’s business, financial condition and results of operations could be adversely affected.
GNOG cannot guarantee that the third-party geolocation and identity verification systems that GNOG relies on will perform effectively. GNOG relies on these geolocation and identity verification systems to ensure GNOG follows certain laws and regulations, and any service disruption to those systems would prohibit GNOG from operating its platform and would adversely affect GNOG’s business. Additionally, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in GNOG inadvertently allowing access to its offerings to individuals who are not permitted to access them, or otherwise inadvertently deny access to individuals who are permitted access them, in each case based on inaccurate identity or geographic location determination. GNOG’s third-party geolocation services provider relies on its ability to obtain information necessary to determine geolocation from mobile devices, operating systems, and other sources. Changes, disruptions or temporary or permanent failure to access such sources by GNOG’s third-party service providers may result in their inability to accurately determine the location of GNOG’s users. Moreover, failure to maintain GNOG’s existing contracts with third-party service providers, or to replace them with equivalent third parties, may result in GNOG’s inability to access geolocation and identity verification data necessary for GNOG’s operations. If any of these risks materializes, GNOG may be subject to disciplinary action, fines, lawsuits, and GNOG’s business, financial condition and results of operations could be adversely affected.
 
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GNOG’s platform contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict GNOG’s ability to provide its offerings.
GNOG’s internal and third-party platforms contain software modules licensed to it by third-party authors under “open source” licenses. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. In addition, the public availability of such software may make it easier for others to compromise GNOG’s platform.
Some open source licenses contain requirements that GNOG and its third-party providers make available source code for modifications or derivative works GNOG and its third-party providers create, or that GNOG or its third-party providers grant other licenses to their proprietary software, based upon the type of open source software GNOG and its third-party providers use. If GNOG comingles any in-house software with open source software in a certain manner, GNOG and its third-party providers could, under certain open source licenses, be required to release their proprietary source code to the public. This would enable GNOG’s competitors to create similar offerings at a lower economic cost and ultimately could result in a loss of GNOG’s competitive advantages. Alternatively, to avoid the public release of the affected portions of GNOG’s source code, GNOG could be required to expend substantial time and resources to re-engineer some or all of GNOG’s software.
Although GNOG monitors its use of open source software to avoid subjecting GNOG’s platform to conditions it does not intend, the terms of many open source licenses have not been interpreted by U.S. or foreign courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on GNOG’s ability to provide or distribute GNOG’s platform. In the past there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As such, GNOG could be subject to lawsuits by parties claiming infringement of intellectual property rights in what GNOG believes to be open source software. Moreover, GNOG cannot assure that GNOG’s processes for controlling the use of open source software in GNOG’s platform will be effective. If GNOG is determined to have breached or failed to fully comply with all the terms and conditions of an open source software license, GNOG could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing its offerings on terms that are not economically feasible, to re-engineer GNOG’s platform, to discontinue or delay the provision of its offerings if re-engineering could not be accomplished on a timely basis or to make generally available, proprietary source code, any of which could adversely affect its business, financial condition and results of operations.
GNOG relies on third-party payment processors to process deposits and withdrawals made by customers on GNOG’s platform, and if GNOG cannot manage GNOG’s relationships with such third parties and other payment-related risks, GNOG’s business, financial condition and results of operations could be adversely affected.
GNOG relies on a limited number of third-party payment processors to process deposits and withdrawals made by customers on GNOG’s platform. If any of GNOG’s third-party payment processors terminates its relationship with it or refuses to renew its agreement with it on economically reasonable terms, GNOG would be forced to find an alternative payment processor, and may not be able to secure favorable terms or replace such payment processor in a timely manner. Further, the software and services provided by GNOG’s third-party payment processors may not meet GNOG’s expectations, contain errors or other defects, be compromised or experience outages. Any of these risks could cause GNOG to lose its ability to accept online payments or other payment transactions or make timely payments to users on GNOG’s platform, any of which could make GNOG’s platform less well perceived by the market and adversely affect its ability to attract and retain its users.
Nearly all of GNOG’s payments are made by credit card, debit card or through other third-party payment services, which subjects GNOG to certain regulations, contractual obligations and to the risk of fraud. GNOG may in the future offer new payment options to users that may be subject to additional regulations and risks. GNOG is also subject to a number of other laws, regulations and contractual obligations relating to the payments GNOG accept from GNOG’s users, including with respect to money laundering, money transfers, privacy and information security. If GNOG fails to comply with applicable rules and
 
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regulations, GNOG may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose its ability to accept online payments or other payment card transactions, which could make its platform less well perceived by its users. If any of these events were to occur, GNOG’s business, financial condition and results of operations could be adversely affected.
For example, if GNOG is deemed to be a money transmitter as defined by applicable regulation, GNOG could be subject to certain laws, rules and regulations enforced by multiple authorities and governing bodies in the United States and numerous state and local agencies who may define money transmitter differently. Certain states may have a more expansive view of who qualifies as a money transmitter. If GNOG is found to be a money transmitter under any applicable regulation and GNOG is not in compliance with such regulations, GNOG may be subject to fines or other penalties in one or more jurisdictions levied by federal or state or local regulators, including state Attorneys General, as well as those levied by foreign regulators. Penalties for failing to comply with applicable rules and regulations could include criminal and civil proceedings, forfeiture of material assets or other enforcement actions. GNOG could also be required to make changes to GNOG’s business practices or compliance programs as a result of regulatory scrutiny.
Additionally, GNOG’s payment processors require GNOG to comply with payment card network operating rules, which are set and interpreted by payment card networks. The payment card networks could adopt new operating rules or interpret or reinterpret existing rules in ways that might prohibit GNOG from providing certain offerings to particular users, be costly to implement or difficult to follow. GNOG has agreed to reimburse its payment processors for fines they are assessed by payment card networks if GNOG or the users on GNOG’s platform violate these rules. Any of the foregoing risks could adversely affect GNOG’s business, financial condition and results of operations.
GNOG relies on other third-party service providers and if such third parties do not perform adequately or terminate their relationships with GNOG, its costs may increase and GNOG’s business, financial condition and results of operations could be adversely affected.
GNOG relies heavily on GNOG’s relationships with third-party information technology service providers. For example, GNOG relies on third parties for online connectivity, infrastructure hosting, technical infrastructure, network management, content delivery, load balancing and protection against hacking and distributed denial-of-service attacks. If those providers do not perform adequately, GNOG’s users may experience errors or disruptions in operations and services. Furthermore, if any of GNOG’s partners terminates its relationship with GNOG or refuses to renew its agreement with GNOG on commercially reasonable terms, GNOG could be forced to find an alternative provider and may not be able to secure similar terms in a timely manner. GNOG also relies on other software and services supplied by third parties, such as communications and internal software, and GNOG’s business may be adversely affected to the extent such software and services do not meet GNOG’s expectations, contain errors or vulnerabilities, are compromised or experience outages. Any of these risks could increase GNOG’s costs and adversely affect GNOG’s business, financial condition and results of operations. Further, any negative publicity related to any of GNOG’s third-party partners, including any publicity related to regulatory concerns, could adversely affect GNOG’s brand’s reputation and could potentially lead to increased regulatory or litigation exposure.
GNOG incorporates technology from third parties into GNOG’s platform. GNOG cannot be certain that GNOG’s licensors are not infringing the intellectual property rights of others or that the suppliers and licensors have sufficient rights to the technology in all jurisdictions in which GNOG may operate. Some of GNOG’s license agreements may be terminated by GNOG’s licensors at their determination. If GNOG is unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against GNOG’s suppliers and licensors or against it, or if GNOG is unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, GNOG’s ability to develop GNOG’s platform containing that technology could be severely limited and GNOG’s business could be harmed.
Additionally, if GNOG is unable to obtain necessary technology from third parties, GNOG may be forced to acquire or develop or own services which could be economically costly and negatively impact GNOG’s operations. If alternative technology cannot be obtained or developed, GNOG may not be able to
 
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offer certain functionality as part of GNOG’s offerings, which could adversely affect GNOG’s business, financial condition and results of operations.
If GNOG fails to detect fraud or theft, including by its users and employees, GNOG’s brand’s reputation may suffer which could negatively impact GNOG’s business, financial condition and results of operations and can subject GNOG to investigations and litigation.
GNOG has in the past incurred, and may in the future incur, losses from various types of financial fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds. Bad actors use increasingly sophisticated methods to engage in illegal activities involving sensitive financial information, such as unauthorized use of another person’s identity, account information or payment information and unauthorized acquisition or use of credit or debit card details, bank account information and mobile phone numbers and accounts. Under current credit card practices, GNOG may be liable for use of funds on GNOG’s platform with fraudulent credit card data, even if the associated financial institution approved the credit card transaction.
Acts of fraud may involve various tactics, including collusion. Successful exploitation of GNOG’s systems could have negative effects on GNOG’s product offerings, services and user experience and could harm GNOG’s brand’s reputation. Failure to uncover such bad actors could result in harm to GNOG’s operations. In addition, negative publicity related to breaches of this nature could have an adverse effect on GNOG’s brand’s reputation, potentially causing a material adverse effect on GNOG’s business, financial condition, results of operations and business prospects. In the event of the occurrence of any such issues with GNOG’s existing platform or product offerings, substantial engineering and marketing resources and management attention, may be diverted from other projects to correct these issues, which may delay other projects and the achievement of GNOG’s strategic objectives.
Despite measures GNOG has taken to detect and reduce the occurrence of fraudulent or other malicious activity on GNOG’s platform, GNOG cannot say with certainty that any of GNOG’s measures will be effective. GNOG’s failure to adequately detect or prevent fraudulent transactions could harm GNOG’s brand’s reputation, result in litigation or regulatory action and lead to expenses that could adversely affect GNOG’s business, financial condition and results of operations.
GNOG’s business is dependent on internet and other technology-based serviced providers, if these parties experience business interruptions, GNOG’s ability to conduct business may be impaired and GNOG’s financial conditions and results of operations could be adversely affected.
A substantial portion of GNOG’s network infrastructure is provided by third parties, including internet service providers and other technology-based service providers. GNOG requires technology-based service providers to maintain adequate cyber security systems and processes. However, if these service providers experience service interruptions, including those due to cyber-attacks, or those due to an event causing an unusually high volume of Internet use (such as a pandemic or public health emergency), communications over the Internet may be interrupted and impair GNOG’s ability to conduct its business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may impact the ability of GNOG’s users to access its platform or offerings in a timely fashion or at all. Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect GNOG’s business, and it exercises little influence over these providers, which increases its vulnerability to problems with their services. Furthermore, GNOG’s ability to process digital transactions depends on bank processing and credit card systems. To prepare for system malfunctions, GNOG continuously seeks to improve its facilities and the capabilities of its system infrastructure and support. Nevertheless, there can be no guarantee that the internet infrastructure or GNOG’s own network systems will be able to meet the demand placed on them by the continued growth of the internet, the overall online gaming industry and its users. Any system failure as a result of reliance on these third parties, such as network, software or hardware failure, including as a result of cyber-attacks, which causes a loss of GNOG’s users’ property or personal information or a delay or interruption in its online services and products could result in a loss of anticipated revenue, interruptions to its platform and offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience and
 
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cause users to lose confidence in its offerings, any of which could have a material adverse effect on its business, financial condition, results of operations and business prospects.
GNOG relies on strategic relationships with casinos and other gaming operators to offer GNOG’s products in certain jurisdictions. If GNOG cannot establish and manage such relationships with these partners, GNOG’s business, financial condition and results of operations could be adversely affected.
Under some states’ gaming laws, online betting is limited to a finite number of retail operators, who own a “skin” or “skins” under that state’s law. A “skin” is a legally-authorized license from a state to offer online betting services provided by a casino. The “skin” provides a market access opportunity for mobile operators to operate in the jurisdiction subject to the appropriate licensure and other required approvals from the appropriate regulatory body. The entities that control those “skins,” and the numbers of “skins” available, are typically determined by state betting laws. In order to offer iGaming and online sports betting in Michigan, GNOG currently intends to rely on a tribal casino in order to get access through a “skin.” This “skin” is what allows GNOG to gain access to a jurisdiction where online operators are required to have a retail relationship. If GNOG cannot establish, renew or manage GNOG’s relationships, as it pertains to Michigan or any other states GNOG enters in the future, GNOG’s relationships could be terminated, and GNOG would not be allowed to operate in those jurisdictions until GNOG enters into new relationships, which could be at significantly higher cost. As a result, GNOG’s business, financial condition and results of operations could be adversely affected.
GNOG relies on licenses to use the intellectual property rights of third parties, which are incorporated into GNOG’s products and services. Failure to renew or expand existing licenses may require GNOG to modify, limit or discontinue certain offerings, which could materially affect its business, financial condition and results of operations.
GNOG relies on products, technologies and intellectual property that GNOG licenses from third parties, for use in GNOG’s business-to-business and business-to-consumers offerings. Substantially all of GNOG’s offerings and services use intellectual property licensed from third parties. The future success of GNOG’s business may depend, in part, on GNOG’s ability to obtain, retain and expand licenses for popular technologies and games in a competitive market. GNOG cannot assure that these third-party licenses, or support for such licensed products and technologies, will continue to be available to GNOG on commercially reasonable terms, if at all. In the event that GNOG cannot renew and expand existing licenses, GNOG may be required to discontinue or limit GNOG’s use of the products that include or incorporate the licensed intellectual property.
Some of GNOG’s license agreements contain minimum guaranteed royalty payments to the third-party licensor. If GNOG is unable to generate sufficient revenue to offset the minimum guaranteed royalty payments, it could have a material adverse effect on GNOG’s results of operations, cash flows and financial condition. GNOG’s license agreements generally allow for assignment by GNOG in the event of a strategic transaction but some contain limited termination rights in the event of an attempted assignment by GNOG. Certain of GNOG’s license agreements grant the licensor rights to audit GNOG’s use of the licensor’s intellectual property. Disputes with licensors over license agreements could result in the payment of additional royalties or penalties by GNOG, cancellation or non-renewal of the underlying license or litigation.
The regulatory review process and licensing requirements also may preclude GNOG from using technologies owned or developed by third parties if those parties are unwilling to subject themselves to regulatory review or do not meet regulatory requirements. Some gaming authorities require gaming manufacturers to obtain approval before engaging in certain transactions, such as acquisitions, mergers, reorganizations, financings, stock offerings and share repurchases. Obtaining such approvals can be costly and time consuming, and GNOG cannot assure that such approvals will be granted or that the approval process will not result in delays or disruptions to GNOG’s strategic objectives.
GNOG’s growth will depend, in part, on the success of GNOG’s strategic relationships with third parties. Overreliance on certain third parties, or GNOG’s inability to extend existing relationships or agree to new relationships may cause unanticipated costs and impact GNOG’s future financial performance.
GNOG relies on relationships with advertisers, casinos and other third parties in order to attract users to GNOG’s platform. These relationships along with providers of online services, search engines, social
 
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media, directories and other websites and ecommerce businesses direct consumers to GNOG’s platform. In addition, many of the parties with whom GNOG has advertising arrangements provide advertising services to other companies, including other gaming platforms with whom GNOG competes. While GNOG believes there are other third parties that could drive users to GNOG’s platform, adding or transitioning to them may disrupt GNOG’s business and increase GNOG’s costs. In the event that any of GNOG’s existing relationships or GNOG’s future relationships fails to provide services to GNOG in accordance with the terms of GNOG’s arrangement, or at all, and GNOG is not able to find suitable alternatives, this could impact GNOG’s ability to attract consumers in a cost-effective manner and thus harm GNOG’s business, financial condition, results of operations and business prospects.
GNOG’s growth prospects may suffer if GNOG is unable to develop successful offerings or if GNOG fails to pursue additional offerings. In addition, if GNOG fails to make the right investment decisions in GNOG’s offerings and technology platform, GNOG may not attract and retain key users and GNOG’s revenue and results of operations may decline.
The industries in which GNOG operates are subject to frequent changes in standards, technologies, products and service offerings, as well as in customer demands, preferences and regulations. GNOG must continuously make decisions regarding which offerings and technology to invest in to meet customer demand in compliance with evolving industry standards and regulatory requirements and must continually introduce and successfully market new and innovative technologies, offerings and enhancements to remain competitive and effectively stimulate customer demand, acceptance and engagement. GNOG’s ability to engage, retain, and increase its user base and to increase its revenue depends heavily on its ability to successfully implement new offerings, both independently and jointly with third parties. GNOG may introduce significant changes to its existing platforms and offerings or develop and introduce new and unproven products, with which GNOG has little or no prior development or operating experience. The process of developing new offerings and systems is inherently complex and uncertain, and new offerings may not be well received by users, even if well reviewed and of high quality. If GNOG is unable to develop technology and products that address users’ needs or enhance and improve GNOG’s existing platforms and offerings in a timely manner, that could have a material adverse effect on GNOG’s business, financial condition, results of operations and business prospects.
Although GNOG intends to continue investing in innovative content and systems, if new or enhanced offerings fail to engage GNOG’s users or partners, GNOG may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify GNOG’s investments, any of which may seriously harm GNOG’s business. In addition, management may not properly ascertain or assess the risks of new initiatives, and subsequent events may alter the risks that GNOG evaluated at the time it decided to execute any new initiative. Developing new offerings may also divert GNOG’s management’s attention from other business issues and opportunities. Even if GNOG’s new offerings attain market acceptance, those new offerings could cannibalize the market share of GNOG’s existing product offerings or share of GNOG’s users’ wallets in a manner that could negatively impact their economics. Furthermore, such expansion of GNOG’s business may increase the complexity of GNOG’s business and place a significant strain on GNOG’s management, operations, technical systems and financial resources and GNOG may not recover the often-substantial up-front costs of developing and marketing new offerings or recover the opportunity cost of diverting management and financial resources away from other offerings. In the event of continued growth of GNOG’s operations, products or in the number of third-party relationships, GNOG may not have adequate resources, operationally, technologically or otherwise to support such growth and the quality of its existing platforms, offerings or relationships with third parties. Conversely, failure to effectively identify, pursue and execute new offerings, or to efficiently adapt GNOG’s processes and infrastructure to meet the needs of GNOG’s innovations, may adversely affect GNOG’s business, financial condition, results of operations and business prospects.
Any new offerings may also require GNOG’s users to learn new skills to use GNOG’s platform. This could create friction in the adoption of new offerings and new user additions related to any new offerings. To date, new offerings and enhancements on GNOG’s existing platforms have not hindered GNOG’s user growth or engagement. To the extent that future users are less willing to invest the time to learn to use GNOG’s products, and if GNOG is unable to make GNOG’s products easier to learn to use, GNOG’s user growth
 
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or engagement could be affected, and GNOG’s business could be harmed. GNOG may develop new products that increase user engagement and costs without increasing revenue.
Additionally, GNOG may make poor or unprofitable decisions regarding these investments. If new or existing competitors offer more attractive offerings, GNOG may lose users or users may decrease their spending on GNOG’s platforms. New customer preferences, superior competitive offerings, new industry standards or changes in the regulatory environment could render GNOG’s existing offerings unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to GNOG’s platforms or business model. GNOG’s failure to adapt to a rapidly changing market or evolving customer demands could harm GNOG’s business, financial condition, results of operations and business prospects.
GNOG’s growth inherently depends on GNOG’s ability to attract and retain users, and the loss of GNOG’s users, failure to attract new users in a cost-effective manner, or failure to effectively manage GNOG’s growth could adversely affect GNOG’s business, financial condition, results of operations and business prospects.
GNOG’s ability to achieve growth in revenue in the future will depend, in large part, upon GNOG’s ability to attract new users to its offerings, retain existing users of its offerings and reactivate users in a cost-effective manner. Achieving growth in GNOG’s database of users may require GNOG to engage in increasingly costly sales and marketing efforts, which may impact GNOG’s return on investment. GNOG has used and expects to continue to use a variety of free and paid marketing channels, in combination with compelling offers and exciting games to achieve GNOG’s objectives. For paid marketing, GNOG intends to leverage a broad array of advertising channels. If the search engines on which GNOG relies modify their algorithms, change their terms around gaming, or if the prices at which GNOG may purchase listings increase, then GNOG’s costs could increase, and fewer users may visit GNOG’s website. If links to GNOG’s website are not displayed prominently in online search results, if fewer users visit GNOG’s website, if GNOG’s other digital marketing campaigns are not effective, of it the costs of attracting users using any of GNOG’s current methods significantly increase, then GNOG’s ability to efficiently attract new users could be reduced, GNOG’s revenue could decline and GNOG’s business, financial condition and results of operations could be harmed.
In addition, GNOG’s ability to increase the number of users of GNOG’s offerings will depend on continued user adoption of iGaming and online sports betting. Growth in the iGaming and online sports betting industries and the level of demand for and market acceptance of GNOG’s product offerings will be subject to a high degree of uncertainty. GNOG cannot assure that consumer adoption of GNOG’s product offerings will continue or exceed current growth rates, or that the industry will achieve more widespread acceptance.
Additionally, as technological or regulatory standards change and GNOG modifies its platform to comply with those standards, GNOG may need users to take certain actions to continue accessing GNOG’s offerings, such as performing age verification checks or accepting new terms and conditions. Users may stop using GNOG’s product offerings if the quality of the user experience on its platform, including age checks, terms and conditions acceptance, and support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the customer experience generally offered by competitive offerings.
GNOG may require additional capital to support its growth initiatives, and such capital may not be available on economically favorable terms, if at all. This could hamper GNOG’s growth and adversely affect GNOG’s business.
GNOG intends to make significant investments to support its growth and may require additional capital to address business challenges, including the need to expand to new markets, develop new offerings and features or enhance its existing platforms, improve its operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, GNOG may need to engage in equity or debt financings to secure additional funds. GNOG’s ability to obtain additional capital when required will depend on GNOG’s business plans, investor demand, GNOG’s operating performance, capital markets conditions and other variables, some of which are uncertain. If GNOG raises additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of GNOG’s currently issued and outstanding equity or debt, and GNOG’s existing stockholders