|
Nevada
|
| |
6770
|
| |
84-4052441
|
|
|
(State of Incorporation)
|
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(IRS Employer
Identification No.) |
|
|
Joel L. Rubinstein
Jonathan P. Rochwarger Elliott M. Smith Winston & Strawn LLP 200 Park Avenue New York, New York 10166 Tel: (212) 294-6700 |
| |
Scott D. Miller
Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 Tel: (212) 558-4000 |
| |
R. Stanton Dodge
DraftKings Inc. 222 Berkeley Street, 5th Floor Boston, Massachusetts 02116 |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☒
|
|
| | | |
Emerging growth company
☒
|
|
|
Title of each class of securities to
be registered |
| |
Amount to be
registered(1) |
| |
Proposed maximum
offering price per share |
| |
Proposed maximum
aggregate offering price |
| |
Amount of
registration fee |
| ||||||||||||
|
Shares of Class A Common Stock(2)(3)
|
| | | | 87,306,117 | | | | | | 10.66(4) | | | | | | 930,683,207.22(4) | | | | | $ | 120,802.68(11) | | |
| Warrants(5) | | | | | 19,666,667 | | | | | | 2.34(6) | | | | | | 46,020,000.78(6) | | | | | $ | 5,973.40(11) | | |
|
Shares of Class A Common Stock(3)(7)
|
| | | | 19,666,667 | | | | | $ | 11.50(8) | | | | | | 226,166,670.50(8) | | | | | $ | 29,356.43(11) | | |
|
Shares of Class A Common Stock(9)
|
| | | | 4,440,592 | | | | | $ | 13.87(10) | | | | | $ | 61,591,011.04(10) | | | | | $ | 7,994.51 | | |
|
Total
|
| | | | | | | | | | | | | | | $ | 1,264,460,889.54 | | | | | $ | 164,127.02(12) | | |
| [ ], 2020 | | | By Order of the Board of Directors, | |
| | | |
Jeff Sagansky
Chief Executive Officer and Chairman |
|
| | |
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| | | | F-1 | | | |
| | | | A-1 | | | |
| | | | B-1 | | | |
| | | | C-1 | | | |
| | | | D-1 | | | |
| | | | E-1 | | | |
| | | | F-1 | | | |
| | | | G-1 | | |
| | |
Assuming No
Redemptions of Public Shares |
| |
Assuming
Maximum Redemptions of Public Shares(1) |
| ||||||
DK Equityholders
|
| | | | 59.5% | | | | | | 66.0% | | |
SBT Equityholders
|
| | | | 13.2% | | | | | | 14.6% | | |
DEAC Public Stockholders
|
| | | | 12.8% | | | | | | 3.3% | | |
Initial Stockholders
|
| | | | 1.2% | | | | | | 1.3% | | |
PIPE Investors(2)
|
| | | | 13.3% | | | | | | 14.8% | | |
(in millions)
|
| |
Assuming No
Redemption(1) |
| |
Assuming
Maximum Redemption(2) |
| ||||||
Sources | | | | ||||||||||
Proceeds from Trust Account(3)
|
| | | $ | 403 | | | | | $ | 95 | | |
Private Placement
|
| | | | 305 | | | | | | 305 | | |
Convertible Notes(4)
|
| | | | 109 | | | | | | 109 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Total Sources
|
| | | $ | 3,554 | | | | | $ | 3,246 | | |
Uses | | | | | | | | | | | | | |
Cash to Balance Sheet
|
| | | $ | 569 | | | | | $ | 261 | | |
Cash to SBT Shareholders(5)
|
| | | | 198 | | | | | | 198 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Transaction costs(7)
|
| | | | 50 | | | | | | 50 | | |
Total Uses
|
| | | $ | 3,554 | | | | | $ | 3,246 | | |
|
| | |
For the Period
from March 27, 2019 (Date of Inception) to September 30, 2019 |
| |||
Statement of Operations Data | | | |||||
Revenue
|
| | | $ | — | | |
General and administrative expenses
|
| | | | 433,756 | | |
Loss from operations
|
| | | | (433,756) | | |
Other income: | | | | | | | |
Interest income
|
| | | | 3,390,875 | | |
Provision for income tax
|
| | | | (620,995) | | |
Net income
|
| | | $ | 2,336,124 | | |
Weighted average shares outstanding of Class A common stock
|
| | | | 40,000,000 | | |
Basic and diluted net income per share, Class A
|
| | | $ | 0.06 | | |
Weighted average shares outstanding of Class B common stock
|
| | | | 10,014,960 | | |
Basic and diluted net loss per share, Class B
|
| | | $ | (0.01) | | |
| | |
September 30,
2019 |
| |||
Balance Sheet Data | | | |||||
Total assets
|
| | | $ | 403,775,665 | | |
Total liabilities
|
| | | | 14,470,410 | | |
Total shareholders’ equity
|
| | | | 389,305,255 | | |
| | |
Nine Months Ended
September 30, 2019 |
| |
Nine Months Ended
September 30, 2018 |
| |
For The Year Ended
December 31, 2018 |
| |
For The Year Ended
December 31, 2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Statement of Operations Data | | | | | | ||||||||||||||||||||
Revenue
|
| | | $ | 191,995 | | | | | | 133,016 | | | | | $ | 226,277 | | | | | | 191,844 | | |
Total costs and expenses
|
| | | | 307,411 | | | | | | 208,639 | | | | | | 303,058 | | | | | | 265,042 | | |
Loss from operations
|
| | | | (115,416) | | | | | | (75,623) | | | | | | (76,781) | | | | | | (73,198) | | |
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income
|
| | | | 1,364 | | | | | | 537 | | | | | | 666 | | | | | | (1,541) | | |
Other expense, net
|
| | | | | | | | | | | | | | | | | | | | | | (607) | | |
Income Tax Expense
|
| | | | 35 | | | | | | 63 | | | | | | 105 | | | | | | 210 | | |
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | | | | $ | (76,220) | | | | | $ | (75,556) | | |
Statement of Cash Flows Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities
|
| | | | (64,168) | | | | | | (52,225) | | | | | | (45,830) | | | | | | (88,437) | | |
Net cash provided by (used in) investing activities
|
| | | | (25,971) | | | | | | (13,711) | | | | | | (26,421) | | | | | | (7,715) | | |
Net cash provided by (used in) financing activities
|
| | | | 8,246 | | | | | | 91,862 | | | | | | 140,892 | | | | | | 118,531 | | |
| | |
September 30,
2019 |
| |
September 30,
2018 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance Sheet Data | | | | | | ||||||||||||||||||||
Total assets
|
| | | $ | 259,839 | | | | | | N/A | | | | | $ | 299,393 | | | | | $ | 183,033 | | |
Total liabilities
|
| | | | 290,505 | | | | | | N/A | | | | | | 223,343 | | | | | | 182,389 | | |
Total redeemable convertible preferred stock and stockholders’ deficit
|
| | | | (30,666) | | | | | | N/A | | | | | | 76,050 | | | | | | 644 | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
Adjusted EBITDA (dollars in thousands)(1)
|
| | | $ | (92,255) | | | | | $ | (62,851) | | | | | $ | (58,850) | | | | | $ | (49,946) | | |
Monthly Unique Payers (MUPs) (in thousands)(2)
|
| | | | 565 | | | | | | 485 | | | | | | 601 | | | | | | 574 | | |
Average Revenue per MUP (ARPMUP) (in whole
dollars)(2) |
| | | $ | 38 | | | | | $ | 30 | | | | | $ | 31 | | | | | $ | 28 | | |
| | |
Nine Months Ended
September 30, 2019 |
| |
Nine Months Ended
September 30, 2018 |
| |
For The Year Ended
December 31, 2018 |
| |
For The Year Ended
December 31, 2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Statement of Operations Data | | | | | | ||||||||||||||||||||
Revenue
|
| | | € | 68,345 | | | | | € | 69,631 | | | | | € | 94,147 | | | | | € | 66,087 | | |
Total costs and expenses
|
| | | | 61,190 | | | | | | 50,393 | | | | | | 66,560 | | | | | | 49,393 | | |
Profit from operations
|
| | | € | 7,155 | | | | | | 19,238 | | | | | € | 27,587 | | | | | | 16,694 | | |
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial income
|
| | | | 22 | | | | | | 121 | | | | | | 97 | | | | | | 37 | | |
Financial expenses
|
| | | | 676 | | | | | | 44 | | | | | | 340 | | | | | | 177 | | |
Income tax expense
|
| | | | 297 | | | | | | 417 | | | | | | 565 | | | | | | 264 | | |
Net income
|
| | | € | 6,204 | | | | | € | 18,898 | | | | | € | 26,779 | | | | | € | 16,290 | | |
Statement of Cash Flows Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities
|
| | | € | 14,744 | | | | | € | 15,310 | | | | | € | 30,949 | | | | | € | 18,260 | | |
Net cash provided by (used in) investing activities
|
| | | | (14,055) | | | | | | (12,875) | | | | | | (17,384) | | | | | | (14,307) | | |
Net cash provided by (used in) financing activities
|
| | | | (12,279) | | | | | | (445) | | | | | | (1,184) | | | | | | 190 | | |
| | |
September 30,
2019 |
| |
September 30,
2018 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance Sheet Data | | | | | | ||||||||||||||||||||
Total assets
|
| | | € | 92,418 | | | | | | N/A | | | | | € | 72,656 | | | | | € | 43,947 | | |
Total liabilities
|
| | | | 37,920 | | | | | | N/A | | | | | | 14,207 | | | | | | 11,057 | | |
Total equity
|
| | | | 54,498 | | | | | | N/A | | | | | | 58,449 | | | | | | 32,890 | | |
| | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| ||||||
| | |
(in thousands, except share and per share data)
|
| |||||||||
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data Nine Months Ended September 30, 2019
|
| | | | | | | | | | | | |
Revenue
|
| | | $ | 268,773 | | | | | $ | 268,773 | | |
Net loss per share – basic and diluted
|
| | | $ | (0.37) | | | | | $ | (0.41) | | |
Weighted-average shares outstanding – basic and diluted
|
| | | | 337,078,329 | | | | | | 306,558,197 | | |
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data Year Ended December 31, 2018
|
| | | | | | | | | | | | |
Revenue
|
| | | $ | 308,533 | | | | | $ | 308,533 | | |
Net loss per share – basic and diluted
|
| | | $ | (0.29) | | | | | $ | (0.31) | | |
Weighted-average shares outstanding – basic and diluted
|
| | | | 337,078,329 | | | | | | 306,558,197 | | |
Summary Unaudited Pro Forma Condensed Combined Balance Sheet
Data as of September 30, 2019 |
| | | ||||||||||
Total assets
|
| | | $ | 1,693,817 | | | | | $ | 1,396,479 | | |
Total liabilities
|
| | | $ | 307,616 | | | | | $ | 307,616 | | |
Total deficit
|
| | | $ | 1,386,201 | | | | | $ | 1,088,863 | | |
| | | | | | | | |
Combined Pro Forma
|
| |||||||||
| | |
Diamond
Eagle (Historical) |
| |
Pro Forma
Combined (Assuming No Redemption) |
| |
Pro Forma
Combined (Assuming Maximum Redemption) |
| |||||||||
As of and for the Nine Months Ended September 30, 2019 (Unaudited) |
| | | | | | | | | | | | | | | | | | |
Book Value per share(1)
|
| | | $ | 0.10 | | | | | $ | 4.11 | | | | | $ | 3.55 | | |
Weighted average shares outstanding of Class A common stock – basic and diluted
|
| | | | 40,000,000 | | | | | | 337,078,329 | | | | | | 306,558,197 | | |
Weighted average shares outstanding of Class B common stock – basic and diluted
|
| | | | 10,014,960 | | | | | | | | | | | | | | |
Net income (loss) per share of Class A common stock – basic and diluted
|
| | | $ | 0.06 | | | | | $ | (0.37) | | | | | $ | (0.41) | | |
Net income (loss) per share of Class B common stock – basic and diluted
|
| | | $ | (0.01) | | | | | | | | | | | | | | |
| | | | | | | | |
Combined Pro Forma
|
| |||||||||
| | |
Diamond
Eagle (Historical) |
| |
Pro Forma
Combined (Assuming No Redemption) |
| |
Pro Forma
Combined (Assuming Maximum Redemption) |
| |||||||||
As of and for the Year Ended December 31, 2018 | | | | | | | | | | | | | | | | | | | |
Book Value per share(1)
|
| | | | N/A(2) | | | | | | N/A(3) | | | | | | N/A(3) | | |
Weighted average shares outstanding of Class A common stock – basic and diluted
|
| | | | N/A(2) | | | | | | 337,078,329 | | | | | | 306,558,197 | | |
Weighted average shares outstanding of Class B common stock – basic and diluted
|
| | | | N/A(2) | | | | | | | | | | | | | | |
Net income (loss) per share of Class A common stock – basic and diluted
|
| | | | N/A(2) | | | | | $ | (0.29) | | | | | $ | (0.31) | | |
Net income (loss) per share of Class B common stock – basic and diluted
|
| | | | N/A(2) | | | | | | | | | | | | | | |
| | DEAC’S BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE BUSINESS COMBINATION PROPOSAL AND THE OTHER PROPOSALS TO BE PRESENTED AT THE SPECIAL MEETING ARE IN THE BEST INTERESTS OF AND ADVISABLE TO THE DEAC STOCKHOLDERS AND RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE PROPOSALS DESCRIBED ABOVE. | | |
| | |
2019E
|
| |
2020E
|
| |
2021E
|
| |||||||||
DraftKings
|
| | | $ | 305 | | | | | $ | 400 | | | | | $ | 550 | | |
SBT
|
| | | $ | 110 | | | | | $ | 140 | | | | | $ | 150 | | |
| | |
DraftKings +
SBT |
| |
High-Growth
Consumer Internet |
| |
Interactive
Gaming |
| |
E.U.
Sportsbook Operators |
| ||||||||||||
Enterprise Value/2021E Revenue
|
| | | | 3.9x | | | | | | 5.6x | | | | | | 4.4x | | | | | | 2.4x | | |
2019E to 2021E Revenue CAGR
|
| | | | 30% | | | | | | 26% | | | | | | 9% | | | | | | 5% | | |
Enterprise Value / 2021E Revenue – Growth Adjusted(1)
|
| | | | 0.13x | | | | | | 0.25x | | | | | | 0.57x | | | | | | 0.51x | | |
Enterprise Value / 2020E EBITDA(2)
|
| | | | 9.9x | | | | | | 26.7x | | | | | | 16.6x | | | | | | 10.1x | | |
(in millions)
|
| |
Assuming No
Redemption(1) |
| |
Assuming Maximum
Redemption(2) |
| ||||||
Sources | | | | ||||||||||
Proceeds from Trust Account(3)
|
| | | $ | 403 | | | | | $ | 95 | | |
Private Placement
|
| | | | 305 | | | | | | 305 | | |
Convertible Notes(4)
|
| | | | 109 | | | | | | 109 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Total Sources
|
| | | $ | 3,554 | | | | | $ | 3,246 | | |
Uses | | | | | | | | | | | | | |
Cash to Balance Sheet
|
| | | $ | 569 | | | | | $ | 261 | | |
Cash to SBT Shareholders(5)
|
| | | | 198 | | | | | | 198 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Transaction costs(7)
|
| | | | 50 | | | | | | 50 | | |
Total Uses
|
| | | $ | 3,554 | | | | | $ | 3,246 | | |
Advisory Charter Proposal
|
| |
Current Charter
|
| |
Proposed Charter
|
|
Advisory Proposal A –
Changes in Share Capital |
| | The Current Charter authorizes 401,000,000 shares, consisting of (a) 400,000,000 shares of common stock, including 380,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (b) 1,000,000 shares of preferred stock. | | | The Proposed Charter would authorize 2,100,000,000 shares, consisting of (a) 1,800,000,000 shares of common stock, including 900,000,000 shares of Class A common stock and 900,000,000 shares of Class B common stock, and (b) 300,000,000 shares of preferred stock. | |
Advisory Proposal B –
Voting Rights of Common Stock |
| | The Current Charter provides that the holders of each share of common stock of DEAC is entitled to one vote for each share on each matter properly submitted to the stockholders entitled to vote. | | | The Proposed Charter provides holders of shares of New DraftKings Class A common stock will be entitled to cast one vote per Class A share, and holders of shares of Class B common stock will be entitled to cast 10 votes per Class B share on each matter properly submitted to the stockholders entitled to vote. | |
Advisory Proposal C –
Declassification of the New DraftKings Board |
| | The Current Charter provides that the DEAC Board is divided into three classes, with only one class of directors being elected in each year and each class serving a three-year term. | | | The Proposed Charter provides that the New DraftKings board of directors will consist of one class of directors only, whose term will continue to the next annual meeting of stockholders. | |
Advisory Proposal D –
Limiting the Ability to Act by Written Consent |
| | The Current Charter provides that any action required or permitted to be taken by the stockholders of DEAC must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the | | | The Proposed Charter provides that any action required or permitted to be taken by the stockholders of New DraftKings may be taken by written consent; provided that, from and after the time that Mr. Robins beneficially owns less than a majority of the voting power of the outstanding shares of stock entitled to | |
Advisory Charter Proposal
|
| |
Current Charter
|
| |
Proposed Charter
|
|
| | | stockholders, other than with respect to the Class B common stock, which action may be taken by written consent. | | | vote thereon, no such action may be taken by written consent of the stockholders. | |
Advisory Proposal E –
Forum Selection |
| | The Current Charter provides that the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, will be the exclusive forum for certain actions and claims. | | | The Proposed Charter provides that the Eighth Judicial District Court of Clark County, Nevada, or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Nevada, will be the exclusive forum for certain actions and claims. | |
Advisory Proposal F –
Required Vote to Amend the Charter |
| | The Current Charter provides that the Current Charter may be amended in accordance with Delaware law; provided that, as long as any shares of Class B common stock are outstanding, any amendment to the Current Charter that would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock requires the vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class. | | | The Proposed Charter provides that amendments to certain provisions of the Proposed Charter will require the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings once Mr. Robins beneficially owns shares of New DraftKings stock representing less than a majority of the voting power of New DraftKings stock. Prior to that time, amendments to those provisions will require the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New DraftKings. | |
Advisory Proposal G –
Required Vote to Amend the Bylaws |
| | The Current Charter provides that the bylaws may only be adopted, amended, altered or repealed with the approval of a majority of the DEAC Board or by the holders of a majority of DEAC’s outstanding shares. | | | The Proposed Charter provides that the bylaws may be amended, altered, rescinded or repealed or adopted by the New DraftKings board of directors or the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New DraftKings once Mr. Robins beneficially owns shares of New DraftKings stock representing less than a majority of the voting power of the outstanding capital stock of New DraftKings. Prior to that time, amendments to those provisions through stockholder action will require the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New DraftKings. | |
Advisory Charter Proposal
|
| |
Current Charter
|
| |
Proposed Charter
|
|
Advisory Proposal H –
Required Vote to Change Number of Directors |
| | The Current Charter provides that the number of directors is determined by the DEAC Board. | | | The Proposed Charter provides that the number of directors is fixed and may be modified by the New DraftKings board of directors and, from and after the time that Mr. Robins ceases to beneficially own shares of New DraftKings stock representing at least a majority of the voting power of the capital stock of New DraftKings, the number of directors may be modified by the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings. | |
Advisory Proposal I –
Redemption Rights and Transfer Restrictions with Respect to Capital Stock held by Unsuitable Persons and Their Affiliates |
| | The Current Charter does not contain provisions providing for redemption rights and transfer restrictions with respect to capital stock held by Unsuitable Persons or their affiliates. | | | The Proposed Charter provides that common stock or any other equity securities of New DraftKings, or securities exchangeable or exercisable for, or convertible into, such other equity securities of New DraftKings, owned or controlled by an a stockholder who is an Unsuitable Person (as defined under “Description of New DraftKings Securities — Redemption Rights and Transfer Restrictions with Respect to Capital Stock Held by Unsuitable Persons and Their Affiliates”) or such person’s affiliate will be subject to mandatory sale and transfer on the terms and conditions set forth in the Proposed Charter. | |
Total Consideration (in 000s)
|
| |
Amounts
|
| |
Shares
|
| ||||||
Share consideration – DraftKings(2)
|
| | | $ | 3,003,106 | | | | | | 206,968 | | |
Cash consideration – SBTech(1)
|
| | | | 199,224 | | | | | | — | | |
Share consideration – SBTech(2)
|
| | | | 648,672 | | | | | | 44,705 | | |
Total Merger Consideration
|
| | | $ | 3,851,002 | | | | | | 251,673 | | |
Total Capitalization (in 000s)
|
| |
No
Redemptions |
| |
%
|
| |
Maximum
Redemptions |
| |
%
|
| ||||||||||||
DraftKings rollover equity – New DraftKings Class A
|
| | | | 206,968 | | | | | | 61.4 | | | | | | 206,968 | | | | | | 67.5 | | |
SBTech rollover equity
|
| | | | 44,705 | | | | | | 13.3 | | | | | | 44,705 | | | | | | 14.6 | | |
DEAC public shareholders
|
| | | | 40,000 | | | | | | 11.9 | | | | | | 9,480 | | | | | | 3.1 | | |
DEAC Founders Shares
|
| | | | 3,659 | | | | | | 1.1 | | | | | | 3,659 | | | | | | 1.2 | | |
DEAC shares issued upon conversion of Convertible
Notes |
| | | | 11,275 | | | | | | 3.3 | | | | | | 11,275 | | | | | | 3.7 | | |
DEAC shares issued in PIPE Offering
|
| | | | 30,471 | | | | | | 9.0 | | | | | | 30,471 | | | | | | 9.9 | | |
Total Shares
|
| | | | 337,078 | | | | | | 100.0 | | | | | | 306,558 | | | | | | 100.0 | | |
|
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 36,015 | | | | | $ | 871 | | | | | $ | 10,208 | | | | | $ | — | | | | | $ | 402,623 | | | | |
|
A
|
| | | | $ | (216,208) | | | | |
|
A
|
| | | | $ | 600,959 | | | | | $ | (307,338) | | | | |
|
K
|
| | | | $ | 293,621 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (14,000) | | | | |
|
B
|
| | | | | | | | | | | | | | | | | | | | | | | 10,000 | | | | |
|
L
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (32,430) | | | | |
|
C
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 109,166 | | | | |
|
D
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 304,714 | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (10,000) | | | | |
|
L
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Cash reserved for
customers |
| | | | 137,165 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 137,165 | | | | | | — | | | | | | | | | | | | 137,165 | | |
Receivables reserved for customers
|
| | | | 21,784 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 21,784 | | | | | | — | | | | | | | | | | | | 21,784 | | |
Trade receivables, net
|
| | | | — | | | | | | — | | | | | | 20,633 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 20,633 | | | | | | — | | | | | | | | | | | | 20,633 | | |
Prepaid expenses
|
| | | | — | | | | | | 281 | | | | | | — | | | | | | (281) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Prepaid expenses and other current assets
|
| | | | 11,456 | | | | | | — | | | | | | — | | | | | | 4,607 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 16,063 | | | | | | — | | | | | | | | | | | | 16,063 | | |
Other current assets
|
| | | | — | | | | | | — | | | | | | 4,326 | | | | | | (4,326) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Total current assets
|
| | | | 206,420 | | | | | | 1,152 | | | | | | 35,167 | | | | | | — | | | | | | 760,073 | | | | | | | | | | | | (216,208) | | | | | | | | | | | | 786,604 | | | | | | (297,338) | | | | | | | | | | | | 489,266 | | |
Cash and investments held in Trust Account
|
| | | | — | | | | | | 402,623 | | | | | | — | | | | | | — | | | | | | (402,623) | | | | |
|
A
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Property and equipment,
net |
| | | | 26,039 | | | | | | — | | | | | | 11,197 | | | | | | 123 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 37,359 | | | | | | — | | | | | | | | | | | | 37,359 | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
Intangible assets, net
|
| | | | 20,988 | | | | | | — | | | | | | 27,320 | | | | | | (123) | | | | | | — | | | | | | | | | | | | 234,523 | | | | |
|
B
|
| | | | | 282,708 | | | | | | — | | | | | | | | | 282,708 | | |
Goodwill
|
| | | | 4,738 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 580,283 | | | | |
|
A
|
| | | | | 585,021 | | | | | | — | | | | | | | | | 585,021 | | |
Deposits
|
| | | | 1,654 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,654 | | | | | | — | | | | | | | | | 1,654 | | |
Deferred tax assets
|
| | | | — | | | | | | — | | | | | | 154 | | | | | | (154) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Other non-current assets
|
| | | | — | | | | | | — | | | | | | 317 | | | | | | 154 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 471 | | | | | | — | | | | | | | | | 471 | | |
Total Assets
|
| | |
|
259,839
|
| | | |
|
403,775
|
| | | |
|
74,155
|
| | | |
|
—
|
| | | |
|
357,450
|
| | | | | | | | | |
|
598,598
|
| | | | | | | | | |
|
1,693,817
|
| | | |
|
(297,338)
|
| | | | | | |
|
1,396,479
|
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | — | | | | | | 470 | | | | | | — | | | | | | (470) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Accounts payable and accrued
expenses |
| | | | 68,108 | | | | | | — | | | | | | — | | | | | | 13,307 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 81,415 | | | | | | — | | | | | | | | | 81,415 | | |
Liabilities to customers
|
| | | | 158,949 | | | | | | — | | | | | | — | | | | | | 1,015 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 159,964 | | | | | | — | | | | | | | | | 159,964 | | |
Term note, current portion
|
| | | | 3,750 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | |
|
—
|
| | | | | — | | | | | | | | | | | | 3,750 | | | | | | — | | | | | | | | | 3,750 | | |
Settlement liability, current portion
|
| | | | 2,977 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 2,977 | | | | | | — | | | | | | | | | 2,977 | | |
Trade payables
|
| | | | — | | | | | | — | | | | | | 6,234 | | | | | | (6,234) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Other accounts payable
|
| | | | — | | | | | | — | | | | | | 7,618 | | | | | | (7,618) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Total current liabilities
|
| | | | 233,784 | | | | | | 470 | | | | | | 13,852 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 248,106 | | | | | | — | | | | | | | | | 248,106 | | |
Deferred underwriting commissions
|
| | | | — | | | | | | 14,000 | | | | | | — | | | | | | — | | | | | | (14,000) | | | | |
|
B
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Other long-term liabilities
|
| | | | 56,721 | | | | | | — | | | | | | — | | | | | | 519 | | | | | | — | | | | | | | | | | | | 2,270 | | | | |
|
C
|
| | | | | 59,510 | | | | | | — | | | | | | | | | 59,510 | | |
Accrued severance pay, net
|
| | | | — | | | | | | — | | | | | | 519 | | | | | | (519) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Total liabilities
|
| | | | 290,505 | | | | | | 14,470 | | | | | | 14,371 | | | | | | — | | | | | | (14,000) | | | | | | | | | | | | 2,270 | | | | | | | | | | | | 307,616 | | | | | | — | | | | | | | | | 307,616 | | |
Class A common stock subject to possible redemption
|
| | | | — | | | | | | 384,305 | | | | | | — | | | | | | — | | | | | | (384,305) | | | | |
|
F
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
Series E-1 Redeemable Convertible Preferred Stock
|
| | | | 119,671 | | | | | | — | | | | | | — | | | | | | — | | | | | | (119,671) | | | | |
|
H
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Series F Redeemable Convertible Preferred Stock
|
| | | | 138,453 | | | | | | — | | | | | | — | | | | | | — | | | | | | (138,453) | | | | |
|
H
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | |
|
D
|
| | | | | 4 | | | | |
|
A
|
| | | | | 34 | | | | | | (3) | | | | |
|
K
|
| | | | | 31 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3 | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4 | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | | | |
|
G
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21 | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class B common stock
|
| | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | (1) | | | | |
|
G
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 389 | | | | | | — | | | | | | — | | | | | | — | | | | | | (389) | | | | |
|
H
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Share capital
|
| | | | — | | | | | | — | | | | | | 3 | | | | | | — | | | | | | — | | | | | | | | | | | | (3) | | | | |
|
D
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Actuarial reserve
|
| | | | — | | | | | | — | | | | | | (156) | | | | | | — | | | | | | — | | | | | | | | | | | | 156 | | | | |
|
D
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Additional paid-in capital
|
| | | | 680,958 | | | | | | 2,663 | | | | | | — | | | | | | — | | | | | | (6,000) | | | | |
|
C
|
| | | | | 656,108 | | | | |
|
A
|
| | | | | 2,396,322 | | | | | | (307,335) | | | | |
|
K
|
| | | | | 2,088,987 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 112,753 | | | | |
|
D
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 304,711 | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 384,301 | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,336 | | | | |
|
I
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 258,492 | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | [ ] | | | | |
|
J
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Retained earnings
|
| | | | — | | | | | | 2,336 | | | | | | 59,175 | | | | | | (61,511) | | | | | | 0 | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accumulated deficit
|
| | | | (970,137) | | | | | | — | | | | | | — | | | | | | 61,511 | | | | | | (26,430) | | | | |
|
C
|
| | | | | (59,175) | | | | |
|
D
|
| | | | | (1,010,155) | | | | | | 10,000 | | | | |
|
L
|
| | | | | (1,000,155) | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,588) | | | | |
|
D
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (2,336) | | | | |
|
I
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | [ ] | | | | |
|
J
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (10,000) | | | | |
|
L
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total parent stockholders’ equity
|
| | | | (288,790) | | | | | | 5,000 | | | | | | 59,022 | | | | | | — | | | | | | 1,013,879 | | | | | | | | | | | | 597,090 | | | | | | | | | | | | 1,386,201 | | | | | | (297,338) | | | | | | | | | 1,088,863 | | |
Non-controlling interest
|
| | | | — | | | | | | — | | | | | | 762 | | | | | | — | | | | | | — | | | | | | | | | | | | (762) | | | | |
|
D
|
| | | | | — | | | | | | — | | | | | | | | | — | | |
Total stockholders’ equity
|
| | | | (288,790) | | | | | | 5,000 | | | | | | 59,784 | | | | | | — | | | | | | 1,013,879 | | | | | | | | | | | | 596,328 | | | | | | | | | | | | 1,386,201 | | | | | | (297,338) | | | | | | | | | 1,088,863 | | |
Total Liabilities and Stockholders’ Equity
|
| | |
|
259,839
|
| | | |
|
403,775
|
| | | |
|
74,155
|
| | | |
|
—
|
| | | |
|
357,450
|
| | | | | | | | | |
|
598,598
|
| | | | | | | | | |
|
1,693,817
|
| | | |
|
(297,338)
|
| | | | | | |
|
1,396,479
|
| |
|
| | |
For the Nine
Months Ended September 30, 2019 |
| |
For the period
from March 27, 2019 (inception) to September 30, 2019 |
| |
For the Nine
Months Ended September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the Nine
Months Ended September 30, 2019 |
| ||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No and Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Net revenue
|
| | | $ | 191,995 | | | | | $ | — | | | | | $ | 76,778 | | | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 268,773 | | |
Cost of revenue
|
| | | | 64,718 | | | | | | — | | | | | | 40,235 | | | | | | — | | | | | | — | | | | | | | | | | | | 9,127 | | | | |
|
AA
|
| | | | | 114,080 | | |
Gross Profit
|
| | | | 127,277 | | | | | | — | | | | | | 36,543 | | | | | | — | | | | | | — | | | | | | | | | | | | (9,127) | | | | | | | | | | | | 154,693 | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing
|
| | | | 124,867 | | | | | | — | | | | | | 4,924 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 129,791 | | |
General and administrative
|
| | | | 78,181 | | | | | | 434 | | | | | | 8,451 | | | | | | — | | | | | | (860) | | | | |
|
AA
|
| | | | | 495 | | | | |
|
BB
|
| | | | | 86,701 | | |
Product and technology
|
| | | | 39,645 | | | | | | — | | | | | | — | | | | | | 15,289 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 54,934 | | |
Research and development expenses
|
| | | | | | | | | | | | | | | | 15,289 | | | | | | (15,289) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses
|
| | | | 242,693 | | | | | | 434 | | | | | | 28,664 | | | | | | — | | | | | | (860) | | | | | | | | | | | | 495 | | | | | | | | | | | | 271,426 | | |
Loss from Operations
|
| | | | (115,416) | | | | | | (434) | | | | | | 7,879 | | | | | | — | | | | | | 860 | | | | | | | | | | | | (9,622) | | | | | | | | | | | | (116,733) | | |
Interest income (expense)
|
| | | | 1,364 | | | | | | — | | | | | | — | | | | | | (210) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,154 | | |
Other income – interest on trust account
|
| | | | — | | | | | | 3,391 | | | | | | — | | | | | | — | | | | | | (3,391) | | | | |
|
BB
|
| | | | | — | | | | | | | | | | | | — | | |
| | |
For the Nine
Months Ended September 30, 2019 |
| |
For the period
from March 27, 2019 (inception) to September 30, 2019 |
| |
For the Nine
Months Ended September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the Nine
Months Ended September 30, 2019 |
| ||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No and Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Financial Income
|
| | | | – | | | | | | – | | | | | | 25 | | | | | | (25) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | |
Financial Expenses
|
| | | | – | | | | | | – | | | | | | (235) | | | | | | 235 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | |
Loss before Income Tax Expense
|
| | | | (114,052) | | | | | | 2,957 | | | | | | 7,669 | | | | | | — | | | | | | (2,531) | | | | | | | | | | | | (9,622) | | | | | | | | | | | | (115,579) | | |
Income Tax Expense
|
| | | | 35 | | | | | | 621 | | | | | | 334 | | | | | | — | | | | | | 936 | | | | |
|
CC
|
| | | | | 6,919 | | | | |
|
CC
|
| | | | | 8,845 | | |
Net Income/(Loss)
|
| | | | (114,087) | | | | | | 2,336 | | | | | | 7,335 | | | | | | — | | | | | | (3,467) | | | | | | | | | | | | (16,541) | | | | | | | | | | | | (124,424) | | |
No Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 337,078,329 | | |
Loss per share (Basic and Diluted) attributable to Class A common stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.37) | | |
Maximum Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 306,558,197 | | |
Loss per share (Basic and Diluted) attributable to Class A common stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.41) | | |
| | |
For the Twelve Months Ended December 31, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Twelve
Months Ended December 31, 2018 |
| ||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting Policies and
Reclassification Adjustments (Note 2) |
| |
Pro Forma Adjustments
(Assuming No and Maximum Redemptions) (Note 4 — PF) |
| |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma Combined
(Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Net revenue
|
| | | $ | 226,277 | | | | | | | | | | | $ | 82,256 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | 308,533 | | |
Cost of revenue
|
| | | | 48,689 | | | | | | | | | | | | 49,551 | | | | | | — | | | | | | — | | | | | | 15,554 | | | | |
|
AA
|
| | | | | 113,911 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 117 | | | | |
|
BB
|
| | | | | | | | ||
Gross Profit
|
| | | | 177,588 | | | | | | – | | | | | | 32,705 | | | | | | — | | | | | | — | | | | | | (15,671) | | | | | | | | | | | | 194,622 | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing
|
| | | | 145,580 | | | | | | | | | | | | 4,399 | | | | | | — | | | | | | — | | | | | | 98 | | | | |
|
BB
|
| | | | $ | 150,077 | | |
General and administrative
|
| | | | 75,904 | | | | | | | | | | | | 9,024 | | | | | | — | | | | | | — | | | | | | 190 | | | | |
|
AA
|
| | | | | 86,578 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,460 | | | | |
|
BB
|
| | | | | | | |
Product and technology
|
| | | | 32,885 | | | | | | | | | | | | — | | | | | | 11,954 | | | | | | — | | | | | | 66 | | | | |
|
BB
|
| | | | | 44,905 | | |
Research and development expenses
|
| | | | | | | | | | | | | | | 11,954 | | | | | | (11,954) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses
|
| | | | 254,369 | | | | | | – | | | | | | 25,377 | | | | | | — | | | | | | — | | | | | | 1,814 | | | | | | | | | | | | 281,560 | | |
Loss from Operations
|
| | | | (76,781) | | | | | | – | | | | | | 7,328 | | | | | | — | | | | | | — | | | | | | (17,485) | | | | | | | | | | | | (86,938) | | |
Interest income (expense)
|
| | | | 666 | | | | | | | | | | | | — | | | | | | (287) | | | | | | — | | | | | | — | | | | | | | | | | | | 379 | | |
Other income – interest on trust account
|
| | | | – | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | |
For the Twelve Months Ended December 31, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Twelve
Months Ended December 31, 2018 |
| ||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting Policies and
Reclassification Adjustments (Note 2) |
| |
Pro Forma Adjustments
(Assuming No and Maximum Redemptions) (Note 4 — PF) |
| |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma Combined
(Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Financial Income
|
| | | | — | | | | | | | | | | | | 115 | | | | | | (115) | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Financial Expenses
|
| | | | — | | | | | | | | | | | | (402) | | | | | | 402 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Loss before Income Tax Expense
|
| | | | (76,115) | | | | | | — | | | | | | 7,041 | | | | | | — | | | | | | — | | | | | | (17,485) | | | | | | | | | | | | (86,559) | | |
Income Tax Expense
|
| | | | 105 | | | | | | | | | | | 668 | | | | | | — | | | | | | — | | | | | | 9,182 | | | | |
|
CC
|
| | | | | 9,955 | | | |
Net Income/(Loss)
|
| | | | (76,220) | | | | | | — | | | | | | 6,373 | | | | | | — | | | | | | — | | | | | | (26,667) | | | | | | | | | | | | (96,514) | | |
No Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares
outstanding |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 337,078,329 | | |
Loss per share (Basic and Diluted)
attributable to Class A common stockholders |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.29) | | |
Maximum Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 306,558,197 | | |
Loss per share (Basic and Diluted)
attributable to Class A common stockholders |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.31) | | |
| | |
$ / €
|
| |||
Period end exchange rate as of September 30, 2019
|
| | | | 1.09 | | |
Average exchange rate for nine months ended September 30, 2019
|
| | | | 1.12 | | |
Average exchange rate for year ended December 31, 2018
|
| | | | 1.18 | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | |
As of
September 30, 2019 |
| |
As of
September 30, 2019 |
| |||||||||
| | |
IFRS
SBTech (in EUR) |
| |
Total
Adjustments (in EUR) |
| | | | | | | |
U.S. GAAP
SBTech (in EUR) |
| |
U.S. GAAP
SBTech (in USD) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | € | 9,361 | | | | | € | — | | | | | | | | | | | € | 9,361 | | | | | $ | 10,208 | | |
Trade receivables, net
|
| | | | 18,921 | | | | | | — | | | | | | | | | | | | 18,921 | | | | | | 20,633 | | |
Other current assets
|
| | | | 3,833 | | | | | | 134 | | | | |
|
A
|
| | | | | 3,967 | | | | | | 4,326 | | |
Total current assets
|
| | | | 32,115 | | | | | | 134 | | | | | | | | | | | | 32,249 | | | | | | 35,167 | | |
NON-CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | 25,053 | | | | | | — | | | | | | | | | | | | 25,053 | | | | | | 27,320 | | |
Right-of-use assets
|
| | | | 24,662 | | | | | | (24,662) | | | | |
|
B
|
| | | | | — | | | | | | — | | |
Property, plant and equipment, net
|
| | | | 10,268 | | | | | | — | | | | | | | | | | | | 10,268 | | | | | | 11,197 | | |
Deferred tax assets
|
| | | | 275 | | | | | | (134) | | | | |
|
A
|
| | | | | 141 | | | | | | 154 | | |
Other non-current assets
|
| | | | 45 | | | | | | 246 | | | | |
|
B
|
| | | | | 291 | | | | | | 317 | | |
Total assets
|
| | | | 92,418 | | | | | | (24,416) | | | | | | | | | | | | 68,002 | | | | | | 74,155 | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade payables
|
| | | | 5,717 | | | | | | — | | | | | | | | | | | | 5,717 | | | | | | 6,234 | | |
Lease liabilities
|
| | | | 2,423 | | | | | | (2,423) | | | | |
|
B
|
| | | | | — | | | | | | — | | |
Other accounts payable
|
| | | | 6,986 | | | | | | — | | | | | | | | | | | | 6,986 | | | | | | 7,618 | | |
Total current liabilities
|
| | | | 15,126 | | | | | | (2,423) | | | | | | | | | | | | 12,703 | | | | | | 13,852 | | |
NON-CURRENT LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | 22,318 | | | | | | (22,318) | | | | |
|
B
|
| | | | | — | | | | | | — | | |
Accrued severance pay, net
|
| | | | 476 | | | | | | — | | | | | | | | | | | | 476 | | | | | | 519 | | |
Total non-current liabilities
|
| | | | 22,794 | | | | | | (22,318) | | | | | | | | | | | | 476 | | | | | | 519 | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share capital
|
| | | | 3 | | | | | | — | | | | | | | | | | | | 3 | | | | | | 3 | | |
Actuarial reserve
|
| | | | (143) | | | | | | — | | | | | | | | | | | | (143) | | | | | | (156) | | |
Retained earnings
|
| | | | 53,939 | | | | | | 325 | | | | |
|
B
|
| | | | | 54,264 | | | | | | 59,175 | | |
Equity attributable to owners of the parent
|
| | | | 53,799 | | | | | | 325 | | | | | | | | | | | | 54,124 | | | | | | 59,022 | | |
Non-controlling interest
|
| | | | 699 | | | | | | — | | | | | | | | | | | | 699 | | | | | | 762 | | |
Total equity
|
| | | | 54,498 | | | | | | 325 | | | | | | | | | | | | 54,823 | | | | | | 59,784 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | 92,418 | | | | | | (24,416) | | | | | | | | | | | | 68,002 | | | | | | 74,155 | | |
| | |
For nine months
ended September 30, 2019 |
| | | | | | | | | | | | | |
For nine months
ended September 30, 2019 |
| |
For nine months
ended September 30, 2019 |
| |||||||||
| | |
IFRS
SBTech (in EUR) |
| |
Total
Adjustments (in EUR) |
| | | | | | | |
U.S. GAAP
SBTech (in EUR) |
| |
U.S. GAAP
SBTech (in USD) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Revenue
|
| | | € | 68,345 | | | | | € | — | | | | | | | | | | | € | 68,345 | | | | | $ | 76,778 | | |
Cost of revenue
|
| | | | 35,816 | | | | | | — | | | | | | | | | | | | 35,816 | | | | | | 40,235 | | |
Gross profit
|
| | | | 32,529 | | | | | | — | | | | | | | | | | | | 32,529 | | | | | | 36,543 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and marketing expenses
|
| | | | 4,383 | | | | | | — | | | | | | | | | | | | 4,383 | | | | | | 4,924 | | |
General and administrative expenses
|
| | | | 7,381 | | | | | | 142 | | | | |
|
B
|
| | | | | 7,523 | | | | | | 8,451 | | |
Research and development expenses
|
| | | | 13,610 | | | | | | — | | | | | | | | | | | | 13,610 | | | | | | 15,289 | | |
Total operating costs and expenses
|
| | | | 25,374 | | | | | | 142 | | | | | | | | | | | | 25,516 | | | | | | 28,664 | | |
Operating income
|
| | | | 7,155 | | | | | | (142) | | | | | | | | | | | | 7,013 | | | | | | 7,879 | | |
Financial income
|
| | | | 22 | | | | | | — | | | | | | | | | | | | 22 | | | | | | 25 | | |
Financial expenses
|
| | | | 676 | | | | | | (467) | | | | |
|
B
|
| | | | | 209 | | | | | | 235 | | |
Profit before tax
|
| | | | 6,501 | | | | | | 325 | | | | | | | | | | | | 6,826 | | | | | | 7,669 | | |
Tax expenses
|
| | | | 297 | | | | | | — | | | | | | | | | | | | 297 | | | | | | 334 | | |
Net profit
|
| | | | 6,204 | | | | | | 325 | | | | | | | | | | | | 6,529 | | | | | | 7,335 | | |
| | |
For year ended
December 31, 2018 |
| | | | | | | | | | | | | |
For year ended
December 31, 2018 |
| |
For year ended
December 31, 2018 |
| |||||||||
| | |
IFRS
SBTech (in EUR) |
| |
Total
Adjustments (in EUR) |
| | | | | | | |
U.S. GAAP
SBTech (in EUR) |
| |
U.S. GAAP
SBTech (in USD) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Revenue
|
| | | € | 94,147 | | | | | € | (24,544) | | | | |
|
C
|
| | | | € | 69,603 | | | | | $ | 82,256 | | |
Cost of revenue
|
| | | | 45,087 | | | | | | (3,158) | | | | |
|
C
|
| | | | | 41,929 | | | | | | 49,551 | | |
Gross profit
|
| | | | 49,060 | | | | | | (21,386) | | | | | | | | | | | | 27,674 | | | | | | 32,705 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and marketing expenses
|
| | | | 3,722 | | | | | | — | | | | | | | | | | | | 3,722 | | | | | | 4,399 | | |
General and administrative expenses
|
| | | | 7,636 | | | | | | — | | | | | | | | | | | | 7,636 | | | | | | 9,024 | | |
Research and development expenses
|
| | | | 10,115 | | | | | | — | | | | | | | | | | | | 10,115 | | | | | | 11,954 | | |
Total operating costs and expenses
|
| | | | 21,473 | | | | | | — | | | | | | | | | | | | 21,473 | | | | | | 25,377 | | |
Operating income
|
| | | | 27,587 | | | | | | (21,386) | | | | | | | | | | | | 6,201 | | | | | | 7,328 | | |
Financial income
|
| | | | 97 | | | | | | — | | | | | | | | | | | | 97 | | | | | | 115 | | |
Financial expenses
|
| | | | 340 | | | | | | — | | | | | | | | | | | | 340 | | | | | | 402 | | |
Profit before tax
|
| | | | 27,344 | | | | | | (21,386) | | | | | | | | | | | | 5,958 | | | | | | 7,041 | | |
Tax expenses
|
| | | | 565 | | | | | | — | | | | |
|
C
|
| | | | | 565 | | | | | | 668 | | |
Net profit
|
| | | | 26,779 | | | | | | (21,386) | | | | | | | | | | | | 5,393 | | | | | | 6,373 | | |
|
(in thousands)
|
| | |||||
Cash consideration(1)
|
| | | $ | 212,826 | | |
Share consideration(2)
|
| | | | 656,112 | | |
Other consideration(3)
|
| | | | 3,382 | | |
Total estimated consideration
|
| | | | 872,320 | | |
|
Cash and cash equivalents
|
| | | $ | 10,208 | | |
|
Trade receivables, net
|
| | | | 20,633 | | |
|
Other current assets
|
| | | | 4,326 | | |
|
Property and equipment, net
|
| | | | 11,320 | | |
|
Intangible assets, net
|
| | | | 261,720 | | |
|
Deferred tax assets
|
| | | | 154 | | |
|
Other non-current assets
|
| | | | 317 | | |
|
Total Assets
|
| | | | 308,678 | | |
|
Trade payables
|
| | | | 6,234 | | |
|
Other accounts payable
|
| | | | 7,618 | | |
|
Other long-term liabilities
|
| | | | 2,270 | | |
|
Accrued severance pay, net
|
| | | | 519 | | |
|
Total liabilities
|
| | | | 16,641 | | |
|
Net assets acquired (a)
|
| | | | 292,037 | | |
|
Estimated purchase consideration (b)
|
| | | | 872,320 | | |
|
Estimated goodwill (b) - (a)
|
| | | | 580,283 | | |
Change in stock price
|
| |
Stock Price
|
| |
Estimated
Consideration |
| |
Goodwill
|
| |||||||||
Decrease of 10%
|
| | | $ | 13.06 | | | | | $ | 807,453 | | | | | $ | 515,416 | | |
Increase of 10%
|
| | | $ | 15.96 | | | | | $ | 937,187 | | | | | $ | 645,150 | | |
| | |
Preliminary Estimated
Asset Fair Value |
| |
Weighted Average
Useful Life (Years) |
| ||||||
| | |
(in thousands, except for useful life)
|
| |||||||||
Developed technology
|
| | | | 130,860 | | | | | | 10 | | |
User Relationships
|
| | | | 100,871 | | | | | | 15 | | |
Trademarks and Trade Names
|
| | | | 29,989 | | | | | | 15 | | |
| | |
Preliminary Estimated
Asset Fair Value |
| |
Weighted Average
Useful Life (Years) |
| |||
| | |
(in thousands, except for useful life)
|
| ||||||
Total
|
| | | | 261,720 | | | | | |
Less: Net intangible assets reported on SBTech’s historical financial statements
|
| | | | (27,197) | | | | | |
Pro forma adjustment
|
| | | | 234,523 | | | | | |
| | |
Nine Months Ended
September 30, 2019 |
| |
Year Ended
December 31, 2018 |
| ||||||||||||||||||
| | |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||||||||
Pro forma net loss
|
| | | | (124,424) | | | | | | (124,424) | | | | | | (96,514) | | | | | | (96,514) | | |
Weighted average shares outstanding of Class A common stock
|
| | | | 337,078,329 | | | | | | 306,558,197 | | | | | | 337,078,329 | | | | | | 306,558,197 | | |
Net loss per share (Basic and Diluted) attributable to Class A common stockholders(1)
|
| | | $ | (0.37) | | | | | $ | (0.41) | | | | | $ | (0.29) | | | | | $ | (0.31) | | |
Name
|
| |
Age
|
| |
Position
|
|
Jeff Sagansky | | |
67
|
| | Chief Executive Officer and Chairman | |
Eli Baker | | |
45
|
| |
President, Chief Financial Officer and Secretary
|
|
Scott M. Delman | | |
60
|
| | Director | |
Joshua Kazam | | |
42
|
| | Director | |
Fredric D. Rosen | | |
76
|
| | Director | |
Scott I. Ross | | |
39
|
| | Director | |
| | | |
DraftKings
|
| |
SBTech
|
|
| 2007 | | | | | |
•
SBTech was founded and officially began its operations.
|
|
| 2012 | | |
•
DraftKings began its operations and offered its first DFS contest to the public for the Major League Baseball (“MLB”) season.
|
| |
•
SBTech’s operator base had grown to six.
|
|
| 2013 | | |
•
MLB became the first major sports organization to invest in, and establish a relationship, with DraftKings.
•
We launched the first mobile app in the DFS industry.
|
| |
•
SBTech’s operator base had grown to eight and just over 200 employees.
|
|
| 2014 | | |
•
We acquired DraftStreet, a DFS operator, increasing our user base by more than 50%, and acquired Starstreet, another DFS operator.
•
We signed a two-year deal to become the official DFS provider of the National Hockey League.
|
| |
•
SBTech’s operator base had grown to 11 and just over 400 employees.
|
|
| 2015 | | |
•
We were named the official DFS game of NASCAR, Ultimate Fighting Championship and Major League Soccer, and announced partnership deals with major sports teams including the New England Patriots, New York Knicks and Chicago Cubs.
•
21st Century Fox America, Inc. (“FOX”) became the first major media company to invest in us.
•
We obtained a license from the United Kingdom Gambling Commission to provide facilities to offer daily fantasy sports contests and other forms of pool betting, and to manufacture gambling software.
|
| |
•
SBTech obtained a license from the United Kingdom Gambling Commission to provide facilities for real event betting and to manufacture gambling software.
|
|
| | | |
DraftKings
|
| |
SBTech
|
|
| 2016 | | |
•
We acquired a leading provider of DFS Mixed Martial Arts contests, Kountermove, to bolster our user base in the burgeoning space of combat sports.
•
We explored a possible combination with a DFS competitor, but did not receive Federal Trade Commission approval.
|
| |
•
SBTech re-domiciled SBTech in the Isle of Man, and acquired a Maltese B2B license from the Malta Gaming Authority for hosting and management of remote gaming operators.
•
SBTech acquired two Romanian licenses from the National Gambling Office of Romania for the production of gambling software and the hosting of a gambling platform.
•
SBTech launched our Sportsbook into the newly regulated Romanian and Portuguese jurisdictions, opened an office in London and accepted our first retail sports bet in Mexico.
|
|
| 2017 | | |
•
We were granted a skill gaming license in Malta, allowing for further expansion in the European Union.
|
| |
•
SBTech launched a sportsbook for the Czech Republic National Lottery, marking SBTech’s first major lottery partner.
•
SBTech’s sportsbook launched in the Spanish regulated market.
|
|
| 2018 | | |
•
PASPA was struck down by the U.S. Supreme Court, opening the potential for state-by-state authorization of sports betting.
•
We launched the first online sportsbook in New Jersey.
•
We opened our first retail sportsbooks in Atlantic City, New Jersey (Resorts Casino and Hotel) and D’Iberville, Mississippi (Scarlet Pearl Casino Resort).
|
| |
•
SBTech entered the Danish sports betting and iGaming industry by partnering with the Danish National Lottery, Danske Spil, under the brand YOUBET.
•
SBTech was awarded a B2B remote gambling license in Gibraltar, where we opened an office.
•
SBTech became one of the first sportsbook providers to be licensed in the state of Mississippi as a manufacturer and distributor by the Mississippi Gaming Commission, and we debuted our retail sportsbook at the Golden Nugget’s Biloxi Casino as well as two Churchill Downs properties.
•
SBTech was awarded a Casino Service Industry Enterprise transactional waiver by the New Jersey Gaming Board and debuted a retail sportsbook at the Golden Nugget Atlantic City.
|
|
| | | |
DraftKings
|
| |
SBTech
|
|
| 2019 | | |
•
We officially launched iGaming in New Jersey with blackjack, roulette, video poker and slots.
•
We announced a landmark partnership with the National Football League (“NFL”) which made us the Official Daily Fantasy Partner of the NFL.
•
We were named the Official Daily Fantasy Game of the PGA Tour.
•
Our online sportsbook launched in Indiana, New Hampshire, Pennsylvania and West Virginia.
•
We launched retail sportsbooks in Iowa (Wild Rose) and New York (del Lago).
•
We were selected by the state of New Hampshire as its exclusive sportsbook partner.
|
| |
•
SBTech launched our online sportsbook and iGaming offerings with Churchill Downs, and our online sportsbook with the Golden Nugget in New Jersey.
•
SBTech obtained conditional manufacturer and operator licenses from the Pennsylvania Gaming Commission, a manufacturer and Distributer license from the Arkansas Racing Commission and a temporary supplier’s license from the Indiana Gaming Commission, allowing us to launch our retail sportsbook in Pennsylvania, Indiana and Arkansas with Churchill Downs properties.
•
SBT Malta Limited signed a five-year agreement with the Oregon State Lottery to provide online and retail sportsbook offering, and successfully launched the first online sportsbook offering in the State of Oregon in October 2019. The retail sportsbook offering is expected to be rolled out mid-2020.
•
SBTech launched an online sportsbook for the State Lottery and Monopoly of Azerbaijan, and signed agreements to provide its online and retail sportsbook solution with the Finnish state lottery, Viekkaus, and the Swedish state lottery, Svenska Spel, in 2020.
|
|
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | | | | $ | 226,227 | | | | | $ | 191,844 | | |
Net Loss
|
| | | | (114,087) | | | | | | (75,149) | | | | | | (76,220) | | | | | | (75,556) | | |
Adjusted EBITDA(1)
|
| | | $ | (92,255) | | | | | $ | (62,851) | | | | | $ | (58,850) | | | | | $ | (49,946) | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | | | | $ | (76,220) | | | | | $ | (75,556) | | |
Adjusted for: | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 9,629 | | | | | | 4,757 | | | | | | 7,499 | | | | | | 6,301 | | |
Interest (income) expense, net
|
| | | | (1,364) | | | | | | (537) | | | | | | (666) | | | | | | 1,541 | | |
Income tax expense
|
| | | | 35 | | | | | | 63 | | | | | | 105 | | | | | | 210 | | |
Stock-based compensation
|
| | | | 8,519 | | | | | | 5,376 | | | | | | 7,210 | | | | | | 4,500 | | |
Transaction-related costs(1)
|
| | | | 2,603 | | | | | | — | | | | | | — | | | | | | 10,697 | | |
Litigation, settlement and related costs(2)
|
| | | | 2,410 | | | | | | 2,639 | | | | | | 3,222 | | | | | | 1,754 | | |
Other non-operating costs(3)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 607 | | |
Adjusted EBITDA
|
| | | $ | (92,255) | | | | | $ | (62,851) | | | | | $ | (58,850) | | | | | $ | (49,946) | | |
| | |
Nine months ended September 30,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||
Revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | | | | $ | 58,979 | | | | | | 44.3% | | |
Cost of revenue
|
| | | | 64,718 | | | | | | 26,576 | | | | | | 38,142 | | | | | | 143.5% | | |
Sales and marketing
|
| | | | 124,867 | | | | | | 107,127 | | | | | | 17,740 | | | | | | 16.6% | | |
Product and technology
|
| | | | 39,645 | | | | | | 22,897 | | | | | | 16,748 | | | | | | 73.1% | | |
General and administrative
|
| | | | 78,181 | | | | | | 52,039 | | | | | | 26,142 | | | | | | 50.2% | | |
Loss from operations
|
| | | | (115,416) | | | | | | (75,623) | | | | | | (39,793) | | | | | | 52.6% | | |
Interest income, net
|
| | | | 1,364 | | | | | | 537 | | | | | | 827 | | | | | | 154.0% | | |
Loss before income tax expense
|
| | | | (114,052) | | | | | | (75,086) | | | | | | (38,966) | | | | | | 51.9% | | |
Income tax expense
|
| | | | 35 | | | | | | 63 | | | | | | (28) | | | | | | -44.4% | | |
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | | | | $ | (38,938) | | | | | | 51.8% | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||
Revenue
|
| | | $ | 226,277 | | | | | $ | 191,844 | | | | | $ | 34,433 | | | | | | 17.9% | | |
Cost of revenue
|
| | | | 48,689 | | | | | | 31,750 | | | | | | 16,939 | | | | | | 53.4% | | |
Sales and marketing
|
| | | | 145,580 | | | | | | 156,632 | | | | | | (11,052) | | | | | | -7.1% | | |
Product and technology
|
| | | | 32,885 | | | | | | 20,212 | | | | | | 12,673 | | | | | | 62.7% | | |
General and administrative
|
| | | | 75,904 | | | | | | 56,448 | | | | | | 19,456 | | | | | | 34.5% | | |
Loss from operations
|
| | | | (76,781) | | | | | | (73,198) | | | | | | (3,583) | | | | | | 4.9% | | |
Interest income (expense), net
|
| | | | 666 | | | | | | (1,541) | | | | | | 2,207 | | | | | | -143.2% | | |
Other income (expense), net
|
| | | | — | | | | | | (607) | | | | | | 607 | | | | | | n.m. | | |
Loss before income taxes expense
|
| | | | (76,115) | | | | | | (75,346) | | | | | | (769) | | | | | | 1.0% | | |
Income tax expense
|
| | | | 105 | | | | | | 210 | | | | | | (105) | | | | | | -50.0% | | |
Net loss
|
| | | $ | (76,220) | | | | | $ | (75,556) | | | | | $ | (664) | | | | | | 0.9% | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Net cash used by operating activities
|
| | | $ | (64,168) | | | | | $ | (52,225) | | | | | $ | (45,830) | | | | | $ | (88,437) | | |
Net cash used in investing activities
|
| | | | (25,971) | | | | | | (13,711) | | | | | | (26,421) | | | | | | (7,715) | | |
Net cash provided by financing activities
|
| | | | 8,246 | | | | | | 91,862 | | | | | | 140,892 | | | | | | 118,531 | | |
Net increase (decrease) in cash
|
| | | | (81,893) | | | | | | 25,926 | | | | | | 68,641 | | | | | | 22,379 | | |
Cash at beginning of period
|
| | | | 117,908 | | | | | | 49,267 | | | | | | 49,267 | | | | | | 26,888 | | |
Cash at end of period
|
| | | $ | 36,015 | | | | | $ | 75,193 | | | | | $ | 117,908 | | | | | $ | 49,267 | | |
| | |
Total
|
| |
Less than
1 year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Operating lease obligations(1)
|
| | | $ | 57,539 | | | | | $ | 1,390 | | | | | $ | 13,418 | | | | | $ | 13,547 | | | | | $ | 29,184 | | |
Vendors and licenses(2)
|
| | | | 140,252 | | | | | | 26,738 | | | | | | 84,081 | | | | | | 20,283 | | | | | | 9,150 | | |
Debt obligations(3)
|
| | | | 14,750 | | | | | | 3,750 | | | | | | 11,000 | | | | | | — | | | | | | — | | |
Other commitments(4)
|
| | | | 2,977 | | | | | | — | | | | | | 2,977 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 215,518 | | | | | $ | 31,878 | | | | | $ | 111,476 | | | | | $ | 33,830 | | | | | $ | 38,334 | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(€ in thousands)
|
| |||||||||||||||||||||
Revenue
|
| | | € | 68,345 | | | | | € | 69,631 | | | | | € | 94,147 | | | | | € | 66,087 | | |
Gross profit
|
| | | | 32,529 | | | | | | 36,384 | | | | | | 49,060 | | | | | | 34,243 | | |
Net profit after tax
|
| | | | 6,204 | | | | | | 18,898 | | | | | | 26,779 | | | | | | 16,290 | | |
| | |
Nine months ended September 30,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
€ Change
|
| |
% Change
|
| ||||||||||||
| | |
(€ in thousands)
|
| |||||||||||||||||||||
Revenue | | | | € | 68,345 | | | | | € | 69,631 | | | | | € | (1,286) | | | | | | -1.8% | | |
Cost of revenue
|
| | | | 35,816 | | | | | | 33,247 | | | | | | 2,569 | | | | | | 7.7% | | |
Gross profit
|
| | | | 32,529 | | | | | | 36,384 | | | | | | (3,855) | | | | | | -10.6% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development expenses
|
| | | | 13,610 | | | | | | 8,409 | | | | | | 5,201 | | | | | | 61.9% | | |
Selling and marketing expenses
|
| | | | 4,383 | | | | | | 3,124 | | | | | | 1,259 | | | | | | 40.3% | | |
General and administrative expenses
|
| | | | 7,381 | | | | | | 5,613 | | | | | | 1,768 | | | | | | 31.5% | | |
Profit from operations
|
| | | | 7,155 | | | | | | 19,238 | | | | | | (12,083) | | | | | | -62.8% | | |
Financial income
|
| | | | 22 | | | | | | 121 | | | | | | (99) | | | | | | -81.8% | | |
Financial expense
|
| | | | 676 | | | | | | 44 | | | | | | 632 | | | | | | 1,436.4% | | |
Profit before tax
|
| | | | 6,501 | | | | | | 19,315 | | | | | | (12,814) | | | | | | -66.3% | | |
Tax expenses
|
| | | | 297 | | | | | | 417 | | | | | | (120) | | | | | | -28.8% | | |
Net profit
|
| | | € | 6,204 | | | | | € | 18,898 | | | | | € | (12,694) | | | | | | -67.2% | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
€ Change
|
| |
% Change
|
| ||||||||||||
| | |
(€ in thousands, except percentages)
|
| |||||||||||||||||||||
Revenue | | | | € | 94,147 | | | | | € | 66,087 | | | | | € | 28,060 | | | | | | 42.5% | | |
Cost of revenue
|
| | | | 45,087 | | | | | | 31,844 | | | | | | 13,243 | | | | | | 41.6% | | |
Gross profit
|
| | | | 49,060 | | | | | | 34,243 | | | | | | 14,817 | | | | | | 43.3% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development expenses
|
| | | | 10,115 | | | | | | 8,693 | | | | | | 1,422 | | | | | | 16.4% | | |
Selling and marketing expenses
|
| | | | 3,722 | | | | | | 2,964 | | | | | | 758 | | | | | | 25.6% | | |
General and administrative expenses
|
| | | | 7,636 | | | | | | 5,892 | | | | | | 1,744 | | | | | | 29.6% | | |
Profit from operations
|
| | | | 27,587 | | | | | | 16,694 | | | | | | 10,893 | | | | | | 65.3% | | |
Financial income
|
| | | | 97 | | | | | | 37 | | | | | | 60 | | | | | | 162.2% | | |
Financial expense
|
| | | | 340 | | | | | | 177 | | | | | | 163 | | | | | | 92.1% | | |
Profit before tax
|
| | | | 27,344 | | | | | | 16,554 | | | | | | 10,790 | | | | | | 65.2% | | |
Tax expenses
|
| | | | 565 | | | | | | 264 | | | | | | 301 | | | | | | 114.0% | | |
Net profit
|
| | | € | 26,779 | | | | | € | 16,290 | | | | | € | 10,489 | | | | | | 64.4% | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(€ in thousands)
|
| |||||||||||||||||||||
Net cash provided by operating activities
|
| | | € | 14,744 | | | | | € | 15,310 | | | | | € | 30,949 | | | | | € | 18,260 | | |
Net cash used in investing activities
|
| | | | (14,055) | | | | | | (12,875) | | | | | | (17,384) | | | | | | (14,307) | | |
Net cash provided by (used in) financing activities
|
| | | | (12,279) | | | | | | (445) | | | | | | (1,184) | | | | | | 190 | | |
Effects of exchange rate changes
|
| | | | 220 | | | | | | 75 | | | | | | (104) | | | | | | (6) | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | (11,370) | | | | | | 2,065 | | | | | | 12,277 | | | | | | 4,137 | | |
Cash, cash equivalents at beginning of period
|
| | | | 20,731 | | | | | | 8,454 | | | | | | 8,454 | | | | | | 4,317 | | |
Cash, cash equivalents at end of period
|
| | | € | 9,361 | | | | | € | 10,519 | | | | | € | 20,731 | | | | | € | 8,454 | | |
| | |
Total
|
| |
Less than
1 year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||
| | |
(€ in thousands)
|
| |||||||||||||||||||||||||||
Lease obligations(1)
|
| | | € | 26,746 | | | | | € | 3,227 | | | | | € | 6,767 | | | | | € | 6,080 | | | | | € | 10,672 | | |
| | |
Fair Market Value of New DraftKings Class A Common Stock
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption Date (period to expiration of warrants) |
| |
$10.00
|
| |
$11.00
|
| |
$12.00
|
| |
$13.00
|
| |
$14.00
|
| |
$15.00
|
| |
$16.00
|
| |
$17.00
|
| |
$18.00
|
| |||||||||||||||||||||||||||
57 months
|
| | | | 0.257 | | | | | | 0.277 | | | | | | 0.294 | | | | | | 0.310 | | | | | | 0.324 | | | | | | 0.337 | | | | | | 0.348 | | | | | | 0.358 | | | | | | 0.365 | | |
54 months
|
| | | | 0.252 | | | | | | 0.272 | | | | | | 0.291 | | | | | | 0.307 | | | | | | 0.322 | | | | | | 0.335 | | | | | | 0.347 | | | | | | 0.357 | | | | | | 0.365 | | |
51 months
|
| | | | 0.246 | | | | | | 0.268 | | | | | | 0.287 | | | | | | 0.304 | | | | | | 0.320 | | | | | | 0.333 | | | | | | 0.346 | | | | | | 0.357 | | | | | | 0.365 | | |
48 months
|
| | | | 0.241 | | | | | | 0.263 | | | | | | 0.283 | | | | | | 0.301 | | | | | | 0.317 | | | | | | 0.332 | | | | | | 0.344 | | | | | | 0.356 | | | | | | 0.365 | | |
45 months
|
| | | | 0.235 | | | | | | 0.258 | | | | | | 0.279 | | | | | | 0.298 | | | | | | 0.315 | | | | | | 0.330 | | | | | | 0.343 | | | | | | 0.356 | | | | | | 0.365 | | |
42 months
|
| | | | 0.228 | | | | | | 0.252 | | | | | | 0.274 | | | | | | 0.294 | | | | | | 0.312 | | | | | | 0.328 | | | | | | 0.342 | | | | | | 0.355 | | | | | | 0.364 | | |
39 months
|
| | | | 0.221 | | | | | | 0.246 | | | | | | 0.269 | | | | | | 0.290 | | | | | | 0.309 | | | | | | 0.325 | | | | | | 0.340 | | | | | | 0.354 | | | | | | 0.364 | | |
36 months
|
| | | | 0.213 | | | | | | 0.239 | | | | | | 0.263 | | | | | | 0.285 | | | | | | 0.305 | | | | | | 0.323 | | | | | | 0.339 | | | | | | 0.353 | | | | | | 0.364 | | |
33 months
|
| | | | 0.205 | | | | | | 0.232 | | | | | | 0.257 | | | | | | 0.280 | | | | | | 0.301 | | | | | | 0.320 | | | | | | 0.337 | | | | | | 0.352 | | | | | | 0.364 | | |
30 months
|
| | | | 0.196 | | | | | | 0.224 | | | | | | 0.250 | | | | | | 0.274 | | | | | | 0.297 | | | | | | 0.316 | | | | | | 0.335 | | | | | | 0.351 | | | | | | 0.364 | | |
27 months
|
| | | | 0.185 | | | | | | 0.214 | | | | | | 0.242 | | | | | | 0.268 | | | | | | 0.291 | | | | | | 0.313 | | | | | | 0.332 | | | | | | 0.350 | | | | | | 0.364 | | |
24 months
|
| | | | 0.173 | | | | | | 0.204 | | | | | | 0.233 | | | | | | 0.260 | | | | | | 0.285 | | | | | | 0.308 | | | | | | 0.329 | | | | | | 0.348 | | | | | | 0.364 | | |
21 months
|
| | | | 0.161 | | | | | | 0.193 | | | | | | 0.223 | | | | | | 0.252 | | | | | | 0.279 | | | | | | 0.304 | | | | | | 0.326 | | | | | | 0.347 | | | | | | 0.364 | | |
18 months
|
| | | | 0.146 | | | | | | 0.179 | | | | | | 0.211 | | | | | | 0.242 | | | | | | 0.271 | | | | | | 0.298 | | | | | | 0.322 | | | | | | 0.345 | | | | | | 0.363 | | |
15 months
|
| | | | 0.130 | | | | | | 0.164 | | | | | | 0.197 | | | | | | 0.230 | | | | | | 0.262 | | | | | | 0.291 | | | | | | 0.317 | | | | | | 0.342 | | | | | | 0.363 | | |
12 months
|
| | | | 0.111 | | | | | | 0.146 | | | | | | 0.181 | | | | | | 0.216 | | | | | | 0.250 | | | | | | 0.282 | | | | | | 0.312 | | | | | | 0.339 | | | | | | 0.363 | | |
9 months
|
| | | | 0.090 | | | | | | 0.125 | | | | | | 0.162 | | | | | | 0.199 | | | | | | 0.237 | | | | | | 0.272 | | | | | | 0.305 | | | | | | 0.336 | | | | | | 0.362 | | |
6 months
|
| | | | 0.065 | | | | | | 0.099 | | | | | | 0.137 | | | | | | 0.178 | | | | | | 0.219 | | | | | | 0.259 | | | | | | 0.296 | | | | | | 0.331 | | | | | | 0.362 | | |
3 months
|
| | | | 0.034 | | | | | | 0.065 | | | | | | 0.104 | | | | | | 0.150 | | | | | | 0.197 | | | | | | 0.243 | | | | | | 0.286 | | | | | | 0.326 | | | | | | 0.361 | | |
0 months
|
| | | | — | | | | | | — | | | | | | 0.042 | | | | | | 0.115 | | | | | | 0.179 | | | | | | 0.233 | | | | | | 0.281 | | | | | | 0.323 | | | | | | 0.361 | | |
| | |
DEAC Stockholder Rights
|
| |
New DraftKings Stockholder Rights
|
|
Authorized Capital Stock
|
| | The Current Charter authorizes 401,000,000 shares of capital stock, consisting of (a) 400,000,000 shares of common stock, including 380,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (b) 1,000,000 shares of preferred stock. | | |
New DraftKings will be authorized to issue 2,100,000,000 shares of capital stock, consisting of (i) 900,000,000 shares of Class A common stock, par value $0.0001 per share, (ii) 900,000,000 shares of Class B common stock, par value $0.0001 per share, and (iii) 300,000,000 shares of preferred stock, par value $0.0001 per share.
As of [ ], 2020, upon consummation of the Business Combination, we expect there will be [ ] million shares of New DraftKings Class A common stock and [ ] million shares of New DraftKings Class B common stock (in each case, assuming no redemptions) outstanding. Following consummation of the Business Combination, New DraftKings is not expected to have any preferred stock outstanding.
|
|
Rights of Preferred Stock
|
| | The Current Charter permits DEAC’s board of directors to provide out of the unissued shares of preferred stock for one or more series of preferred stock and to establish from time to time the number of shares to be included in each such series | | | The Proposed Charter permits New DraftKings’ board of directors to fix for any class or series of preferred stock the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, | |
| | |
DEAC Stockholder Rights
|
| |
New DraftKings Stockholder Rights
|
|
| | | and to fix the voting rights, if any, designations, powers, preference and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof. | | | including, without limitation, dividend rights, dividend rates, conversion rights, exchange rights, voting rights, rights and terms of redemption, dissolution preferences, and treatment in the case of a merger, business combination transaction, or sale of New DraftKings’ assets, which rights may be greater than the rights of the holders of the common stock. | |
Number and Qualification of Directors
|
| | The Current Charter provides that the number of directors of DEAC, other than those who may be elected by the holders of one or more series of preferred stock voting separately by class or series, will be fixed from time to time exclusively by DEAC’s board of directors pursuant to a resolution adopted by a majority of DEAC’s board of directors. | | | Subject to any rights of holders of preferred stock to elect additional directors under specified circumstances, the number of directors will be fixed from time to time pursuant to a resolution adopted by the New DraftKings board of directors, or, from and after the time that Mr. Robins beneficially owns less than a majority of the voting power of the outstanding capital stock of New DraftKings, by the affirmative vote of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings. Directors need not be stockholders of New DraftKings. | |
Classification of the Board of Directors
|
| | Delaware law permits a corporation to classify its board of directors into as many as three classes with staggered terms of office. Under the Current Charter, the DEAC Board is classified into three classes of directors with staggered terms of office. | | | The NRS permits a corporation to classify its board of directors into as many as four classes with staggered terms of office, where at least one-fourth of the directors must be elected annually. However, the New DraftKings amended and restated articles of incorporation does not provide for a classified board of directors, and thus all directors will be elected each year for one-year terms. | |
Removal of Directors
|
| | Under the DGCL, holders of a majority of shares of each class entitled to vote at an election of directors may vote to remove any director or the entire board without cause unless (i) the board is a classified board, in which case directors may be removed only for cause, or (ii) the corporation has cumulative voting, in which case, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect such director. Thus, under the DGCL, a director of a corporation that does not have a classified board or permit cumulative voting may be removed, without cause, by the affirmative vote of a majority of the outstanding | | |
The NRS requires the vote of the holders of at least two-thirds of voting power of the issued and outstanding stock entitled to vote at an election of directors in order to remove a director or all of the directors. Furthermore, the NRS does not make a distinction between removals for cause and removals without cause.
The New DraftKings amended and restated articles of incorporation provides that any or all of the directors may be removed from office at any time with or without cause by the affirmative vote of the holders representing not less than two-thirds of the voting power of the then-outstanding shares of capital stock of New DraftKings entitled to vote at an annual or special meeting duly noticed and called.
|
|
| | |
DEAC Stockholder Rights
|
| |
New DraftKings Stockholder Rights
|
|
| | |
shares entitled to vote at an election of directors.
The Current Charter provides that any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then-outstanding shares of capital stock of DEAC entitled to vote generally in the election of directors, voting together as a single class.
|
| | | |
Voting
|
| | The Current Charter provides that the holders of the Class A common stock and the Class B common stock exclusively possess all voting power with respect to DEAC. The holders of shares of DEAC common stock shall be entitled to one vote for each such share on each matter properly submitted to DEAC’s stockholders on which the holders of DEAC’s common stock are entitled to vote. | | | Holders of New DraftKings Class A common stock will be entitled to cast one vote per Class A share, while holders of New DraftKings Class B common stock will be entitled to cast 10 votes per Class B share. Generally, holders of all classes of New DraftKings common stock vote together as a single class, and an action is approved by New DraftKings stockholders if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, while directors are elected by a plurality of the votes cast. | |
Cumulative Voting
|
| | Delaware law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation; however, the Current Charter does not authorize cumulative voting. | | | Nevada law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its articles of incorporation as long as certain procedures are followed; however, the Proposed Charter does not authorize cumulative voting. | |
Vacancies on the Board of Directors
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| | The Current Charter provides that vacancies in DEAC’s board of directors and newly created directorships resulting from any increase in the authorized number of directors or resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum or by a sole remaining director (and not by stockholders). | | | Subject to the rights of holders of any series of preferred stock and the terms and conditions of the Stockholders Agreement, vacancies in the New DraftKings’ board of directors and newly created directorships resulting from any increase in the authorized number of directors or from any other cause will be filled by, and only by, a majority of the directors then in office, even though less than a quorum. | |
Special Meeting of the Board of Directors
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| | There is no such provision in the Current Charter. | | | Special meetings of the New DraftKings’ board of directors may be called by the Chairperson, the Chief Executive Officer, the President, or two or more Directors (or the sole Director, if applicable) of New DraftKings. | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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Stockholder Action by Written Consent
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The DGCL provides that, unless the articles or certificate of incorporation provides otherwise, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if the holders of outstanding stock having at least the minimum number of votes that would be necessary to authorize or take the action at a meeting of stockholders consent to the action in writing. In addition, the DGCL requires a corporation to give prompt notice of the taking of corporate action without a meeting by less than unanimous written consent to those stockholders who did not consent in writing.
Under the Current Charter, any action required or permitted to be taken by the stockholders of DEAC must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders, other than with respect to the Class B common stock with respect to which action may be taken by written consent.
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The NRS provides that, unless the articles of incorporation or bylaws provides otherwise, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the meeting, the holders of outstanding stock having at least a majority of the voting power of the capital stock of New DraftKings, or a different proportion of voting power if required for such action at the meeting, consent to the action in writing.
The New DraftKings amended and restated articles of incorporation provide that any action required or permitted to be taken by the stockholders of New DraftKings may be effected by an action by written consent in lieu of a meeting with the approval of the holders of outstanding capital stock having not less than the minimum voting power that would be necessary to authorize or take such action at a meeting at which all shares of capital stock entitled to vote thereon were present and voted; however, from and after the time that Mr. Robins beneficially owns less than a majority of the voting power of the capital stock of New DraftKings, no action which is required to be taken or which may be taken at any annual or special meeting of stockholders of New DraftKings may be taken by written consent without a meeting.
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Amendment of the Charter
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| | Under Delaware law, an amendment to a charter generally requires the approval of DEAC’s board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. | | |
Nevada law provides generally that a resolution of the board of directors is required to propose an amendment to a corporation’s articles of incorporation and that the amendment must be approved by the affirmative vote of a majority of the voting power of all classes of New DraftKings capital stock entitled to vote, as well as a majority of any class adversely affected.
Amendments to the Proposed Charter must be approved by (1) a majority of the combined voting power of all shares entitled to vote, voting together as a single class, so long as shares representing a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote are beneficially owned by Mr. Robins or (2) two-thirds of the combined voting
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | power of all shares entitled to vote, voting together as a single class, thereafter. | |
Amendment of the Bylaws
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| | DEAC’s board of directors is expressly authorized to make, alter, amend or repeal the amended and restated bylaws. The bylaws may also be adopted, amended, altered or repealed by the DEAC stockholders representing a majority of the voting power of all of the then-outstanding shares of capital stock of DEAC entitled to vote generally in the election of directors. | | | The New DraftKings amended and restated bylaws may be amended or repealed by the affirmative vote of a majority of the New DraftKings board of directors or by stockholders representing either a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote, so long as shares representing a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote are beneficially owned by Mr. Robins, or thereafter, by at least two-thirds of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote. | |
Quorum
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Board of Directors. A majority of DEAC’s board of directors constitutes a quorum at any meeting of DEAC’s board of directors.
Stockholders. The presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting constitutes a quorum.
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Board of Directors. At all meetings of the New DraftKings board of directors, a majority of the directors will constitute a quorum for the transaction of business.
Stockholders. The holders of a majority of the voting power of all shares of New DraftKings capital stock issued and outstanding and entitled to vote constitute a quorum at all meetings of New DraftKings stockholders for the transaction of business.
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Special Meetings of Stockholders
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Under Delaware law, a special meeting of stockholders may be called by the board of directors or by any other person authorized in the certificate of incorporation or bylaws to call a special stockholder meeting.
The DEAC bylaws provide that a special meeting of stockholders may be called by the Secretary of DEAC at the written request of the majority of the board of directors of DEAC, by the Chairman of the board, by the President of DEAC or by the stockholders owning a majority of the shares outstanding and entitled to vote.
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The NRS permits special meetings of stockholders to be called by the entire board of directors, any two directors or the President, unless the articles of incorporation or bylaws provide otherwise.
Subject to the rights, if any, of the holders of any class or series of preferred stock then outstanding of New DraftKings, special meetings of stockholders may be called at any time (a) by the Chairman of the New DraftKings board of directors or by the Chief Executive Officer upon direction of the Board pursuant to a resolution adopted by a majority of the entire New DraftKings board of directors or by the holders of a majority of the voting power of the capital stock of New DraftKings, so long as shares representing a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote are
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | beneficially owned by Mr. Robins, and (b) thereafter, only by the Chairman of the Board of Directors or by the Chief Executive Officer of New DraftKings upon the direction of the New DraftKings board of directors pursuant to a resolution adopted by a majority of the entire Board, and may not be called by any other person or persons. | |
Notice of Stockholder Meetings
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| | Whenever notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. | | | Whenever stockholders are required or permitted to take any action at a meeting, a timely notice in writing or by electronic transmission, in the manner consistent with the NRS, of the meeting, which will state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purposes for which the meeting is called, will be mailed to or transmitted electronically to each stockholder of record entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting. Unless otherwise provided by law, the charter or the bylaws, notice will be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. | |
Stockholder Proposals (Other than Nominations of Persons for Election as Directors)
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| | No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in DEAC’s notice of meeting (or any supplement thereto) given by or at the direction of DEAC’s board of directors, (ii) otherwise properly brought before the annual meeting by or at the direction of DEAC’s board of directors or (iii) otherwise properly brought before the annual meeting by any DEAC stockholder (x) who is a stockholder of record entitled to vote at such annual meeting on the date of the giving of the required notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with applicable notice procedures. | | |
No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in New DraftKings’ notice of meeting delivered pursuant to the bylaws, (ii) properly brought before the annual meeting by or at the direction of the board (or a committee thereof) or (iii) otherwise properly brought before the annual meeting by any stockholder of New DraftKings who is entitled to vote at the meeting, who complies with the notice procedures set forth in the bylaws and who is a stockholder of record at the time such notice is delivered to the Secretary of New DraftKings.
The stockholder must (i) give timely notice thereof in proper written form to the
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | Secretary of New DraftKings and (ii) the business must be a proper matter for stockholder action. To be timely, a stockholder’s notice must be received by the Secretary at the principal executive offices of New DraftKings not less than 90 or more than 120 days before the meeting. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a stockholder’s notice. Additionally, the stockholder must provide information pursuant to the advance notice provisions in the New DraftKings bylaws. | |
Stockholder Nominations of Persons for Election as Directors
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| | Nominations of persons for election to DEAC’s board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to DEAC’s notice of meeting only by giving notice to the secretary must be received by the secretary at the principal executive offices of DEAC (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date (or if there has been no prior annual meeting), notice by the stockholder to be timely must be so received no earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by DEAC; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by DEAC. | | |
Nominations of persons for election to the New DraftKings board of directors at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in New DraftKings’ notice of such special meeting, may be made (i) by or at the direction of the board of directors or (ii) by any stockholder of New DraftKings (x) who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in the New DraftKings Bylaws.
For a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of New DraftKings (i) in the case of an annual meeting, not later than the close of business not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting or, if the number of directors to be elected to the board of directors is increased and the first public announcement naming all of the nominees for directors or specifying the size of the increased board of directors is less than 100 days prior to the meeting, the close of business on the 10th day following the day on which public announcement of the date
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | of such meeting is first made; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by New DraftKings. In no event will the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice. Additionally, the stockholder must provide information pursuant to the advance notice provisions in the New DraftKings bylaws. | |
Limitation of Liability of Directors and Officers
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The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit.
The Current Charter provides that no director will be personally liable, except to the extent an exemption from liability or limitation is not permitted under the DGCL, unless a director violated his or her duty of loyalty to the DEAC or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from his or her actions as a director.
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The NRS has a similar, but somewhat broader provision limiting or eliminating the individual liability of both directors and officers unless the articles of incorporation provide for greater liability. Under the NRS, a director or officer is not liable unless the presumption that such person acted in good faith, on an informed basis and with a view to the interests of the corporation has been rebutted. In addition, there must be proof both that the act or failure to act constituted a breach of a fiduciary duty as a director or officer and that such breach involved intentional misconduct, fraud or a knowing violation of law, a more stringent burden than a breach of the duty of loyalty or deriving an improper personal benefit under the DGCL. In addition, the NRS provision permitting limitation of liability applies to both directors and officers and expressly applies to liabilities owed to creditors of the corporation. Furthermore, under the NRS, it is not necessary to adopt provisions in the articles of incorporation limiting personal liability of directors as this limitation is provided by statute. Thus, the NRS provides broader protection from personal liability for directors and officers than the DGCL.
Under the New DraftKings amended and restated articles of incorporation and bylaws, no director or officer will be personally liable to New DraftKings, or its stockholders or its creditors for any damages as a result of any act or failure to
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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act in his or her capacity as a director or officer to the fullest extent permitted by Nevada law.
In addition, New DraftKings renounces in its amended and restated articles of incorporation, any interest or expectancy to participate in specific or specified classes or categories of business opportunities, limiting certain types of claims against directors or officers for certain possible breaches of the duty of loyalty.
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Indemnification of Directors, Officers
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The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity.
The Current Charter provides that DEAC will indemnify each director and officer to the fullest extent permitted by applicable law.
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The NRS generally permits a corporation to indemnify any director or officer who acted in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of the corporation (and, in the case of a non-derivative action involving a criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful). Under the NRS, the person seeking indemnity may also be indemnified if he or she is not liable for his or her actions under Nevada law as described under “— Limitation of Liability of Directors and Officers” above.
The New DraftKings amended and restated articles of incorporation and bylaws provide that New DraftKings will indemnify each current, former or prospective director, officer, employee or agent to the fullest extent permitted by Nevada law.
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Dividends
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| | Unless further restricted in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of either (i) surplus, or (ii) if no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (provided that the amount of capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its | | | The NRS provides that no distribution (including dividends on, or redemption or repurchases of, shares of capital stock) may be made if, after giving effect to such distribution, (i) the corporation would not be able to pay its debts as they become due in the usual course of business, or, (ii) except as otherwise specifically permitted by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed at the time of a dissolution to satisfy the preferential rights of preferred stockholders. In making those determinations, the board of directors may consider financial statements prepared on the basis of accounting practices that are reasonable in the | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of a corporation.
The Current Charter provides that, subject to applicable law, the rights, if any, of the holders of any outstanding series of preferred stock and the charter requirements relating to business combinations, holders of shares of common stock are entitled to receive such dividends and other distributions (payable in cash, property or capital stock of DEAC) when, as and if declared thereon by DEAC’s board of directors from time to time out of any assets or funds legally available therefor and will share equally on a per share basis in such dividends and distributions.
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circumstances, a fair valuation, including but not limited to unrealized appreciation and depreciation, or any other method that is reasonable in the circumstances.
The Proposed Charter provides that holders of Class A common stock are entitled, on a per share basis, to such dividends and other distributions of cash, property, shares of capital stock or rights to acquire shares of capital stock of New DraftKings as may be declared by the Board from time to time with respect to common stock out of assets or funds legally available therefor. Dividends will not be declared or paid on the Class B common stock and holders of Class B common stock will have no entitlement in respect of dividends thereon.
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Liquidation
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| | In the event of any voluntary or involuntary liquidation, dissolution or winding up of DEAC, after payment or provision for payment of the debts and other liabilities of DEAC, the holders of shares of common stock shall be entitled to receive all the remaining assets of DEAC available for distribution to its stockholders, ratably in proportion to the number of shares of common stock held by them. | | | On the liquidation, dissolution, distribution of assets or winding up of New DraftKings, each holder of New DraftKings Class A common stock will be entitled to a pro rata distribution of the net assets, if any, available for distribution to common stockholders. Holders of New DraftKings Class B common stock will not be entitled to receive any distribution of New DraftKings’ assets of whatever kind available until distribution has first been made to all holders of New DraftKings Class A common stock. | |
Supermajority Voting Provisions
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| | Amendments to Article VIII (Indemnification) of the Current Charter require the affirmative vote of DEAC’s stockholders holding at least two-thirds of the voting power of all outstanding shares of capital stock of DEAC. | | | Amendments to certain provisions of the Proposed Charter will require the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings once Mr. Robins beneficially owns shares of New DraftKings capital stock representing less than a majority of the voting power of New DraftKings capital stock. Prior to that time, amendments to those provisions will require the affirmative vote of the holders of a majority of the voting power of the outstanding voting stock of New DraftKings. See “Description of New DraftKings Securities — Anti-Takeover Effects of Provisions of the New DraftKings Amended and Restated Articles of | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | Incorporation, the New DraftKings Amended and Restated Bylaws and Applicable Law”. In addition, removal of directors and changes to the number of directors requires the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings in certain circumstances. | |
Anti-Takeover Provisions and Other Stockholder Protections
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| | The anti-takeover provisions and other stockholder protections in the Current Charter include the staggered board, blank check preferred stock, and an election to be subject to Section 203 of the DGCL, which regulates corporate takeovers, among others. | | |
See “Description of New DraftKings Securities — Anti-Takeover Effects of Provisions of the New DraftKings Amended and Restated Articles of Incorporation, the New DraftKings Amended and Restated Bylaws and Applicable Law” for further information regarding the anti-takeover provisions related thereto.
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Preemptive Rights
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| | There are no preemptive rights provisions in the Current Charter. | | | There are no preemptive rights relating to shares of New DraftKings Class A common stock. | |
Fiduciary Duties of Directors
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| | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. | | | Nevada requires that directors and officers of Nevada corporations exercise their powers in good faith and with a view to the interests of the corporation. As a matter of law, under the NRS, directors and officers are presumed to act in good faith, on an informed basis and with a view to the interests of the corporation in making business decisions. In performing such duties, directors and officers may exercise their business judgment through reliance on information, opinions, reports, financial statements and other financial data prepared or presented by corporate directors, officers or employees who are reasonably believed to be reliable and competent. Professional reliance may also be extended to legal counsel, public accountants, advisers, bankers or other persons as to matters reasonably believed to be within their professional competence, and to the work of a committee (on which the particular director or officer does not serve) if the committee was established and empowered by the corporation’s board of directors, and if the committee’s work was within its designated authority and was about matters on which the committee was reasonably believed to merit confidence. However, directors and officers may not rely on such information, opinions, reports, | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | books of account or similar statements if they have knowledge concerning the matter in question that would make such reliance unwarranted. | |
Inspection of Books and Records
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| | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. | | |
Inspection rights under Nevada law are more limited. The NRS grants any person who has been a stockholder of record of a corporation for at least six months immediately preceding the demand, or any person holding, or thereunto authorized in writing by the holders of, at least 5% of all of its outstanding shares, upon at least five days’ written demand, the right to inspect in person or by agent or attorney, during usual business hours (i) the articles of incorporation and all amendments thereto, (ii) the bylaws and all amendments thereto and (iii) a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them respectively. A Nevada corporation may require a stockholder to furnish the corporation with an affidavit that such inspection is for a proper purpose related to his or her interest as a stockholder of the corporation.
In addition, the NRS grants certain stockholders the right to inspect the books of account and records of a corporation for any proper purpose. The right to inspect the books of account and all financial records of a corporation, to make copies of records and to conduct an audit of such records is granted only to a stockholder who owns at least 15% of the issued and outstanding shares of a Nevada corporation, or who has been authorized in writing by the holders of at least 15% of such shares. However, these requirements do not apply to any corporation that furnishes to its stockholders a detailed, annual financial statement or any corporation that has filed during the preceding 12 months all reports required to be filed pursuant to Section 13 or Section 15(d) of the Exchange Act.
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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Choice of Forum
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| | The Current Charter generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of DEAC, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of DEAC to DEAC or DEAC’s stockholders, (iii) any action asserting a claim against DEAC, its directors, officers or employees arising pursuant to any provision of the DGCL or its charter or bylaws, or (iv) any action asserting a claim against DEAC, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, subject to certain exceptions. | | | The Proposed Charter generally designates the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for any or all actions, suits, proceedings, whether civil, administrative or investigative or that asserts any claim or counterclaim, (a) brought in the name or right of New DraftKings or on its behalf; (b) asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of New DraftKings to New DraftKings or New DraftKings’ stockholders; (c) arising or asserting a claim pursuant to any provision of NRS Chapters 78 or 92A or any provision of the charter or bylaws; (d) to interpret, apply, enforce or determine the validity of the Proposed Charter or bylaws; or (e) asserting a claim governed by the internal affairs doctrine, subject to certain exceptions, to the fullest extent permitted by law. | |
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Before the Business
Combination |
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After the Business Combination
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Assuming No
Redemption |
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Assuming Maximum
Redemption |
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Name and Address of Beneficial Owner |
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Number of
shares of DEAC common stock |
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%
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% of
Total Voting Power** |
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Number of
shares of New DraftKings Class A Common Stock |
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%
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Number of
shares of New DraftKings Class B Common Stock |
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%
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% of
Total Voting Power** |
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Number of
shares of New DraftKings Class A Common Stock |
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%
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Number of
shares of New DraftKings Class B Common Stock |
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%
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% of
Total Voting Power** |
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Eagle Equity Partners,
LLC(1)(2) |
| | | | 5,020,000 | | | | | | 10.0 | | | | | | 10.0 | | | | | | 2,718,529 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,529 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Jeff Sagansky(1)(2)
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| | | | 5,020,000 | | | | | | 10.0 | | | | | | 10.0 | | | | | | 2,718,529 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,529 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Eli Baker(1)(2)
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| | | | 5,020,000 | | | | | | 10.0 | | | | | | 10.0 | | | | | | 2,718,529 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,529 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Harry E. Sloan(1)(3)
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| | | | 4,900,000 | | | | | | 9.8 | | | | | | 9.8 | | | | | | 2,718,528 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,528 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Fredric Rosen(1)(4)
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| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Joshua Kazam(1)(5)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Scott Ross(1)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 20,000 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 20,000 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Scott Delman(1)(6)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 86,666 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 86,666 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
All Directors and Executive
Officers of DEAC as a Group (Seven Individuals) |
| | | | 10,000,000 | | | | | | 20.0% | | | | | | 20.0% | | | | | | 5,850,389 | | | | | | 1.9% | | | | | | — | | | | | | — | | | | | | * | | | | | | 5,850,389 | | | | | | 2.1% | | | | | | — | | | | | | — | | | | | | * | | |
Directors and Executive Officers of New DraftKings After
Consummation of the Business Combination |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Jason Robins(7)(8)(9)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 9,806,694 | | | | | | 3.1% | | | | | | [ ] | | | | | | 100% | | | | | | [ ] | | | | | | 9,806,694 | | | | | | 3.4% | | | | | | [ ] | | | | | | 100% | | | | | | [ ] | | |
Matthew Kalish(7)(9)(10)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 4,355,041 | | | | | | 1.4% | | | | | | — | | | | | | — | | | | | | * | | | | | | 4,355,041 | | | | | | 1.5% | | | | | | — | | | | | | — | | | | | | * | | |
Paul Liberman(7)(9)(11)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,005,226 | | | | | | 1.6% | | | | | | — | | | | | | — | | | | | | * | | | | | | 5,005,266 | | | | | | 1.8% | | | | | | — | | | | | | — | | | | | | * | | |
R. Stanton Dodge(7)(9)(12)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,750,454 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 1,750,454 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Jason Park(7)(9)(13)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 255,521 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 255,521 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
All Directors and Executive
Officers of New DraftKings as a Group ([ ] Individuals) |
| | | | — | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
Five Percent Holders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Shalom Meckenzie(14)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 35,007,377 | | | | | | 11.2% | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | 35,007,377 | | | | | | 12.4% | | | | | | — | | | | | | — | | | | | | [ ] | | |
RPII DK LLC(7)(9)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 22,972,850 | | | | | | 7.3% | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | 22,972,850 | | | | | | 8.1% | | | | | | — | | | | | | — | | | | | | [ ] | | |
TFCF Sports Enterprises,
LLC(7)(9) |
| | | | — | | | | | | — | | | | | | — | | | | | | 18,720,084 | | | | | | 6.0% | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | 18,720,084 | | | | | | 6.6% | | | | | | — | | | | | | — | | | | | | [ ] | | |
Name
|
| |
Position with New
DraftKings |
| |
Age as of Special
Meeting |
| |
Nominated By
|
| |||||||||
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
Name
|
| |
Position with New
DraftKings |
| |
Age as of
Special Meeting |
| |||
Jason Robins
|
| |
Chief Executive Officer
|
| | | | 39 | | |
Matthew Kalish
|
| |
President, DraftKings North America
|
| | | | 38 | | |
Paul Liberman
|
| |
President, Global Technology and Product
|
| | | | 36 | | |
R. Stanton Dodge
|
| |
Chief Legal Officer and Secretary
|
| | | | 52 | | |
Jason Park
|
| |
Chief Financial Officer
|
| | | | 43 | | |
Name and Position
|
| |
Fiscal
Year |
| |
Salary
($) |
| |
Bonus
($) (1) |
| |
Option
Awards ($) (2) |
| |
Non-Equity
Incentive Plan Compensation ($) (3) |
| |
All Other
Compensation ($) (4) |
| |
Total
($) |
| |||||||||||||||||||||
Jason Robins
Chief Executive Officer |
| | | | 2019 | | | | | $ | 400,000 | | | | | $ | — | | | | | $ | 3,239,689 | | | | | $ | — | | | | | $ | — | | | | | $ | 3,639,689 | | |
| | | 2018 | | | | | $ | 400,000 | | | | | $ | — | | | | | $ | 12,847,259 | | | | | $ | 500,000 | | | | | $ | 9,250 | | | | | $ | 13,756,509 | | | ||
Jason Park
Chief Financial Officer |
| | | | 2019 | | | | | $ | 201,923 | | | | | $ | 250,000 | | | | | $ | 2,326,845 | | | | | $ | — | | | | | $ | 14,279 | | | | | $ | 2,793,047 | | |
Paul Liberman
President, Global Technology & Product |
| | | | 2019 | | | | | $ | 300,000 | | | | | $ | — | | | | | $ | 1,350,348 | | | | | $ | — | | | | | $ | 9,600 | | | | | $ | 1,659,948 | | |
| | | 2018 | | | | | $ | 300,000 | | | | | $ | — | | | | | $ | 2,817,791 | | | | | $ | 300,000 | | | | | $ | 10,588 | | | | | $ | 3,428,379 | | |
Name
|
| |
Time-Vested
Options ($) |
| |
PSP
Options ($) |
| |
LTIP
Performance Options ($) |
| |||||||||
Jason Robins
|
| | | $ | 2,242,186 | | | | | $ | 997,503 | | | | | $ | — | | |
Jason Park
|
| | | $ | 1,163,753 | | | | | $ | — | | | | | $ | 1,163,092 | | |
Paul Liberman
|
| | | $ | 601,848 | | | | | $ | 535,500 | | | | | $ | 213,000 | | |
Name
|
| |
Grant Date
|
| |
Number of
Securities Underlying Unexercised Options Exercisable (#) |
| |
Number of
Securities Underlying Unexercised Options Unexercisable (#) |
| |
Equity Incentive
Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| ||||||||||||||||||
Jason Robins
|
| | | | 7/12/2013(1) | | | | | | 2,000,000 | | | | | | ― | | | | | | ― | | | | | $ | 0.09 | | | | | | 7/12/2023 | | |
| | | 9/22/2014(1) | | | | | | 400,000 | | | | | | ― | | | | | | ― | | | | | $ | 0.22 | | | | | | 9/22/2024 | | | ||
| | | 2/18/2015(1) | | | | | | 1,671,032 | | | | | | ― | | | | | | ― | | | | | $ | 0.22 | | | | | | 2/18/2025 | | | ||
| | | 8/27/2015(1) | | | | | | 835,358 | | | | | | ― | | | | | | ― | | | | | $ | 0.22 | | | | | | 8/27/2025 | | | ||
| | | 3/24/2016(1) | | | | | | 4,446,707 | | | | | | 296,448 | | | | | | ― | | | | | $ | 0.22 | | | | | | 3/24/2026 | | | ||
| | | 5/3/2017(1) | | | | | | 1,734,554 | | | | | | 788,435 | | | | | | ― | | | | | $ | 1.35 | | | | | | 5/3/2027 | | | ||
| | | 4/18/2018(2) | | | | | | 963,713 | | | | | | 1,606,189 | | | | | | ― | | | | | $ | 1.16 | | | | | | 4/18/2028 | | | ||
| | | 4/18/2018(3) | | | | | | 1,307,645 | | | | | | ― | | | | | | ― | | | | | $ | 1.16 | | | | | | 4/18/2028 | | | ||
| | | 5/3/2018(4) | | | | | | ― | | | | | | ― | | | | | | 21,376,180 | | | | | $ | 1.16 | | | | | | 5/3/2028 | | | ||
| | | 6/4/2019(2) | | | | | | 395,834 | | | | | | 2,770,841 | | | | | | ― | | | | | $ | 1.66 | | | | | | 6/4/2029 | | | ||
| | | 6/4/2019(3) | | | | | | ― | | | | | | ― | | | | | | 1,583,338 | | | | | $ | 1.66 | | | | | | 6/4/2029 | | | ||
Jason Park
|
| | | | 6/4/2019(1) | | | | | | ― | | | | | | 1,500,000 | | | | | | ― | | | | | $ | 1.66 | | | | | | 6/4/2029 | | |
| | | 6/4/2019(4) | | | | | | ― | | | | | | ― | | | | | | 1,500,000 | | | | | $ | 1.66 | | | | | | 6/4/2029 | | | ||
| | | 8/15/2019(1) | | | | | | ― | | | | | | 138,158 | | | | | | ― | | | | | $ | 1.67 | | | | | | 8/15/2029 | | | ||
| | | 8/15/2019(4) | | | | | | ― | | | | | | ― | | | | | | 138,518 | | | | | $ | 1.67 | | | | | | 8/15/2029 | | | ||
Paul Liberman
|
| | | | | | | ||||||||||||||||||||||||||||||
| | | 7/12/2013(1) | | | | | | 2,415,000 | | | | | | ― | | | | | | ― | | | | | $ | 0.09 | | | | | | 7/12/2023 | | | ||
| | | 9/22/2014(1) | | | | | | 302,160 | | | | | | ― | | | | | | ― | | | | | $ | 0.22 | | | | | | 9/22/2024 | | | ||
| | | 2/18/2015(1) | | | | | | 835,516 | | | | | | ― | | | | | | ― | | | | | $ | 0.22 | | | | | | 2/18/2025 | | | ||
| | | 8/27/2015(1) | | | | | | 578,077 | | | | | | ― | | | | | | ― | | | | | $ | 0.22 | | | | | | 8/27/2025 | | | ||
| | | 3/24/2016(1) | | | | | | 2,223,353 | | | | | | 148,224 | | | | | | ― | | | | | $ | 0.22 | | | | | | 3/24/2026 | | | ||
| | | 5/3/2017(1) | | | | | | 722,730 | | | | | | 328,515 | | | | | | ― | | | | | $ | 1.35 | | | | | | 5/3/2027 | | | ||
| | | 4/18/2018(2) | | | | | | 392,294 | | | | | | 653,822 | | | | | | ― | | | | | $ | 1.16 | | | | | | 4/18/2028 | | | ||
| | | 4/18/2018(3) | | | | | | 256,298 | | | | | | ― | | | | | | ― | | | | | $ | 1.16 | | | | | | 4/18/2028 | | | ||
| | | 5/3/2018(4) | | | | | | ― | | | | | | ― | | | | | | 4,275,236 | | | | | $ | 1.16 | | | | | | 5/3/2028 | | | ||
| | | 6/4/2019(4) | | | | | | ― | | | | | | ― | | | | | | 300,000 | | | | | $ | 1.66 | | | | | | 6/4/2029 | | | ||
| | | 6/4/2019(3) | | | | | | ― | | | | | | ― | | | | | | 850,000 | | | | | $ | 1.66 | | | | | | 6/4/2029 | | | ||
| | | 6/4/2019(2) | | | | | | 106,250 | | | | | | 743,750 | | | | | | ― | | | | | $ | 1.66 | | | | | | 6/4/2029 | | |
Name
|
| |
Fees Earned or
Paid in Cash ($) |
| |
Stock Awards
($) |
| |
Option Awards
($)(1) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| |||||||||||||||
Woodrow Levin
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 92,404 | | | | | $ | 0 | | | | | $ | 92,404 | | |
Ryan Moore(2)
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Steven Murray(2)
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Hany Nada(2)
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Richard Rosenblatt
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 90,205 | | | | | $ | 0 | | | | | $ | 90,205 | | |
Marni Walden
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 80,589 | | | | | $ | 0 | | | | | $ | 80,589 | | |
John Salter(2)
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Name
|
| |
Number of
Shares |
| |
Purchase Price
($) |
| ||||||
Revolution Growth III, LP(1)
|
| | | | 2,269,718 | | | | | | 4,999,998.10 | | |
GGV Capital Select L.P.(2)
|
| | | | 1,815,775 | | | | | | 3,999,999.80 | | |
RPII DK LLC(3)
|
| | | | 1,361,830 | | | | | | 2,999,997.10 | | |
Entities affiliated with Accomplice, LLC(4)
|
| | | | 478,003 | | | | | | 1,053,000.46 | | |
Entities affiliated with Redpoint Ventures(5)
|
| | | | 453,943 | | | | | | 999,998.30 | | |
Name
|
| |
Number of
Shares |
| |
Purchase Price
($) |
| ||||||
Revolution Growth III, LP(1)
|
| | | | 3,922,245 | | | | | | 9,999,998.97 | | |
Italianflare & Co., as nominee for Hadley Harbor Master Investors (Cayman) L.P.(2)
|
| | | | 980,561 | | | | | | 2,499,999.11 | | |
Accomplice Fund II, L.P.(3)
|
| | | | 784,449 | | | | | | 1,999,999.80 | | |
Jason Robins Revocable Trust u/d/t January 8, 2014(4)
|
| | | | 39,222 | | | | | | 99,998.85 | | |
Name
|
| |
Common
Units |
| |
Incentive
Units(1) |
| |
Cash
Consideration ($) |
| |
In-Kind
Consideration ($)(2) |
| ||||||||||||
DraftKings
|
| | | | 4,500,000 | | | | | | — | | | | | | — | | | | | | 3,000,000 | | |
Accomplice Fund II, L.P.(3)
|
| | | | 1,500,000 | | | | | | — | | | | | | 1,000,000 | | | | | | — | | |
Hany Nada(4)
|
| | | | 375,000 | | | | | | — | | | | | | 250,000 | | | | | | — | | |
Jason Robins(5)
|
| | | | — | | | | | | 126,603 | | | | | | — | | | | | | — | | |
Jason Park(6)
|
| | | | — | | | | | | 63,301 | | | | | | — | | | | | | — | | |
| | |
Page
|
| |||
Condensed Financial Statements as of September 30, 2019 | | | | | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-8 | | | |
Financial Statements as of March 31, 2019 | | | |||||
| | | | F-17 | | | |
| | | | F-18 | | | |
| | | | F-19 | | | |
| | | | F-20 | | | |
| | | | F-21 | | | |
| | | | F-22 | | |
|
Unaudited Condensed Consolidated Financial Statements as of September 30, 2019 and December 31,
2018 |
| | | | | | |
| | | | | F-30 | | | |
| | | | | F-32 | | | |
| | | | | F-33 | | | |
| | | | | F-34 | | | |
| | | | | F-35 | | | |
| Consolidated Financial Statements as of December 31, 2018 and 2017 | | | | | | | |
| | | | | F-50 | | | |
| | | | | F-51 | | | |
| | | | | F-53 | | | |
| | | | | F-54 | | | |
| | | | | F-55 | | | |
| | | | | F-56 | | |
|
Unaudited Condensed Interim Consolidated Financial Statements as of September 30, 2019 and December 31, 2018
|
| | | | | | |
| | | | | F-83 | | | |
| | | | | F-85 | | | |
| | | | | F-86 | | | |
| | | | | F-88 | | | |
| | | | | F-89 | | | |
| Consolidated Financial Statements as of December 31, 2018 and 2017 | | | | | | | |
| | | | | F-95 | | | |
| | | | | F-96 | | | |
| | | | | F-97 | | | |
| | | | | F-98 | | | |
| | | | | F-99 | | | |
| | | | | F-100 | | |
|
ASSETS:
|
| ||||||
| Current assets: | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 870,851 | | |
|
Prepaid expenses
|
| | | | 280,605 | | |
|
Total current assets
|
| | | | 1,151,456 | | |
|
Cash and investments held in Trust Account
|
| | | | 402,624,209 | | |
|
Total Assets
|
| | |
$
|
403,775,665
|
| |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
| | | | | | |
| Current liabilities: | | | | | | | |
|
Accounts payable
|
| | | $ | 470,410 | | |
|
Total current liabilities
|
| | | | 470,410 | | |
|
Deferred underwriting compensation
|
| | | | 14,000,000 | | |
|
Total Liabilities
|
| | | | 14,470,410 | | |
|
Class A common shares subject to possible redemptions; 38,430,525 shares at redemption value of approximately $10.00 per share
|
| | | | 384,305,250 | | |
| Stockholders’ equity: | | | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
| | | | — | | |
|
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 1,569,475 shares
issued and outstanding, (excluding 38,430,525 shares subject to possible redemption) |
| | | | 157 | | |
|
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares
issued and outstanding |
| | | | 1,000 | | |
|
Additional paid-in capital
|
| | | | 2,662,724 | | |
|
Retained earnings
|
| | | | 2,336,124 | | |
|
Total stockholders’ equity, net
|
| | | | 5,000,005 | | |
|
Total liabilities and stockholders’ equity
|
| | |
$
|
403,775,665
|
| |
| | |
Three Months
Ended September 30, 2019 |
| |
For the period from
March 27, 2019 (inception) to September 30, 2019 |
| ||||||
Revenue: | | | | $ | — | | | | | $ | — | | |
General and administrative expenses
|
| | | | 247,387 | | | | | | 433,756 | | |
Loss from operations
|
| | | | (247,387) | | | | | | (433,756) | | |
Other income — interest on Trust Account
|
| | | | 2,195,999 | | | | | | 3,390,875 | | |
Income before provision for income tax
|
| | | | 1,948,612 | | | | | | 2,957,119 | | |
Provision for income tax
|
| | | | (409,209) | | | | | | (620,995) | | |
Net income
|
| | | $ | 1,539,403 | | | | | $ | 2,336,124 | | |
Two Class Method: | | | | | | | | | | | | | |
Weighted average number of Class A common stock outstanding
|
| | | | 40,000,000 | | | | | | 40,000,000 | | |
Net income per common stock, Class A — basic and diluted
|
| | | $ | 0.04 | | | | | $ | 0.06 | | |
Weighted average number of Class B common stock outstanding
|
| | | | 10,000,000 | | | | | | 10,014,960 | | |
Net loss per common stock, Class B — basic and diluted
|
| | | $ | (0.01) | | | | | $ | (0.01) | | |
| | |
Common Stock
|
| | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
| | |
Class A
|
| |
Class B
|
| |
Additional
Paid-in Capital |
| |
Retained
Earnings |
| |
Total
Stockholders’ Equity |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Issuance of common stock to initial shareholder at approximately $0.002 per share
|
| | | | — | | | | | $ | — | | | | | | 10,062,500 | | | | | $ | 1,006 | | | | | $ | 23,994 | | | | | $ | — | | | | | $ | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (675) | | | | | | (675) | | |
Balance, March 31, 2019
|
| | | | — | | | | | | — | | | | | | 10,062,500 | | | | | | 1,006 | | | | | | 23,994 | | | | | | (675) | | | | | | 24,325 | | |
Sale of Units to the public at $10.00 per unit
|
| | | | 40,000,000 | | | | | | 4,000 | | | | | | — | | | | | | — | | | | | | 399,996,000 | | | | | | — | | | | | | 400,000,000 | | |
Underwriters’ discount and offering expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (22,555,870) | | | | | | — | | | | | | (22,555,870) | | |
Sale of 6,333,334 Private Placement Warrants at $1.50 per warrant
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,500,001 | | | | | | — | | | | | | 9,500,001 | | |
Forfeiture of Class B shares by initial shareholders
|
| | | | — | | | | | | — | | | | | | (62,500) | | | | | | (6) | | | | | | 6 | | | | | | — | | | | | | — | | |
Change in value of common stock subject to possible redemption
|
| | | | (38,276,585) | | | | | | (3,828) | | | | | | — | | | | | | — | | | | | | (382,762,022) | | | | | | — | | | | | | (382,765,850) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 797,396 | | | | | | 797,396 | | |
Balance, June 30, 2019
|
| | | | 1,723,415 | | | | | | 172 | | | | | | 10,000,000 | | | | | | 1,000 | | | | | | 4,202,109 | | | | | | 796,721 | | | | | | 5,000,002 | | |
Change in value of common stock subject to possible redemption
|
| | | | (153,940) | | | | | | (15) | | | | | | — | | | | | | — | | | | | | (1,539,385) | | | | | | — | | | | | | (1,539,400) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,539,403 | | | | | | 1,539,403 | | |
Balance, September 30, 2019
|
| | | | 1,569,475 | | | | | $ | 157 | | | | | | 10,000,000 | | | | | $ | 1,000 | | | | | $ | 2,662,724 | | | | | $ | 2,336,124 | | | | | $ | 5,000,005 | | |
|
| | |
For the period from
March 27, 2019 (inception) to September 30, 2019 |
| |||
Cash flows from operating activities: | | | | | | | |
Net income
|
| | | $ | 2,336,124 | | |
Adjustments to reconcile net income to net cash used in operating activities:
|
| | | | | | |
Trust income reinvested in Trust Account
|
| | | | (3,390,875) | | |
Changes in operating assets and liabilities: | | | | | | | |
Prepaid expenses
|
| | | | (280,605) | | |
Accounts payable
|
| | | | 246,085 | | |
Net cash used in operating activities
|
| | | | (1,089,271) | | |
Cash flows from investing activities: | | | | | | | |
Principal deposited in Trust Account
|
| | | | (400,000,000) | | |
Interest income released from Trust Account to pay taxes
|
| | | | 766,666 | | |
Net cash used in investing activities
|
| | | | (399,233,334) | | |
Cash flows from financing activities: | | | | | | | |
Proceeds from private placement of warrants
|
| | | | 9,500,001 | | |
Proceeds from sale of Class A common stock
|
| | | | 400,000,000 | | |
Payment of underwriters’ discount
|
| | | | (8,000,000) | | |
Payment of offering costs
|
| | | | (306,545) | | |
Net cash provided by financing activities
|
| | | | 401,193,456 | | |
Increase in cash during period
|
| | | | 870,851 | | |
Cash at beginning of period
|
| | | | — | | |
Cash at end of period
|
| | | $ | 870,851 | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash paid during the year for income taxes
|
| | | $ | 766,666 | | |
Supplemental disclosure of non-cash financing activities: | | | | | | | |
Deferred underwriting compensation
|
| | | $ | 14,000,000 | | |
Class A common stock subject to possible redemption
|
| | | $ | 384,305,250 | | |
Offering costs paid by sponsor in exchange for founder shares (Class B Common Stock)
|
| | | $ | 25,000 | | |
Deferred offering costs included in accounts payable
|
| | | $ | 224,325 | | |
| | |
Carrying Value
|
| |
Gross
Unrealized Holding Gain |
| |
Quoted Prices in
Active Markets (Level 1) |
| |||||||||
U.S. Government Treasury Securities as of September 30, 2019(1)
|
| | | $ | 402,622,630 | | | | | $ | 34,420 | | | | | $ | 402,657,050 | | |
|
ASSETS:
|
| ||||||
| Current asset: | | | | | | | |
|
Cash
|
| | | $ | — | | |
|
Deferred offering costs
|
| | | | 26,733 | | |
|
Total assets
|
| | | $ | 26,733 | | |
|
LIABILITIES AND STOCKHOLDER’S EQUITY:
|
| | | | | | |
| Current Liabilities: | | | | | | | |
|
Accrued expenses
|
| | | $ | 2,408 | | |
| Stockholder’s equity: | | | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
| | | | — | | |
|
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; none issued and outstanding
|
| | | | | | |
|
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,062,500 shares issued and outstanding(1)
|
| | | | 1,006 | | |
|
Additional paid-in capital
|
| | | | 23,994 | | |
|
Accumulated deficit
|
| | | | (675) | | |
|
Total stockholder’s equity
|
| | | | 24,325 | | |
|
Total liabilities and stockholder’s equity
|
| | | $ | 26,733 | | |
|
Revenue
|
| | | $ | — | | |
|
General and administrative expenses
|
| | | | 675 | | |
|
Net loss attributable to stockholder
|
| | | $ | (675) | | |
|
Weighted average number of shares of common stock outstanding(1)
|
| | | | 8,750,000 | | |
|
Basic and diluted net loss per share attributable to stockholder
|
| | | $ | (0.00) | | |
| | |
Class B Common stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholder’s Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Issuance of common stock to initial stockholder at approximately $0.002 per share(1)
|
| | | | 10,062,500 | | | | | $ | 1,006 | | | | | $ | 23,994 | | | | | $ | — | | | | | $ | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (675) | | | | | | (675) | | |
Balances as of March 31, 2019
|
| | | | 10,062,500 | | | | | $ | 1,006 | | | | | $ | 23,994 | | | | | $ | (675) | | | | | $ | 24,325 | | |
| Cash flows from operating activities: | | | | | | | |
|
Net loss
|
| | | | (675) | | |
|
Changes in operating assets and liabilities:
|
| | | | | | |
|
Increase in accured expense
|
| | | | 2,408 | | |
|
Increase in deferred offering costs
|
| | | | (1,733) | | |
|
Net cash provided by operating activities
|
| | | | — | | |
|
Net change in cash
|
| | | | — | | |
|
Cash at beginning of period
|
| | | | — | | |
|
Cash at end of period
|
| | | $ | — | | |
| Supplemental Schedule of Non-Cash Financing Activities: | | | | | | | |
|
Offering costs paid by Sponsor in exchange for Founder Shares
|
| | | $ | 25,000 | | |
|
Deferred offering costs included in accrued expenses
|
| | | $ | 1,733 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 36,015 | | | | | $ | 117,908 | | |
Cash reserved for users
|
| | | | 137,165 | | | | | | 111,698 | | |
Receivables reserved for users
|
| | | | 21,784 | | | | | | 21,334 | | |
Prepaid expenses and other current assets
|
| | | | 11,456 | | | | | | 11,233 | | |
Total current assets
|
| | | | 206,420 | | | | | | 262,173 | | |
Property and equipment, net
|
| | | | 26,039 | | | | | | 14,102 | | |
Intangible assets, net
|
| | | | 20,988 | | | | | | 16,876 | | |
Goodwill
|
| | | | 4,738 | | | | | | 4,738 | | |
Deposits
|
| | | | 1,654 | | | | | | 1,504 | | |
Total assets
|
| | | $ | 259,839 | | | | | $ | 299,393 | | |
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | | $ | 68,108 | | | | | $ | 56,149 | | |
Liabilities to users
|
| | | | 158,949 | | | | | | 132,769 | | |
Term note, current portion
|
| | | | 3,750 | | | | | | 3,750 | | |
Settlement liability, current portion
|
| | | | 2,977 | | | | | | 3,272 | | |
Total current liabilities
|
| | | | 233,784 | | | | | | 195,940 | | |
Other long-term liabilities
|
| | | | 56,721 | | | | | | 27,403 | | |
Total liabilities
|
| | | $ | 290,505 | | | | | $ | 223,343 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Commitments and Contingencies (Note 13) | | | | | | | | | | | | | |
Stockholders’ Deficit: | | | | | | | | | | | | | |
Series E-1 Redeemable Convertible Preferred Stock, $0.001 par value; 54,901 shares authorized, issued and outstanding at September 30, 2019 and December 31, 2018; liquidation preference of $120,943 as of September 30, 2019 and December 31, 2018
|
| | | | 119,671 | | | | | | 119,427 | | |
Series F Redeemable Convertible Preferred Stock, $0.001 par value; 78,445
shares authorized at September 30, 2019 and December 31, 2018, respectively, 55,349 and 57,068 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively; liquidation preference of $141,117 and $145,499 as of September 30, 2019 and December 31, 2018, respectively |
| | | | 138,453 | | | | | | 141,850 | | |
Total Redeemable Convertible Preferred Stock
|
| | | | 258,124 | | | | | | 261,277 | | |
Stockholders’ Deficit: | | | | | | | | | | | | | |
Common stock, $0.001 par value 735,000 shares authorized as of September 30,
2019 and December 31, 2018; 388,764 and 384,009 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively |
| | | | 389 | | | | | | 384 | | |
Additional paid-in capital
|
| | | | 680,958 | | | | | | 670,439 | | |
Accumulated deficit
|
| | | | (970,137) | | | | | | (856,050) | | |
Total Stockholders’ Deficit
|
| | | | (288,790) | | | | | | (185,227) | | |
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
|
| | | $ | 259,839 | | | | | $ | 299,393 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | |
Cost of revenue
|
| | | | 64,718 | | | | | | 26,576 | | |
Sales and marketing
|
| | | | 124,867 | | | | | | 107,127 | | |
Product and technology
|
| | | | 39,645 | | | | | | 22,897 | | |
General and administrative
|
| | | | 78,181 | | | | | | 52,039 | | |
Loss from operations
|
| | | | (115,416) | | | | | | (75,623) | | |
Interest income, net
|
| | | | 1,364 | | | | | | 537 | | |
Loss before income tax expense
|
| | | | (114,052) | | | | | | (75,086) | | |
Income tax expense
|
| | | | 35 | | | | | | 63 | | |
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | |
| | |
Convertible
Redeemable Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balances at December 31, 2017
|
| | | | 54,901 | | | | | $ | 119,009 | | | | | | 379,932 | | | | | $ | 380 | | | | | $ | 661,085 | | | | | $ | (779,830) | | | | | $ | (118,365) | | |
Issuance of Series F Redeemable Convertible Preferred Stock
|
| | | | 37,448 | | | | | | 92,676 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 2,385 | | | | | | 2 | | | | | | 434 | | | | | | — | | | | | | 436 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 892 | | | | | | 1 | | | | | | 1,146 | | | | | | — | | | | | | 1,147 | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 383 | | | | | | | | | | | | | | | | | | (383) | | | | | | | | | | | | (383) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,376 | | | | | | — | | | | | | 5,376 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | (75,149) | | | | | | (75,149) | | |
Balances at September 30, 2018
|
| | | | 92,349 | | | | | $ | 212,068 | | | | | | 383,209 | | | | | | 383 | | | | | | 667,658 | | | | | | (854,979) | | | | | | (186,938) | | |
Balance at December 31, 2018
|
| | | | 111,969 | | | | | | 261,277 | | | | | | 384,009 | | | | | | 384 | | | | | | 670,439 | | | | | | (856,050) | | | | | | (185,227) | | |
Issuance of Series F Redeemable Convertible Preferred Stock
|
| | | | 2,879 | | | | | | 7,804 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 2,145 | | | | | | 2 | | | | | | 723 | | | | | | — | | | | | | 725 | | |
Common Stock Issued
|
| | | | — | | | | | | — | | | | | | 1,906 | | | | | | 2 | | | | | | 437 | | | | | | — | | | | | | 439 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 704 | | | | | | 1 | | | | | | 1,167 | | | | | | — | | | | | | 1,168 | | |
Repurchase of Series F Preferred
Stock |
| | | | (4,598) | | | | | | (11,722) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 765 | | | | | | — | | | | | | — | | | | | | (765) | | | | | | — | | | | | | (765) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,519 | | | | | | — | | | | | | 8,519 | | |
Issuance of warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 438 | | | | | | — | | | | | | 438 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (114,087) | | | | | | (114,087) | | |
Balances at September 30, 2019
|
| | | | 110,250 | | | | | $ | 258,124 | | | | | | 388,764 | | | | | $ | 389 | | | | | $ | 680,958 | | | | | $ | (970,137) | | | | | $ | (288,790) | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net loss
|
| | |
$
|
(114,087)
|
| | | | $ | (75,149) | | |
Adjustments to reconcile net loss to cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | |
|
9,629
|
| | | | | 4,757 | | |
Non-cash rent expense
|
| | |
|
325
|
| | | | | 37 | | |
Non-cash interest expense
|
| | |
|
16
|
| | | | | 24 | | |
Loss on exit activities
|
| | |
|
179
|
| | | | | — | | |
Loss on disposal of fixed assets
|
| | |
|
730
|
| | | | | — | | |
Stock-based compensation expense
|
| | |
|
8,519
|
| | | | | 5,376 | | |
Issuance of warrants
|
| | |
|
438
|
| | | | | — | | |
Advertising expense paid through issuance of Common Stock
|
| | |
|
1,168
|
| | | | | 1,147 | | |
Deferred income taxes
|
| | |
|
27
|
| | | | | 25 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Cash reserved for users
|
| | |
|
(25,467)
|
| | | | | (14,257) | | |
Receivables reserved for users
|
| | |
|
(450)
|
| | | | | (3,486) | | |
Prepaid expenses and other current assets
|
| | |
|
(223)
|
| | | | | (3,067) | | |
Deposits
|
| | |
|
(150)
|
| | | | | 893 | | |
Accounts payable and accrued expenses
|
| | |
|
11,764
|
| | | | | 7,379 | | |
Other long-term liability
|
| | |
|
17,966
|
| | | | | 7,581 | | |
Settlement liability
|
| | |
|
(295)
|
| | | | | (1,255) | | |
Liabilities to users
|
| | |
|
26,180
|
| | | | | 17,823 | | |
Acquisition of state licenses
|
| | |
|
(437)
|
| | | | | (53) | | |
Net cash used in operating activities
|
| | | | (64,168) | | | | | | (52,225) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | |
|
(15,892)
|
| | | | | (3,972) | | |
Capitalization of internal-use software costs
|
| | |
|
(10,079)
|
| | | | | (9,739) | | |
Net cash used in investing activities
|
| | | | (25,971) | | | | | | (13,711) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Repayment of notes payable
|
| | |
|
—
|
| | | | | (1,250) | | |
Net proceeds from issuance of common stock
|
| | |
|
439
|
| | | | | — | | |
Net proceeds from issuance of Series F redeemable convertible Preferred Stock
|
| | |
|
7,804
|
| | | | | 92,676 | | |
Repurchase of Preferred Stock
|
| | |
|
(722)
|
| | | | | — | | |
Proceeds from exercise of stock options
|
| | |
|
725
|
| | | | | 436 | | |
Net cash provided by financing activities
|
| | | | 8,246 | | | | | | 91,862 | | |
Net Increase (Decrease) in Cash
|
| | | | (81,893) | | | | | | 25,926 | | |
Cash at Beginning of Year
|
| | | | 117,908 | | | | | | 49,267 | | |
Cash at End of Period
|
| | | $ | 36,015 | | | | | $ | 75,193 | | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | | | | | | | | | | | | | |
Non-cash Redemption of Series F redeemable convertible preferred to stock through issuance of Promissory Note
|
| | |
$
|
11,000
|
| | | | $ | 0 | | |
Accretion of preferred stock
|
| | |
$
|
765
|
| | | | $ | 383 | | |
Supplemental Disclosure of Cash Activities: | | | | | | | | | | | | | |
Cash paid for interest
|
| | |
$
|
184
|
| | | | $ | 202 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Computer equipment and software
|
| | | $ | 9,357 | | | | | $ | 5,537 | | |
Furniture and fixtures
|
| | | | 5,845 | | | | | | 4,018 | | |
Leasehold improvements
|
| | | | 16,945 | | | | | | 7,924 | | |
Property and Equipment
|
| | | | 32,147 | | | | | | 17,479 | | |
Accumulated depreciation
|
| | | | (6,108) | | | | | | (3,377) | | |
Property and Equipment, net
|
| | | $ | 26,039 | | | | | $ | 14,102 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| |
—
|
| | | $ | 3,328 | | | | | $ | (3,328) | | | | | $ | — | | |
Internally developed software
|
| |
1.80 years
|
| | | | 39,016 | | | | | | (18,342) | | | | | | 20,674 | | |
State licenses
|
| |
.75 years
|
| | | | 688 | | | | | | (374) | | | | | | 314 | | |
| | | | | | | $ | 43,032 | | | | | $ | (22,044) | | | | | $ | 20,988 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| |
.5 years
|
| | | $ | 3,328 | | | | | $ | (3,013) | | | | | $ | 315 | | |
Internally developed software
|
| |
1.91 years
|
| | | | 28,937 | | | | | | (12,572) | | | | | | 16,365 | | |
State licenses
|
| |
.75 years
|
| | | | 251 | | | | | | (55) | | | | | | 196 | | |
| | | | | | | $ | 32,516 | | | | | $ | (15,640) | | | | | $ | 16,876 | | |
Years ending December 31,
|
| | | | | | |
2019 (remaining three months)
|
| | | $ | 2,548 | | |
2020
|
| | | | 7,847 | | |
2021
|
| | | | 5,369 | | |
2022
|
| | | | 5,224 | | |
Total | | | | $ | 20,988 | | |
| | |
At September 30,
|
| |
At December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Accounts payable
|
| | | $ | 15,135 | | | | | $ | 11,626 | | |
Accrued marketing fees
|
| | | | 13,948 | | | | | | 3,237 | | |
Accrued payroll and related expenses
|
| | | | 13,062 | | | | | | 9,857 | | |
Accrued litigation, lobbying & compliance
|
| | | | 5,375 | | | | | | 5,566 | | |
Accrued partnership fees
|
| | | | 4,881 | | | | | | 4,340 | | |
Accrued loyalty points
|
| | | | 4,376 | | | | | | 7,272 | | |
Accrued other
|
| | | | 4,561 | | | | | | 7,269 | | |
Accrued operating taxes
|
| | | | 3,510 | | | | | | 2,741 | | |
Accrued professional fees
|
| | | | 2,114 | | | | | | 1,978 | | |
Accrued software licenses
|
| | | | 1,146 | | | | | | 2,263 | | |
Accounts payable and accrued expenses
|
| | | $ | 68,108 | | | | | $ | 56,149 | | |
(in thousands)
|
| |
Preferred Shares
Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying Value
|
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,671 | | |
Series F redeemable convertible preferred stock
|
| | | | 78,445 | | | | | | 55,349 | | | | | $ | 138,453 | | |
Total
|
| | | | 133,346 | | | | | | 110,250 | | | | | $ | 258,124 | | |
(in thousands)
|
| |
Preferred Shares
Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying Value
|
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,427 | | |
Series F redeemable convertible preferred stock
|
| | | | 78,445 | | | | | | 57,068 | | | | | $ | 141,850 | | |
Total
|
| | | | 133,346 | | | | | | 111,969 | | | | | $ | 261,277 | | |
|
In thousands
|
| |
Number of
Shares |
| |
Weighted
Average Exercise Price |
| |
Weighted Average
Remaining Contractual Term (years) |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Outstanding at December 31, 2017
|
| | | | 61,562 | | | | | $ | 0.51 | | | | | | 8.00 | | | | | $ | 32,401 | | |
Granted – Time Vesting
|
| | | | 13,564 | | | | | | 1.23 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | 5,320 | | | | | | 1.16 | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 35,058 | | | | | | 1.16 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (2,297) | | | | | | 0.25 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (1,171) | | | | | | 0.84 | | | | | | | | | | | | | | |
Forfeited – PSP
|
| | | | (159) | | | | | | 1.16 | | | | | | | | | | | | | | |
Outstanding at December 31, 2018
|
| | | | 111,877 | | | | | $ | 0.84 | | | | | | 8.15 | | | | | $ | 69,765 | | |
Granted – Time Vesting
|
| | | | 15,874 | | | | | | 1.65 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | 6,263 | | | | | | 1.66 | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 5,250 | | | | | | 1.66 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (2,131) | | | | | | 0.34 | | | | | | | | | | | | | | |
Exercised – PSP
|
| | | | (44) | | | | | | 1.16 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (1,007) | | | | | | 1.17 | | | | | | | | | | | | | | |
Forfeited – PSP
|
| | | | (54) | | | | | | 1.23 | | | | | | | | | | | | | | |
Outstanding at September 30, 2019
|
| | | | 136,028 | | | | | $ | 1.01 | | | | | | 7.88 | | | | | $ | 90,298 | | |
Vested and Expected to Vest as of September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Time Vesting
|
| | | | 75,637 | | | | | $ | 0.79 | | | | | | 6.91 | | | | | $ | 63,621 | | |
PSP
|
| | | | 5,320 | | | | | $ | 1.16 | | | | | | 8.55 | | | | | $ | 2,698 | | |
LTIP
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Nine Months ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Provision for income taxes
|
| | | $ | 35 | | | | | $ | 63 | | |
Years ending December 31,
|
| | | | | | |
2019 (remaining three months)
|
| | | $ | 1,390 | | |
2020
|
| | | | 6,702 | | |
2021
|
| | | | 6,716 | | |
2022
|
| | | | 6,903 | | |
2023
|
| | | | 6,644 | | |
Thereafter
|
| | | | 29,184 | | |
Total | | | | $ | 57,539 | | |
|
Years ending December 31,
|
| | | | | | |
2019 (remaining three months)
|
| | | $ | 26,738 | | |
2020
|
| | | | 42,992 | | |
2021
|
| | | | 41,089 | | |
2022
|
| | | | 14,720 | | |
2023
|
| | | | 5,563 | | |
Thereafter
|
| | | | 9,150 | | |
Total | | | | $ | 140,252 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
United States
|
| | | $ | 189,046 | | | | | $ | 128,408 | | |
Other
|
| | | | 2,949 | | | | | | 4,608 | | |
Total net revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 117,908 | | | | | $ | 49,267 | | |
Cash reserved for users
|
| | | | 111,698 | | | | | | 89,065 | | |
Receivables reserved for users
|
| | | | 21,334 | | | | | | 17,247 | | |
Prepaid expenses and other current assets
|
| | | | 11,233 | | | | | | 9,019 | | |
Total current assets
|
| | | | 262,173 | | | | | | 164,598 | | |
Property and equipment, net
|
| | | | 14,102 | | | | | | 1,603 | | |
Intangible assets, net
|
| | | | 16,876 | | | | | | 10,201 | | |
Goodwill
|
| | | | 4,738 | | | | | | 4,399 | | |
Deposits
|
| | | | 1,504 | | | | | | 2,232 | | |
Total assets
|
| | | $ | 299,393 | | | | | $ | 183,033 | | |
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | | $ | 56,149 | | | | | $ | 50,363 | | |
Liabilities to users
|
| | | | 132,769 | | | | | | 106,207 | | |
Term note, current portion
|
| | | | 3,750 | | | | | | 2,500 | | |
Settlement liability, current portion
|
| | | | 3,272 | | | | | | 2,408 | | |
Total current liabilities
|
| | | | 195,940 | | | | | | 161,478 | | |
Term note, net of current portion
|
| | | | — | | | | | | 2,500 | | |
Settlement liability, net of current portion
|
| | | | — | | | | | | 3,076 | | |
Other long-term liabilities
|
| | | | 27,403 | | | | | | 15,335 | | |
Total liabilities
|
| | | $ | 223,343 | | | | | $ | 182,389 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Commitments and contingencies (Note 14) | | | | | | | | | | | | | |
Redeemable convertible preferred stock: | | | | | | | | | | | | | |
Series E-1 redeemable convertible preferred stock, $0.001 par value; 54,901 shares
authorized, issued and outstanding at December 31, 2018 and 2017; liquidation preference of $120,943 |
| | | $ | 119,427 | | | | | $ | 119,009 | | |
Series F redeemable convertible preferred stock, $0.001 par value; 78,445 shares authorized, 57,068 shares issued and outstanding at December 31, 2018; liquidation preference of $145,499 as of December 31, 2018
|
| | | | 141,850 | | | | | | — | | |
Total redeemable convertible preferred stock
|
| | | | 261,277 | | | | | | 119,009 | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Common stock, $0.001 par value 735,000 and 545,000 shares authorized as of December 31, 2018 and 2017; 384,009 and 379,932 shares issued and outstanding at December 31, 2018 and 2017
|
| | | | 384 | | | | | | 380 | | |
Additional paid-in capital
|
| | | | 670,439 | | | | | | 661,085 | | |
Accumulated deficit
|
| | | | (856,050) | | | | | | (779,830) | | |
Total stockholders’ deficit
|
| | | | (185,227) | | | | | | (118,365) | | |
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
| | | $ | 299,393 | | | | | $ | 183,033 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Revenue
|
| | | $ | 226,277 | | | | | $ | 191,844 | | |
Cost of revenue
|
| | | | 48,689 | | | | | | 31,750 | | |
Sales and marketing
|
| | | | 145,580 | | | | | | 156,632 | | |
Product and technology
|
| | | | 32,885 | | | | | | 20,212 | | |
General and administrative
|
| | | | 75,904 | | | | | | 56,448 | | |
Loss from operations
|
| | | | (76,781) | | | | | | (73,198) | | |
Other income (expenses): | | | | | | | | | | | | | |
Interest income (expense)
|
| | | | 666 | | | | | | (1,541) | | |
Other expense, net
|
| | | | — | | | | | | (607) | | |
Total other income (expenses), net
|
| | | | 666 | | | | | | (2,148) | | |
Loss before income tax expense
|
| | | | (76,115) | | | | | | (75,346) | | |
Income tax expense
|
| | | | 105 | | | | | | 210 | | |
Net loss
|
| | | $ | (76,220) | | | | | $ | (75,556) | | |
| | |
Convertible Redeemable
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balances at December 31,
2016 |
| | | | 184,499 | | | | | $ | 490,971 | | | | | | 22,291 | | | | | $ | 22 | | | | | $ | 3,998 | | | | | $ | (704,274) | | | | | $ | (700,254) | | |
Conversion of Debt to Series E Preferred Stock
|
| | | | 103,077 | | | | | | 160,928 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of Series E-1 Redeemable Convertible Preferred Stock
|
| | | | 54,901 | | | | | | 118,623 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of Series D
Redeemable Convertible Preferred Stock for In-kind Transfer |
| | | | 714 | | | | | | 1,077 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Conversion of Preferred Stock
to Common Stock |
| | | | (288,290) | | | | | | (654,103) | | | | | | 353,850 | | | | | | 354 | | | | | | 653,749 | | | | | | — | | | | | | 654,103 | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 1,233 | | | | | | 1 | | | | | | 179 | | | | | | — | | | | | | 180 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 2,558 | | | | | | 3 | | | | | | 172 | | | | | | — | | | | | | 175 | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 1,513 | | | | | | — | | | | | | — | | | | | | (1,513) | | | | | | — | | | | | | (1,513) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,500 | | | | | | — | | | | | | 4,500 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (75,556) | | | | | | (75,556) | | |
Balances at December 31,
2017 |
| | | | 54,901 | | | | | | 119,009 | | | | | | 379,932 | | | | | | 380 | | | | | | 661,085 | | | | | | (779,830) | | | | | | (118,365) | | |
Issuance of Series F Preferred
Stock |
| | | | 57,068 | | | | | | 141,590 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 2,385 | | | | | | 2 | | | | | | 550 | | | | | | — | | | | | | 552 | | |
Common Stock Issued
|
| | | | — | | | | | | — | | | | | | 393 | | | | | | 1 | | | | | | 339 | | | | | | — | | | | | | 340 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 1,299 | | | | | | 1 | | | | | | 1,933 | | | | | | — | | | | | | 1,934 | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 678 | | | | | | — | | | | | | — | | | | | | (678) | | | | | | — | | | | | | (678) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,210 | | | | | | — | | | | | | 7,210 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (76,220) | | | | | | (76,220) | | |
Balances at December 31,
2018 |
| | | | 111,969 | | | | | $ | 261,277 | | | | | | 384,009 | | | | | $ | 384 | | | | | $ | 670,439 | | | | | $ | (856,050) | | | | | $ | (185,227) | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (76,220) | | | | | $ | (75,556) | | |
Adjustments to reconcile net loss to cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 7,499 | | | | | | 6,301 | | |
Non-cash rent expense
|
| | | | 37 | | | | | | (120) | | |
Non-cash interest expense
|
| | | | 31 | | | | | | 1,487 | | |
Stock-based compensation expense
|
| | | | 7,210 | | | | | | 4,500 | | |
Advertising expense paid through issuance of Common Stock
|
| | | | 1,934 | | | | | | 1,252 | | |
Amortization of debt discount
|
| | | | — | | | | | | 141 | | |
Gain on derivative fair value adjustment
|
| | | | — | | | | | | (184) | | |
Loss on exit activities
|
| | | | — | | | | | | 877 | | |
Loss on disposal of assets
|
| | | | — | | | | | | 185 | | |
Loss on conversion of promissory notes
|
| | | | — | | | | | | 650 | | |
Deferred income taxes
|
| | | | 19 | | | | | | 145 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Cash reserved for users
|
| | | | (22,633) | | | | | | (17,346) | | |
Receivables reserved for users
|
| | | | (4,087) | | | | | | 5,680 | | |
Prepaid expenses and other current assets
|
| | | | (2,214) | | | | | | (4,175) | | |
Deposits
|
| | | | 728 | | | | | | (133) | | |
Accounts payable and accrued expenses
|
| | | | 5,699 | | | | | | (29,793) | | |
Other long-term liabilities
|
| | | | 12,068 | | | | | | 5,307 | | |
Settlement liability
|
| | | | (2,212) | | | | | | 783 | | |
Liabilities to users
|
| | | | 26,562 | | | | | | 11,562 | | |
Acquisition of state licenses
|
| | | | (251) | | | | | | — | | |
Net cash used in operating activities
|
| | | | (45,830) | | | | | | (88,437) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (13,683) | | | | | | (599) | | |
Capitalization of internal-use software costs
|
| | | | (12,738) | | | | | | (7,116) | | |
Net cash used in investing activities
|
| | | | (26,421) | | | | | | (7,715) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Repayment of notes payable
|
| | | | (1,250) | | | | | | — | | |
Net cost due to conversion of Series E Stock
|
| | | | — | | | | | | (272) | | |
Net proceeds due to issuance of Series E-1 Redeemable Convertible Preferred
Stock |
| | | | — | | | | | | 118,623 | | |
Net proceeds due to issuance of Series F Redeemable Convertible Preferred Stock
|
| | | | 141,590 | | | | | | — | | |
Proceeds from exercise of stock options
|
| | | | 552 | | | | | | 180 | | |
Net cash provided by financing activities
|
| | | | 140,892 | | | | | | 118,531 | | |
Net Increase in Cash
|
| | | | 68,641 | | | | | | 22,379 | | |
Cash at Beginning of Year
|
| | |
|
49,267
|
| | | |
|
26,888
|
| |
Cash at End of Year
|
| | | $ | 117,908 | | | | | $ | 49,267 | | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | | | | | | | | | | | | | |
Accretion of preferred stock
|
| | | $ | 678 | | | | | $ | 1,513 | | |
Conversion of Series A through E of preferred stock to common stock
|
| | | | — | | | | | | 654,103 | | |
Conversion of convertible notes into preferred stock
|
| | | | — | | | | | | 160,928 | | |
Common stock Issued
|
| | | | 340 | | | | | | — | | |
Supplemental Disclosure of Cash Activities: | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 261 | | | | | $ | 285 | | |
| Computer equipment and software | | | 3 years | |
| Furniture and fixtures | | | 7 years | |
| Leasehold improvements | | | Lesser of the lease terms or the estimated useful lives of the improvements, generally 1 – 10 years | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Computer equipment and software
|
| | | $ | 5,537 | | | | | $ | 1,485 | | |
Furniture and fixtures
|
| | | | 4,018 | | | | | | 1,100 | | |
Leasehold improvements
|
| | | | 7,924 | | | | | | 1,210 | | |
Property and Equipment
|
| | | | 17,479 | | | | | | 3,795 | | |
Accumulated depreciation
|
| | | | (3,377) | | | | | | (2,192) | | |
Property and Equipment, net
|
| | | $ | 14,102 | | | | | $ | 1,603 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| | 0.5 years | | | | $ | 3,328 | | | | | $ | (3,013) | | | | | $ | 315 | | |
Internally developed software
|
| | 1.91 years | | | | | 28,937 | | | | | | (12,572) | | | | | | 16,365 | | |
State Licenses
|
| | 0.75 years | | | | | 251 | | | | | | (55) | | | | | | 196 | | |
Intangible Assets, net
|
| | | | | | $ | 32,516 | | | | | $ | (15,640) | | | | | $ | 16,876 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| | 1.5 years | | | | $ | 3,328 | | | | | $ | (2,383) | | | | | $ | 945 | | |
Internally developed software
|
| | 1.96 years | | | | | 16,199 | | | | | | (6,943) | | | | | | 9,256 | | |
Intangible Assets, net
|
| | | | | | $ | 19,527 | | | | | $ | (9,326) | | | | | $ | 10,201 | | |
Year ending December 31,
|
| | | | | | |
2019
|
| | | $ | 7,738 | | |
2020
|
| | | | 5,718 | | |
2021
|
| | | | 3,420 | | |
Total | | | | $ | 16,876 | | |
|
Balance as of December 31, 2016
|
| | | $ | 4,399 | | |
|
Goodwill acquired
|
| | | | — | | |
|
Balance as of December 31, 2017
|
| | | $ | 4,399 | | |
|
Goodwill acquired
|
| | | | 339 | | |
|
Balance as of December 31, 2018
|
| | | $ | 4,738 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Accounts payable
|
| | | $ | 11,626 | | | | | $ | 13,074 | | |
Accrued payroll and related expenses
|
| | | | 9,857 | | | | | | 7,305 | | |
Accrued loyalty points
|
| | | | 7,272 | | | | | | 5,163 | | |
Accrued other
|
| | | | 7,269 | | | | | | 2,604 | | |
Accrued litigation, lobbying & compliance
|
| | | | 5,566 | | | | | | 2,205 | | |
Accrued partnership fees
|
| | | | 4,340 | | | | | | — | | |
Accrued marketing fees
|
| | | | 3,237 | | | | | | 16,638 | | |
Accrued operating taxes
|
| | | | 2,741 | | | | | | 981 | | |
Accrued software & licenses
|
| | | | 2,263 | | | | | | 197 | | |
Accrued professional fees
|
| | | | 1,978 | | | | | | 2,196 | | |
Accounts payable and accrued expenses
|
| | | $ | 56,149 | | | | | $ | 50,363 | | |
(in thousands)
|
| |
Preferred
Shares Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying Value
|
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,427 | | |
Series F redeemable convertible preferred stock
|
| | | | 78,445 | | | | | | 57,068 | | | | | | 141,850 | | |
Total | | | | | 133,346 | | | | | | 111,969 | | | | | $ | 261,277 | | |
(in thousands)
|
| |
Preferred
Shares Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying
Value |
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,009 | | |
| | |
2018
|
| |
2017
|
| ||||||
Risk-free interest rate
|
| | | | 2.80% | | | | | | 2.06% | | |
Expected term (in years)
|
| | | | 6.11 | | | | | | 6.11 | | |
Expected volatility
|
| | | | 41.98% | | | | | | 42.70% | | |
Expected dividend yield
|
| | | | 0% | | | | | | 0% | | |
In thousands
|
| |
Number of
Shares |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term (years) |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Outstanding at December 31, 2016
|
| | | | 44,530 | | | | | $ | 0.22 | | | | | | 8.24 | | | | | $ | 30,680 | | |
Granted – Time Vesting
|
| | | | 14,165 | | | | | | 1.22 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 5,131 | | | | | | 1.04 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (1,306) | | | | | | 0.15 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (958) | | | | | | 0.61 | | | | | | | | | | | | | | |
Outstanding at December 31, 2017
|
| | | | 61,562 | | | | | $ | 0.51 | | | | | | 8.00 | | | | | $ | 32,401 | | |
Granted – Time Vesting
|
| | | | 13,564 | | | | | | 1.23 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | 5,320 | | | | | | 1.16 | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 35,058 | | | | | | 1.16 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (2,297) | | | | | | 0.25 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (1,171) | | | | | | 0.84 | | | | | | | | | | | | | | |
Forfeited – PSP
|
| | | | (159) | | | | | | 1.16 | | | | | | | | | | | | | | |
Outstanding at December 31, 2018
|
| | | | 111,877 | | | | | $ | 0.84 | | | | | | 8.15 | | | | | $ | 69,765 | | |
Vested and Expected to Vest as of December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Time Vesting
|
| | | | 62,262 | | | | | $ | 0.58 | | | | | | 6.90 | | | | | $ | 52,158 | | |
PSP
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
LTIP
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
United States
|
| | | $ | (76,122) | | | | | $ | (75,445) | | |
Foreign
|
| | | | 7 | | | | | | 99 | | |
Loss before provision for (benefit from) income taxes
|
| | | $ | (76,115) | | | | | $ | (75,346) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Current: | | | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | — | | |
State
|
| | | | — | | | | | | — | | |
Foreign
|
| | | | 86 | | | | | | 65 | | |
Total current provision
|
| | | | 86 | | | | | | 65 | | |
Deferred: | | | | | | | | | | | | | |
Federal
|
| | | | 9 | | | | | | 36 | | |
State
|
| | | | 10 | | | | | | 109 | | |
Foreign
|
| | | | — | | | | | | — | | |
Total deferred provision
|
| | | | 19 | | | | | | 145 | | |
Total expense (benefit)
|
| | | $ | 105 | | | | | $ | 210 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Provision for income taxes at statutory rate
|
| | | $ | (15,984) | | | | | $ | (25,400) | | |
State taxes, net of federal benefit
|
| | | | (7,525) | | | | | | (2,769) | | |
Stock-based compensation expense
|
| | | | 430 | | | | | | 536 | | |
Non-deductible lobbying expenses
|
| | | | 1,352 | | | | | | 2,505 | | |
Change in valuation allowance
|
| | | | 21,584 | | | | | | (66,370) | | |
Impact of federal rate change on net deferred taxes
|
| | | | — | | | | | | 90,889 | | |
Other
|
| | | | 248 | | | | | | 819 | | |
Provision for income taxes
|
| | | $ | 105 | | | | | $ | 210 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Share-based compensation
|
| | | $ | 3,472 | | | | | $ | 1,587 | | |
Intangible assets
|
| | | | 187 | | | | | | 131 | | |
Fixed assets
|
| | | | 365 | | | | | | 225 | | |
Accrual & other temporary differences
|
| | | | 12,273 | | | | | | 9,793 | | |
Credit carryforwards
|
| | | | 15 | | | | | | 15 | | |
Net operating loss carryforwards
|
| | | | 203,180 | | | | | | 184,144 | | |
Total deferred tax assets:
|
| | | $ | 219,492 | | | | | $ | 195,895 | | |
Deferred tax liability: | | | | | | | | | | | | | |
Capitalized software costs
|
| | | | (4,364) | | | | | | (2,521) | | |
Total Net Deferred Tax Assets
|
| | | | 215,128 | | | | | | 193,374 | | |
Valuation allowance
|
| | | | (215,292) | | | | | | (193,519) | | |
Net deferred tax liabilities
|
| | | $ | (164) | | | | | $ | (145) | | |
|
Balance as of December 31, 2016
|
| | | $ | 184 | | |
|
Gain upon extinguishment of embedded promissory note derivative
|
| | | | (184) | | |
|
Balance as of December 31, 2017
|
| | | $ | — | | |
Years ending December 31,
|
| | | | | | |
2019
|
| | | $ | 5,877 | | |
2020
|
| | | | 5,199 | | |
2021
|
| | | | 4,929 | | |
2022
|
| | | | 5,069 | | |
2023
|
| | | | 4,760 | | |
Thereafter
|
| | | | 22,089 | | |
Total | | | | $ | 47,923 | | |
|
Years ending December 31,
|
| | | | | | |
2019
|
| | | $ | 46,910 | | |
2020
|
| | | | 17,145 | | |
2021
|
| | | | 16,514 | | |
2022
|
| | | | 3,800 | | |
2023
|
| | | | 3,413 | | |
Thereafter
|
| | | | 3,000 | | |
Total
|
| | | $ | 90,782 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
United States
|
| | | $ | 219,415 | | | | | $ | 187,261 | | |
Other
|
| | | | 6,862 | | | | | | 4,583 | | |
Total net revenue
|
| | | $ | 226,277 | | | | | $ | 191,844 | | |
| | |
Note
|
| |
September 30,
2019 |
| |
December 31,
2018 |
| |||||||||
| | | | | | | | |
Unaudited
|
| | | | | | | |||
ASSETS | | | | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | | | | | | | 9,361 | | | | | | 20,731 | | |
Trade receivables, net
|
| | | | | | | | | | 18,921 | | | | | | 17,220 | | |
Other current assets
|
| | | | | | | | | | 3,833 | | | | | | 2,876 | | |
Total current assets
|
| | | | | | | | | | 32,115 | | | | | | 40,827 | | |
NON-CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | | | | | | | 25,053 | | | | | | 21,980 | | |
Right-of-use assets
|
| | | | 2 | | | | | | 24,662 | | | | | | — | | |
Property, plant and equipment, net
|
| | | | | | | | | | 10,268 | | | | | | 7,926 | | |
Deferred tax assets
|
| | | | | | | | | | 275 | | | | | | 235 | | |
Other non-current assets
|
| | | | | | | | | | 45 | | | | | | 1,688 | | |
Total non-current assets
|
| | | | | | | | | | 60,303 | | | | | | 31,829 | | |
TOTAL ASSETS
|
| | | | | | | | | | 92,418 | | | | | | 72,656 | | |
| | |
Note
|
| |
September 30,
2019 |
| |
December 31,
2018 |
| |||||||||
| | | | | | | | |
Unaudited
|
| | | | | | | |||
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | |
Trade payables
|
| | | | | | | | | | 5,717 | | | | | | 7,006 | | |
Lease liabilities
|
| | | | 2 | | | | | | 2,423 | | | | | | — | | |
Other accounts payable
|
| | | | | | | | | | 6,986 | | | | | | 6,923 | | |
Total current liabilities
|
| | | | | | | | | | 15,126 | | | | | | 13,929 | | |
NON-CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | 2 | | | | | | 22,318 | | | | | | — | | |
Accrued severance pay, net
|
| | | | | | | | | | 476 | | | | | | 278 | | |
Total non-current liabilities
|
| | | | | | | | | | 22,794 | | | | | | 278 | | |
SHAREHOLDERS’ EQUITY:
|
| | | | 3 | | | | | | | | | | | | | | |
Share capital
|
| | | | | | | | | | 3 | | | | | | 3 | | |
Actuarial reserve
|
| | | | | | | | | | (143) | | | | | | (65) | | |
Retained earnings
|
| | | | | | | | | | 53,939 | | | | | | 57,928 | | |
Equity attributable to owners of the parent
|
| | | | | | | | | | 53,799 | | | | | | 57,866 | | |
Non-controlling interest
|
| | | | | | | | | | 699 | | | | | | 583 | | |
Total equity
|
| | | | | | | | | | 54,498 | | | | | | 58,449 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | | | | | 92,418 | | | | | | 72,656 | | |
|
|
/s/ Richard Carter
Richard Carter
Chief Executive Officer |
| |
/s/ Shay Berka
Shay Berka
Chief Financial Officer |
| |
January 6, 2020
Date of approval of financial statements
|
|
| | |
Nine months period ended
September 30, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
Unaudited
|
| |||||||||
Revenue
|
| | | | 68,345 | | | | | | 69,631 | | |
Cost of revenue
|
| | | | 35,816 | | | | | | 33,247 | | |
Gross profit
|
| | | | 32,529 | | | | | | 36,384 | | |
Research and development expenses
|
| | | | 13,610 | | | | | | 8,409 | | |
Selling and marketing expenses
|
| | | | 4,383 | | | | | | 3,124 | | |
General and administrative expenses
|
| | | | 7,381 | | | | | | 5,613 | | |
Profit from operations
|
| | | | 7,155 | | | | | | 19,238 | | |
Financial income
|
| | | | 22 | | | | | | 121 | | |
Financial expenses
|
| | | | 676 | | | | | | 44 | | |
Profit before tax
|
| | | | 6,501 | | | | | | 19,315 | | |
Tax expenses
|
| | | | 297 | | | | | | 417 | | |
Net Profit
|
| | | | 6,204 | | | | | | 18,898 | | |
Other comprehensive loss: | | | | | | | | | | | | | |
Items not reclassified to profit or loss in subsequent periods | | | | | | | | | | | | | |
re-measurements of accrued severance pay
|
| | | | (155) | | | | | | (39) | | |
Total comprehensive income for the year
|
| | | | 6,049 | | | | | | 18,859 | | |
Profit for the period attributed to: | | | | | | | | | | | | | |
Owners of the parent
|
| | | | 6,011 | | | | | | 18,696 | | |
Non - controlling interest
|
| | | | 193 | | | | | | 202 | | |
| | | | | 6,204 | | | | | | 18,898 | | |
Total comprehensive income for the period attributed to: | | | | | | | | | | | | | |
Owners of the parent
|
| | | | 5,933 | | | | | | 18,676 | | |
Non - controlling interest
|
| | | | 116 | | | | | | 183 | | |
| | | | | 6,049 | | | | | | 18,859 | | |
| | |
Equity attributable to owners of the parent
|
| |
Non-
controlling interest |
| |
Total
Shareholders’ equity |
| |||||||||||||||||||||||||||
For the nine-month period ended September 30, 2019 (Unaudited) |
| |
Share
capital |
| |
Actuarial
reserve |
| |
Retained
earnings |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2019
|
| | | | 3 | | | | | | (65) | | | | | | 57,928 | | | | | | 57,866 | | | | | | 583 | | | | | | 58,449 | | |
Changes during the period: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 6,011 | | | | | | 6,011 | | | | | | 193 | | | | | | 6,204 | | |
Other comprehensive loss
|
| | | | — | | | | | | (78) | | | | | | — | | | | | | (78) | | | | | | (77) | | | | | | (155) | | |
Total comprehensive income
|
| | | | — | | | | | | (78) | | | | | | 6,011 | | | | | | 5,933 | | | | | | 116 | | | | | | 6,049 | | |
Dividend paid
|
| | | | — | | | | | | — | | | | | | (10,000) | | | | | | (10,000) | | | | | | — | | | | | | (10,000) | | |
Balance at September 30, 2019
|
| | | | 3 | | | | | | (143) | | | | | | 53,939 | | | | | | 53,799 | | | | | | 699 | | | | | | 54,498 | | |
| | |
Equity attributable to owners of the parent
|
| |
Non-
controlling interest |
| |
Total
Shareholders’ equity |
| |||||||||||||||||||||||||||
For the nine-month period ended September 30, 2018 (Unaudited) |
| |
Share
capital |
| |
Actuarial
reserve |
| |
Retained
earnings |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2018
|
| | | | 3 | | | | | | (45) | | | | | | 31,419 | | | | | | 31,377 | | | | | | 333 | | | | | | 31,710 | | |
Changes during the period: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 18,696 | | | | | | 18,696 | | | | | | 202 | | | | | | 18,898 | | |
Other comprehensive loss
|
| | | | — | | | | | | (20) | | | | | | — | | | | | | (20) | | | | | | (19) | | | | | | (39) | | |
Total comprehensive income
|
| | | | — | | | | | | (20) | | | | | | 18,696 | | | | | | 18,676 | | | | | | 183 | | | | | | 18,859 | | |
Balance at September 30, 2018
|
| | | | 3 | | | | | | (65) | | | | | | 50,115 | | | | | | 50,053 | | | | | | 516 | | | | | | 50,569 | | |
| | |
Nine months period ended
September 30, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
Unaudited
|
| |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net profit for the period
|
| | | | 6,204 | | | | | | 18,898 | | |
Adjustments to reconcile net profit to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 10,774 | | | | | | 6,255 | | |
Increase in trade receivables
|
| | | | (1,847) | | | | | | (10,554) | | |
Decrease (increase) in other current assets
|
| | | | 490 | | | | | | (1,587) | | |
Increase in other non-current assets
|
| | | | (50) | | | | | | — | | |
Decrease (increase) in deferred tax assets
|
| | | | (40) | | | | | | 56 | | |
Increase (decrease) in trade payables
|
| | | | (1,361) | | | | | | 1,055 | | |
Increase (decrease) in other non-current liabilities
|
| | | | 43 | | | | | | (110) | | |
Increase in lease liabilities
|
| | | | 468 | | | | | | — | | |
Increase (decrease) in accrued severance pay, net
|
| | | | 433 | | | | | | 1,275 | | |
Income tax expenses
|
| | | | 297 | | | | | | 417 | | |
Cash generated from operations
|
| | | | 15,411 | | | | | | 15,705 | | |
Income tax paid
|
| | | | (667) | | | | | | (395) | | |
Net cash provided by operating activities
|
| | | | 14,744 | | | | | | 15,310 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchase of property, plant and equipment
|
| | | | (4,103) | | | | | | (4,819) | | |
Purchase of software and licenses
|
| | | | (166) | | | | | | (284) | | |
Disposal of fixed assets
|
| | | | — | | | | | | 543 | | |
Increase in deposits
|
| | | | — | | | | | | (65) | | |
Repayment of loan from related party
|
| | | | — | | | | | | 1,200 | | |
Internally generated intangible assets
|
| | | | (9,786) | | | | | | (9,450) | | |
Net cash used in investing activities
|
| | | | (14,055) | | | | | | (12,875) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Dividend paid
|
| | | | (10,000) | | | | | | (338) | | |
Payment of lease liabilities
|
| | | | (2,279) | | | | | | — | | |
Repayment of loan received from related party
|
| | | | — | | | | | | (107) | | |
Net cash used in financing activities
|
| | | | (12,279) | | | | | | (445) | | |
Effects of exchange rate changes on cash and cash equivalents
|
| | | | 220 | | | | | | 75 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | (11,370) | | | | | | 2,065 | | |
Cash and cash equivalents at the beginning of the period
|
| | | | 20,731 | | | | | | 8,454 | | |
Cash and cash equivalents at the end of the period
|
| | | | 9,361 | | | | | | 10,519 | | |
| | |
Under
previous policy |
| |
The change
|
| |
Under IFRS 16
|
| |||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | |
Right-of-use assets
|
| | | | — | | | | | | 20,769 | | | | | | 20,769 | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 2,440 | | | | | | 2,440 | | |
Non-current liability: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 18,329 | | | | | | 18,329 | | |
| | |
€
|
| |||
Operating lease commitments as of December 31, 2018
|
| | | | 20,769 | | |
Weighted average incremental borrowing rate as of January 1, 2019
|
| | | | 2.98% | | |
Lease liabilities as of January 1, 2019
|
| | | | 21,388 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
| | |
September 30, 2019
|
| |||||||||
| | |
Number
of options |
| |
Weighted average
exercise price (€) |
| ||||||
Outstanding at beginning of period
|
| | | | 5,217 | | | | | | 927 | | |
Granted
|
| | | | 676 | | | | | | 10,730 | | |
Outstanding at end of period
|
| | | | 5,893 | | | | | | 2,330 | | |
|
| | |
September 30, 2018
|
| |||||||||
| | |
Number
of options |
| |
Weighted average
exercise price (€) |
| ||||||
Outstanding at beginning of period
|
| | | | 3,120 | | | | | | 130 | | |
Granted
|
| | | | — | | | | | | — | | |
Outstanding at end of period
|
| | | | 3,120 | | | | | | 130 | | |
| | |
Nine months ended
|
| |||||||||
| | |
September 30,
2019 |
| |
September 30,
2018 |
| ||||||
| | |
%
|
| |
%
|
| ||||||
Customer A
|
| | | | 47% | | | | | | 51% | | |
Customer B
|
| | | | 8% | | | | | | 8% | | |
Customer C
|
| | | | 7% | | | | | | 7% | | |
Customer D
|
| | | | 4% | | | | | | 6% | | |
Others
|
| | | | 34% | | | | | | 28% | | |
| | | | | 100% | | | | | | 100% | | |
| Tel-Aviv, Israel | | |
/s/ Ziv haft
|
|
| January 6, 2020 | | |
Certified Public Accountants (Isr.)
|
|
| | | |
BDO Member Firm
|
|
| | |
Note
|
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
| | | | | |
€ In thousands
|
| |
€ In thousands
|
| ||||||
ASSETS | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | | | | 20,731 | | | | | | 8,454 | | |
Trade receivables, net
|
| |
2
|
| | | | 17,220 | | | | | | 11,694 | | |
Restricted deposits
|
| | | | | | | — | | | | | | 250 | | |
Other current assets
|
| |
4
|
| | | | 2,876 | | | | | | 2,243 | | |
Total current assets
|
| | | | | | | 40,827 | | | | | | 22,641 | | |
NON-CURRENT ASSETS: | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| |
6
|
| | | | 21,980 | | | | | | 15,521 | | |
Property and equipment, net
|
| |
5
|
| | | | 7,926 | | | | | | 3,922 | | |
Deferred tax assets
|
| |
13
|
| | | | 235 | | | | | | 201 | | |
Other non-current assets
|
| |
7
|
| | | | 1,688 | | | | | | 1,662 | | |
Total non-current assets
|
| | | | | | | 31,829 | | | | | | 21,306 | | |
TOTAL ASSETS
|
| | | | | | | 72,656 | | | | | | 43,947 | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | |
Trade payables
|
| | | | | | | 7,006 | | | | | | 4,707 | | |
Loan from related party
|
| | | | | | | — | | | | | | 497 | | |
Other accounts payable
|
| |
8
|
| | | | 6,923 | | | | | | 5,507 | | |
Total current liabilities
|
| | | | | | | 13,929 | | | | | | 10,711 | | |
NON-CURRENT LIABILITIES: | | | | | | | | | | | | | | | | |
Accrued severance pay, net
|
| | | | | | | 278 | | | | | | 346 | | |
Total non-current liabilities
|
| | | | | | | 278 | | | | | | 346 | | |
SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | |
Share capital
|
| |
9
|
| | | | 3 | | | | | | 3 | | |
Actuarial reserve
|
| | | | | | | (65) | | | | | | (45) | | |
Retained earnings
|
| | | | | | | 57,928 | | | | | | 32,599 | | |
Equity attributable to owners of the parent
|
| | | | | | | 57,866 | | | | | | 32,557 | | |
Non-controlling interest
|
| | | | | | | 583 | | | | | | 333 | | |
Total equity
|
| | | | | | | 58,449 | | | | | | 32,890 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | | 72,656 | | | | | | 43,947 | | |
|
|
/s/ Richard Carter
Richard Carter
Chief Executive Officer |
| |
/s/ Shay Berka
Shay Berka
Chief Financial Officer |
| |
January 6, 2020
Date of approval of the
Financial statements |
|
| | |
Note
|
| |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| |||||||||
| | | | | | | | |
€ In thousands
|
| |
€ In thousands
|
| ||||||
Revenue
|
| | | | 10 | | | | | | 94,147 | | | | | | 66,087 | | |
Cost of revenue
|
| | | | 11 | | | | | | 45,087 | | | | | | 31,844 | | |
Gross profit
|
| | | | | | | | | | 49,060 | | | | | | 34,243 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Research and development expenses
|
| | | | | | | | | | 10,115 | | | | | | 8,693 | | |
Selling and marketing expenses
|
| | | | | | | | | | 3,722 | | | | | | 2,964 | | |
General and administrative expenses
|
| | | | | | | | | | 7,636 | | | | | | 5,892 | | |
Total operating expenses
|
| | | | | | | | | | 21,473 | | | | | | 17,549 | | |
Profit from operations
|
| | | | | | | | | | 27,587 | | | | | | 16,694 | | |
Financial income
|
| | | | | | | | | | 97 | | | | | | 37 | | |
Financial expense
|
| | | | | | | | | | 340 | | | | | | 177 | | |
Profit before tax
|
| | | | | | | | | | 27,344 | | | | | | 16,554 | | |
Tax expenses
|
| | | | 13 | | | | | | 565 | | | | | | 264 | | |
Net profit
|
| | | | | | | | | | 26,779 | | | | | | 16,290 | | |
Other comprehensive loss: | | | | | | | | | | | | | | | | | | | |
Items that will not be reclassified to profit or loss: | | | | | | | | | | | | | | | | | | | |
Re-measurements of accrued severance pay
|
| | | | | | | | | | 40 | | | | | | 17 | | |
Total comprehensive income for the year
|
| | | | | | | | | | 26,739 | | | | | | 16,273 | | |
Profit for the year attributed to: | | | | | | | | | | | | | | | | | | | |
Owners of the parent
|
| | | | | | | | | | 26,509 | | | | | | 16,110 | | |
Non-controlling interest
|
| | | | | | | | | | 270 | | | | | | 180 | | |
| | | | | | | | | | | 26,779 | | | | | | 16,290 | | |
Total comprehensive income for the year attributed to: | | | | | | | | | | | | | | | | | | | |
Owners of the parent
|
| | | | | | | | | | 26,489 | | | | | | 16,102 | | |
Non-controlling interest
|
| | | | | | | | | | 250 | | | | | | 171 | | |
| | | | | | | | | | | 26,739 | | | | | | 16,273 | | |
| | |
Owners of the parent
|
| |
Non-
controlling interest |
| |
Total
Shareholders’ equity |
| |||||||||||||||||||||||||||
| | |
Share
capital |
| |
Actuarial
reserve |
| |
Retained
earnings |
| |
Total
|
| ||||||||||||||||||||||||
| | |
€ In thousands
|
| |||||||||||||||||||||||||||||||||
Balance at December 31, 2016
|
| | | | 3 | | | | | | (37) | | | | | | 17,489 | | | | | | 17,455 | | | | | | 162 | | | | | | 17,617 | | |
Changes during 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 16,110 | | | | | | 16,110 | | | | | | 180 | | | | | | 16,290 | | |
Other comprehensive loss
|
| | | | — | | | | | | (8) | | | | | | — | | | | | | (8) | | | | | | (9) | | | | | | (17) | | |
Total comprehensive income for the year
|
| | | | — | | | | | | (8) | | | | | | 16,110 | | | | | | 16,102 | | | | | | 171 | | | | | | 16,273 | | |
Dividend declared (see Note 9B)
|
| | | | — | | | | | | — | | | | | | (687) | | | | | | (687) | | | | | | — | | | | | | (687) | | |
Dividend declared and paid
|
| | | | — | | | | | | — | | | | | | (313) | | | | | | (313) | | | | | | — | | | | | | (313) | | |
Balance at December 31, 2017 as previously stated
|
| | | | 3 | | | | | | (45) | | | | | | 32,599 | | | | | | 32,557 | | | | | | 333 | | | | | | 32,890 | | |
Changes in accounting policy-IFRS 9 Financial Instruments (see Note 2)
|
| | | | — | | | | | | — | | | | | | (1,180) | | | | | | (1,180) | | | | | | — | | | | | | (1,180) | | |
Balance at January 1, 2018 as restated
|
| | | | 3 | | | | | | (45) | | | | | | 31,419 | | | | | | 31,377 | | | | | | 333 | | | | | | 31,710 | | |
Changes during 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 26,509 | | | | | | 26,509 | | | | | | 270 | | | | | | 26,779 | | |
Other comprehensive loss
|
| | | | — | | | | | | (20) | | | | | | — | | | | | | (20) | | | | | | (20) | | | | | | (40) | | |
Total comprehensive income for the year
|
| | | | — | | | | | | (20) | | | | | | 26,509 | | | | | | 26,489 | | | | | | 250 | | | | | | 26,739 | | |
Balance at December 31, 2018
|
| | | | 3 | | | | | | (65) | | | | | | 57,928 | | | | | | 57,866 | | | | | | 583 | | | | | | 58,449 | | |
| | |
Note
|
| |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
| | | | | |
€ In thousands
|
| |
€ In thousands
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | |
Net profit for the year
|
| | | | | | | 26,779 | | | | | | 16,290 | | |
Adjustments required to reflect the cash flows from operating
activities: |
| | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | | | | 8,325 | | | | | | 4,222 | | |
Gain on sale of fixed assets
|
| | | | | | | (14) | | | | | | — | | |
Increase in trade receivables
|
| | | | | | | (6,706) | | | | | | (7,602) | | |
Increase in other current assets
|
| |
4
|
| | | | (1,833) | | | | | | (245) | | |
Increase (decrease) in other non-current assets
|
| |
7
|
| | | | 34 | | | | | | (46) | | |
Increase in deferred tax assets
|
| |
13
|
| | | | (34) | | | | | | (56) | | |
Increase in trade payables
|
| | | | | | | 2,402 | | | | | | 3,295 | | |
Increase (decrease) in other non-current liabilities
|
| | | | | | | (107) | | | | | | 13 | | |
Increase in other accounts payable
|
| | | | | | | 1,903 | | | | | | 2,255 | | |
Income tax expenses
|
| |
13
|
| | | | 565 | | | | | | 264 | | |
Cash generated from operations
|
| | | | | | | 31,314 | | | | | | 18,390 | | |
Income tax paid
|
| |
13
|
| | | | (365) | | | | | | (130) | | |
Net cash provided by operating activities
|
| | | | | | | 30,949 | | | | | | 18,260 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | |
Purchase of property, plant and equipment
|
| |
5
|
| | | | (5,999) | | | | | | (3,225) | | |
Disposal of fixed assets
|
| |
5
|
| | | | 169 | | | | | | — | | |
Purchase of software and licenses
|
| |
6
|
| | | | (388) | | | | | | (215) | | |
Proceeds from sale of fixed assets
|
| |
5
|
| | | | 55 | | | | | | — | | |
Decrease in restricted deposits
|
| | | | | | | 250 | | | | | | 467 | | |
Increase in deposits
|
| |
7
|
| | | | (60) | | | | | | (72) | | |
Loans granted to related party
|
| |
14
|
| | | | — | | | | | | (50) | | |
Repayment of loan from related party
|
| |
14
|
| | | | 1,200 | | | | | | — | | |
Internally generated intangible assets
|
| |
6
|
| | | | (12,611) | | | | | | (11,212) | | |
Net cash used in investing activities
|
| | | | | | | (17,384) | | | | | | (14,307) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | |
Dividend paid
|
| |
9
|
| | | | (687) | | | | | | (313) | | |
Loans received from related party
|
| |
12
|
| | | | 43 | | | | | | 503 | | |
Repayment of loan
|
| |
12
|
| | | | (540) | | | | | | — | | |
Net cash provided by (used in) financing activities
|
| | | | | | | (1,184) | | | | | | 190 | | |
Effects of exchange rate changes on cash and cash equivalents
|
| | | | | | | (104) | | | | | | (6) | | |
Net Increase in cash and cash equivalents
|
| | | | | | | 12,277 | | | | | | 4,137 | | |
Cash and cash equivalents at beginning of the year
|
| | | | | | | 8,454 | | | | | | 4,317 | | |
Cash and cash equivalents at the end of the year
|
| | | | | | | 20,731 | | | | | | 8,454 | | |
Appendix A: Non-cash activities | | | | | | | | | | | | | | | | |
Dividend declared
|
| | | | | | | — | | | | | | 687 | | |
| Level 1 | | | — | | | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
| Level 2 | | | — | | | Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly. | |
| Level 3 | | | — | | | Inputs that are not based on observable market data (valuation techniques that use inputs that are not based on observable market data). | |
Aging Schedule 31.12.2018
|
| |
Within
payment terms |
| |
0-90 days over
payment terms |
| |
90+ days over
payment terms |
| |
Total
|
| ||||||||||||
Payment option 1
|
| | | | 8,890 | | | | | | 1,366 | | | | | | 3,226 | | | | | | 13,482 | | |
Payment option 2
|
| | | | 459 | | | | | | 275 | | | | | | 3,872 | | | | | | 4,606 | | |
Total
|
| | | | 9,349 | | | | | | 1,641 | | | | | | 7,098 | | | | | | 18,088 | | |
|
Aging Schedule 31.12.2017
|
| |
Within
payment terms |
| |
0-90 days over
payment terms |
| |
90+ days over
payment terms |
| |
Total
|
| ||||||||||||
Payment option 1
|
| | | | 6,811 | | | | | | 820 | | | | | | 95 | | | | | | 7,726 | | |
Payment option 2
|
| | | | 1,007 | | | | | | 1,914 | | | | | | 1,047 | | | | | | 3,968 | | |
Total
|
| | | | 7,818 | | | | | | 2,734 | | | | | | 1,142 | | | | | | 11,694 | | |
| | |
As at
December 31, 2018 |
| |
As at
December 31, 2017 |
| ||||||
Europe
|
| | | | 9,018 | | | | | | 5,964 | | |
Rest of the world
|
| | | | 9,070 | | | | | | 5,730 | | |
Total
|
| | | | 18,088 | | | | | | 11,694 | | |
| | |
As at
December 31, 2018 |
| |
As at
December 31, 2017 |
| ||||||
Payment option 1
|
| | | | 13,481 | | | | | | 7,726 | | |
Payment option 2
|
| | | | 4,607 | | | | | | 3,968 | | |
Total
|
| | | | 18,088 | | | | | | 11,694 | | |
|
| | |
Default rate
|
| |
31.12.2018
|
| |
ECL
|
| |||||||||
Payment option 1
|
| | | | 0.62% | | | | | | 13,481 | | | | | | 84 | | |
Payment option 2
|
| | | | 17.02% | | | | | | 4,607 | | | | | | 784 | | |
Total
|
| | | | | | | | | | 18,088 | | | | | | 868 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
As January 1 under IAS 39
|
| | | | — | | | | | | — | | |
Restated through opening retained earnings
|
| | | | 1,180 | | | | | | — | | |
Decrease during the year
|
| | | | (312) | | | | | | — | | |
Total
|
| | | | 868 | | | | | | — | | |
| | |
Annual depreciation rate (%)
|
| |
Main annual depreciation rate (%)
|
| |||
Motor vehicle
|
| |
15
|
| | | | 15 | | |
Computers
|
| |
15-50
|
| | | | 33 | | |
Furniture and office equipment
|
| |
7-15
|
| | | | 15 | | |
Leasehold improvements
|
| |
Over the shorter of the term of the
lease or useful life |
| | | | 10 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Payment option 1
|
| | | | 87,277 | | | | | | 57,322 | | |
Payment option 2
|
| | | | 6,870 | | | | | | 8,765 | | |
Total revenue
|
| | | | 94,147 | | | | | | 66,087 | | |
| | |
Under
previous policy |
| |
The change
|
| |
Under
IFRS 16 |
| |||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | |
Right-of-use assets
|
| | | | — | | | | | | 20,769 | | | | | | 20,769 | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 2,440 | | | | | | 2,440 | | |
Non-current liability: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 18,329 | | | | | | 18,329 | | |
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Prepaid expenses
|
| | | | 1,286 | | | | | | 419 | | |
Institutions
|
| | | | 567 | | | | | | 341 | | |
Related parties
|
| | | | 86 | | | | | | 1,468 | | |
Other receivables
|
| | | | 937 | | | | | | 15 | | |
Total
|
| | | | 2,876 | | | | | | 2,243 | | |
|
| | |
Leasehold
Improvements |
| |
Motor
Vehicle |
| |
Computers
|
| |
Furniture and
Office Equipment |
| |
Total
|
| |||||||||||||||
Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | 783 | | | | | | 121 | | | | | | 4,263 | | | | | | 375 | | | | | | 5,542 | | |
Additions
|
| | | | 1,601 | | | | | | — | | | | | | 3,957 | | | | | | 441 | | | | | | 5,999 | | |
Disposals
|
| | | | (10) | | | | | | (121) | | | | | | (420) | | | | | | (106) | | | | | | (657) | | |
At December 31, 2018
|
| | | | 2,374 | | | | | | — | | | | | | 7,800 | | | | | | 710 | | | | | | 10,884 | | |
Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | (79) | | | | | | (33) | | | | | | (1,338) | | | | | | (170) | | | | | | (1,620) | | |
Depreciation
|
| | | | (319) | | | | | | (18) | | | | | | (1,324) | | | | | | (124) | | | | | | (1,785) | | |
Disposals
|
| | | | 5 | | | | | | 51 | | | | | | 310 | | | | | | 81 | | | | | | 447 | | |
At December 31, 2018
|
| | | | (393) | | | | | | — | | | | | | (2,352) | | | | | | (213) | | | | | | (2,958) | | |
Net book value at December 31, 2018
|
| | | | 1,981 | | | | | | — | | | | | | 5,448 | | | | | | 497 | | | | | | 7,926 | | |
|
| | |
Leasehold
Improvements |
| |
Motor
Vehicle |
| |
Computers
|
| |
Furniture and
Office Equipment |
| |
Total
|
| |||||||||||||||
Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | 313 | | | | | | 121 | | | | | | 1,591 | | | | | | 310 | | | | | | 2,335 | | |
Additions
|
| | | | 470 | | | | | | — | | | | | | 2,690 | | | | | | 65 | | | | | | 3,225 | | |
Disposals
|
| | | | — | | | | | | — | | | | | | (18) | | | | | | — | | | | | | (18) | | |
At December 31, 2017
|
| | | | 783 | | | | | | 121 | | | | | | 4,263 | | | | | | 375 | | | | | | 5,542 | | |
Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | (46) | | | | | | (14) | | | | | | (650) | | | | | | (135) | | | | | | (845) | | |
Depreciation
|
| | | | (33) | | | | | | (19) | | | | | | (706) | | | | | | (35) | | | | | | (793) | | |
Disposals
|
| | | | — | | | | | | — | | | | | | 18 | | | | | | — | | | | | | 18 | | |
At December 31, 2017
|
| | | | (79) | | | | | | (33) | | | | | | (1,338) | | | | | | (170) | | | | | | (1,620) | | |
Net book value at December 31, 2017
|
| | | | 704 | | | | | | 88 | | | | | | 2,925 | | | | | | 205 | | | | | | 3,922 | | |
| | |
Internally generated
intangible assets |
| |
Software
and licenses |
| |
Total
|
| |||||||||
Cost | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | 20,070 | | | | | | 215 | | | | | | 20,285 | | |
Additions
|
| | | | 12,611 | | | | | | 388 | | | | | | 12,999 | | |
At December 31, 2018
|
| | | | 32,681 | | | | | | 603 | | | | | | 33,284 | | |
Accumulated Amortization | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | (4,705) | | | | | | (59) | | | | | | (4,764) | | |
Amortization
|
| | | | (6,405) | | | | | | (135) | | | | | | (6,540) | | |
At December 31, 2018
|
| | | | (11,110) | | | | | | (194) | | | | | | (11,304) | | |
Net book value at December 31, 2018
|
| | | | 21,571 | | | | | | 409 | | | | | | 21,980 | | |
|
| | |
Internally generated
intangible assets |
| |
Software and
licenses |
| |
Total
|
| |||||||||
Cost | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | 8,858 | | | | | | — | | | | | | 8,858 | | |
Additions
|
| | | | 11,212 | | | | | | 215 | | | | | | 11,427 | | |
At December 31, 2017
|
| | | | 20,070 | | | | | | 215 | | | | | | 20,285 | | |
Accumulated Amortization | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | (1,335) | | | | | | — | | | | | | (1,335) | | |
Amortization
|
| | | | (3,370) | | | | | | (59) | | | | | | (3,429) | | |
At December 31, 2017
|
| | | | (4,705) | | | | | | (59) | | | | | | (4,764) | | |
Net book value at December 31, 2017
|
| | | | 15,365 | | | | | | 156 | | | | | | 15,521 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Related parties (see also Note 4)*
|
| | | | 1,407 | | | | | | 1,441 | | |
Deposit
|
| | | | 281 | | | | | | 221 | | |
Total
|
| | | | 1,688 | | | | | | 1,662 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Employees, salaries and related liabilities
|
| | | | 3,684 | | | | | | 3,272 | | |
Advances from customers and deposits
|
| | | | 1,767 | | | | | | 390 | | |
Provision for vacation
|
| | | | 976 | | | | | | 813 | | |
Tax payables
|
| | | | 373 | | | | | | 307 | | |
Shareholders
|
| | | | — | | | | | | 687 | | |
Others
|
| | | | 123 | | | | | | 38 | | |
Total
|
| | | | 6,923 | | | | | | 5,507 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
|
| | |
Share Option Plan: 2018
|
| |
Share Option Plan: 2017
|
| ||||||||||||||||||
| | |
Number of
Options |
| |
Weighted Average
Exercise Price |
| |
Number of
Options |
| |
Weighted
Average Exercise Price |
| ||||||||||||
| | | | | | | | |
€
|
| | | | | | | |
€
|
| ||||||
Options outstanding at beginning of year
|
| | | | 3,120 | | | | | | 130 | | | | | | 3,120 | | | | | | 130 | | |
Changes during the year: | | | | | | | | | | | | | | | | | | | | | | | | | |
Granted
|
| | | | 2,337 | | | | | | 1,998 | | | | | | — | | | | | | — | | |
Exercised
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Cancelled
|
| | | | 240 | | | | | | 997 | | | | | | — | | | | | | — | | |
Options outstanding at end of year
|
| | | | 5,217 | | | | | | 927 | | | | | | 3,120 | | | | | | 130 | | |
| | |
For the year ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Europe
|
| | | | 34% | | | | | | 48% | | |
Rest of the world
|
| | | | 66% | | | | | | 52% | | |
| | | | | 100% | | | | | | 100% | | |
| | |
Year ended
|
| |||||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||||||||
| | |
€
|
| |
%
|
| |
€
|
| |
%
|
| ||||||||||||
Customer A
|
| | | | 35,510 | | | | | | 38% | | | | | | 26,840 | | | | | | 41% | | |
Customer B
|
| | | | 14,300 | | | | | | 15% | | | | | | 8,950 | | | | | | 14% | | |
Customer C
|
| | | | 6,870 | | | | | | 7% | | | | | | 8,765 | | | | | | 13% | | |
| | |
Year ended
|
| |||||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||||||||
| | |
€
|
| |
%
|
| |
€
|
| |
%
|
| ||||||||||||
Customer D
|
| | | | 5,432 | | | | | | 6% | | | | | | 2,548 | | | | | | 4% | | |
Others
|
| | | | 32,035 | | | | | | 34% | | | | | | 18,984 | | | | | | 28% | | |
| | | | | 94,147 | | | | | | 100% | | | | | | 66,087 | | | | | | 100% | | |
|
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Payroll and related expenses
|
| | | | 18,934 | | | | | | 15,683 | | |
Game and data providers
|
| | | | 8,724 | | | | | | 5,600 | | |
Depreciation and amortization
|
| | | | 7,962 | | | | | | 3,972 | | |
IT
|
| | | | 3,917 | | | | | | 3,526 | | |
Agent fees
|
| | | | 2,212 | | | | | | 1,468 | | |
Others
|
| | | | 3,338 | | | | | | 1,595 | | |
Total
|
| | | | 45,087 | | | | | | 31,844 | | |
| | |
Loans from
related parties |
| |||
As of January 1, 2018
|
| | | | (497) | | |
Changes from financing cash flows: | | | | | | | |
Loan received from related party
|
| | | | (43) | | |
Exchange rate differences
|
| | | | (27) | | |
Interest
|
| | | | (28) | | |
Repayment of loan including interest
|
| | | | 595 | | |
As of December 31, 2018
|
| | | | — | | |
|
| | |
Loans from
related parties |
| |||
As of January 1, 2017
|
| | | | — | | |
Changes from financing cash flows: | | | | | | | |
Loan received from related party
|
| | | | (503) | | |
Exchange rate differences
|
| | | | 6 | | |
As of December 31, 2017
|
| | | | (497) | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Accrued severance pay, net
|
| | | | 64 | | | | | | 80 | | |
Other provisions and employee-related obligations
|
| | | | 171 | | | | | | 121 | | |
Deferred tax assets
|
| | | | 235 | | | | | | 201 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
At January 1
|
| | | | 201 | | | | | | 145 | | |
Recognized in profit and loss Tax income
|
| | | | 34 | | | | | | 56 | | |
At December 31
|
| | | | 235 | | | | | | 201 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Current tax
|
| | | | 599 | | | | | | 320 | | |
Change in deferred tax
|
| | | | (34) | | | | | | (56) | | |
Total
|
| | | | 565 | | | | | | 264 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Profit before taxation
|
| | | | 27,344 | | | | | | 16,554 | | |
Theoretical tax credit at applicable statutory 0%
|
| | | | — | | | | | | — | | |
Tax Rate difference between Isle of Man and Israeli, Bulgarian and Ukrainian subsidiaries
|
| | | | 463 | | | | | | 188 | | |
Non-allowable expenses
|
| | | | 21 | | | | | | 14 | | |
Recognition of deferred tax assets
|
| | | | (34) | | | | | | (56) | | |
Miscellaneous
|
| | | | 115 | | | | | | 118 | | |
Tax on income
|
| | | | 565 | | | | | | 264 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Revenue received from related party
|
| | | | 6,870 | | | | | | 8,765 | | |
Lease paid to related party
|
| | | | 480 | | | | | | 127 | | |
Salary to related parties
|
| | | | 395 | | | | | | 331 | | |
Proceeds from sale of vehicle
|
| | | | 55 | | | | | | — | | |
Interest income on loan to related party
|
| | | | (40) | | | | | | 113 | | |
Name
|
| |
Nature of transaction
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Related company
|
| |
Trade receivables, net
|
| | | | 3,823 | | | | | | 3,968 | | |
Related company
|
| | Loan granted* | | | | | 1,407 | | | | | | 2,641 | | |
Related company
|
| |
Ongoing transaction
|
| | | | — | | | | | | 216 | | |
Major shareholder
|
| |
Ongoing transaction
|
| | | | 86 | | | | | | 52 | | |
Name
|
| |
Nature of transaction
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Related company
|
| | Loan received | | | | | — | | | | | | 497 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Salary, benefits and others
|
| | | | 947 | | | | | | 814 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Not later than one year
|
| | | | 3,220 | | | | | | 1,408 | | |
Later than one year and not later five years
|
| | | | 8,089 | | | | | | 4,342 | | |
| | | | | 11,309 | | | | | | 5,750 | | |
|
| | |
Fair value through
profit or loss |
| |
Amortized cost (Loans
and receivables 2017) |
| |
Fair value through Other
comprehensive income (Available for sale 2017) |
| |||||||||||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||||||||
Cash and cash equivalents
|
| | | | — | | | | | | — | | | | | | 20,731 | | | | | | 8,454 | | | | | | — | | | | | | — | | |
Restricted deposits
|
| | | | — | | | | | | — | | | | | | — | | | | | | 250 | | | | | | — | | | | | | — | | |
Trade receivables
|
| | | | — | | | | | | — | | | | | | 17,220 | | | | | | 11,694 | | | | | | — | | | | | | — | | |
Other current and non-current assets
|
| | | | — | | | | | | — | | | | | | 2,713 | | | | | | 2,915 | | | | | | — | | | | | | — | | |
Total
|
| | | | — | | | | | | — | | | | | | 40,664 | | | | | | 23,313 | | | | | | — | | | | | | — | | |
| | |
Fair value through
profit or loss |
| |
Amortized cost
|
| ||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||
Trade payables
|
| | | | — | | | | | | — | | | | | | 7,006 | | | | | | 4,707 | | |
Total
|
| | | | — | | | | | | — | | | | | | 7,006 | | | | | | 4,707 | | |
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Cash and cash equivalents
|
| | | | 20,731 | | | | | | 8,454 | | |
Restricted deposits
|
| | | | — | | | | | | 250 | | |
Trade receivables
|
| | | | 17,220 | | | | | | 11,694 | | |
Other current and non-current assets
|
| | | | 2,713 | | | | | | 2,915 | | |
Total
|
| | | | 40,664 | | | | | | 23,313 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||||||||||||||||||||||||||
| | |
Assets
|
| |
Liabilities
|
| |
Total
|
| |
Assets
|
| |
Liabilities
|
| |
Total
|
| ||||||||||||||||||
NIS
|
| | | | 631 | | | | | | (523) | | | | | | 108 | | | | | | 487 | | | | | | (280) | | | | | | 207 | | |
USD
|
| | | | 868 | | | | | | (2,304) | | | | | | (1,436) | | | | | | 6 | | | | | | (1,171) | | | | | | (1,165) | | |
GBP
|
| | | | 1,796 | | | | | | (1,688) | | | | | | 108 | | | | | | 564 | | | | | | (752) | | | | | | (188) | | |
UAH
|
| | | | 14 | | | | | | (58) | | | | | | (44) | | | | | | 45 | | | | | | (47) | | | | | | (2) | | |
| | | | | 3,309 | | | | | | (4,573) | | | | | | (1,264) | | | | | | 1,102 | | | | | | (2,250) | | | | | | (1,148) | | |
| | |
December 31, 2018
|
| |||||||||
| | |
Weaknesses
|
| |
Strengths
|
| ||||||
GBP
|
| | | | 11 | | | | | | (11) | | |
NIS
|
| | | | 11 | | | | | | (11) | | |
USD
|
| | | | (144) | | | | | | 144 | | |
UAH
|
| | | | (4) | | | | | | 4 | | |
Total
|
| | | | (126) | | | | | | 126 | | |
|
| | |
December 31, 2017
|
| |||||||||
| | |
Weaknesses
|
| |
Strengths
|
| ||||||
GBP
|
| | | | (19) | | | | | | 19 | | |
NIS
|
| | | | 21 | | | | | | (21) | | |
USD
|
| | | | (116) | | | | | | 116 | | |
UAH
|
| | | | (1) | | | | | | 1 | | |
Total
|
| | | | (115) | | | | | | 115 | | |
|
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Current assets
|
| | | | 40,827 | | | | | | 22,641 | | |
Current liabilities
|
| | | | 13,929 | | | | | | 10,711 | | |
Working capital
|
| | | | 26,898 | | | | | | 11,930 | | |
| | |
Up to
3 months |
| |
Between 3 and
12 months |
| |
Between 1 and
2 years |
| |
Between 2 and
5 years |
| |
Over 5 years
|
| |||||||||||||||
At December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade and other payables
|
| | | | 12,677 | | | | | | 839 | | | | | | 413 | | | | | | — | | | | | | — | | |
Loans from related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 12,677 | | | | | | 839 | | | | | | 413 | | | | | | — | | | | | | — | | |
|
| | |
Up to
3 months |
| |
Between 3 and
12 months |
| |
Between 1 and
2 years |
| |
Between 2 and
5 years |
| |
Over 5 years
|
| |||||||||||||||
At December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade and other payables
|
| | | | 4,372 | | | | | | 1,245 | | | | | | 504 | | | | | | — | | | | | | — | | |
Loans from related parties
|
| | | | — | | | | | | 497 | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 4,372 | | | | | | 1,742 | | | | | | 504 | | | | | | — | | | | | | — | | |
|
Name
|
| |
Country of
incorporation |
| |
Proportion of
voting rights and ordinary share capital held |
| |
Nature of business
|
| |
Held by
|
|
Gaming Tech Ltd * | | |
Israel
|
| |
50%
|
| | General and administration, marketing support and research & development | | | SBTech (Global) Limited | |
SBTech Limited — Subsidiary Bulgaria | | |
Bulgaria
|
| |
100%
|
| | Research, development and marketing support | | | SBTech (Global) Limited | |
SBTech Malta Limited
|
| |
Malta
|
| |
100%
|
| | Holder of Maltase and U.S. licenses | | | SBTech (Global) Limited | |
SBTech Cyprus Limited
|
| |
Cyprus
|
| |
100%
|
| | Holding company | | | SBTech (Global) Limited | |
Sky Star Eight Limited
|
| |
UK
|
| |
100%
|
| | Business analytics and commercial support | | | SBTech (Global) Limited | |
SBTech Gibraltar Limited | | |
Gibraltar
|
| |
100%
|
| | Commercial support and holder of Gibraltar license | | | SBTech (Global) Limited | |
SBTech UA | | |
Ukraine
|
| |
100%
|
| | Research and development | | |
SBTech Cyprus Limited
|
|
SBTech US Inc. | | |
United States
|
| |
100%
|
| | IT and Business support | | |
SBTech Malta Limited
|
|
Lucrative Green Leaf Limited | | |
Ireland
|
| |
100%
|
| |
IT & Hosting services
|
| |
SBTech Malta Limited
|
|
| | |
Gaming Tech Ltd
|
| |||||||||
| | |
31.12.2018
|
| |
31.12.2017
|
| ||||||
Current assets
|
| | | | 1,891 | | | | | | 1,846 | | |
Non — current assets
|
| | | | 1,581 | | | | | | 837 | | |
Current liabilities
|
| | | | (1,981) | | | | | | (1,670) | | |
Non — current liabilities
|
| | | | (325) | | | | | | (346) | | |
Total assets, net
|
| | | | 1,166 | | | | | | 667 | | |
NCI
|
| | | | 583 | | | | | | 333 | | |
| | |
Page
|
| |||
| | | | A-2 | | | |
| | | | A-2 | | | |
| | | | A-3 | | | |
| | | | A-3 | | | |
| | | | A-3 | | | |
| | | | A-3 | | | |
| | | | A-4 | | | |
| | | | A-4 | | | |
| | | | A-5 | | | |
| | | | A-8 | | | |
| | | | A-8 | | | |
| | | | A-9 | | | |
| | | | A-10 | | | |
| | | | A-11 | | | |
| | | | A-11 | | | |
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Term
|
| |
Section
|
|
Actual Adjustment Amount | | | 3.4(c) | |
Adverse Recommendation | | | 9.2 | |
Alternative Acquistion | | | 8.5(a) | |
Agreement | | | Preamble | |
Amended and Restated New DK Bylaws | | | 1.1(b) | |
Amended and Restated New DK Charter | | | 1.1(b) | |
Amended Plan | | | 3.3(d)(ii) | |
Appointment Notice | | | 3.5(d)(ii) | |
A&R DK Charter | | | 1.6(b) | |
Assumed DK Stock Plans | | | 2.3(d) | |
Basket Amount | | | 10.2(c)(ii) | |
Burdensome Condition | | | 9.4(c) | |
Cancelled Shares | | | 2.1(b) | |
Cap | | | 10.2(c)(i) | |
Cashed-Out SBT Options | | | 3.3(a) | |
Certificate of Merger | | | 1.2(a) | |
Chosen Courts | | | 14.8 | |
Claim Notice | | | 10.4(a) | |
Claimed Amount | | | 3.6(f) | |
Class A DEAC Shares | | | 7.2(a) | |
Class B DEAC Shares | | | 7.2(a) | |
Closing Date | | | 1.5 | |
Closing Date Lockup Shares | | | 3.6(c) | |
Closing | | | 1.5 | |
Collected Amount Purchase Price | | | 9.11(b) | |
Collected Amount | | | 9.11(b) | |
Continuing Employees | | | 9.10(b) | |
DEAC Audited Financial Statements | | | 7.9(a) | |
DEAC Balance Sheet Date | | | 7.9(a) | |
DEAC Board | | | Recital | |
DEAC Cap Expenses | | | 7.13 | |
DEAC Disclosure Letter | | | Article VII | |
DEAC Earnout Shares | | | 1.8(a) | |
DEAC Financial Statements | | | 7.9(a) | |
DEAC NewCo Common Stock | | | 7.2(c) | |
DEAC NewCo | | | Recital | |
DEAC Record Date | | | 9.1(a) | |
DEAC SEC Reports | | | 7.8 | |
DEAC Shares | | | 7.2(a) | |
DEAC Special Meeting | | | 9.2 | |
DEAC Stockholder Approvals | | | 7.3(a) | |
Term
|
| |
Section
|
|
DEAC Trustee | | | 8.6 | |
DEAC Unaudited Financial Statements | | | 7.9(a) | |
DEAC Warrant | | | 7.2(a) | |
DEAC | | | Preamble | |
DGCL | | | 1.1(a) | |
Disagreement Notice | | | 3.5(d)(i) | |
Disclosure Letters | | | 14.14 | |
DK | | | Preamble | |
DK Audited Financial Statements | | | 6.4(a) | |
DK Balance Sheet Date | | | 6.4(a) | |
DK Board | | | Recital | |
DK Book-Entry Shares | | | 2.2(a) | |
DK Class A Common Stock | | | 1.6(b) | |
DK Class B Common Stock | | | 1.6(b) | |
DK Charter | | | Recital | |
DK Certificates | | | 2.2(a) | |
DK Continuing Employees | | | 9.10(a) | |
DK Disclosure Letter | | | Article VI | |
DK Material Contracts | | | 6.10(a) | |
DK Merger Consideration | | | 2.1(c) | |
DK Merger Effective Time | | | 1.2(a) | |
DK Merger | | | Recital | |
DK Option | | | 2.3 | |
DK/SBT Earnout Group | | | 1.8(a) | |
DK Earnout Shares | | | 1.8(a) | |
DK/SBT Escrowed Earnout Shares | | | 1.8(a) | |
DK Securities | | | 6.2(a) | |
DK Share Exchange Ratio | | | 2.1(c) | |
DK Stockholder Consent | | | 9.16(a) | |
DK Stockholder Notice | | | 9.16(b) | |
Draft SBT Net Debt Statement | | | 3.5(a) | |
Draft SBT Working Capital Statement | | | 3.5(a) | |
Dual Class Structure | | | Recital | |
Earnout Escrow Account | | | 1.8(b)(i) | |
Earnout Escrow Agent | | | 1.8(b)(i) | |
Earnout Escrow Agreement | | | 1.8(b)(i) | |
Equity Investors | | | Recital | |
Escrow Agreement | | | Section 7.14(c) | |
Escrow Fund | | | 3.6(b) | |
Estimated Adjustment Amount | | | 3.4(c) | |
Exchange Agent | | | 2.2(a) | |
Exchange Fund | | | 2.2(a) | |
Exchanged DK Option | | | 2.3(a) | |
Term
|
| |
Section
|
|
Export and Sanctions Regulations | | | 4.22 | |
Final Release Date | | | 3.6(c) | |
Final Released Amount | | | 3.6(f) | |
Former Founder Shares | | | 1.8(a) | |
Indemnified Parties | | | 9.5(a) | |
Indemnified Party | | | 10.4(a) | |
Independent Accountant | | | 1.8(b)(ii) | |
Initial Release Date | | | 3.6(f) | |
Initial Released Amount | | | 3.6(f) | |
Initial SBT Cash Consideration | | | 3.2(a)(G) | |
Interim Option Ruling | | | 13.2(b) | |
Last Comments Date | | | 3.5(g)(ii) | |
Lockup End Date | | | 3.6(c) | |
Lockup Shares | | | 3.6(c) | |
Material Adverse Effect | | | 10.2(a)(i) | |
Material | | | 10.2(a)(i) | |
Merger Sub Common Stock | | | 7.2(b) | |
Merger Sub | | | Preamble | |
NASDAQ Listing Application | | | 9.9 | |
Nevada Articles of Merger | | | 1.1(a) | |
New DK Board of Directors | | | 1.7(a) | |
New DK Indemnified Parties | | | 10.2(a) | |
New DK | | | Recital | |
Nonparty | | | 10.8(b) | |
NRS | | | 1.1(a) | |
NV Merger | | | Recital | |
NV Merger Effective Time | | | 1.1(a) | |
Option Tax Ruling | | | 13.2(b) | |
Outside Date | | | 12.1(b)(i) | |
Owned IT Systems | | | 4.16 | |
Parties | | | Preamble | |
Party | | | Preamble | |
Paying Agent Agreement | | | 3.4(a) | |
Payor | | | 13.6 | |
Per Claim Amount | | | 10.2(c)(iii) | |
Permitted Transfer | | | 3.6(c) | |
Pre-Closing Tax Return | | | 13.4 | |
Promissory Notes | | | 9.15(c) | |
Proxy Statement/Prospectus | | | 9.1(a) | |
Release Date | | | 3.6(f) | |
Release Notice | | | 1.8(b)(ii) | |
Released Amount | | | 3.6(f) | |
Relevant SBT Contractor | | | 4.11(n) | |
Term
|
| |
Section
|
|
Relevant SBT Employee | | | 4.11(a) | |
Resolved | | | 3.6(i) | |
Restraints | | | 11.1(d) | |
Rolled-Over SBT Options | | | 3.3(b) | |
SBT | | | Preamble | |
SBT Audited Financial Statements | | | 4.4(a) | |
SBT Balance Sheet Date | | | 4.4(a) | |
SBT Board | | | Recital | |
SBT Cash Amount | | | 3.1(a)(i) | |
SBT Cash Consideration | | | 3.1(vi) | |
SBT Consideration Shares | | | 3.1(c) | |
SBT Continuing Employees | | | 9.10(a) | |
SBT Disclosure Letter | | | Article IV | |
SBT Employee | | | 4.11(b) | |
SBT Financial Documents | | | 4.19(a) | |
SBT Financial Facilities | | | 4.19(a) | |
SBT Grantees | | | Section 9.10(c) | |
SBT Group Lease Documents | | | 4.17(b) | |
SBT Group Properties | | | 4.17(a) | |
SBT Material Contracts | | | 4.10(a) | |
SBT Option Waiver Letter | | | 3.3(a) | |
SBT Pre-Closing Restructuring | | | 8.7 | |
SBT Policies | | | 4.20 | |
SBT Seller Representative Indemnitees | | | 9.12(f) | |
SBT Sellers | | | Preamble | |
SBT Sellers’ Representative | | | 9.12(a) | |
SBT Shares | | | 4.2(a) | |
SBT Unaudited Financial Statements | | | 4.4(c) | |
SBT Warrants Value | | | 9.15(b) | |
Schemes | | | 4.11(b) | |
Second Released Amount | | | 3.6(f) | |
Second Released Date | | | 3.6(f) | |
Seller Controlled Audit | | | 13.5 | |
Subscription Agreement | | | Section 7.14(c) | |
Surviving Company | | | 1.2(b) | |
Third Party Claim Expenses | | | 10.4(b)(iv) | |
Third Party Claim | | | 10.4(b) | |
Third Party Target | | | 7.17 | |
Third Released Amount | | | 3.6(f) | |
Third Released Date | | | 3.6(f) | |
Transaction Proposals | | | 9.2 | |
Transactions | | | Recital | |
Transferor | | | 3.6(c) | |
Term
|
| |
Section
|
|
Trust Account | | | 7.10 | |
Trust Agreement | | | 7.10 | |
U.S. GAAP | | | 6.4(a) | |
UKGC | | | 4.6(c) | |
Unclaimed Amount | | | 3.6(f) | |
104H Trustee | | | 1.8(a) | |
By: |
Name: |
|
Number of Subscribed Shares subscribed for:
|
| | | | | | |
| Price Per Subscribed Share: | | | | $ | 10.00 | | |
| Aggregate Purchase Price: | | | | $ | | | |
| DRAFTKINGS INC. | | ||||||
| By: | | | | | |||
| | | | Name: | | | ||
| | | | Title: | | |
| | | | DEAC NV Merger Corp. | | |||
| | | | By: | | |
/s/ Jeff Sagansky
|
|
| | | | | | | Name: Jeff Sagansky | |
| | | | | | | Title: President and Chairman | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Jeff Sagansky
Jeff Sagansky
|
| | President and Chairman (Principal Executive Officer) |
| |
February 13, 2020.
|
|
|
/s/ Eli Baker
Eli Baker
|
| | Secretary and Vice Chairman (Principal Financial and Accounting Officer) |
| |
February 13, 2020.
|
|
Exhibit 5.1
[Letterhead of Greenberg Traurig, LLP]
[__], 2020
DEAC NV Merger Corp.
2121 Avenue of the Stars, Suite 3200
Los Angeles, California 90067
Re: | DEAC NV Merger Corp. Registration Statement on Form S-4 |
Ladies and Gentlemen:
We have acted as special Nevada counsel to DEAC NV Merger Corp., a Nevada corporation (the “Company”), in connection with the Registration Statement on Form S-4, filed with the Securities and Exchange Commission (the “Commission”) on January 6, 2020, as amended and supplemented through the date hereof, under the Securities Act of 1933, as amended (the “Securities Act”) (such Registration Statement, as amended or supplemented, is hereinafter referred to as the “Registration Statement”), relating to, among other things the proposal of the Diamond Eagle Acquisition Corp., a Delaware corporation (“DEAC”) to change its jurisdiction of incorporation from a corporation incorporated under the Delaware General Corporation Law to a corporation incorporated under the laws of the State of Nevada, pursuant to a merger of DEAC with and into the Company, with the Company being the surviving entity (the “Reincorporation”). In connection with the Reincorporation, the surviving corporation will change its name to “DraftKings Inc.” In this opinion, we refer to the entity surviving following effectiveness of the Reincorporation as “DEAC Nevada.” The Reincorporation is subject to the approval of the shareholders of the Company as set forth in the Registration Statement.
Under the terms of the Agreement and Plan of Merger by and among the DEAC and the Company (the “Plan of Merger”), (i) each share of the DEAC’s currently issued and outstanding Class A common stock, par value $0.0001 per share (“DEAC Class A Common Stock”), will be cancelled and automatically converted into one share of Class A common stock, par value $0.0001 per share, of DEAC Nevada (the “DEAC Nevada Class A Common Stock”), in accordance with the terms of the Articles of Merger and the Amended and Restated Charter (each, as defined below), and (ii) all rights and obligations of the Company under the Warrant Agreement, dated as of May 10, 2019, between DEAC and Continental Stock Transfer & Trust Company (the “Warrant Agreement”), will become rights and obligations of DEAC Nevada by operation of law. Each of the DEAC’s outstanding warrants (the “Warrants”) will become one warrant to acquire an equal number of shares of DEAC Nevada Class A Common Stock pursuant to the terms and subject to the conditions of the Warrant Agreement (each, a “Nevada Warrant”).
This opinion letter is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Securities Act.
In rendering the opinions set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the form of Articles of Merger and the other documents to be filed with the Nevada Secretary of State to effect the Reincorporation (the “Articles of Merger”), including therein the [form of] Plan of Merger, the form of Amended and Restated Articles of Incorporation of DEAC Nevada to be effective upon the Reincorporation (the “Amended and Restated Charter”); (iv) the form of amended and restated bylaws of DEAC Nevada to be effective upon the Reincorporation, (the “Bylaws”); (v) resolutions of the board of directors of DEAC and the Company with respect to the Reincorporation, the Articles of Merger, the Amended and Restated Charter and the Bylaws ; and (vi) the Warrant Agreement.
We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such records of DEAC and the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the DEAC and the Company and, and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth below.
In our examination, we have assumed the legal capacity of all-natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents, we have assumed that the parties thereto had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and the validity and binding effect thereof on such parties. As to any facts material to the opinions expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials, including with respect to the filing procedure for effecting the Reincorporation under Section 92A.200 of the Nevada Revised Statutes (the “NRS”).
In addition to the foregoing, for the purpose of rendering our opinions as expressed herein, we have assumed that:
A. Prior to effecting the Reincorporation: (i) the Registration Statement, as finally amended, will have become effective under the Securities Act; (ii) the shareholders of the DEAC and the Company will have approved, among other things, the Reincorporation, the Plan of Merger and the Amended and Restated Charter; and (iii) all other necessary action will have been taken by DEAC under the applicable laws of Delaware to authorize and permit the Reincorporation, and any and all consents, approvals and authorizations from applicable Delaware governmental and regulatory authorities required to authorize and permit the Reincorporation will have been obtained;
B. The current draft of each of the Articles of Merger and the Amended and Restated Charter, as attached as an exhibit to the Articles of Merger, in the form submitted for our review, without alteration or amendment (other than identifying the appropriate date), will be duly authorized and executed and thereafter be duly filed with the Nevada Secretary of State in accordance with NRS 92A.200, that no other certificate or document, other than the Articles of Merger, including the Amended and Restated Charter, has been filed by or in respect of the Company with the Nevada Secretary of State and that the Company will pay all fees and other charges required to be paid in connection with the filing of the Articles of Merger; and
C. Prior to the issuance of the shares of DEAC Nevada Class A Common Stock in the Reincorporation: (i) the Registration Statement, as finally amended, will have become effective under the Securities Act; (ii) the shareholders of the Company and DEAC Newco will have approved and adopted the Reincorporation (iii) the shareholders of the Company and DEAC Newco will have approved the Plan of Merger and the Amended and Restated Charter; (iv) the Reincorporation and the other transactions contemplated by the Articles of Merger to be consummated concurrent with or prior to the Reincorporation will have been consummated; and (v) the Reincorporation will have become effective under Delaware Law.
In giving the following opinions, we have relied (without further verification) upon the legal opinion of Winston and Strawn filed as Exhibit 5.1 to the Company’s registration statement on Form S-4 (No. 333-230815) filed on May 3, 2019.
Based upon and subject to the foregoing and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion that:
1. Upon the [filing of ][effective date, after filing, specified in] the Articles of Merger, including the Amended and Restated Charter, with the Nevada Secretary of State, the Reincorporation will become effective and DEAC Nevada will continue as a corporation incorporated under the laws of the State of Nevada.
2. Upon effectiveness of the Reincorporation, the issued and outstanding shares of Company Class A Common Stock will automatically convert, by operation of law, on a one-for-one basis, into duly authorized, validly issued, fully paid and non-assessable shares of DEAC Nevada Class A Common Stock.
3. Upon effectiveness of the Reincorporation, the shares of the DEAC Nevada Class A Common Stock underlying the Nevada Warrants, when delivered upon exercise of the Nevada Warrants in accordance with the terms and conditions set forth in the Registration Statement and the Warrant Agreement, subject to the full payment of the exercise price therefor, will be validly issued, fully paid and non-assessable.
The opinions expressed herein are based upon and limited to the laws of the State of Nevada. We express no opinion herein as to any other laws, statutes, regulations or ordinances. The opinions expressed herein that are based on the laws of the State of Nevada are limited to the laws generally applicable in transactions of the type covered by the Registration Statement.
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Registration Statement. In giving such consent, we do not thereby admit that we are experts within the meaning of the Securities Act or the rules and regulations of the Commission or that this consent is required by Section 7 of the Securities Act.
Very truly yours, | |
Exhibit 5.2
[ ], 2020
DEAC NV Merger Corp.
2121 Avenue of the Stars, Suite 2300
Los Angeles, California 90067
Re: DEAC NV Merger Corp. Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel to DEAC NV Merger Corp., a Nevada corporation (the “Company”), a wholly owned subsidiary of Diamond Eagle Acquisition Corp. (“DEAC”), in connection with the Company’s Registration Statement on Form S-4, initially filed with the Securities and Exchange Commission (the “Commission”) on January 6, 2020, as amended and supplemented through the date hereof, under the Securities Act of 1933, as amended (the “Securities Act”) (such Registration Statement, as amended or supplemented, is hereinafter referred to as the “Registration Statement”), relating to, among other things, a business combination pursuant to which (i) DEAC will merge with and into the Company, with the Company surviving the merger (the “DEAC Merger”), (ii) following the DEAC Merger, DEAC Merger Sub Inc., a wholly owned subsidiary of DEAC, will merge with and into DraftKings Inc., a Delaware corporation (“DraftKings”), with DraftKings surviving the merger (the “DK Merger”) and (iii) immediately following the DK Merger, the Company will acquire all of the issued and outstanding share capital of SBTech (Global) Limited (“SBT”) for a combination of cash and stock consideration. In connection with the DEAC Merger, the DK Merger and the related transactions (the “Business Combination”), the Company will change its name to “DraftKings Inc.” and will succeed to DEAC’s obligations as a public reporting company, and the current security holders of DEAC who do not exercise their redemption rights will become security holders of the Company.
This opinion letter is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Securities Act.
In rendering the opinions set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the business combination agreement relating to the Business Combination (the “Business Combination Agreement”); (iii) the Warrant Agreement, dated as of May 10, 2019, between the Company and Continental Stock Transfer & Trust Company (the “Warrant Agreement”); and (iv) the form of Assignment and Assumption Agreement to be entered into in connection with the Closing (the “Warrant Assignment Agreement”).
We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth below.
In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents, we have assumed that the parties thereto had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and the validity and binding effect thereof on such parties. As to any facts material to the opinions expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials.
[ ], 2020 Page 2 |
In addition to the foregoing, for the purpose of rendering our opinions as expressed herein, we have assumed that:
1. Prior to effecting the DEAC Merger: (i) the Registration Statement, as finally amended, will have become effective under the Securities Act; (ii) the shareholders of the Company will have approved, among other things, the Business Combination Agreement and the DEAC Merger; and (iii) all other necessary action will have been taken under the applicable laws of the State of Nevada to authorize and permit the DEAC Merger, and any and all consents, approvals and authorizations from applicable governmental and regulatory authorities required to authorize and permit the DEAC Merger will have been obtained; and
2. Prior to the issuance of the warrants by the Company: (i) the Registration Statement, as finally amended, will have become effective under the Securities Act; (ii) the shareholders of the Company will have approved and adopted the Business Combination Agreement; (iii) the Business Combination and the other transactions contemplated by the Business Combination Agreement to be consummated concurrently with or prior to the Business Combination will have been consummated; and (iv) the Business Combination will have become effective under the Nevada Revised Statutes, as amended.
Based upon and subject to the foregoing and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion that, upon effectiveness of the Closing, each of the issued and outstanding warrants of the Company will be a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
The opinions expressed herein are based upon and limited to the laws of the State of New York. We express no opinion herein as to any other laws, statutes, regulations or ordinances. The opinions expressed herein that are based on the laws of the State of New York are limited to the laws generally applicable in transactions of the type covered by the Registration Statement.
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Registration Statement. In giving such consent, we do not thereby admit that we are experts within the meaning of the Securities Act or the rules and regulations of the Commission or that this consent is required by Section 7 of the Securities Act.
Very truly yours, | |
Exhibit 8.1
February [ ], 2020
Diamond Eagle Acquisition Corp.
2121 Avenue of the Stars, Suite 2300
Los Angeles, California 90067
Re: United States Federal Income Tax Consequences
Ladies and Gentlemen:
We have acted as counsel to Diamond Eagle Acquisition Corp., a Delaware corporation (the “Company”) in connection with the transactions contemplated by the business combination agreement (the “Business Combination Agreement”), dated December 22, 2019 by and among the Company, DraftKings Inc., a Delaware corporation, SBTech (Global) Limited, a company limited by shares, originally incorporated in Gibraltar and continued as a company under the Isle of Man Companies Act 2006 (“SBT”), DEAC NV Merger Corp, a Nevada corporation and a wholly-owned subsidiary of the Company (“DEAC NV”), DEAC Merger Sub Inc., a Delaware corporation, the shareholders of SBT who are party thereto and the SBT Sellers’ Representative. Pursuant to the Business Combination Agreement, (i) the Company will merge with and into DEAC Nevada, with DEAC Nevada surviving the merger (the “Reincorporation”), (ii) following the Reincorporation, DEAC Merger Sub Inc. will merge with and into DraftKings Inc., with DraftKings Inc. surviving the merger and the stockholders of DraftKings Inc. will receive shares of Class A common stock and Class B common stock of New DraftKings (as defined below) and (iii) immediately thereafter, DEAC Nevada will acquire all of the issued and outstanding share capital of SBT for a combination of cash and stock consideration (the “Business Combination”). DEAC NV will change its name to DraftKings Inc. (“New DraftKings”). This opinion is being delivered in connection with the Registration Statement of the Company on Form S-4, originally filed on January 6, 2020 with the Securities and Exchange Commission, as amended and supplemented through the date hereof (the “Registration Statement”). Capitalized terms used herein but not defined shall have the meanings set forth in the Business Combination Agreement.
In preparing the opinion set forth below, we have examined and reviewed originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement; (ii) the Business Combination Agreement; (iii) the form of Certificate of Incorporation of New DraftKings (the “Certificate of Incorporation”) to be effective upon the Reincorporation; (iv) the form of By-laws of New DraftKings to be effective upon the Reincorporation (the “By-laws”); (v) the representation letter of an officer of the Company (the “Representation Party”) delivered to us for purposes of this opinion (the “Representation Letter”); and (vi) such other documents, certificates and records as we have deemed necessary or appropriate as a basis for our opinion. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed, photostatic or electronic copies, and the authenticity of the originals of such latter documents.
In rendering our opinion, we have relied upon statements and representations of officers and other representatives of the Representation Party, and we have assumed that such statements and representations, including those set forth in the Representation Letter, are and will continue to be true and correct through the closing of the Business Combination without regard to any qualification as to knowledge, belief, intent, or otherwise.
In rendering our opinion, we have assumed, without any independent investigation or examination thereof, that (i) the Reincorporation and the Business Combination will be consummated in the manner described in the Business Combination Agreement and the Registration Statement, will be effective under applicable state law, and that none of the terms or conditions contained therein will be waived or modified and (ii) the Business Combination Agreement, the Registration Statement and the Representation Letter accurately and completely reflect the facts relating to the Reincorporation and the Business Combination. Our opinion assumes and is expressly conditioned on, among other things, the initial and continuing accuracy of the facts, information, covenants, representations and warranties set forth in the documents referred to above, including those set forth in the Representation Letter.
Our opinion is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, judicial decisions, published positions of the Internal Revenue Service (the “Service”), and such other authorities as we have considered relevant, all as in effect on the date of this opinion and all of which are subject to change or differing interpretations, possibly with retroactive effect. A change in the authorities upon which our opinion is based could affect the conclusions expressed herein. Moreover, there can be no assurance that positions contrary to our opinion will not be taken by the Service or, if challenged, by a court.
Based upon the foregoing and subject to the assumptions, limitations and qualifications set forth herein and in the Registration Statement under the heading “U.S. Federal Income Tax Considerations,” we are of the opinion that, for United States federal income tax purposes, the Reincorporation will qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code.
Except as expressly set forth above, we express no other opinion. This opinion has been prepared solely in connection with the Registration Statement and may not be relied upon for any other purpose without our prior written consent.
February [ ], 2020 Page 2 |
This opinion is being delivered prior to the consummation of the Reincorporation and the Business Combination and therefore is prospective and dependent on future events. This opinion is expressed as of the date hereof, and we are under no obligation to supplement or revise our opinion to reflect any legal developments, any factual matters arising subsequent to the date hereof, or the impact of any information, document, certificate, record, statement, representation, covenant, or assumption relied upon herein that becomes incorrect or untrue.
In accordance with the requirements of Item 601(b)(23) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”), we hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the use of our name under the headings “Material U.S. Tax Consequences of the Reincorporation and Exercise of Redemption Rights” in the Registration Statement. In giving this consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities Exchange Commission (the “SEC”) thereunder, nor do we admit that we are experts with respect to any part of the Registration Statement within the meaning of the term “experts” as used in the Securities Act or the rules and regulations of the SEC thereunder.
Very truly yours, | |
Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (“Agreement”) is entered into as of May 30, 2019 by and between DraftKings Inc., a Delaware corporation (“Company”), and Jason Park (“Executive”).
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive as the Chief Financial Officer of the Company; and
WHEREAS, the Company and the Executive desire to enter into this Agreement to set forth the terms of the Executive’s employment with the Company.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. POSITION AND DUTIES.
(a) GENERAL. Commencing June 3, 2019 (the “Effective Date”), Executive shall serve as the Company’s Chief Financial Officer and shall report directly to the Chief Executive Officer of the Company (the “CEO”). In this position, Executive shall have such duties, authorities and responsibilities as are customary for an employee in such position, and such other duties, authorities and responsibilities as may reasonably be assigned to the Executive from time to time by the CEO. The Executive’s principal place of employment with the Company shall be at the Company’s headquarters located in Boston, Massachusetts (the “Company’s Headquarters”).
(b) OTHER ACTIVITIES. For so long as Executive remains in the employ of the Company (the “Employment Term”), the Executive shall devote substantially all of the Executive’s business time, energy, knowledge and skill to the performance of the Executive’s duties with the Company, provided that the foregoing shall not prevent the Executive from: (A) serving on the boards of directors of non-profit organizations or for profit companies, provided such activities do not pose a conflict of interest or interfere with Executive’s performance of his duties under this Agreement, in each case as determined in the sole discretion of the CEO; and (B) participating in charitable, civic, educational, professional, community or industry affairs, provided such activities do not pose a conflict of interest or interfere with Executive’s performance of his duties under this Agreement, in each case as determined in the sole discretion of the CEO.
2. BASE SALARY. During the Employment Term, the Company agrees to pay the Executive a base salary at an annual rate of Three Hundred and Fifty Thousand Dollars ($350,000) payable subject to standard federal and state payroll withholding requirements in accordance with the regular payroll practices of the Company. The Executive’s base salary may be subject to annual review by the Company’s Board of Directors (“Board”) (or a committee thereof), and may be increased from time to time as determined by the Board. The base salary as may be increased from time to time shall constitute “Base Salary” for purposes of this Agreement.
3. EQUITY INCENTIVE AWARDS. Subject to approval by the Board, as soon as reasonably practicable after the Effective Date (but no later than the first regularly scheduled Board meeting after the Effective Date), the Company shall grant to Executive two awards of options (the “Option Awards”) to purchase Common Stock of the Company pursuant to the Company’s 2017 Equity Incentive Plan, as amended (the “Option Plan”). Each Option Award shall have an exercise price per share equal to fair market value of the Company’s Common Stock on the date of grant, as determined by the Board in its sole discretion. Each Option Award shall also be subject to the terms and conditions of the Company’s stock option award agreement under the Option Plan in substantially the form attached hereto as Exhibit D (together with the Option Awards, the “Equity Documents”). The Option Awards represent mutually-agreed upon consideration for the noncompetition covenants set forth in the Noncompetition Covenant (as referenced in Section 16).
(a) Time Vested Option: The first Option Award (the “Time Vested Option”), shall be awarded with respect to 1,500,000 shares of the Company’s Common Stock. Twenty-five percent (25%) of the shares subject to the Time-Vested Option shall vest on June 24, 2020 and the remaining shares shall vest in twelve (12) substantially equal quarterly installments on each quarterly anniversary date thereafter, such that the Time-Vested Option shall be fully vested as of June 24, 2023, subject in all cases to Executive’s continued employment with the Company through each such vesting date.
(b) Long-Term Incentive Plan Option: The second Option Award (the “LTIP Option”), shall be awarded with respect to 1,500,000 shares of the Company’s Common Stock, and, subject in all cases to Executive’s continued employment with the Company through each such vesting date, shall vest upon the Company’s achievement of certain liquidity event target stock prices, revenue targets, or EBITDA targets as determined by the Board and as further set forth in the applicable stock option award agreement under the Option Plan.
In addition, if in connection with a Change in Control (as defined in the Option Plan), (i) the Time Vested Option (or unvested portion thereof) is assumed or continued by the successor or acquiror entity in such Change in Control or the Time Vested Option is substituted for a similar award of the successor or acquiror entity, and (ii) within three (3) months prior to, or within twelve (12) months following, such Change in Control, either (x) the Company terminates Executive’s employment without Cause (as defined below) or (y) Executive terminates his employment with Good Reason (as defined below), then effective as of the date of such termination (or, if later, immediately prior to such Change in Control) the unvested portion of the Time Vested Option shall be immediately vested and exercisable. In the event that the Time Vested Option (or unvested portion thereof) is not assumed or continued by the successor or acquiror entity in such Change in Control, or not substituted for a similar award of the successor or acquiror entity, then effective as of immediately prior to, but subject to the occurrence of, such Change in Control, the unvested portion of such Time Vested Option shall become immediately vested and exercisable.
4. EXECUTIVE BENEFITS.
(a) BENEFIT PLANS. During the Employment Term, the Executive shall be entitled to participate in any executive benefit plan that the Company has adopted or may adopt, maintain or contribute to for the benefit of its executives generally, currently including, without limitation, health and dental insurance coverage, long-term and short-term disability insurance coverage and group life insurance coverage, subject, in all events to satisfying the applicable eligibility requirements, and except to the extent such plans are duplicative of the benefits otherwise provided hereunder. The Executive’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding the foregoing, the Company may modify or terminate any executive benefit plan at any time.
(b) VACATION TIME. During the Employment Term, the Executive shall be entitled to paid vacation in accordance with the Company’s policy applicable to its executives as in effect from time to time.
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(c) BUSINESS EXPENSES. Upon presentation of such reasonable substantiation and documentation as the Company reasonably may specify from time to time, the Executive shall be reimbursed for all reasonable out-of-pocket business expenses incurred and paid by the Executive during the Employment Term in connection with the performance of the Executive’s duties hereunder.
(d) SIGNING BONUS. Executive shall be eligible to receive a signing bonus in the amount of Two Hundred and Twenty Nine Thousand Eight Hundred and Eight Dollars ($229,808) (the “Signing Bonus”), which will be earned upon Executive remaining in employment with the Company for thirty (30) days following June 24, 2019. The Signing Bonus will subject to applicable payroll deductions and withholdings and will be paid as an advance, in a lump-sum on the Company’s first ordinary payroll date that is at least thirty (30) days following June 24, 2019. If Executive terminates his employment without Good Reason (as defined below) or the Company terminates Executive’s employment for Cause (as defined below), in each case, before June 24, 2020, Executive shall be obligated to, and hereby agrees to, repay the full amount of the Signing Bonus previously advanced. Executive agrees that if he is obligated to repay the Signing Bonus, the Company may deduct, subject to applicable law, any such amount from any payments the Company may owe Executive, including but not limited to any regular payroll amount and any expense payments. Executive further agrees to pay to the Company, within thirty (30) days of the effective termination date, any remaining unpaid balance of the unearned Signing Bonus not covered by such deductions.
(e) ANNUAL BONUS. During the Employment Term, Executive shall be eligible for an annual target bonus of Three Hundred Fifty Thousand Dollars ($350,000) (the “Annual Bonus”) which shall be pro-rated from June 24, 2019 for Executive’s first year of employment, with the Annual Bonus amount in any given fiscal year to be determined based on overall Company performance and Executive’s individual performance, as determined in the sole discretion of the Board and provided Executive remains employed by the Company through the applicable payment date. Any such Annual Bonus shall be paid to Executive at the same time that annual bonuses are paid to other senior executives of the Company.
5. TERMINATION. The Executive’s employment under this Agreement and the Employment Term shall terminate on the first of the following to occur:
(a) DISABILITY. Thirty (30) days after written notice by the Company to the Executive of a termination due to Disability. For purposes of this Agreement, “Disability” shall be defined as the inability of the Executive to perform the Executive’s material duties hereunder with a reasonable accommodation due to a physical or mental injury, infirmity or incapacity for one hundred and twenty (120) days (including weekends and holidays) in any three hundred sixty-five (365) day period. The Executive shall reasonably cooperate with the Company if a question arises as to whether the Executive has become disabled (including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists reasonably selected by the Company and authorizing such medical doctors and other health care specialists to discuss the Executive’s condition with the Company).
(b) DEATH. Automatically upon the date of death of the Executive.
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(c) CAUSE. Thirty (30) days after written notice by the Company to the Executive of a termination for Cause if the Executive shall have failed to cure or remedy such matter, if curable, within such thirty (30) day period. “Cause” shall mean the Company’s termination of the Executive’s employment with the Company as a result of: (i) fraud, embezzlement or other willful act of material dishonesty by the Executive in connection with or relating to the Executive’s employment with the Company; (ii) theft or misappropriation of property, information or other assets by the Executive in connection with the Executive’s employment with the Company which results in or could reasonably be expected to result in material loss, damage or injury to the Company, its goodwill, business or reputation; (iii) the Executive’s commission, guilty plea, no contest plea, or similar plea for any felony or crime involving moral turpitude; (iv) the Executive’s use of alcohol or drugs while working that materially interferes with the Executive’s duties under this Agreement; (v) material breach of a material Company policy, or material breach of a Company policy that results in or could reasonably be expected to result in material loss, damage or injury to the Company, its goodwill, business or reputation; (vi) the Executive’s material breach of any of his obligations under this Agreement; or (vii) the Executive’s repeated insubordination, or refusal (other than as a result of a Disability or physical or mental illness) to carry out or follow specific reasonable and lawful instructions, duties or assignments given by the CEO which are consistent with Executive’s position with the Company. Additionally, in the event that the basis for Cause is, in the reasonable good faith determination of the Company not reasonably subject to cure, then such thirty (30) days’ prior notice of termination for Cause shall not be required, and such termination shall be effective on the date the Company delivers notice of such termination for Cause.
(d) WITHOUT CAUSE. The date of termination set forth in any written notice by the Company to the Executive of an involuntary termination without Cause (other than death or Disability).
(e) GOOD REASON. Thirty-one (31) days after written notice by the Executive to the Company of a condition giving rise to a termination for Good Reason. “Good Reason” shall mean the occurrence of any of the following events, without the express written consent of the Executive: (i) the Company’s material breach of any of its obligations under this Agreement or the Equity Documents; (ii) any material adverse change in Executive’s duties or authority or responsibilities (including reporting responsibilities), or the assignment of duties or responsibilities to Executive materially inconsistent with his position, (iii) Executive is no longer serving as the CFO of the Company, (iv) reduction in your total annual cash compensation opportunity (i.e. Base Salary and target Annual Bonus), (v) a material relocation of Executive’s principal place of employment to a location more than fifty (50) miles from the Company’s Headquarters, or (vi) the failure of a successor to the Company to assume the Company’s obligations under this Agreement, provided, that, for (i) – (vi) above, Executive has given written notice to the Company of the condition giving rise to Good Reason within ninety (90) days after its initial occurrence and the Company fails to cure such condition within thirty (30) days following the receipt of such written notification by the Executive to the Company.
(f) WITHOUT GOOD REASON. Thirty (30) days after written notice by the Executive to the Company of the Executive’s voluntary termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date).
Notwithstanding the foregoing, in the event that Executive gives notice of termination to the Company, the Company may unilaterally accelerate the date of Executive’s termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.
6. CONSEQUENCES OF TERMINATION.
(a) DEATH. In the event that the Executive’s employment ends on account of the Executive’s death, the Executive or the Executive’s estate, as the case may be, shall be entitled to the following (with the amounts due under Sections 6(a)(i) through 6(a)(iii) hereof to be paid within thirty (30) days following termination of employment, or such earlier date as may be required by applicable law):
(i) any unpaid Base Salary through the date of termination;
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(ii) reimbursement for any unreimbursed business expenses incurred through the date of termination;
(iii) all other accrued and vested payments, benefits or fringe benefits required to be paid or provided to the Executive under the applicable plans or by law, including without limitation, payment for all accrued vacation (collectively, Sections 6(a)(i) through 6(a)(iii) hereof shall be hereafter referred to as the “Accrued Benefits”);
(b) DISABILITY. In the event that the Executive’s employment ends on account of the Executive’s Disability, the Company shall pay or provide the Executive with the Accrued Benefits at such times as set forth in Section 6(a) above.
(c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If the Executive’s employment is terminated (i) by the Company for Cause, or (ii) by the Executive without Good Reason, the Company shall pay to the Executive the Accrued Benefits, at such times as set forth in Section 6(a) above.
(d) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. If the Executive’s employment by the Company is terminated (x) by the Company without Cause, or (y) by the Executive for Good Reason, the Company will provide Executive with the Accrued Benefits at such times as set forth in Section 6(a) above, and provided Executive executes, returns to the Company and does not revoke the release and waiver of claims in the form attached hereto as Exhibit C (with such changes as may be required in order to reflect or comply with applicable laws at such time, as determined by the Company in its reasonable judgment, the “Release and Waiver”) and the Release and Waiver becomes effective pursuant to its terms and conditions, all within sixty (60) days following termination of employment, then the Company shall also pay or provide the Executive with the following:
(i) an amount equal to the Executive’s then monthly Base Salary, less all applicable withholdings and deductions, for a period of twelve (12) months following such termination (the “Severance Period”), payable beginning on or before the first regular payroll date of the Company that is sixty (60) days following the date of Executive’s termination, with such monthly payments continuing for the next eleven (11) consecutive months thereafter; and
(ii) continued participation through COBRA coverage (all costs, expenses and premiums to be paid by Company) on the same basis in the executive benefit plans contemplated by Section 4(a) hereof in which the Executive is participating on the date of such termination of employment for the Severance Period (the “COBRA Payment Period”); provided that the Executive is eligible and remains eligible for coverage under such plans; and provided, further, that in the event that the Executive obtains other employment that offers Executive substantially equivalent benefits, such continuation of coverage by the Company under this Section 6(d)(ii) shall immediately cease. Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on Executive’s behalf would result in a violation of applicable law (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to Executive’s payment of COBRA premiums and without regard to the expiration of the COBRA period prior to the end of the COBRA Payment Period. Nothing in this Agreement shall deprive Executive of his rights under COBRA or ERISA for benefits under plans and policies arising under his employment by the Company.
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(e) RETURN OF COMPANY PROPERTY. Within ten (10) days after Executive’s termination of employment with the Company for any reason, the Executive shall return all property belonging to the Company or its affiliates (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company).
7. REPRESENTATIONS AND WARRANTIES.
(a) AUTHORIZATION. All corporate action on the part of the Company and its directors necessary for the authorization, execution and delivery of this Agreement by the Company, and the performance of all of the Company’s obligations under this Agreement has been taken.
(b) ENFORCEABILITY. This Agreement, when executed and delivered by the Company, will constitute valid and legally binding obligations of the Company, enforceable in accordance with its terms.
8. NO ASSIGNMENTS. This Agreement is personal to each of the parties hereto and no party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto; provided, however that the Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company; provided further that the Company shall require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.
9. NOTICE. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered by hand, (b) on the date of transmission, if delivered by confirmed facsimile on a business day or, if not so delivered, then on the next business day, (c) on the date of delivery, if delivered by guaranteed overnight delivery service, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Jason Park [Address] [Address]
If to the Company:
DraftKings Inc. Attn: General Counsel 222 Berkley Street Boston, MA 02116 Fax: (617) 977-1727 |
or to such other address or fax number as either party may have furnished to the other in writing in accordance herewith.
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10. SECTION HEADINGS; INCONSISTENCY. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. In the event of any conflict or inconsistency between the terms and conditions of this Agreement and any offer letter, form, award, plan or policy of the Company, the terms of this Agreement shall govern and control.
11. SEVERABILITY. Each provision of this Agreement will be construed as separable and divisible from every other provision and the enforceability of any one (1) provision will not limit the enforceability, in whole or in part, of any other provision. In the event that a court or administrative body of competent jurisdiction holds any provision of this Agreement to be invalid, illegal, void or less than fully enforceable as to time, scope or otherwise, then such provision will be construed by limiting and reducing it so that such provision is valid, legal and fully enforceable while preserving to the greatest extent permissible the original intent of the parties; the remaining terms and conditions of this Agreement will not be affected by such alteration, and will remain in full force and effect.
12. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
13. GOVERNING LAW; ARBITRATION. This Agreement, the rights and obligations of the parties hereto, and all claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the choice of law provisions thereof. Except for disputes arising under Exhibit A and Exhibit B hereof, which shall be decided pursuant to the terms of these Exhibits, any dispute arising from this Agreement or Executive’s employment with the Company, including but not limited to claims for wrongful termination; violation of Title VII of the Civil Rights Act of 1964 as amended; violations of the Americans with Disabilities Act of 1990; or claims for violations of any state law or rule or regulation regarding discrimination, harassment or other wrongful conduct (collectively, “Covered Claims”), shall be decided solely and exclusively in a final and binding arbitration administered by the JAMS in Boston, Massachusetts, in accordance with the JAMS Employment Arbitration Rules in effect at the time of the filing of the demand for arbitration (the “Rules”), a copy of which is available at http://www.jamsadr.com/rules-employment-arbitration/. The arbitrator shall be a single arbitrator with expertise in employment disputes, mutually selected by the parties, or, if the parties are unable to agree thereon, a single arbitrator with expertise in employment disputes designated by the Boston office of JAMS. The arbitrator shall have the authority to award all remedies available in a court of law. The Company shall pay the arbitrator’s fees and all fees and costs to administer the arbitration. The parties acknowledge and agree that their obligations to arbitrate under this Section survive the termination of the Agreement and continue after the termination of the employment relationship between the Executive and the Company. By agreeing to arbitrate disputes arising out of Executive’s employment, both the Executive and the Company voluntarily and irrevocably waive any and all rights to have any such dispute heard or resolved in any forum other than through arbitration as provided herein. This waiver specifically includes, but is not limited to, any right to trial by jury. Notwithstanding anything to the contrary set forth herein, this Section will not apply to claims for workers’ compensation or unemployment benefits, any claim for injunctive or equitable relief, or any claim arising from Exhibit A or Exhibit B to this Agreement brought by the Company or the Executive in any court of competent jurisdiction. All arbitration proceedings hereunder shall be confidential, except: (a) to the extent the parties otherwise agree in writing; (b) as may be otherwise appropriate in response to a request from a government agency, subpoena, or legal process; (c) if the substantive law of the State of Massachusetts (without giving effect to choice of law principles) provides to the contrary; or (d) as is necessary in a court proceeding to enforce, correct, modify or vacate the arbitrator’s award or decision (and in the case of this subpart (d), the parties agree to take all reasonable steps to ensure that the arbitrator’s award, decision or findings and all other documents, pleadings and papers are filed and/or entered with the court under seal and/or in a manner that would maintain their confidentiality, including, without limitation, complying with all rules of procedure and local rules for filing documents, pleadings and papers under seal).
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14. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the CEO or other authorized representative of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement and, following approval of the Option Awards by the Board, the Equity Documents, together with all other exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes any and all prior agreements or understandings between the Executive and the Company with respect to the subject matter hereof. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.
15. TAX MATTERS.
(a) WITHHOLDING. The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.
(b) SECTION 409A COMPLIANCE.
(i) The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A.
(ii) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amount or benefit upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 15(b)(ii) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and all remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
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(iii) To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
(iv) For purposes of Code Section 409A, the Executive’s right to receive installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company. If the period during which the Executive has to consider the Release and Waiver and for the Release and Waiver to become effective begins in one calendar year and ends in a second calendar year, amounts payable hereunder that are contingent upon the occurrence of the effectiveness of the Release and Waiver shall begin to be paid in the second calendar year.
(v) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment or benefit under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.
16. NONSOLICITATION, NONDISCLOSURE & ASSIGNMENT OF INVENTIONS AGREEMENT AND NONCOMPETITION COVENANT. As a condition of employment, Executive agrees to execute and abide by a Nonsolicitation, Nondisclosure & Assignment of Inventions Agreement in the form attached as Exhibit A and the Noncompetition Covenant in the form attached as Exhibit B (together the “Covenants”), which may be amended by the mutual agreement of the parties from time to time without regard to this Agreement. The Covenants contain provisions that are intended by the parties to survive and do survive termination of this Agreement.
17. EXPENSES; INDEMNIFICATION. The Company will reimburse Executive for Executive’s reasonable out-of-pocket legal expenses associated with the review of this Agreement, up to a maximum of $7,500. Executive will be insured under the Company's Director's and Officer's Liability Insurance to the extent the Company maintains such a policy and will be entitled to indemnification by the Company pursuant to the terms and conditions of the Company’s certification of incorporation and by-laws to the same extent as the Company’s executive officers and directors.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
DRAFTKINGS INC. | ||
By: | /s/ Jason Robins | |
Name: | Jason Robins | |
Title: | CEO | |
EXECUTIVE | ||
/s/ Jason Park | ||
Jason Park |
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EXHIBIT A
NONSOLICITATION, NONDISCLOSURE & ASSIGNMENT OF INVENTIONS AGREEMENT
The undersigned Employee (the “Employee”), executes this Nonsolicitation, Nondisclosure & Assignment of Inventions Agreement (the “Agreement”) in consideration of, and a material inducement for, the Company’s (as defined below) relationship with Employee, whether by employment, contractor, or in advisory or consulting capacities, or otherwise, and in consideration of receiving any form of compensation or benefit from or in the Company. Employee understands and agrees that this Agreement shall remain in effect and survive any and all changes in Employee’s job duties, titles and compensation during Employee’s relationship with Company.
Definitions
i. | “Company” shall mean any entity controlled by, controlling, or under common control with DraftKings Inc., including affiliates and subsidiaries. Control means the direct or indirect possession of the power to direct or cause the direction of the management and policies of an entity, whether through ownership, by contract or otherwise. |
ii. | “Competing Business” shall mean any person, firm, association, corporation or any other legal entity that is engaged in a business that is competitive with any aspect of the Business of the Company, including but not limited to: FanDuel, Paddy Power Betfair, William Hill and bet365. |
iii. | “Business of the Company” shall mean the research, design, development, marketing, sales, operations, maintenance and commercial exploitation pertaining to the operation of, and providing products and services for: (1) fantasy sports contests (“FSC”); (2) Regulated Gaming (defined below); (3) all other products and services that exist, are in development, or are under consideration by the Company during your relationship with the Company (“Other Products and Services”); and (4) all products and services incidentally related to, or which are an extension, development or expansion of, FSC, Regulated Gaming and/or Other Products and Services (“Incidental Products and Services”). |
iv. | “Regulated Gaming” shall mean the operation of games of chance or skill or pari-mutuel or fixed odds games (including, but not limited to, lotteries, pari-mutuel betting, bingo, race tracks, jai alai, legalized bookmaking, off-track betting, casino games, racino, keno, and sports betting or any play for fun (non-wagering) versions of the foregoing) and any type of ancillary service or product related to or connected with the foregoing. |
v. | “Confidential Information” shall mean all information or a compilation of information, in any form (tangible or intangible or otherwise), that is not generally known to competitors or the public, which Company considers to be confidential and/or proprietary, including but not limited to: research and development; techniques; methodologies; strategies; product information, designs, prototypes and technical specifications; algorithms, source codes, object codes, trade secrets or technical data; training materials methods; internal policies and procedures; marketing plans and strategies; pricing and cost policies; customer, supplier, vendor and partner lists and accounts; customer and supplier preferences; contract terms and rates; financial data, information, reports, and forecasts; inventions, improvements and other intellectual property; product plans or proposed product plans; know-how; designs, processes or formulas; software and website applications; computer passwords; market or sales information, plans or strategies; business plans, prospects and opportunities (including, but not limited to, possible acquisitions or dispositions of businesses or facilities); information concerning existing or potential customers, partners or vendors. Confidential Information shall also mean of or related to Company’s current or potential customers, vendors or partners that is considered to be confidential or proprietary to the applicable customer, vendor or partner. |
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Confidential Information does not include: information in the public domain (other than as a result of disclosure by you); information approved in writing for unrestricted release by Company; or information produced or disclosed pursuant to a valid court order, provided you have given Company written notice of such request such that Company has an actual, reasonable opportunity to defend, limit or protect such production or disclosure.
1. | Duty of Loyalty. During the period of Employee’s relationship with the Company, Employee will devote Employee’s best efforts on behalf of the Company. Employee agrees not to provide any services to any Competing Business or engage in any conduct which may create an actual or appear to create a conflict of interest, without the expressed, written permission of the Company. |
2. | Nonsolicitation of Customers, Clients or Vendors. During the period of Employee’s relationship with the Company and for a period of twelve (12) months after termination of such relationship (for any reason), Employee shall not directly or indirectly either for him/herself or for any other person, partnership, legal entity, or enterprise, solicit or transact business, or attempt to solicit or transact business with, any of the Company’s customers, clients, vendors or partners, or prospective customers, clients, vendors or partners, in all cases, about which Employee learned Confidential Information (as defined above) or which Employee had some involvement or knowledge related to the Business of the Company. |
3. | Nonsolicitation of Employees and Contractors. During the period of Employee’s relationship with the Company and for a period of twelve (12) months after termination of such relationship (for any reason), Employee will not directly or indirectly either for him/herself or for any other person, partnership, legal entity, or enterprise: (i) solicit, in person or through supervision or control of others, an employee, advisor, consultant or contractor of the Company for the purpose of inducing or encouraging the employee, advisor, consultant or contractor to leave his or her relationship with the Company or to change an existing business relationship with the Company or to change an existing business relationship to the detriment of the Company, (ii) hire away an employee, advisor, consultant or contractor of the Company; or (iii) help another person or entity hire away a Company employee, advisor, consultant or contractor. Notwithstanding the foregoing, the placement of general advertisements offering employment, other service relationships or activities that are not specifically targeted toward employees, advisors, consultants or contractors of the Company shall not be deemed to be a breach of this Section 3. |
4. | Nondisclosure of Customer, Partner and Vendor Information. Employee understands and agrees that it is essential to the Company’s success that all nonpublic customer, partner, and vendor information is deemed and treated as Confidential Information and a confidential trade secret. Employee will not, directly or indirectly, either for him/herself or for any other person, partnership, legal entity, or enterprise, use or disclose any such customer, partner, or vendor information, except as may be necessary in the normal conduct of the Company’s business for the specific customer, partner, or vendor. Employee agrees that at the end of Employee’s relationship with the Company, or upon request by the Company, Employee will return to the Company any materials containing such information. |
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5. | Nondisclosure of Confidential Information. All such Confidential Information is (and will be) the exclusive property of the Company, and Employee shall not, during or after Employee’s employment: (i) use any Confidential Information for any purpose that is not authorized by the Company; (ii) disclose any Confidential Information to any person or entity, except as authorized by the Company in connection with Employee’s job duties; or (iii) remove or transfer Confidential Information from the Company’s premises or systems except as authorized by the Company. |
Upon termination of Employee’s relationship (for any reason), or upon the request of the Company, Employee will immediately surrender to the Company all Company property in Employee’s possession, custody, or control, including any and all documents, electronic information, and materials of any nature containing any Confidential Information, without retaining any copies.
Employee understands that the Company is now and may hereafter be subject to non-disclosure or confidentiality agreements with third persons that require the Company to protect or refrain from use of Confidential Information. Employee agrees to respect and be bound by the terms of such agreements in the event Employee has access to such Confidential Information.
Employee understands that Confidential Information is never to be used or disclosed by Employee, as provided in this Section 5. If a temporal limitation on Employee’s obligation not to use or disclose such information is required under applicable law, and the Agreement or its restriction(s) cannot otherwise be enforced, Employee agrees and the Company agrees that the two (2) year period after the date Employee’s employment ends will be the temporal limitation relevant to the contested restriction; provided, however, that this sentence will not apply to trade secrets protected without temporal limitation under applicable law.
Notwithstanding the foregoing or anything to the contrary in this Agreement or any other agreement between the Company and the Employee, nothing in this Agreement shall limit the Employee’s right to discuss Employee’s employment or report possible violations of law or regulation with the Equal Employment Opportunity Commission, United States Department of Labor, the National Labor Relations Board, the Securities and Exchange Commission, or other federal government agency or similar state or local agency or to discuss the terms and conditions of his employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act or to the extent that such disclosure is protected under the applicable provisions of law or regulation, including but not limited to “whistleblower” statutes or other similar provisions that protect such disclosure. Employee agrees to take all reasonable steps to ensure that the Company’s Confidential Information is not made public during any such disclosure. Pursuant to 18 U.S.C. Section 1833(b), the Employee shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (1) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
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6. | Assignment of Inventions. Employee expressly understands and agrees that any and all right or interest Employee obtains in any designs, trade secrets, technical specifications and technical data, know-how and show-how, customer and vendor lists, marketing plans, pricing policies, inventions, concepts, ideas, expressions, discoveries, improvements and patent or patent rights which are authored, conceived, devised, developed, reduced to practice, or otherwise obtained by him during the term of this Agreement which relate to or arise out of his relationship with the Company and which relate to the business of the Company are expressly regarded as “works for hire” or works invented or authored within the scope of employment or engagement, whether as an adviser, consultant, officer, executive, director or other capacity (the “Inventions”). Employee hereby assigns to the Company the sole and exclusive right to such Inventions. Any assignment of Inventions (and all intellectual property rights with respect thereto) hereunder includes an assignment of all “Moral Rights” (which shall mean all paternity, integrity, disclosure, withdrawal, special and any other similar rights recognized by the laws of any jurisdiction or country). To the extent such Moral Rights cannot be assigned to the Company and to the extent the following is allowed by the laws in any country where Moral Rights exist, Employee hereby unconditionally and irrevocably waives the enforcement of such Moral Rights, and all claims and causes of action of any kind against the Company or related to the Company’s customers, with respect to such rights. Employee further acknowledges and agrees that neither his successors-in-interest nor legal heirs retain any Moral Rights in any Inventions (and any intellectual property rights with respect thereto). |
Employee agrees to disclose all Inventions fully and in writing to the Company promptly after development, conception, invention, creation or discovery of the same, and at any time upon request. Employee will provide all assistance that the Company reasonably requests to secure or enforce its rights throughout the world with respect to Inventions, including signing all necessary documents to memorialize those rights and take any other action which the Company shall deem necessary to assign to and vest completely in the Company, to perfect trademark, copyright and patent protection with respect to, or to otherwise protect the Company’s trade secrets and proprietary interest in such Inventions. The obligations of this Section shall continue beyond the termination of Employee’s relationship with respect to such Inventions conceived of, reduced to practice, or developed by the Employee during the term of this Agreement. The Company agrees to pay any and all copyright, trademark and patent fees and expenses or other costs incurred by Employee for any assistance rendered to the Company pursuant to this Section.
In the event the Company is unable, after reasonable effort, to secure Employee’s signature on any patent application, copyright or trademark registration or other analogous protection relating to an Invention, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officer and agent and his agent and attorney-in-fact, to act for and on his behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright or other analogous protection thereon with the same legal force and effect as if executed by the Employee.
In Attachment A to this Agreement, Employee has listed all Inventions that relate to the Business of the Company that Employee (alone or jointly with others) made, conceived, or first reduced to practice by Employee prior to Employee’s execution of this Agreement, and in which Employee has any property interest or claim of ownership. If no such Inventions are listed in said Attachment, Employee represents that Employee has no such Inventions.
To the extent Employee is a citizen of and subject to law of a state which provides a limitation on invention assignments, then this Agreement’s assignment shall not include inventions excluded under such law.
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7. | Absence of Conflicting Agreements. Employee understands that the Company does not desire to acquire from Employee any trade secrets, know-how or confidential business information that Employee may have acquired from others, and Employee agrees not to disclose any such information to the Company or otherwise utilize any such information in connection with Employee’s performance of duties with the Company. Employee represents that Employee is not bound by any agreement or any other existing or previous business relationship which purports to conflict or impact the full performance of Employee’s duties and obligations to the Company. |
8. | Remedies Upon Breach. Employee agrees that any action that violates this Agreement would cause the Company irreparable harm for which monetary damages are inadequate. Accordingly, in the event of a breach, or threatened breach, the Company shall be entitled to an injunction restraining such breach or threatened breach, or requiring specific performance, in addition to any and all rights and remedies at law and equity. The Company shall not be obligated to present additional evidence of irreparable harm or the insufficiency of monetary damages and, to the extent permitted by law or under applicable court rule, does not need to post a bond or other surety. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy available to the Company for such breach or threatened breach. |
9. | Jurisdiction, Venue and Choice of Law The parties hereby mutually agree to the exclusive jurisdiction of the Superior Court (inclusive of the Business Litigation Session) of the Commonwealth of Massachusetts or the United States District Court for the District of Massachusetts for any dispute arising hereunder. Accordingly, with respect to any such court action, Employee (a) submits to the personal jurisdiction of such courts; (b) consents to service of process by regular mail to his last known address; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process. If Employee commences a legal action or other proceeding against the Company concerning a dispute arising from or relating to this Agreement outside of Massachusetts, Employee shall reimburse the Company for its reasonable attorneys’ fees, costs and expenses if Company prevails in staying, transferring, dismissing or otherwise defending such action or proceeding based on the location of the action or proceeding, regardless of whether such fees, costs and expenses are incurred in the forum where Employee commenced the action or in a Massachusetts forum. This Agreement shall be governed by the internal substantive laws of Massachusetts, without regard to the doctrine of conflicts of law. |
10. | At-Will Employment. Employee agrees and acknowledges that Employee is an employee “at will” and nothing in this Agreement is intended to guarantee employment for any period of time. Even though the nature of Employee’s relationship with the Company is as an “at will” employee, the parties enter this Agreement with the understanding that Employee’s position, title, duties and responsibilities could change in a material way in the future and, in light of that understanding, the parties intend that this Agreement shall follow Employee throughout the entire course of Employee’s employment with the Company, and such subsequent material change shall not affect the enforceability or validity of this Agreement. |
11. | Return of Property. Employee agrees that, at the time of termination of Employee’s employment (for any reason), Employee will return immediately to the Company, in good condition, all property of the Company. This return of property includes, without limitation, a return of physical property (such as computer, phone or other mobile devices, credit card, promotional materials, etc.) and intangible property (such as computer passwords). |
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12. | Litigation and Regulatory Cooperation. During and after the Employee’s relationship with the Company, Employee shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company by/against third parties that relate to events or occurrences that transpired while the Employee was employed by the Company. Employee’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness at mutually convenient times. During and after the Employee’s employment, Employee also shall cooperate fully with the Company in connection with any investigation or review of any federal, state, or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Employee was employed by the Company, unless such claim is brought by Employee. |
13. | Communication to Future Employers. Employee agrees to communicate the contents of all post-relationship obligations in this Agreement to any Competing Business that you intend to be employed by, associated with, or represent. Employee understands and agrees that the Company may, in its discretion, also share any post-employment obligation set out in this Agreement with any future employer or potential employer of Employee, or any entity which seeks to be associated with Employee for Employee’s services. |
14. | Miscellaneous. Any waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach hereof. If a court determines that one or more of the provisions contained in this Agreement shall be invalid or unenforceable, such court shall construe, reform or otherwise revise such provision(s) and/or sever such provisions from this Agreement so as to render it enforceable to the maximum extent allowed by law. Any part of this Agreement which is prohibited or which is held to be void or unenforceable shall be ineffective only to the extent of such prohibition without invalidating the remaining provisions of this Agreement. The obligations of Employee under this Agreement shall survive the termination of the Employee’s relationship with the Company regardless of the manner of such termination. All covenants and agreements hereunder shall inure to the benefit of and be enforceable by the successors of the Company. This Agreement amends, supplants and supersedes any agreement previously executed between the parties regarding the subject matter of this Agreement. |
Employee recognizes and agrees that the enforcement of this Agreement is necessary, among other things, to ensure the preservation, protection and continuity of Confidential Information, trade secrets and goodwill of the Company. Employee agrees that, due to the proprietary nature of the Business of the Company and relationships with others, the post-employment restrictions set forth above are reasonable as to duration and scope.
Employee is advised to consult with an attorney before entering into this Agreement.
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IN WITNESS WHEREOF, the undersigned Employee and the Company have executed this Nonsolicitation, Nondisclosure and Assignment of Inventions Agreement as an instrument under seal as of this 30th day of May, 2019.
DraftKings Inc. | Employee | |
/s/ Jason Robins | /s/ Jason Park | |
By: Jason Robins | Jason Park | |
Title: Chief Executive Officer |
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NONSOLICITATION, NONDISCLOSURE & ASSIGNMENT OF INVENTIONS AGREEMENT
Attachment A
List of all inventions or improvements (referred to in Section 6) made by you, alone or jointly with others, prior to joining the Company.
Right, Title or Interest (If none, please write “NONE”.)
|
Date Acquired | Identifying Number or Brief Description of Inventions or Improvements | ||
Name of Employee: | |
Jason Park | |
/s/ Jason Park | |
Sign | |
5/30/2019 | |
Date |
EXHIBIT B
Noncompetition Covenant
(a) | During the period of your relationship with Company, you, Jason Park (hereinafter “you”) agree to not, anywhere within the Restricted Area (defined below), acting individually, or as an owner, shareholder, partner, employee, contractor, agent or otherwise (other than on behalf of Company): provide services to a Competing Business (defined below). For a period of twelve (12) months following termination of your relationship with Company (for any reason other than referenced below in section (b)), you agree to not, anywhere within the Restricted Area, acting individually, or as an owner, shareholder, partner, employee, contractor, agent or otherwise (other than on behalf of Company): provide services to a Competing Business that relate to any aspect of the Business of the Company (i.e., FSC, Regulated Gaming, Other Products and Services, and/or Incidental Products and Services) for which you performed services or received confidential information at any time during the twelve (12) month period prior to such termination. For example, if you performed services for the FSC aspect of the Business of the Company and received confidential information about the Regulated Gaming aspect of the Business of the Company during the twelve (12) month period prior to the termination of your relationship with the Company (for any reason other than referenced below in section (b)), then for twelve (12) months after such termination, you shall not, anywhere within the Restricted Area, acting individually, or as an owner, shareholder, partner, employee, contractor, agent or otherwise (other than on behalf of Company), provide services to a Competing Business that relate to FSC or Regulated Gaming. The foregoing shall not be construed to preclude you from (i) owning up to one percent (1%) of the outstanding stock of a publicly held corporation that constitutes or is affiliated with a Competing Business, or (ii) becoming a shareholder, partner, contractor, agent, member, employee or otherwise of a private equity, venture capital or other investment firm, and providing services in connection therewith. The foregoing shall, however, be construed to specifically prevent you from (x) acting individually, or as an owner, shareholder, partner, employee, contractor, agent or otherwise (other than on behalf of Company) anywhere within the Restricted Area, during the period of your relationship with the Company and for a period of twelve (12) months following termination of your relationship with Company (for any reason other than referenced below in section (b)), and (y) providing services that relate to any aspect of the Business of the Company for any private equity, venture capital or other investment firm that at any time during such twelve (12) month period, has investments in any Competing Business. To the extent that you act individually, or as an owner, shareholder, partner, employee, contractor, agent or otherwise and provide services unrelated to the Business of the Company for any private equity, venture capital or other investment firm at any time during such twelve (12) month period, you agree to institute an ethical screen that prevents your access to communications, information and participation in all services related to the Business of the Company. |
As set out in the Massachusetts Noncompetition Act, you and the Company agree that the Option Awards (as defined in your Executive Employment Agreement) constitute mutually-agreed upon consideration for this Noncompetition Covenant. Such consideration is specifically designated and you acknowledge the receipt and sufficiency of the consideration.
i. | “Company” shall mean any entity controlled by, controlling, or under common control with DraftKings Inc., including affiliates and subsidiaries. Control means the direct or indirect possession of the power to direct or cause the direction of the management and policies of an entity, whether through ownership, by contract or otherwise. |
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ii. | “Restricted Area” shall mean the entire United States since the Business of the Company encompasses the entire United States, of which you acknowledge and agree. |
iii. | “Competing Business” shall mean any person, firm, association, corporation or any other legal entity that is engaged in a business that is competitive with any aspect of the Business of the Company, including but not limited to: FanDuel, Paddy Power Betfair, William Hill and bet365. |
iv. | “Business of the Company” shall mean the research, design, development, marketing, sales, operations, maintenance and commercial exploitation pertaining to the operation of, and providing products and services for: (1) fantasy sports contests (“FSC”); (2) Regulated Gaming (defined below); (3) all other products and services that exist, are in development, or are under consideration by the Company during your relationship with the Company (“Other Products and Services”); and (4) all products and services incidentally related to, or which are an extension, development or expansion of, FSC, Regulated Gaming and/or Other Products and Services (“Incidental Products and Services”). |
v. | “Regulated Gaming” shall mean the operation of games of chance or skill or pari-mutuel or fixed odds games (including, but not limited to, lotteries, pari-mutuel betting, bingo, race tracks, jai alai, legalized bookmaking, off-track betting, casino games, racino, keno, and sports betting or any play for fun (non-wagering) versions of the foregoing) and any type of ancillary service or product related to or connected with the foregoing. |
vi. | “Confidential Information” shall mean all information or a compilation of information, in any form (tangible or intangible or otherwise), that is not generally known to competitors or the public, which Company considers to be confidential and/or proprietary, including but not limited to: research and development; techniques; methodologies; strategies; product information, designs, prototypes and technical specifications; algorithms, source codes, object codes, trade secrets or technical data; training materials methods; internal policies and procedures; marketing plans and strategies; pricing and cost policies; customer, supplier, vendor and partner lists and accounts; customer and supplier preferences; contract terms and rates; financial data, information, reports, and forecasts; inventions, improvements and other intellectual property; product plans or proposed product plans; know-how; designs, processes or formulas; software and website applications; computer passwords; market or sales information, plans or strategies; business plans, prospects and opportunities (including, but not limited to, possible acquisitions or dispositions of businesses or facilities); information concerning existing or potential customers, partners or vendors. Confidential Information shall also mean of or related to Company’s current or potential customers, vendors or partners that is considered to be confidential or proprietary to the applicable customer, vendor or partner. |
Confidential Information does not include: information in the public domain (other than as a result of disclosure by you); approved in writing for unrestricted release by Company; or produced or disclosed pursuant to a valid court order, provided you have given Company written notice of such request such that Company has an actual, reasonable opportunity to defend, limit or protect such production or disclosure.
B-2
(b) | You and the Company agree that the Noncompetition Covenant shall not be enforceable against you if the Company terminates your employment without Cause (as defined in the Agreement) or if you are laid off. In the event of a termination without Cause or layoff, all other agreements with the Company (including without limitation the Award Agreement (as defined in the Stock Option Grant Notice)), shall remain in full force and effect. |
(c) | You agree to communicate the contents of all post-relationship obligations in this Noncompetition Covenant to any Competing Business that you intend to be employed by, associated with, or represent. You understand and agree that the Company may, in its discretion, also share any post-relationship obligation in this Noncompetition Covenant with any future (or potential) employer or association that is a Competing Business that seeks to be associated with you or employ you for your services. |
(d) | You agree that the enforcement of the Noncompetition Covenant is necessary, among other things, to ensure the preservation, protection and continuity of the Company’s Confidential Information, trade secrets and goodwill of the Company. You agree that, due to the proprietary nature of the Business of the Company and relationships with others, the post-employment restrictions set forth above are reasonable as to duration and scope. |
(e) | You agree that any action that violates this Noncompetition Covenant would cause the Company irreparable harm for which monetary damages are inadequate. Accordingly, in the event of a breach, or threatened breach, of this Noncompetition Covenant, the Company shall be entitled to an injunction restraining such breach or threatened breach, or requiring specific performance, in addition to any and all rights and remedies at law and equity. The Company shall not be obligated to present additional evidence of irreparable harm or the insufficiency of monetary damages and, to the extent permitted by law or under applicable court rule, does not need to post a bond or other surety. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy available to the Company for such breach or threatened breach. |
(f) | You and the Company hereby mutually agree to the exclusive jurisdiction of the Superior Court (inclusive of the Business Litigation Session) of the Commonwealth of Massachusetts or the United States District Court for the District of Massachusetts for any dispute arising hereunder. Accordingly, with respect to any such court action, you (a) submit to the personal jurisdiction of such courts; (b) consent to service of process by regular mail to your last known address; and (c) waive any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process. If you commence a legal action or other proceeding against the Company concerning a dispute arising from or relating to this Noncompetition Covenant outside of Massachusetts you shall reimburse the Company for its reasonable attorneys’ fees, costs and expenses if Company prevails in staying, transferring, dismissing or otherwise defending such action or proceeding based on the location of the action or proceeding, regardless of whether such fees, costs and expenses are incurred in the forum where you commenced the action or in a Massachusetts forum. This Noncompetition Covenant shall be governed by the internal substantive laws of Massachusetts, without regard to the doctrine of conflicts of law. |
(g) | The failure of you or Company to insist upon strict performance of this Noncompetition Covenant irrespective of the length of time for which such failure continues, shall not be a waiver of such party’s rights herein. No term or provision of this Noncompetition Covenant may be waived unless such waiver is in writing. |
B-3
(h) | If a court determines that one or more of the provisions contained in this Noncompetition Covenant shall be invalid or unenforceable, such court shall construe, reform or otherwise revise such provision(s) and/or sever such provisions from this Noncompetition Covenant so as to render it enforceable to the maximum extent allowed by law. Any part of this Noncompetition Covenant which is prohibited or which is held to be void or unenforceable shall be ineffective only to the extent of such prohibition without invalidating the remaining provisions of this Noncompetition Covenant. |
(i) | Except as described in Section (b) of this Noncompetition Covenant, your obligations under this Noncompetition Covenant shall survive the termination of your relationship with the Company regardless of the manner of such termination. |
(j) | The rights granted to the Company under the Noncompetition Covenant shall inure to the benefit of, and be enforceable by, the successors or assigns of Company. |
(k) | You agree that you received this Noncompetition Covenant by the earlier of the formal offer of employment that you received from the Company or 10 business days before commencement of your employment with the Company. |
(l) | Before agreeing to this Noncompetition Covenant, you have the right to consult with counsel. The terms and conditions of this Noncompetition Covenant shall supersede all prior noncompetition covenants between you and Company. |
(m) | In the event that you breach this Noncompetition Covenant, in addition to any other rights and remedies available to the Company, you agree that the Company shall have the right to deem that any and all vested and unvested shares subject to this stock option grant have been forfeited. |
(n) | The parties agree that you are employed “at will” and nothing in this Noncompetition Covenant is intended to guarantee employment for any period of time. Even though the nature of your relationship with the Company is as an “at will” employee, the parties enter this Noncompetition Covenant with the understanding that your position, title, duties and responsibilities could change in a material way in the future and, in light of that understanding, the parties intend that this Noncompetition Covenant shall follow you throughout the entire course of your employment with the Company, and such subsequent material change shall not affect the enforceability or validity of this Noncompetition Covenant. |
DraftKings Inc. | Employee | |
/s/ Jason Robins | /s/ Jason Park | |
By: Jason Robins | Jason Park | |
Title: Chief Executive Officer |
B-4
EXHIBIT C
RELEASE AND WAIVER OF CLAIMS
In consideration for the end of employment / termination benefits set forth in my Executive Employment Agreement dated May 30, 2019, to which this form is attached, including without limitation the end of employment / termination benefits set forth in Section 6 thereof, I, Jason Park, hereby furnish DraftKings, Inc. (the “Company”), with the following release and waiver of claims (the “Release”). For the avoidance of doubt, nothing in this Release is intended or shall be construed to waive, release or limit in any manner the end of employment / termination benefits described above.
I hereby generally and completely release the Company and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) of and from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date that I sign this Release (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (i) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (ii) all claims related to my compensation or benefits from the Company, including salary, bonuses, retention bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (iii) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (v) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Family and Medical Leave Act (as amended) (the “FMLA”), the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the Employee Retirement Income Security Act of 1974 (as amended), the National Labor Relations Act of 1935 (as amended), and any similar applicable state laws, including those of the Commonwealth of Massachusetts and any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance, and any public policy, contract, tort, or common law. Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (i) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; (ii) any rights which are not waivable as a matter of law; (iii) any claims arising from the breach of this Release; or (iv) any claims related to any Accrued Benefits or other vested benefits payable or due to me on account of the end of my employment or my termination under the terms of my Executive Employment Agreement. For the avoidance of doubt, nothing in this Release shall prevent me from challenging the validity of the Release in a legal or administrative proceeding. Nothing in this Release shall prevent me from filing, cooperating with, or participating in any proceeding or investigation before the Equal Employment Opportunity Commission, United States Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal government agency, or similar state or local agency (“Government Agencies”), or exercising any rights pursuant to Section 7 of the National Labor Relations Act. I further understand this Release does not limit my ability to voluntarily communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. While this Release does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, I am otherwise waiving, to the fullest extent permitted by law, any and all rights I may have to individual relief based upon any claims arising out of any proceeding or investigation before one or more of the Government Agencies. If any such claim is not subject to release, to the extent permitted by law, I waive any right or ability to be a class or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which any of the Released Parties is a party. Notwithstanding anything to the contrary set forth herein, this Release does not abrogate my existing rights under any Company benefit plan, the Executive Employment Agreement or any plan or agreement related to equity ownership in the Company; however, it does waive, release and forever discharge claims arising under any such plan or agreement after the Effective Date of this Release.
C-1
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA (“ADEA Waiver”). I also acknowledge that (i) the consideration given for the ADEA Waiver is in addition to anything of value to which I was already entitled; and (ii) that, subject only to Company providing the end of employment / termination benefits described in the first paragraph of this Release, I have been paid for all time worked, has received all the leave, leaves of absence and leave benefits and protections for which I am eligible, and have not suffered any on-the-job injury for which I have not already filed a claim. I affirm that all of the decisions of the Released Parties regarding my pay and benefits through the date of my execution of this Release were not discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by law. I affirm that I have not filed or caused to be filed, and am not presently a party to, a claim against any of the Released Parties. I further affirm that I have no known workplace injuries or occupational diseases. I acknowledge and affirm that I have not been retaliated against for reporting any allegation of corporate fraud or other wrongdoing by any of the Company Parties, or for exercising any rights protected by law, including any rights protected by the Fair Labor Standards Act, the Family Medical Leave Act or any related statute or local leave or disability accommodation laws, or any applicable state workers’ compensation law. I have been advised by this writing, as required by the ADEA, that: (a) my waiver and release do not apply to any claims that may arise after I sign this Release; (b) I should consult with an attorney prior to executing this release; (c) I have twenty-one (21) days within which to consider this release (although I may choose to voluntarily execute this release earlier); (d) I have seven (7) days following the execution of this release to revoke this Release (in a written revocation sent to the Chief Executive Officer of the Company); and (e) this Release will not be effective until the eighth day after I sign this Release, provided that I have not earlier revoked this Release (the “Effective Date”). I will not be entitled to receive any of the benefits specified by this Release unless and until it becomes effective.
C-2
In granting the release herein, which includes claims that may be unknown to me at present, I acknowledge that I expressly waive and relinquish any and all rights and benefits under any applicable law or statute providing, in substance, that a general release does not extend to claims which a party does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her would have materially affected the terms of such release.
This Release constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein. This Release may only be modified by a writing signed by both me and a duly authorized officer of the Company.
Date: 5/30/2019 | By: | /s/ Jason Park | |
Jason Park |
C-3
EXHIBIT D
STOCK OPTION AGREEMENTS
D-1
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4, Amendment No. 1, of our report dated May 9, 2019, relating to the balance sheet of Diamond Eagle Acquisition Corp. as of March 31, 2019, and the related statements of operations, changes in stockholder’s equity and cash flows for the period from March 27, 2019 (date of inception) through March 31, 2019, and to the reference to our Firm under the caption “Experts” in the Registration Statement.
/s/ WithumSmith+Brown, PC | |
New York, New York | |
February 13, 2020 |
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Form S-4, Amendment No. 1, of our report dated January 6, 2020, relating to the consolidated financial statements of DraftKings Inc., which is contained in that Prospectus. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ BDO USA, LLP
Boston, Massachusetts
February 13, 2020
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Form S-4, Amendment No. 1, of our report dated January 6, 2020, relating to the consolidated financial statements of SBTech (Global) Limited LTD., which is contained in that Prospectus.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ Ziv Haft | |
Ziv Haft Certified Public Accountants (Isr.) BDO Member Firm |
Tel Aviv, Israel
February 13, 2020
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