ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ | Small er reporting company |
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Emerging growth company |
1 |
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2 |
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Item 1. |
2 |
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Item 1A. |
17 |
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Item 1B. |
52 |
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Item 2. |
52 |
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Item 3. |
52 |
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Item 4. |
52 |
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53 |
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Item 5. |
53 |
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Item 6. |
54 |
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Item 7. |
54 |
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Item 7A. |
58 |
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Item 8. |
58 |
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Item 9. |
58 |
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Item 9A. |
59 |
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Item 9B. |
60 |
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Item 9C. |
60 |
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61 |
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Item 10. |
61 |
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Item 11. |
72 |
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Item 12. |
72 |
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Item 13. |
75 |
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Item 14. |
78 |
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PART IV |
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Item 15. |
79 |
• | our ability to select an appropriate target business or businesses; |
• | our ability to complete our initial business combination; |
• | our expectations around the performance of the prospective target business or businesses; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements; |
• | our potential ability to obtain additional financing to complete our initial business combination; |
• | our pool of prospective target businesses; |
• | the ability of our officers and directors to generate a number of potential acquisition opportunities; |
• | our public securities’ potential liquidity and trading; |
• | the lack of a market for our securities; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
• | the trust account not being subject to claims of third parties; or |
• | our financial performance. |
Item 1. |
Business. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and |
• | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and |
• | file proxy materials with the SEC. |
• | if we are unable to complete our initial business combination within the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
• | prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to: (1) receive funds from the trust account; or (2) vote on any initial business combination; |
• | although we do not intend to enter into a business combination with a target business that is affiliated with M. Klein and Company, any of our Strategic and Operating Partners, our sponsor, our directors or our officers, we are not prohibited from doing so. In the event we seek to complete our initial business combination with a company that is affiliated with M. Klein and Company, any of our Strategic and Operating Partners, our sponsor, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that such a business combination is fair to our company from a financial point of view; |
• | if a stockholder vote on our initial business combination is not required by applicable law or stock exchange rules and we do not decide to hold a stockholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial |
business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; |
• | if required by applicable stock-exchange rules, our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (excluding the amount of any deferred underwriting discount); |
• | if our stockholders approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon such approval at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals), divided by the number of then outstanding public shares; and |
• | we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
Item 1A. |
Risk Factors. |
• | our ability to complete our initial business combination, including risks arising from the uncertainty resulting from the COVID-19 pandemic, the conflict between Russia and Ukraine and related volatility in the financial markets; |
• | our public shareholders’ ability to exercise redemption rights; |
• | the requirement that we complete our initial business combination within the completion window; |
• | the possibility that NYSE may delist our securities from trading on its exchange; |
• | being declared an investment company under the Investment Company Act; |
• | complying with changing laws and regulations; |
• | the performance of the prospective target business or businesses; |
• | our ability to select an appropriate target business or businesses; |
• | the pool of prospective target businesses available to us and the ability of our officers and directors |
• | to generate a number of potential business combination opportunities; |
• | the issuance of additional Class A common stock in connection with a business combination that may dilute the interest of our shareholders; |
• | the incentives to our sponsor, officers and directors to complete a business combination to avoid losing their entire investment in us if our initial business combination is not completed; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | our ability to obtain additional financing to complete our initial business combination; |
• | our ability to amend the terms of warrants in a manner that may be adverse to the holders of public warrants; |
• | our ability to redeem your unexpired warrants prior to their exercise; |
• | our public securities’ potential liquidity and trading; and |
• | provisions in our amended and restated certificate of incorporation and Delaware law that may have the effect of inhibiting a takeover of us and discouraging lawsuits against our directors and officers, and limiting our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, agents or stockholders. |
• | may significantly dilute the equity interest of investors in the IPO; |
• | may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our units, common stock and/or warrants. |
• | solely dependent upon the performance of a single business, property or asset; or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and a decreased ability to issue additional securities or obtain additional financing in the future. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | longer payment cycles; |
• | tax consequences; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars, including the conflict in Ukraine and the surrounding region; |
• | deterioration of political relations with the United States; |
• | obligatory military service by personnel; and government appropriation of assets. |
• | Any derivative action or proceeding brought on our behalf; |
• | Any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us to us or our stockholders; |
• | Any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our Amended and Restated Certificate of Incorporation or the Bylaws; or |
• | Any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine, except for, as to each of the actions and proceedings noted above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery (C) for which the Court of Chancery does not have subject matter jurisdiction or (D) any action arising under the Securities Act of 1933, as amended, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Notwithstanding the foregoing, this provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. |
Item 1B. |
Unresolved Staff Comments. |
Item 2. |
Properties. |
Item 3. |
Legal Proceedings. |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Item 6. |
[Reserved]. |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. |
Controls and Procedures. |
(1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, |
(2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and |
(3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Item 9B. |
Other Information. |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Item 10. |
Directors, Executive Officers and Corporate Governance. |
Name |
Age |
Title | ||||
Michael Klein |
58 | Chief Executive Officer, President and Chairman of the Board of Directors | ||||
Jay Taragin |
56 | Chief Financial Officer | ||||
Alan M. Schrager |
53 | Director | ||||
Dena J. Brumpton |
58 | Director | ||||
William J. Bynum |
63 | Director | ||||
Mark Klein |
60 | Director | ||||
Karen G. Mills |
68 | Director |
• | assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditors; |
• | the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us; |
• | pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
• | reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; |
• | setting clear hiring policies for employees or former employees of the independent auditors; |
• | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
• | obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
• | meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”; |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
• | reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and making recommendations to our board of directors with respect to (or approving, if such authority is so delegated by our board of directors) the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board, and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors; |
• | developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines; |
• | coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and |
• | reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
• | None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities (including the activities of M. Klein and Company). |
• | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
• | Our sponsor, officers and directors have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders, officers and directors have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination within the completion window. However, if our initial stockholders or any of our officers, directors or affiliates acquire public shares in or after the IPO, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate our initial business combination within the completion window. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until the earlier of: (1) one year after the completion of our initial business combination; and (2) the date on which we consummate a liquidation, merger, stock exchange, reorganization or other similar transaction after our initial business combination that results in all of our public stockholders having the right to exchange |
their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading lock-up. |
• | Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination. |
• | Our key personnel may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such key personnel was included by a target business as a condition to any agreement with respect to our initial business combination. |
• | We may engage M. Klein and Company, or another affiliate of our sponsor, as our lead financial advisor in connection with our initial business combination and may pay such affiliate a customary financial advisory fee in an amount that constitutes a market standard financial advisory fee for comparable transactions. See “Item 1A. Risk Factors — We may engage M. Klein and Company, or another affiliate of our sponsor, as our lead financial advisor on our business combinations and other transactions. Any fee in connection with such engagement may be conditioned upon the completion of such transactions. This financial interest in the completion of such transactions may influence the advice such affiliate provides.” |
• | The conflicts described above may not be resolved in our favor. |
• | In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if: |
• | the corporation could financially undertake the opportunity; |
• | the opportunity is within the corporation’s line of business; and |
• | it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Name of Individual |
Entity Name |
Entity’s Business |
Affiliation | |||
Michael Klein | M. Klein and Company | Strategic advice | Founder and Managing Member | |||
Credit Suisse Group AG | Financial services | Director | ||||
Credit Suisse AG | Financial services | Director | ||||
Skillsoft Corp. | Digital learning and talent solutions | Director |
Name of Individual |
Entity Name |
Entity’s Business |
Affiliation | |||
MultiPlan | Healthcare cost management solutions | Director | ||||
Churchill Capital Corp VI | Blank check company | Chief Executive Officer, President and Chairman of the Board of Directors | ||||
Churchill Capital Corp VII | Blank check company | Chief Executive Officer, President and Chairman of the Board of Directors | ||||
AltC Acquisition Corp. | Blank check company | Chief Executive Officer, President and Chairman of the Board of Directors | ||||
Jay Taragin | M. Klein and Company | Strategic advice | Chief Financial Officer | |||
Churchill Capital Corp VI | Blank check company | Chief Financial Officer | ||||
Churchill Capital Corp VII | Blank check company | Chief Financial Officer | ||||
AltC Acquisition Corp. | Blank check company | Chief Financial Officer | ||||
Alan M. Schrager | Oak Hill Advisors, L.P. | Investment | Portfolio Manager and Senior Partner | |||
Expro Group Holdings N.V. | Energy services provider | Director | ||||
Churchill Capital Corp VI | Blank check company | Director | ||||
Churchill Capital Corp VII | Blank check company | Director | ||||
Dena J. Brumpton | Leathwaite Human Capital Limited | Human capital | Director | |||
Scottish Widows Schroder Wealth Holdings Limited | Financial services holding company | Director | ||||
Maitland International Holdings Limited | Advisory/administration | Director | ||||
William J. Bynum | HOPE | Financial services | Chief Executive Officer | |||
Mark Klein | M. Klein and Company | Strategic advice | Managing Member and Majority Partner | |||
Sutter Rock Capital | Investment | Chief Executive Officer and Director | ||||
Atlantic Alliance Partnership Corp. | Blank check company | Director | ||||
B. Riley Wealth Management | Wealth Management | Investment Advisor | ||||
Churchill Capital Corp VI | Blank check company | Director | ||||
Churchill Capital Corp VII | Blank check company | Director | ||||
Karen G. Mills | MMP Group | Private equity | President | |||
Churchill Capital Corp VI | Blank check company | Director | ||||
Churchill Capital Corp VII | Blank check company | Director | ||||
Skillsoft Corp. | Digital learning and talent solutions | Director |
Item 11. |
Executive Compensation. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
• | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
• | each of our executive officers and directors; and |
• | all our executive officers and directors as a group. |
Name and Address of Beneficial Owner (1) |
Number of Shares Beneficially Owned |
Percentage of Outstanding Common Stock |
||||||
Churchill Sponsor V LLC (2)(3) |
12,500,000 | 20 | % | |||||
Michael Klein (2)(3) |
12,500,000 | 20 | % | |||||
Jay Taragin |
— | — | ||||||
Alan M. Schrager |
— | — | ||||||
Dena J. Brumpton |
— | — | ||||||
William J. Bynum |
— | — | ||||||
Mark Klein |
— | — | ||||||
Karen G. Mills |
— | — | ||||||
D.E. Shaw Valence Portfolios, LLC (4) |
4,950,000 | 9.9 | % | |||||
Magnetar Financial (5) |
2,500,000 | 5 | % | |||||
Millennium Management LLC (6) |
4,387,150 | 8.8 | % | |||||
All officers and directors as a group (7 individuals) |
12,500,000 | 20 | % |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Churchill Capital Corp V, 640 Fifth Avenue, 12th Floor, New York, NY 10019. |
(2) | Interests shown consist solely of shares of Class B common stock which are referred to herein as founder shares. Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one |
(3) | Michael Klein is the controlling stockholder of M. Klein Associates, Inc., which is the managing member of Churchill Sponsor V LLC. The shares beneficially owned by Churchill Sponsor V LLC may also be deemed to be beneficially owned by Mr. Klein. |
(4) | According to Schedule 13G, filed on February 14, 2022 by D.E. Shaw Valence Portfolios, LLC, D.E. Shaw & Co., LLC, D.E. Shaw & Co., LP and David E. Shaw (collectively, the “D.E. Shaw Parties”), the business address of such parties is 1166 Avenue of the Americas, 9th Floor, New York, NY 10036. The D.E. Shaw Parties hold 4,950,000 shares of Class A common stock. Such securities are held through D.E. Shaw Valence Portfolios, LLC, a Delaware limited liability company, that holds 3,712,435 shares of Class A common stock (the “Valence Shares”) and D.E. Shaw & Co. LLC, a Delaware limited liability company, which holds a total of 4,950,000 including the Valence shares and 1,237,565 shares held in the name of D.E. Shaw Oculus Portfolios, LLC. Mr. David E. Shaw, a United States citizen, does not own any shares directly. By virtue of David E. Shaw’s position as President and sole shareholder of D. E. Shaw & Co., Inc., which is the general partner of D. E. Shaw & Co., LP, which in turn is the investment adviser of D. E. Shaw Valence Portfolios, LLC and D. E. Shaw Oculus Portfolios, LLC, and by virtue of David E. Shaw’s position as President and sole shareholder of D. E. Shaw & Co. II, Inc., which is the managing member of D. E. Shaw & Co., LLC, which in turn is the manager of D. E. Shaw Valence Portfolios, LLC and D. E. Shaw Oculus Portfolios, LLC, David E. Shaw may be deemed to have the shared power to vote or direct the vote of, and the shared power to dispose or direct the disposition of, the 4,950,000 shares as described above constituting 9.9% of the outstanding shares and, therefore, David E. Shaw may be deemed to be the beneficial owner of such shares. David E. Shaw disclaims beneficial ownership of such 4,950,000 shares. |
(5) | According to Schedule 13G, filed on January 14, 2022 by Magnetar Financial LLC, Magnetar Capital Partners LP, Supernova Management LLC and Alec N. Litowitz (collectively, the “Magnetar Parties”), the business address of such parties is 1603 Orrington Avenue, 13 th Floor, Evanston, Illinois 60201. The Magnetar Parties hold 2,500,000 shares of Class A common stock. Such securities are held through |
Magnetar Financial LLC (“Magnetar Financial”), a Delaware limited liability company, Magnetar Capital Partners LP (“Magnetar Capital Partners”), a Delaware limited partnership, Supernova Management LLC (“Supernova Management”), a Delaware limited liability company and Mr. Alec N. Litowitz (“Mr. Litowitz”), a United States citizen who serves as the manager of Supernova Management LLC. Magnetar Capital Partners serves as the sole member and parent holding company of Magnetar Financial. Supernova Management is the general partner of Magnetar Capital Partners. The manager of Supernova Management is Mr. Litowitz. |
(6) | According to Schedule 13G, filed on February 3, 2022 by Integrated Core Strategies (US) LLC (“Integrated Core Strategies”), Riverview Group LLC (“Riverview”), ICS Opportunities, Ltd. (“ICS Opportunities), ICS Opportunities II LLC (“ICS Opportunities II), Millennium International Management LP (“Millennium International Management”), Millennium Management LLC (“Millennium Management”), Millennium Group Management LLC (“Millennium Group Management”) and Israel A. Englander (“Mr. Englander”) (collectively, the “Millennium Parties”), the business address of such parties is 399 Park Avenue, New York, New York 10022. The Millennium Parties hold 4,387,150 shares of Class A common stock. Such securities are held by (i) Integrated Core Strategies, a Delaware limited liability company, which beneficially owned 500,000 shares of the Class A Common Stock, (ii) Riverview, a Delaware limited liability company, which beneficially owned 0 shares of the Class A common stock; (iii) ICS Opportunities, a Cayman Islands exempted company, which beneficially owned 1,105,600 shares of the Class A Common Stock, (iv) ICS Opportunities II, a Cayman Islands exempted company, which beneficially owned 23,450 shares of the Class A Common Stock; (v) Millennium International Management LP, a Delaware limited partnership, which beneficially owned 1,129,050 shares of Class A common stock and (vi) Millennium Group Management LLC, a Delaware limited liability company, Millennium Group Management LLC, a Delaware limited liability company, and Mr. Israel A. Englander, a citizen of the United States of America, which beneficially owned 1,629,050 shares of the Class A common stock. Millennium Management, is the general partner of the managing member of Integrated Core Strategies and ICS Opportunities and may be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies, Riverview Group and ICS Opportunities. Millennium Group Management, is the managing member of Millennium Management and may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies, Riverview Group and ICS Opportunities. The managing member of Millennium Group Management is a trust of which Mr. Israel A. Englander, a United States citizen (“Mr. Englander”), currently serves as the sole voting trustee. Therefore, Mr. Englander may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies and ICS Opportunities. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
• | repayment of $200,000 in loans made to us by our sponsor to cover offering-related and organizational expenses; |
• | at the closing of our initial business combination, a customary financial advisory fee to M. Klein and Company, or another affiliate of our sponsor, in an amount that constitutes a market standard financial advisory fee for comparable transactions; |
• | payment to an affiliate of our sponsor of a total of $30,000 per month, for up to 27 months, for office space, administrative and support services; |
• | reimbursement for any out-of-pocket |
• | repayment of loans which may be made by our sponsor, an affiliate of our sponsor or our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. |
Item 14. |
Principal Accountant Fees and Services. |
Item 15. |
Exhibits, Financial Statement Schedules |
Page | ||||
F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7 |
* | Filed herewith. |
** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing. |
CHURCHILL CAPITAL CORP V | ||
By: | /s/ Jay Taragin | |
Name: | Jay Taragin | |
Title: | Chief Financial Officer |
Name |
Position |
Date | ||
/s/ Michael Klein |
Chief Executive Officer, | March 31 , 2022 | ||
Michael Klein | Chairman of the Board | |||
of Directors and Director | ||||
(Principal Executive Officer) | ||||
/s/ Jay Taragin |
Chief Financial Officer | March 31 , 2022 | ||
Jay Taragin | (Principal Financial and | |||
Accounting Officer) | ||||
/s/ Alan M. Schrager |
Director | March 31 , 2022 | ||
Alan M. Schrager | ||||
/s/ Dena J. Brumpton |
Director | March 31 , 2022 | ||
Dena J. Brumpton | ||||
/s/ William J. Bynum |
Director | March 31 , 2022 | ||
William J. Bynum | ||||
/s/ Mark Klein |
Director | March 31 , 2022 | ||
Mark Klein | ||||
/s/ Karen G. Mills |
Director | March 31 , 2022 | ||
Karen G. Mills |
Report of Independent Registered Public Accounting Firm (PCAOB ID 688) |
F-2 |
|||
Financial Statements: |
||||
F-3 |
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F-4 |
||||
F-5 |
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F-6 |
||||
F-7 to F-24 |
December 31, |
||||||||
2021 |
2020 |
|||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ | $ | ||||||
Prepaid expenses |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Cash and marketable securities held in Trust Account |
||||||||
|
|
|
|
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TOTAL ASSETS |
$ |
$ |
||||||
|
|
|
|
|||||
LIABILITIES , CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
||||||||
Current liabilities |
||||||||
Current liabilities - Accrued expenses |
$ | $ | ||||||
Convertible promissory note - related party, net of discount |
— | |||||||
Conversion option liability |
— | |||||||
Warrant liabilities |
||||||||
Deferred underwriting fee payable |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
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|
|||||
COMMITMENTS AND CONTINGENCIES (Note 6) |
||||||||
Class A common stock subject to possible redemption, |
||||||||
|
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|
|
|||||
Stockholders’ deficit |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ (excluding |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
( |
) |
( |
) | ||||
|
|
|
|
|||||
TOTAL LIABILITIES , CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
$ |
$ |
||||||
|
|
|
|
For the Year ended December 31, |
For the Period from May 12, 2020 (inception) through December 31, |
|||||||
2021 |
2020 |
|||||||
Operating and formation costs |
$ | $ | ||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
Other income (expense): |
||||||||
Change in fair value of warrant liabilities |
( |
) | ||||||
Interest earned on marketable securities held in Trust Account |
||||||||
Unrealized gain (loss) on marketable securities held in Trust Account |
( |
) | ||||||
Transaction costs attributable to warrant liabilities |
— | ( |
) | |||||
Change in fair value of conversion option liability |
||||||||
Interest expense - debt discount |
( |
) | — | |||||
|
|
|
|
|||||
Other income (expense), net |
( |
) | ||||||
|
|
|
|
|||||
Net income (loss) |
$ |
$ |
( |
) | ||||
|
|
|
|
|||||
Weighted average shares outstanding of Class A common stock |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class A common stock |
$ |
$ |
( |
) | ||||
|
|
|
|
|||||
Weighted average shares outstanding of Class B common stock |
||||||||
|
|
|
|
|||||
Basic and diluted net income (loss) per share, Class B common stock |
$ |
$ |
( |
) | ||||
|
|
|
|
Class A |
Class B |
Additional |
Total |
|||||||||||||||||||||||||
Common Stock |
Common Stock |
Paid-in |
Accumulated |
Stockholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
||||||||||||||||||||||
Balance — May 12, 2020 (Inception) |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Issuance of Class B common stock to Sponsor |
— | — | — | |||||||||||||||||||||||||
Remeasurement adjustment on redeemable common stock |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Forfeiture of Founder Share s |
— | $ | — | ( |
) | $ | ( |
) | $ | $ | — | $ | — | |||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — December 31, 2020 |
— |
$ |
— |
$ |
$ | — | $ |
( |
) |
$ |
( |
) | ||||||||||||||||
Remeasurement adjustment on redeemable common stock |
— |
— |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance — December 31, 2021 |
— | $ |
— | $ |
— | $ |
( |
) |
$ |
( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year ended December 31, |
For the Period from May 12, 2020 (inception) through December 31, |
|||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
Change in fair value of warrant liabilities |
( |
) | ||||||
Transaction costs attributable to warrant liabilities |
— | |||||||
Amortization of debt discount |
— | |||||||
Interest earned on marketable securities held in Trust Account |
( |
) | ( |
) | ||||
Unrealized (gain) loss on marketable securities held in Trust Account |
( |
) | ||||||
Change in value of conversion option liability |
( |
) | — | |||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
( |
) | ( |
) | ||||
Accrued expenses |
||||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Investment of cash in Trust Account |
— | ( |
) | |||||
Cash withdrawn from Trust Account for working capital purposes |
— | |||||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ||||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of Class B common stock to Sponsor |
— | |||||||
Proceeds from sale of Units, net of underwriting discounts paid |
— | |||||||
Proceeds from sale of Private Placement Warrants |
— | |||||||
Proceeds from promissory note—related party |
||||||||
Repayment of promissory note – related party |
— | ( |
) | |||||
Payment of offering costs |
— | ( |
) | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
|
|
|
|
|||||
Net change in cash |
( |
) |
||||||
Cash – Beginning of period |
— | |||||||
|
|
|
|
|||||
Cash – End of period |
$ |
$ |
||||||
|
|
|
|
|||||
Non-cash investing and financing activities: |
||||||||
Remeasurement for Class A common stock subject to possible redemption |
— | $ |
||||||
|
|
|
|
|||||
Remeasurement adjustment on redeemable common stock |
$ | $ | ( |
) | ||||
|
|
|
|
|||||
Deferred underwriting fee payable |
$ | — | $ | |||||
|
|
|
|
Gross proceeds |
$ | |||
Less: |
||||
Proceeds allocated to Public Warrants |
$ | ( |
) | |
Class A common stock issuance costs |
$ | ( |
) | |
Plus: |
||||
Remeasurement of carrying value to redemption value |
$ | |||
|
|
|||
Class A common stock subject to redemption, December 31, 2020 |
$ | |||
|
|
|||
Plus: |
||||
Remeasurement of carrying value to redemption value |
$ | |||
|
|
|||
Class A common stock subject to possible redemption, December 31, 2021 |
$ | |||
|
|
Year Ended December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Class A |
Class B |
Class A |
Class B |
|||||||||||||
Basic and diluted net income (loss) per common share |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income (loss), as adjusted |
$ | $ | $ |
( |
) | $ |
( |
) | ||||||||
Denominator: |
||||||||||||||||
Basic and diluted weighted average stock outstanding |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted net income (loss) per common share |
$ | $ | $ |
( |
) | $ | ( |
) |
December 31, 2021 |
October (Initial |
August 30, 2021 (Initial Measurement) |
||||||||||
Underlying warrant value |
$ | $ |
$ | |||||||||
Exercise price |
$ | $ |
$ | |||||||||
Holding period |
||||||||||||
Risk-free rate % |
% | % |
% | |||||||||
Volatility % |
% | % |
% | |||||||||
Dividend yield % |
% | % |
% |
Fair value as of January 1, 2021 |
$ | — | ||
Initial measurement on August 30, 2021 |
||||
Change in fair value |
||||
Fair value as of September 30, 2021 |
$ | |||
Change in fair value |
( |
) | ||
Fair value as of December 31, 2021 |
||||
Fair value as of January 1, 2021 |
$ | — | ||
Initial measurement on October 22, 2021 |
||||
Change in fair value |
( |
) | ||
Fair value as of December 31, 2021 |
$ |
• | in whole and not in part; |
• | at a price of $ |
• | upon not less than thirty ( |
• | if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $ |
• | if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants. |
December 31, 2021 |
December 31, 2020 |
|||||||
Deferred tax assets |
||||||||
Net operating loss carryforward |
$ | $ | ||||||
Startup/Organization Expenses |
||||||||
Unrealized loss on marketable securities |
( |
) | ||||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Valuation Allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Deferred tax assets, net of allowance |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Federal |
||||||||
Current |
$ | — | $ | — | ||||
Deferred |
( |
) | ( |
) | ||||
State and Local |
||||||||
Current |
— | — | ||||||
Deferred |
— | — | ||||||
Change in valuation allowance |
||||||||
|
|
|
|
|||||
Income tax provision |
$ | — | $ | — | ||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Statutory federal income tax rate |
% | % | ||||||
Change in fair value of conversion option |
( |
)% | % | |||||
Transaction costs incurred in connection with IPO |
% | ( |
)% | |||||
Interest expense- Debt Discount |
% | |||||||
Change in fair value of warrants |
( |
)% | ( |
)% | ||||
Valuation allowance |
% | ( |
)% | |||||
|
|
|
|
|||||
Income tax provision |
% | % | ||||||
|
|
|
|
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |||
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |||
Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
December 31, 2021 |
December 31, 2020 |
|||||||||
Assets: |
||||||||||||
Marketable securities held in Trust Account |
1 | $ | $ | |||||||||
Liabilities: |
||||||||||||
Warrant liability – Public Warrants |
1 | — | ||||||||||
Warrant liability – Public Warrants |
3 | — | ||||||||||
Warrant liability – Private Placement Warrants |
3 | |||||||||||
Convertible Option Liability |
|
|
3 |
|
|
|
|
|
|
|
— |
|
Private Warrants As of December 31, 2021 |
Private Warrants As of December 31, 2020 |
Public Warrants As of December 31, 2020 |
||||||||||
Exercise price |
$ | $ | $ | |||||||||
Stock price |
$ | $ | $ | |||||||||
Volatility |
% | % | % | |||||||||
Probability of completing a Business Combination |
— | % | % | |||||||||
Term |
||||||||||||
Risk-free rate |
% | % | % | |||||||||
Dividend yield |
% | % | % |
Private Placement |
Public |
Warrant Liabilities |
||||||||||
January 1, 2021 |
$ | $ | $ | |||||||||
Change in valuation inputs or other assumptions |
||||||||||||
|
|
|
|
|
|
|||||||
Fair value as of March 31, 2021 |
||||||||||||
Change in valuation inputs or other assumptions |
||||||||||||
|
|
|
|
|
|
|||||||
Fair value as of June 30, 2021 |
$ | $ | ||||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Fair value as of September 30, 2021 |
$ | |||||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Fair value as of December 31, 2021 |
$ | |||||||||||
|
|
|
|
|
|
Private Placement |
Public |
|||||||
January 1, 2021 |
$ | $ | ||||||
Change in valuation inputs or other assumptions |
( |
) | — | |||||
|
|
|
|
|||||
Transfer out of level 3 |
— | ( |
) | |||||
|
|
|
|
|||||
Value of level 3 liabilities as of December 31, 2021 |
$ | |
$ | — | ||||
|
|
|
|