Delaware |
6770 |
85-1144904 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Dave Peinsipp, Esq. Garth Osterman, Esq. Eric Blanchard, Esq. Richard Segal, Esq. Kevin Cooper, Esq. Cooley LLP 101 California Street, 5th Floor San Francisco, CA 94111 (415) 693-2000 |
Howard Ellin, Esq. C. Michael Chitwood, Esq. David J. Goldschmidt, Esq. Amr Razzak, Esq. Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, NY 10001 (212) 375-3000 |
P. Michelle Gasaway Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue, Suite 3400 Los Angeles, CA 90071 Tel: (213) 687-5000 |
Sandeep Mathrani Jared DeMatteis, Esq. WeWork Inc. 575 Lexington Avenue New York, NY 10022 |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
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Emerging growth company |
Title of each class of securities to be registered |
Amount to be registered (1) (2) |
Proposed maximum offering price per share security |
Proposed maximum aggregate offering price (3) |
Amount of registration fee (4) | ||||
Shares of Class A common stock, par value $0.0001 per share |
646,069,464 |
N/A |
$21,535.65 |
$2.35 (5) | ||||
(1) |
Based on the estimated maximum number of shares of Class A common stock, par value $0.0001 per share (“BowX Class A Common Stock”), of the registrant (“BowX”) to be issued to securityholders of WeWork Inc., a Delaware corporation (“WeWork”) in connection with the merger described herein in respect of outstanding WeWork common and preferred stock plus shares of BowX Class A Common Stock underlying or exchangeable for unvested and/or unexercised stock options (assuming the exercise price is paid for in cash), restricted stock units, restricted stock awards and warrants, respectively, at the closing of the business combination. The number of shares in this registration fee table are based on the exact expected exchange ratio as of August 26, 2021 (for example, rounded to seven decimal places rather than four decimal places the exchange ratio is expected to be 0.8253696) rather than the rounded expected exchange ratio of 0.8254 that is used elsewhere in this registration statement. Specifically, this number includes the following number of shares of BowX Class A Common Stock: (A) 558,238,969 shares to holders of WeWork common and preferred stock (other than Class C common stock) and (B) 87,830,495 shares underlying unvested and/or unexercised stock options (assuming the exercise price is paid for in cash), restricted stock units, restricted stock awards and warrants. The sum of (A) 558,238,969 plus (B) 87,830,495 equals the 646,069,464 shares that are being registered in this registration statement. Using the exact exchange ratio described above (rather than the exchange ratio rounded to four decimal places used elsewhere in this registration statement), there are expected to be issued approximately 558,238,969 shares of BowX Class A Common Stock and 19,918,293 shares of Class C common stock to WeWork stockholders as of the closing of the business combination (not including shares of BowX Class A Common Stock underlying or exchangeable for unvested and/or unexercised stock options, restricted stock units, restricted stock awards, warrants and WeWork partnerships profits interest units). The exchange ratio is subject to adjustment as further described in this registration statement. |
(2) |
Pursuant to Rule 416(a) of Securities Act of 1933, as amended (the “Securities Act”), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(3) |
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended (the “Securities Act”). WeWork is a private company, no market exists for its securities, and WeWork has an accumulated deficit. Therefore, the proposed maximum aggregate offering price is one-third of the aggregate par value of the WeWork securities expected to be exchanged in the merger described herein, including WeWork securities convertible into WeWork capital stock. |
(4) |
Calculated pursuant to Rule 457 of the Securities Act by calculating the product of (i) the proposed maximum aggregate offering price and (ii) 0.0001091. |
(5) |
Previously paid. |
Sincerely, |
Vivek Ranadivé |
Chairman of the Board and Co-Chief Executive Officer |
• | Proposal No. 1 — The BCA Proposal — |
• | Organizational Documents Proposals — |
(A) |
Proposal No. 2 — Organizational Documents Proposal A — non-economic voting security without rights to dividends or on liquidation (“Organizational Documents Proposal A”); |
(B) |
Proposal No. 3 — Organizational Documents Proposal B — |
(C) |
Proposal No. 4 — Organizational Documents Proposal C — |
(D) |
Proposal No. 5 — Organizational Documents Proposal D — |
• | Proposal No. 6 — The Director Election Proposal — |
• | Proposal No. 7 — The Stock Issuance Proposal — |
• | Proposal No. 8 — The Equity Incentive Plan Proposal — |
• | Proposal No. 9 — The ESPP Proposal — |
• | Proposal No. 10 — The Adjournment Proposal — |
(i) | (a) hold BowX Class A Common Stock, or (b) if you hold BowX Class A Common Stock through units, you elect to separate your units into the underlying BowX Class A Common Stock and public warrants prior to exercising your redemption rights with respect to the BowX Class A Common Stock; |
(ii) | submit a written request to Continental Stock Transfer & Trust Company (“Continental”), BowX’s transfer agent, that BowX redeem all or a portion of your public stock for cash; and |
(iii) | deliver your public stock to Continental, BowX’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”). |
Vivek Ranadivé |
Chairman of the Board and Co-Chief Executive Officer |
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II-1 |
• | “2021 Plan” are to the New WeWork 2021 Equity Incentive Plan attached to this proxy statement/prospectus as Annex D; |
• | “Adjusted EBITDA” are to net loss before income tax (benefit) provision, interest and other (income) expense, depreciation and amortization expense, stock-based compensation expense, expense related to stock-based payments for services rendered by consultants, income or expense relating to the changes in fair value of assets and liabilities remeasured to fair value on a recurring basis, expense related to costs associated with mergers, acquisitions, divestitures and capital raising activities, legal, tax and regulatory reserves or settlements, significant legal costs incurred by WeWork in connection with regulatory investigations and litigation regarding WeWork’s 2019 withdrawn initial public offering and the related execution of the SoftBank Transactions, net of any insurance or other recoveries, significant non-ordinary course asset impairment charges and, to the extent applicable, any impact of discontinued operations, restructuring charges, and other gains and losses on operating assets; |
• | “Aggregate Fully Diluted WeWork Capital Stock” are to without duplication, (a) the aggregate number of shares of WeWork Capital Stock (other than WeWork Class C Common Stock and WeWork Restricted Stock Awards) that are (i) issued and outstanding immediately prior to the Effective Time or (ii) issuable upon, or subject to, the settlement of WeWork Options (whether or not then vested or exercisable, before giving effect to clause (c) below), WeWork Warrants (whether or not then exercisable, before giving effect to clause (d) below), WeWork Series C Preferred Convertible Notes, WeWork Restricted Stock Awards, WeWork Restricted Stock Unit Awards and WeWork Partnerships Profits Interest Units (with an assumed 1:1 exchange for Partnership Profits Interest Units for shares of WeWork Common Stock, before giving effect to clause (e) below), in each case, that are outstanding immediately prior to the Effective Time, minus (b) the Treasury Shares outstanding immediately prior to the Effective Time, minus (c) a number of shares with a value based on the Per Share Merger Consideration (as defined in the Merger Agreement) equal to the aggregate exercise price of the WeWork Options described in clause (ii) above divided by the Per Share Merger Consideration; provided that any WeWork Option with an exercise price equal to or greater than the Per Share Merger Consideration shall not be counted for purposes of determining the number of Aggregate Fully Diluted WeWork Capital Stock, minus (d) a number of shares with a value based on the Per Share Merger Consideration equal to the aggregate exercise price of the WeWork Warrants described in clause (ii) above divided by the Per Share Merger Consideration; provided that any WeWork Warrant with an exercise price equal to or greater than the Per Share Merger Consideration shall not be counted for purposes of determining the number of Aggregate Fully Diluted WeWork Capital Stock, minus (e) a number of shares equal to the aggregate Catch-Up Base Amount (as defined in the Partnership Agreement) of the WeWork Partnerships Profits Interest Units described in clause (ii) above divided by the Per Share Merger Consideration; provided that any WeWork Partnerships Profits Interest Unit with a Catch-Up Base Amount equal to or greater than the Per Share Merger Consideration shall not be counted for purposes of determining the number of Aggregate Fully Diluted WeWork Capital Stock, plus (f) 47,366,404 hypothetical shares of WeWork Common Stock, minus a hypothetical number of shares with a value based on the Per Share Merger Consideration equal to $473,664.04 divided by the Per Share Merger Consideration (it being understood that the hypothetical shares of WeWork Common Stock pursuant to this clause (f) is intended to include dilution from the First Warrant in Aggregate Fully Diluted WeWork Capital Stock); |
• | “Aggregate Merger Consideration” are to 655,300,000 shares of BowX Class A Common Stock. |
• | “Agreement End Date” are to October 31, 2021; |
• | “Anchor PIPE Investors” are to certain investors of WeWork that entered into the Anchor Subscription Agreements in connection with the PIPE Investment; |
• | “Anchor Subscription Agreements” are to the Subscription Agreements pursuant to which the Anchor PIPE Investors consummated the PIPE Investment; |
• | “Ancillary Agreements” are to the Stockholder Support Agreements, the Sponsor Support Agreement, the Lock-Up Agreements, the Credit Support Letter Agreement, the First Warrant, the Commitment Letter, the FIRPTA Letter and the Confidentiality Agreement; |
• | “Available Cash” are to the amount as calculated by adding the Trust Amount and the PIPE Investment Amount; |
• | “BowX” are to BowX Acquisition Corp., a Delaware corporation; |
• | “BowX Class A Common Stock” are to BowX’s Class A common stock, par value $0.0001 per share; |
• | “BowX Class B Common Stock” are to BowX’s Class B common stock, par value $0.0001 per share; |
• | “BowX Common Stock” are to BowX Class A Common Stock and BowX Class B Common Stock; |
• | “BowX Modification in Recommendation” are to the Board of Directors of BowX withdrawing, amending, qualifying or modifying its recommendation to the stockholders of BowX that they vote in favor of the Business Combination; |
• | “BowX Units” and “units” are to the units of BowX, each unit representing one share of BowX Class A Common Stock and one-third of one redeemable warrant to acquire one share of BowX Class A Common Stock, that were offered and sold by BowX in its initial public offering and registered pursuant to the IPO registration statement (less the number of units that have been separated into the underlying shares of public stock and underlying warrants upon the request of the holder thereof); |
• | “Business Combination” are to the Mergers together with the other agreements and transactions contemplated by the Merger Agreement; |
• | “Closing” are to the closing of the Business Combination; |
• | “Code” are to the Internal Revenue Code of 1986, as amended; |
• | “COFECE” are to the Mexican Federal Economic Competition Commission (the Comisión Federal de Competencia Económica); |
• | “Commitment Letter” are to that certain Letter Agreement by and between BowX, WeWork Companies LLC, StarBright WW LP, and WW Co-Obligor Inc., dated as of March 25, 2021, attached to this proxy statement/prospectus as Annex F; |
• | “Company,” “we,” “us” and “our” are to BowX, including after its change of name to “WeWork Inc.”; |
• | “Company Credit Agreement” are to the Credit Agreement, dated as of December 27, 2019, as amended by the First Amendment, dated as of February 10, 2020, and as further amended by the Second Amendment to the Credit Agreement and First Amendment to the Security Agreement, dated as of April 1, 2020, among WeWork Companies LLC, as co-obligor, SBG, as co-obligor, Goldman Sachs International Bank, as administrative agent, and the issuing creditors and letter of credit participants from time to time party thereto; |
• | “Company/SBG Reimbursement Agreement” are to the Reimbursement Agreement, dated as of February 10, 2020, as amended by the First Amendment, dated as of April 1, 2020, among WeWork Companies LLC and SBG; |
• | “Condition Precedent Proposals” are to the BCA Proposal, each of the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal and the ESPP Proposal; |
• | “Confidentiality Agreement” are to the Mutual Non-Disclosure Agreement, dated as of December 4, 2020, between BowX and WeWork; |
• | “Continental” are to Continental Stock Transfer & Trust Company; |
• | “Credit Support Letter Agreement” are to that certain Letter Agreement by and between BowX, WeWork Companies LLC and the SoftBank Obligor dated as of March 25, 2021; |
• | “DGCL” are to the General Corporation Law of the State of Delaware; |
• | “Effective Time” are to the date and time the First Merger becomes effective; |
• | “Enterprise Members” are to organizations with more than 500 full time employees; |
• | “ESPP” are to the New WeWork 2021 Employee Stock Purchase Plan attached to this proxy statement/prospectus as Annex E; |
• | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
• | “Exchange Ratio” are to the quotient obtained by dividing (i) Aggregate Merger Consideration by (ii) the number of shares of Aggregate Fully Diluted WeWork Capital Stock, which is expected to be approximately 0.8254 based on WeWork’s capitalization as of August 26, 2021; |
• | “Existing Bylaws” are to the bylaws of BowX, as amended from time to time; |
• | “Existing Charter” are to the amended and restated certificate of incorporation of BowX, as amended from time to time; |
• | “FIRPTA” are to Sections 897, 1445, 6039C and any related provisions of the Code, and the Treasury Regulations promulgated thereunder, commonly known as the “Foreign Investment in Real Property Tax Act”; |
• | “FIRPTA Letter” are to that letter agreement dated as of March 25, 2021, by and among SBWW, SVFE, BowX and WeWork related to WeWork’s potential current or future status as a USRPHC and related tax withholding matters in connection with the Business Combination; |
• | “First Merger” are to the merger of Merger Sub with and into WeWork, with WeWork surviving the merger as a wholly owned subsidiary of BowX; |
• | “First Warrant” are to one or more warrants issued by BowX to SBWW or its designees to purchase a number of shares of BowX Class A Common Stock (rounded to the nearest whole share) equal to 47,366,404 multiplied by the Exchange Ratio, subject to the terms set forth therein, at a price per share equal to $0.01 divided by the Exchange Ratio (rounded to the nearest full cent); |
• | “Founder Shares” are to the shares of BowX Class B Common Stock issued to Sponsor on May 26, 2020, in connection with our initial public offering; |
• | “GAAP” are to accounting principles generally accepted in the United States of America; |
• | “HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
• | “initial public offering” are to BowX’s initial public offering that was consummated on August 7, 2020; |
• | “initial stockholders” are to holders of BowX’s Class B Common Stock prior to the consummation of the initial public offering and their respective permitted transferees; |
• | “IPO registration statement” are to the Registration Statement on Form S-1 (333-239941) filed by BowX in connection with its initial public offering, which became effective on August 4, 2020; |
• | “IRS” are to the U.S. Internal Revenue Service; |
• | “JOBS Act” are to the Jumpstart Our Business Startups Act of 2012; |
• | “LC Warrant” are to one or more warrants issued by BowX to SBG or its designees to purchase a number of shares of BowX Class A Common Stock (rounded to the nearest whole share) equal to 14,431,991 multiplied by the Exchange Ratio, subject to the terms set forth therein, at a price per share equal to $0.01 divided by the Exchange Ratio (rounded to the nearest full cent); |
• | “Lock-Up Agreements” are to lock-up agreements entered into by the Sponsor, certain of BowX’s officers, certain of WeWork’s officers and certain WeWork Stockholders; |
• | “Lock-Up Period” are to one year or nine months as specified in the Lock-Up Agreements; |
• | “Lock-Up Shares” are to any shares of New WeWork Common Stock held by the parties to the Lock-Up Agreements immediately after the Closing, or any shares of New WeWork Common Stock issuable upon the exercise of options, warrants or other convertible securities held by such persons immediately after the Closing; |
• | “Mature Locations” are to locations that are open for longer than 12 months; |
• | “Merger Agreement” are to the Agreement and Plan of Merger by and among BowX, Merger Sub and WeWork dated as of March 25, 2021; |
• | “Merger Sub” are to BowX Merger Subsidiary Corp., a Delaware corporation; |
• | “Merger Sub II” are to BowX Merger Subsidiary II, LLC, a Delaware limited liability company; |
• | “Mergers” are to the First Merger and Second Merger; |
• | “Minimum Available Cash Condition” are to the condition to closing that the Trust Amount and the PIPE Investment Amount, in the aggregate, being greater than $800.0 million; |
• | “Nasdaq” are to the Nasdaq Stock Market LLC; |
• | “New WeWork” are to BowX immediately following the consummation of the Business Combination; |
• | “New WeWork Class A Common Stock” are to Class A common stock, par value $0.0001 per share, of New WeWork; |
• | “New WeWork Class C Common Stock” are to Class C common stock, par value $0.0001 per share, of New WeWork, a non-economic voting security without rights to dividends or on liquidation that are being issued in exchange for WeWork Class C Common Stock in the First Merger, and that correspond with an outstanding WeWork Partnerships Profits Interest Unit, as described in the section entitled “Certain Relationships and Related Person Transactions — WeWork — Operating Partnership”; |
• | “New WeWork Common Stock” are to New WeWork Class A Common Stock and New WeWork Class C Common Stock; |
• | “New WeWork Options” are to options to purchase shares of New WeWork Class A Common Stock; |
• | “New WeWork Preferred Stock” are to preferred stock, par value $0.0001 per share, of New WeWork; |
• | “New WeWork Restricted Stock Awards” are to restricted shares of New WeWork Class A Common Stock; |
• | “New WeWork Restricted Stock Units” are to restricted stock units providing for the issuance of New WeWork Class A Common Stock; |
• | “Non-Mature Locations” are to locations that are open for less than 12 months; |
• | “NYSE” are to New York Stock Exchange; |
• | “Organizational Documents” are to the Existing Charter and the Existing Bylaws; |
• | “Partnership Agreement” are to the Second Amended and Restated Agreement of Exempted Limited Partnership of the WeWork Partnerships, dated on October 30, 2019, which will be amended and restated upon the consummation of the Business Combination as described under “ Certain Relationships and Related Person Transactions—WeWork—Operating Partnership |
• | “Person” are to any individual, firm, corporation, partnership, exempted limited partnership, limited liability company, exempted company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind; |
• | “Physical Occupancy” are to the number of physical memberships divided by total workstations; |
• | “PIPE Investment” are to the purchase of shares of BowX Common Stock pursuant to the Subscription Agreements; |
• | “PIPE Investment Amount” are to the $800.0 million aggregate gross purchase price received by BowX prior to or substantially concurrently with the Closing for the shares in the PIPE Investment; |
• | “PIPE Investors” are to those certain investors participating in the PIPE Investment pursuant to the Subscription Agreements; |
• | “PIPE Shares” are to the shares of BowX Common Stock purchased in the PIPE Investment; |
• | “private placement warrants” are to the warrants to acquire one share each of BowX Class A Common Stock, that were sold in private placements simultaneously with the closing of BowX’s initial public offering; |
• | “pro forma” are to giving pro forma effect to the Business Combination; |
• | “Proposed Bylaws” are to the proposed bylaws of BowX upon Closing attached to this proxy statement/prospectus as Annex C; |
• | “Proposed Charter” are to the proposed certificate of incorporation of BowX upon Closing attached to this proxy statement/prospectus as Annex B; |
• | “Proposed Organizational Documents” are to the Proposed Bylaws and the Proposed Charter; |
• | “public stock” are to the BowX Class A Common Stock (including those shares that underlie the units) that were offered and sold by BowX in its initial public offering and registered pursuant to the IPO registration statement; |
• | “public stockholders” are to holders of public stock, whether acquired in BowX’s initial public offering or acquired in the secondary market; |
• | “public warrants” are to the redeemable warrants to purchase BowX Class A Common Stock (including those that underlie the units) that were offered and sold by BowX in its initial public offering and registered pursuant to the IPO registration statement; |
• | “redemption” are to each redemption of shares of public stock for cash pursuant to the Organizational Documents; |
• | “Registration Rights Agreement” are to the Amended and Restated Registration Rights Agreement to be entered into at Closing, by and among BowX, the Sponsor, the Anchor PIPE Investors and certain other WeWork Stockholders; |
• | “Sarbanes Oxley Act” are to the Sarbanes-Oxley Act of 2002; |
• | “SBG” are to SoftBank Group Corp. or a controlled affiliate or subsidiary thereof, but unless the context otherwise requires, does not include SVFE or the SoftBank Vision Fund; |
• | “SBWW” are to SB WW Holdings (Cayman) Limited, which is an indirect, wholly-owned subsidiary of SBG; |
• | “SEC” are to the United States Securities and Exchange Commission; |
• | “Second Merger” are to the merger of WeWork with and into Merger Sub II following the First Merger, with Merger Sub II surviving the merger as a wholly owned subsidiary of BowX; |
• | “Securities Act” are to the Securities Act of 1933, as amended; |
• | “special meeting” are to the special meeting of the BowX stockholders in lieu of its 2021 annual meeting; |
• | “SoftBank Obligor” are to SoftBank Group Corp., a Japanese joint-stock company; |
• | “SoftBank Vision Fund” are to SoftBank Vision Fund (AIV M1) L.P.; |
• | “Sponsor” are to BowX Sponsor, LLC, a Delaware limited liability company; |
• | “Sponsor Persons” are to Murray Rode, Eric Dunn, Lori Wright, and Vijay Advani; |
• | “Sponsor Support Agreement” are to that certain Support Agreement, dated March 25, 2021, by and among the Sponsor, the Sponsor Persons, BowX and WeWork; |
• | “Stockholders Agreement” are to the certain Stockholders Agreement to be entered into at Closing by and among BowX, the Sponsor, SBWW, SVFE and certain other holders of BowX Common Stock; |
• | “Stockholder Support Agreements” are to those certain Support Agreements, each dated March 25, 2021, entered into by and among BowX, WeWork and certain WeWork Stockholders; |
• | “Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment will be consummated; |
• | “Surviving Corporation” are to WeWork in its capacity as the surviving corporation of the First Merger; |
• | “Surviving Entity” are to Merger Sub II in its capacity as the surviving entity of the Second Merger; |
• | “SVFE” are to SVF Endurance (Cayman) Limited, which is a direct, wholly-owned subsidiary of SoftBank Vision Fund; |
• | “Third-Party PIPE Investment” are to any PIPE Investment made by a Third-Party PIPE Investor; |
• | “Third-Party PIPE Investment Amount” are to the aggregate gross purchase price received by BowX prior to or substantially concurrently with Closing for the shares in the Third-Party PIPE Investment; |
• | “Third-Party PIPE Investor” are to any PIPE Investor who is not an Anchor PIPE Investor; |
• | “trust account” are to the trust account established at the consummation of BowX’s initial public offering maintained by Continental, acting as trustee; |
• | “Trust Agreement” are to the Investment Management Trust Agreement, dated August 4, 2020, by and between BowX and Continental, as trustee; |
• | “Trust Amount” are to the amount of cash available in the trust account as of the Closing, after deducting the amount required to satisfy BowX’s obligations to its stockholders (if any) that exercise their redemption rights (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of BowX, WeWork or their affiliates); |
• | “USRPHC” are to a “United States real property holding corporation” within the meaning of the Code and the Treasury Regulations thereunder; |
• | “Warrant Agreement” are to that certain warrant agreement, dated August 4, 2020, between BowX and Continental Stock Transfer & Trust Company; |
• | “warrants” are to public warrants and private placement warrants; |
• | “WeWork” are to WeWork Inc., a Delaware corporation, prior to the Business Combination; |
• | “WeWork All Access” are to monthly memberships providing an individual with access to any participating WeWork locations; |
• | “WeWork Awards” are to WeWork Options, WeWork Restricted Stock Unit Awards and WeWork Restricted Stock Awards; |
• | “WeWork Capital Stock” are to WeWork Common Stock and WeWork Preferred Stock; |
• | “WeWork Class A Common Stock” are to WeWork’s Class A common stock, par value $0.001 per share; |
• | “WeWork Class A Common Warrants” are to warrants to purchase WeWork’s Class A Common Stock; |
• | “WeWork Class B Common Stock” are to WeWork’s Class B common stock, par value $0.001 per share; |
• | “WeWork Class C Common Stock” are to WeWork’s Class C common stock, par value $0.001 per share; |
• | “WeWork Class D Common Stock” are to WeWork’s Class D common stock, par value $0.001 per share; |
• | “WeWork Common Stock” are to WeWork Class A Common Stock, WeWork Class B Common Stock, WeWork Class C Common Stock and WeWork Class D Common Stock; |
• | “WeWork Incentive Plans” means WeWork’s 2013 Stock Incentive Plan and its 2015 Equity Incentive Plan, in each case as amended from time to time; |
• | “WeWork Junior Non-Voting Preferred Stock” are to WeWork’s Junior Non-Voting Preferred Stock, par value $0.001 per share; |
• | “WeWork Modification in Recommendation” are to the Board of Directors of WeWork withdrawing, amending, qualifying or modifying its recommendation to the stockholders of WeWork that they vote in favor of the Business Combination; |
• | “WeWork On Demand” are to WeWork memberships that give users pay-as-you-go |
• | “WeWork Options” are to options to purchase shares of WeWork Common Stock; |
• | “WeWork Partnership” are to The We Company Management Holdings L.P., a Cayman Islands exempted limited partnership, which was historically used by WeWork to grant Partnerships Profits Interest Units, as described under “ Certain Relationships and Related Person Transactions—WeWork —Profits Interests |
• | “WeWork Partnerships Class A Common Units” are to interests in the WeWork Partnership that are designated as WeWork Partnership Class A Common Units thereof with the rights and obligations specified with respect to a WeWork Partnership Class A Common Unit set forth in the Partnership Agreement. |
• | “WeWork Partnerships Class B Common Units” are to interests in the WeWork Partnership that are designated as WeWork Partnership Class B Common Units thereof with the rights and obligations specified with respect to a WeWork Partnership Class B Common Unit set forth in the Partnership Agreement. |
• | “WeWork Partnerships Profits Interest Units” are to interests in the WeWork Partnership that are designated as WeWork Partnership Class PI Common Units thereof with the rights and obligations specified with respect to a WeWork Partnership Class PI Common Unit set forth in the Partnership Agreement and any applicable profits interest award agreement; |
• | “WeWork Preferred Stock” are to WeWork Junior Non-Voting Preferred Stock, WeWork Series A Preferred Stock, WeWork Series AP-1 Acquisition Preferred Stock, WeWork Series AP-2 Acquisition Preferred Stock, WeWork Series AP-3 Acquisition Preferred Stock, WeWork Series AP-4 Acquisition Preferred Stock, WeWork Series B Preferred Stock, WeWork Series C Preferred Stock, WeWork Series D-1 Preferred Stock, WeWork Series D-2 Preferred Stock, WeWork Series E Preferred Stock, WeWork Series F Preferred Stock, WeWork Series G Preferred Stock, WeWork Series G-1 Preferred Stock, WeWork Series H-1 Preferred Stock, WeWork Series H-2 Preferred Stock, WeWork Series H-3 Preferred Stock and WeWork Series H-4 Preferred Stock; |
• | “WeWork Restricted Stock Awards” are to restricted shares of WeWork Common Stock granted under a WeWork Incentive Plan, which includes any shares of WeWork Common Stock issued pursuant to early-exercised WeWork Options that remain subject to vesting conditions; |
• | “WeWork Restricted Stock Unit Awards” are to restricted stock units based on shares of WeWork Common Stock (whether to be settled in cash or shares), granted under a WeWork Incentive Plan; |
• | “WeWork Series A Preferred Stock” are to WeWork’s Series A preferred stock, par value $0.001; |
• | “WeWork Series AP-1 Acquisition Preferred Stock” are to WeWork’s Series AP-1 preferred stock, par value $0.001 per share; |
• | “WeWork Series AP-2 Acquisition Preferred Stock” are to WeWork’s Series AP-2 preferred stock, par value $0.001 per share; |
• | “WeWork Series AP-3 Acquisition Preferred Stock” are to WeWork’s Series AP-3 preferred stock, par value $0.001 per share; |
• | “WeWork Series AP-4 Acquisition Preferred Stock” are to WeWork’s Series AP-4 preferred stock, par value $0.001 per share; |
• | “WeWork Series B Preferred Stock” are to WeWork’s Series B preferred stock, par value $0.001 per share; |
• | “WeWork Series C Convertible Note” are to a convertible note exercisable for WeWork Series C Preferred Stock; |
• | “WeWork Series C Preferred Stock” are to WeWork’s Series C preferred stock, par value $0.001 per share; |
• | “WeWork Series D-1 Preferred Stock” are to WeWork’s Series D-1 preferred stock, par value $0.001 per share; |
• | “WeWork Series E Preferred Stock” are to WeWork’s Series E preferred stock, par value $0.001 per share; |
• | “WeWork Series F Preferred Stock” are to WeWork’s Series F preferred stock, par value $0.001 per share; |
• | “WeWork Series G-1 Preferred Stock” are to WeWork’s Series G-1 preferred stock, par value $0.001 per share; |
• | “WeWork Series G Preferred Stock” are to WeWork’s Series G preferred stock, par value $0.001 per share; |
• | “WeWork Series H-1 Preferred Stock” are to WeWork’s Series H-1 preferred stock, par value $0.001 per share; |
• | “WeWork Series H-2 Preferred Stock” are to WeWork’s Series H-2 preferred stock, par value $0.001 per share; |
• | “WeWork Series H-3 Preferred Stock” are to WeWork’s Series H-3 preferred stock, par value $0.001 per share; |
• | “WeWork Series H-4 Preferred Stock” are to WeWork’s Series H-4 preferred stock, par value $0.001 per share; |
• | “WeWork Series H Preferred Warrants” are to warrants to purchase WeWork Series H-3 Preferred Stock and/or WeWork Series H-4 Preferred Stock; |
• | “WeWork Stockholders” are to the stockholders of WeWork and holders of WeWork Awards, WeWork Warrants, WeWork Series C Convertible Note, and Partnerships Profits Interest Units prior to the Business Combination; and |
• | “WeWork Warrants” means the WeWork Class A Common Warrants and the WeWork Series H Preferred Warrants. |
Q: |
Why am I receiving this proxy statement/prospectus? |
A: | BowX has entered into the Merger Agreement with WeWork and the other parties thereto pursuant to which, among other transactions, on the terms and conditions set forth therein, Merger Sub is to merge with and into WeWork, with WeWork surviving the First Merger as a wholly owned subsidiary of BowX; and as promptly as practicable and as part of the same overall transaction as the First Merger, such Surviving Corporation will be merged with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A. |
Q: |
What matters will the stockholders consider at the special meeting? |
A: | At the special meeting, BowX is asking holders of BowX Common Stock to consider and vote upon: |
• | The BCA Proposal – a proposal to approve and adopt the Merger Agreement and the Business Combination; |
• | The Organizational Documents Proposals – four proposals to amend the Existing Charter; |
• | The Director Election Proposal—a proposal to approve the election of nine directors, who, upon consummation of the Business Combination, will be the directors of New WeWork; |
• | The Stock Issuance Proposal – a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, the issuance of (a) shares of BowX Class A Common Stock to the PIPE Investors pursuant to the PIPE Investment and (b) shares of New WeWork Common Stock to the WeWork Stockholders pursuant to the Merger Agreement; |
• | The Equity Incentive Plan Proposal – a proposal to approve and adopt the 2021 Plan; |
• | The ESPP Proposal – a proposal to approve and adopt the ESPP; and |
• | The Adjournment Proposal – a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the special meeting. |
Q: |
Are the proposals conditioned on one another? |
A: | Yes. Each of the Condition Precedent Proposals are cross-conditioned on the approval of one another. The Adjournment Proposal is not conditioned upon the approval of any other proposal. |
Q: |
What will happen upon the consummation of the Business Combination? |
A: | On the Closing Date, Merger Sub will merge with and into WeWork, with WeWork surviving the First Merger as a wholly owned subsidiary of BowX; and as promptly as practicable and as part of the same overall transaction as the First Merger, such Surviving Corporation will be merged with and into Merger Sub II, with Merger Sub II being the surviving entity of the Second Merger. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A. |
Q: |
Why is BowX proposing the Business Combination? |
A: | BowX was formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. BowX is not limited to any particular industry or sector. |
Q: |
What will WeWork Stockholders receive in return for BowX’s acquisition of all of the issued and outstanding equity interests of WeWork? |
A: | As a result of and upon the Closing, among other things, all outstanding shares of WeWork Capital Stock immediately prior to the Effective Time (other than shares of WeWork Class C Common Stock, Treasury Shares, Dissenting Shares and shares of WeWork Capital Stock reserved in respect of WeWork Awards) will be cancelled in exchange for the right to receive a portion of the Aggregate Merger Consideration (at a deemed value of $10.00 per share) representing a pre-transaction equity value of WeWork of approximately $6.553 billion. Additionally, as a result of and upon the Closing, in accordance with the applicable terms of the WeWork Warrants, the WeWork Warrants will be converted into the right to receive a warrant to purchase shares of New WeWork Common Stock upon the same terms and conditions as are in effect with respect to such WeWork Warrant immediately prior to the Effective Time except that (i) such Converted New WeWork Warrant will relate to that whole number of shares of New WeWork Common Stock (rounded down to the nearest whole share) equal to the number of shares of WeWork Capital Stock subject to such WeWork Warrants, multiplied by the Exchange Ratio, and (ii) the exercise price per share for each such Converted New WeWork Warrant shall be equal to the exercise price per share of such WeWork Warrants in effect immediately prior to the Effective Time, divided by the Exchange Ratio (the exercise price per share, as so determined, being rounded up to the nearest full cent). An additional 80,000,000 shares of New WeWork Class A Common Stock will be purchased (at a price of $10.00 per share) at the Closing by certain third-party investors, for a total aggregate purchase price of $800,000,000. The proceeds of the PIPE Investment, together with the amounts remaining in BowX’s trust account as of immediately following the Effective Time will be retained by New WeWork following the Closing. See the section entitled “The BCA Proposal |
Q: |
What equity stake will current BowX stockholders and WeWork Stockholders hold in New WeWork immediately after the consummation of the Business Combination? |
A: |
It is anticipated that, based on the assumptions set forth below, upon the consummation of the Business Combination, the ownership of New WeWork will be as follows: |
Share Ownership in New WeWork (1) |
||||||||||||||||
No Additional Redemptions |
Assuming Maximum Redemption |
|||||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
WeWork Stockholders |
655,300,000 | 82.7 | % | 655,300,000 | 87.4 | % | ||||||||||
Initial Stockholders |
9,075,000 | 1.1 | % | 9,075,000 | 1.2 | % | ||||||||||
BowX’s Public Stockholders (excluding PIPE Shares) |
48,300,000 | 6.1 | % | 5,068,902 | 0.7 | % | ||||||||||
PIPE Investors |
80,000,000 | 10.1 | % | 80,000,000 | 10.7 | % | ||||||||||
Total |
792,675,000 | 100 | % | 749,443,902 | 100 | % |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. In the event that shares of BowX Class A Common Stock are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will fall in between the two scenarios. For example, if we assume that the number of shares of BowX Class A Common Stock redeemed in connection with the Business Combination total 21,615,549, BowX public stockholders will hold a total of 26,684,451 shares of New WeWork Common Stock at Closing, representing a 3.5% ownership interest. |
Share Ownership in New WeWork (1) |
||||||||||||||||
No Additional Redemptions |
Assuming Maximum Redemption |
|||||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
WeWork Stockholders |
655,300,000 | 80.3 | % | 655,300,000 | 84.7 | % | ||||||||||
Initial Stockholders |
16,848,333 | 2.1 | % | 16,848,333 | 2.2 | % | ||||||||||
BowX’s Public Stockholders (excluding PIPE Shares) |
64,400,000 | 7.9 | % | 21,168,902 | 2.7 | % | ||||||||||
PIPE Investors |
80,000,000 | 9.8 | % | 80,000,000 | 10.3 | % | ||||||||||
Total |
816,548,333 | 100 | % | 773,317,235 | 100 | % |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. In the event that shares of BowX Class A Common Stock are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will fall in between the two scenarios. For example, if we assume that the number of shares of BowX Class A Common Stock redeemed in connection with the Business Combination total 21,615,549, BowX public stockholders will hold a total of 42,784,451 shares of New WeWork Common Stock at Closing, representing a 5.4% ownership interest. |
Q: |
Will the Company obtain new financing in connection with the Business Combination? |
A: | Yes. The PIPE Investors have agreed to purchase in the aggregate approximately 80,000,000 shares of New WeWork Class A Common Stock, for $800,000,000 of gross proceeds, in the PIPE Investment. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. See “ BCA Proposal — Related Agreements — Subscription Agreements |
Q: |
Did the board of directors of BowX obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
A: | No. The BowX board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. The BowX board of directors believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders. The BowX board of directors also determined, without seeking a valuation from a financial advisor, that WeWork’s fair market value was at least 80% of BowX’s net assets, excluding any taxes payable on interest earned. Accordingly, investors will be relying on the judgment of the BowX board of directors as described above in valuing WeWork’s business and assuming the risk that the BowX board of directors may not have properly valued such business. |
Q: |
Who will be the officers and directors of New WeWork if the Business Combination is consummated? |
A: | The Merger Agreement provides that, immediately following the consummation of the Business Combination, the New WeWork board of directors will be comprised of nine directors: Marcelo Claure, Michel Combes, Bruce Dunlevie, Véronique Laury, Sandeep Mathrani, Deven Parekh, Vivek Ranadivé, Kirthiga Reddy and Jeff Sine. Immediately following the consummation of the Business Combination, we expect that the following will be the executive officers of New WeWork: Sandeep Mathrani, Benjamin “Ben” Dunham, Anthony Yazbeck, Jared DeMatteis, Lauren Fritts, Peter Greenspan, Hamid Hashemi, Maral Kazanjian, Scott Morey and Roger Solé Rafols. Concurrently with the consummation of the Business Combination, BowX’s officers and directors, other than Mr. Ranadivé (who will serve as a director of New WeWork following the Business Combination), will resign from their respective positions at BowX. For more information on the management of New WeWork following the Business Combination, see the section entitled “ Management of New WeWork Following the Business Combination. |
Q: |
Do WeWork Stockholders need to approve the Business Combination? |
A: | Yes. On March 25, 2021, in connection with execution of the Merger Agreement, BowX, WeWork and certain stockholders of WeWork entered into Stockholder Support Agreements, pursuant to which, among other things and subject to the terms and conditions therein, such WeWork Stockholders agreed to execute and deliver a written consent with respect to the outstanding shares of WeWork Capital Stock held by the signing WeWork Stockholders adopting the Merger Agreement and related transactions and approving the Business Combination (including consenting to enter into the Merger Agreement effective on March 25, 2021 for purposes of any transactions subject to Article Fifth, Part A, Section 3.17 of WeWork’s amended and restated certificate of incorporation (the “Related Party Charter Provision”), to the extent applicable). Such written consent must be delivered promptly, and in any event within forty-eight (48) hours (or, in the case of SBWW, WeWork’s largest stockholder, five (5) calendar days) after (x) the proxy statement/prospectus relating to the approval by BowX stockholders of the Business Combination is declared effective by the SEC and delivered or otherwise made available to BowX and WeWork Stockholders, and (y) BowX or WeWork requests it. The shares of WeWork Common Stock and WeWork Preferred Stock that are owned by the Key Stockholders and subject to the Stockholder Support Agreements represent a majority of the outstanding voting power of WeWork Capital Stock (voting as a single class and on an as converted basis). The execution and delivery of such written consents by all of the stockholders of WeWork that have entered into Stockholder Support Agreements will constitute the WeWork stockholder approval at the time of such delivery, and no additional approval or vote from any holders of any class or series of stock of WeWork will be necessary to adopt and approve the Merger Agreement and the Business Combination. |
Q: |
May BowX or BowX’s directors, officers or advisors, or their affiliates, purchase shares in connection with the Business Combination? |
A: | In connection with the stockholder vote to approve the proposed Business Combination, the Sponsor, BowX’s directors, BowX’s officers or BowX’s advisors or any of their affiliates may privately negotiate transactions to purchase shares prior to the Closing from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per |
share pro rata portion of the trust account without the prior written consent of WeWork. None of the Sponsor, BowX’s directors, BowX’s officers or BowX’s advisors, or their respective affiliates, will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such shares. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, directors, officers or advisors, or their affiliates, purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the trust account. The purpose of these purchases would be to increase the amount of cash available to BowX for use in the Business Combination. |
Q: |
Do I have redemption rights? |
A: | If you are a holder of public stock, you may redeem your public stock for cash equal to your pro rata share of the aggregate amount on deposit in the trust account, which holds the proceeds of the initial public offering, as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the trust account and not previously released to BowX to pay its franchise and income taxes and for working capital purposes, upon the consummation of the Business Combination. The per share amount BowX will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions BowX will pay to the underwriters of its initial public offering if the Business Combination is consummated. Holders of the outstanding public warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. Our Sponsor, officers and directors have agreed to waive their redemption rights with respect to their shares of BowX Class B Common Stock and any public stock that they may have acquired during or after the initial public offering in connection with the completion of BowX’s initial business combination. The shares of BowX Class B Common Stock will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on funds in the trust account as of June 30, 2021, of approximately $483.1 million, the estimated per share redemption price would have been approximately $10.00. This is greater than the $10.00 initial public offering price of BowX Units. Additionally, public stock properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the trust account (including interest but net of taxes payable and dissolution expenses) in connection with the liquidation of the trust account. If the Business Combination is not consummated, BowX may enter into an alternative business combination and close such transaction by August 7, 2022 (subject to the requirements of law). The initial stockholders, including our Sponsor, and our directors and officers, have agreed to waive their redemption rights with respect to all of the Founder Shares in connection with the consummation of the Business Combination. The Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. |
Q: |
How do I exercise my redemption rights? |
A: | If you are a public stockholder and wish to exercise your right to redeem the public stock, you must: |
(i) | (a) hold public stock, or (b) if you hold public stock through units, you elect to separate your units into the underlying public stock and public warrants prior to exercising your redemption rights with respect to the public stock; |
(ii) | submit a written request to Continental, BowX’s transfer agent, that BowX redeem all or a portion of your public stock for cash; and |
(iii) | deliver your public stock to Continental, BowX’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”). |
Q: |
Is there a limit on the number of shares I may redeem? |
A: | A public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public stock with respect to more than an aggregate of 15% of the public stock, without the consent of BowX. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public stock, then any such stock in excess of that 15% limit would not be redeemed for cash, except with BowX’s consent. |
Q: |
Must I vote “No” in order to redeem my shares? |
A: | No. You may exercise your redemption rights whether you vote your public stock for or against the BCA Proposal or do not vote your shares. As a result, the BCA Proposal can be approved by stockholders who will redeem their public stock and no longer remain stockholders, leaving stockholders who choose not to redeem their public stock holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet stock exchange listing standards. |
Q: |
If I am a holder of units, can I exercise redemption rights with respect to my units? |
A: | No. Holders of issued and outstanding units must elect to separate the units into the underlying public stock and public warrants prior to exercising redemption rights with respect to the public stock. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public stock and public warrants, or if you hold units registered in your own name, you must contact Continental, BowX’s transfer agent, directly and instruct them to do so. You are requested to cause your public stock to be separated and delivered to Continental by 5:00 p.m., Eastern Time, on , 2021, (two business days before the special meeting) in order to exercise your redemption rights with respect to your public stock. |
Q: |
What are the U.S. federal income tax consequences of exercising my redemption rights? |
A: | BowX stockholders who exercise their redemption rights to receive cash from the trust account in exchange for their public stock generally (subject to specified exceptions) will be required to treat the transaction either as (1) a sale of such shares, in which case the redeeming stockholder would recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the public stock redeemed, or (2) a distribution in respect of such shares. If the redemption is treated as a sale of shares, the stockholder’s gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. A stockholder’s tax basis in his, her or its public stock generally will equal the cost of such shares. If the redemption is treated as a distribution in respect of the stockholder’s public stock, the character of the stockholder’s income will depend on whether BowX has current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. A stockholder who purchased BowX Units will have to allocate the cost between the shares of BowX Class A Common Stock or warrants comprising the BowX Units based on their relative fair market values at the time of the purchase. See the section entitled “ Certain U.S. Federal Income Tax Considerations for Stockholders Exercising Redemption Rights |
Q: |
What are the U.S. federal income tax consequences of the Mergers to WeWork Stockholders? |
A: | For U.S. federal income tax purposes, the Mergers, taken together, are intended to constitute a single integrated transaction that qualifies as a “reorganization” within the meaning of section 368(a) of the Code, and each of BowX and WeWork expects to receive a tax opinion from its counsel, Cooley LLP (“Cooley”) and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), respectively, to the effect that, for U.S. federal income tax purposes, the Mergers will constitute a reorganization within the meaning of section 368(a) of the Code. These opinions of counsel will be based on customary assumptions, representations, covenants, and undertakings of WeWork, BowX, Merger Sub, and Merger Sub II. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or is breached, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Mergers could differ materially from those described in this proxy statement/prospectus. The obligation of each of WeWork and |
BowX to consummate the Mergers, however, is not conditioned upon the receipt of such opinions of Cooley, Skadden, or any other counsel, nor will the parties request a ruling from the IRS regarding the qualification of the Mergers as a reorganization within the meaning of section 368(a) of the Code. Assuming that the Mergers qualify as a reorganization within the meaning of section 368(a) of the Code: (i) U.S. holders (as defined herein) of WeWork Capital Stock will generally not recognize gain or loss for U.S. federal income tax purposes, and (ii) under FIRPTA, Non-U.S. holders (as defined herein) of WeWork Capital Stock will generally recognize gain (but not loss) for U.S. federal income tax purposes. Furthermore, certain Non-U.S. holders will be subject to withholding of U.S. tax under FIRPTA in an amount equal to 15% of the amount realized on the exchange of their WeWork Capital Stock in the Mergers. |
Q: |
What happens to the funds deposited in the trust account after consummation of the Business Combination? |
A: | Upon consummation of the Business Combination, the funds deposited in the trust account will be released to pay holders of public stock who properly exercise their redemption rights; to pay transaction fees and expenses incurred by BowX and WeWork in connection with the Business Combination; and for working capital and general corporate purposes of New WeWork following the Business Combination. See the section entitled “ BCA Proposal — Sources and Uses of Funds for the Business Combination |
Q: |
What happens if a substantial number of the public stockholders vote in favor of the BCA Proposal and exercise their redemption rights? |
A: | Our public stockholders are not required to vote in favor of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public stockholders are reduced as a result of redemptions by public stockholders. As a result of redemptions, holders of New WeWork Common Stock may be left holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet stock exchange listing standards. |
Q: |
What conditions must be satisfied to complete the Business Combination? |
A: | There are a number of closing conditions in the Merger Agreement, including that BowX’s stockholders have approved and adopted the Merger Agreement. |
Q: |
When do you expect the Business Combination to be completed? |
A: | It is currently anticipated that the Business Combination will be consummated promptly following the special meeting of stockholders; provided that all other conditions to the consummation of the Business Combination have been satisfied or waived. For a description of the conditions for the completion of the Business Combination, see the section entitled “ BCA Proposal — The Merger Agreement |
Q: |
What happens if the Business Combination is not consummated? |
A: | There are certain circumstances under which the Merger Agreement may be terminated. See the sections entitled “ BCA Proposal — The Merger Agreement — Closing Conditions ” — Termination; Effectiveness |
Q: |
If I hold warrants, can I exercise redemption rights with respect to my warrants? |
A: | No. There are no redemption rights with respect to the warrants. |
Q: |
Do I have appraisal rights in connection with the proposed Business Combination? |
A: | No. Neither BowX’s stockholders nor BowX’s warrant holders have appraisal rights in connection with the Business Combination. |
Q: |
What do I need to do now? |
A: | BowX urges you to read this proxy statement/prospectus, including the financial statements, Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a stockholder or warrant holder. BowX’s stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee. |
Q: |
How do I vote? |
A: | If you are a holder of record of BowX Common Stock on the record date for the special meeting, you may vote virtually at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by signing, dating and returning the enclosed proxy card in the accompanying pre-addressed |
postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your stock or, if you wish to attend the special meeting and vote while attending virtually, obtain a valid proxy from your broker, bank or nominee. |
Q: |
What will happen if I abstain from voting or fail to vote at the special meeting? |
A: | At the special meeting of stockholders, BowX will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, an abstention or failure to vote will have the same effect as a vote against each of the Business Combination Proposal, the Organizational Documents Proposals and the Adjournment Proposal, and will have no effect on any of the other proposals. |
Q: |
What will happen if I sign, date and return my proxy card without indicating how I wish to vote? |
A: | Signed and dated proxies received by BowX without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each proposal presented to the stockholders. |
Q: |
How can I attend the special meeting? |
A: | You may attend the special meeting and vote your shares virtually during the special meeting via live webcast by visiting https://www.cstproxy.com/bowxacquisitioncorp/sm2021. As a registered stockholder, you received a proxy card from Continental, which contains instructions on how to attend the special meeting virtually, including the URL address, along with your 12-digit meeting control number. You will need the 12-digit meeting control number that is printed on your proxy card to enter the special meeting. If you do not have your 12-digit meeting control number, contact Continental at 917-262-2373 |
Q: |
Do I need to attend the special meeting of stockholders virtually to vote my shares? |
A: | No. You are invited to attend the special meeting virtually to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting of stockholders virtually to |
vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. BowX encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus. |
Q: |
If I am not going to attend the special meeting of stockholders virtually, should I return my proxy card instead? |
A: | Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, as applicable, by signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. |
Q: |
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
A: | No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the stock held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Any broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the special meeting on any proposal, and will have the same effect as a vote against the Organizational Documents Proposal and will have no effect on any of the other proposals. |
Q: |
What is the quorum requirement for the special meeting of stockholders? |
A: | A quorum will be present at the special meeting of stockholders if a majority of the BowX Common Stock outstanding and entitled to vote at the special meeting is attending virtually or by proxy. In the absence of a quorum, the chairman of the meeting has the power to adjourn the special meeting. |
Q: |
Who is entitled to vote at the special meeting? |
A: | BowX stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned BowX Common Stock at the close of business on , 2021, which is the “record date” for the special meeting. Stockholders will have one vote for each share of BowX Common Stock owned at the close of business on the record date. If your stock is held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the stock you beneficially own are properly counted. Warrants do not have voting rights. As of the close of business on the record date, there were 48,300,000 shares of BowX Class A Common Stock issued and outstanding and 12,075,000 shares of BowX Class B Common Stock issued and outstanding. |
Q: |
How many votes do I have? |
A: | BowX stockholders are entitled to one vote at the special meeting for each share of BowX Common Stock held of record as of the record date. As of the close of business on the record date for the special meeting, there were 48,300,000 shares of BowX Class A Common Stock issued and outstanding and 12,075,000 shares of BowX Class B Common Stock issued and outstanding. |
Q: |
What vote is required to approve each proposal at the special meeting? |
A: | The following votes are required for each proposal at the special meeting: |
(i) |
BCA Proposal: |
(ii) |
Organizational Documents Proposals: |
(iii) |
Director Election Proposal: |
(iv) |
Stock Issuance Proposal: |
(v) |
Equity Incentive Plan Proposal : |
(vi) |
ESPP Proposal : |
(vii) |
Adjournment Proposal: |
Q: |
What are the recommendations of BowX’s board of directors? |
A: | BowX’s board of directors believes that the BCA Proposal and the other proposals to be presented at the special meeting are in the best interest of BowX’s stockholders and unanimously recommends that its stockholders vote “FOR” the BCA Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Equity Incentive Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the special meeting. |
Q: |
What interests do BowX’s current officers and directors have in the Business Combination? |
A: | BowX’s board of directors and executive officers may have interests in the Business Combination that are different from, in addition to or in conflict with, yours. These interests include: |
• | the beneficial ownership of our initial stockholders of an aggregate of 12,075,000 shares of BowX Class B Common Stock and 7,773,333 private placement warrants, which shares and warrants would become worthless if BowX does not complete a business combination within the applicable time period, as our initial stockholders have waived any redemption right with respect to these shares. Our initial stockholders paid an aggregate of $25,000 for the BowX Class B Common Stock, and $11,660,000 for the private placement warrants, and such shares and warrants have an aggregate market value of approximately $ million and $ million, respectively, based on the closing price of BowX Class A Common Stock of $ on Nasdaq on , 2021, the record date for the special meeting of stockholders. Each of our officers and directors is a member of the Sponsor. Vivek Ranadivé and Murray Rode are the managing members of the Sponsor, and as such Mr. Ranadivé and Rode have voting and investment discretion with respect to the BowX Common Stock and warrants held of record by the Sponsor; |
• | the anticipated continuation of Mr. Ranadivé as a director of New WeWork; |
• | the fact that our Sponsor, officers and directors have agreed not to redeem any of their shares in connection with a stockholder vote to approve the Business Combination; |
• | the fact that our initial stockholders, including our Sponsor, and our directors and officers, paid an aggregate of approximately $11,660,000 for their 7,773,333 private placement warrants to purchase shares of BowX Class A Common Stock and that such private placement warrants will expire worthless if a business combination is not consummated by August 7, 2022; |
• | the fact that our initial stockholders, including our Sponsor and its affiliates, who purchased Class B Common Stock and private placement warrants at the time of our IPO may experience a positive rate of return on their investment, even if our public shareholders experience a negative rate of return on their investment; |
• | that, at the Closing, we will enter into the Registration Rights Agreement, which provides for registration rights to the initial stockholders, including the Sponsor, and BowX’s directors and officers and their permitted transferees; |
• | the continued indemnification of current directors and officers of BowX and the continuation of directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed. |
Q: |
How does the Sponsor intend to vote their shares? |
A: | Our initial stockholders, including the Sponsor, and our directors and officers have agreed to vote any shares of BowX Common Stock owned by them in favor of the Business Combination, including their shares of BowX Class B Common Stock and any public stock purchased after our initial public offering (including in |
open market and privately negotiated transactions). As of the record date, our initial stockholders, including our Sponsor, and our directors and officers beneficially own an aggregate of approximately 18.6% of the outstanding shares of BowX Common Stock. |
Q: |
What happens if I sell my BowX Common Stock before the special meeting? |
A: | The record date for the special meeting is earlier than the date of the special meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public stock after the applicable record date, but before the special meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting but the transferee, and not you, will have the ability to redeem such stock (if time permits). |
Q: |
May I change my vote after I have mailed my signed proxy card? |
A: | Yes. Stockholders may send a later-dated, signed proxy card to BowX’s Secretary at BowX’s address set forth below so that it is received by BowX’s Secretary prior to the vote at the special meeting (which is scheduled to take place on , 2021) or attend the special meeting virtually and vote. Stockholders also may revoke their proxy by sending a notice of revocation to BowX’s Secretary, which must be received by BowX’s Secretary prior to the vote at the special meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote. |
Q: |
What happens if I fail to take any action with respect to the special meeting? |
A: | If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and the Business Combination is consummated, you will become a stockholder or warrant holder of New WeWork. If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will remain a stockholder or warrant holder of BowX. However, if you fail to vote with respect to the special meeting, you will nonetheless be able to elect to redeem your public stock in connection with the Business Combination (if time permits). |
Q: |
What should I do with my stock certificates, warrant certificates or unit certificates? |
A: | Our stockholders who exercise their redemption rights must deliver (either physically or electronically) their stock certificates to Continental, BowX’s transfer agent, prior to the special meeting. |
Q: |
What should I do if I receive more than one set of voting materials? |
A: | Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your BowX Common Stock. |
Q: |
Who will solicit and pay the cost of soliciting proxies for the special meeting? |
A: | BowX will pay the cost of soliciting proxies for the special meeting. BowX has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the special meeting. BowX has agreed to pay Morrow a fee of $37,500, plus disbursements (to be paid with non-trust account funds). BowX will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of BowX Class A Common Stock for their expenses in forwarding soliciting materials to beneficial owners of BowX Class A Common Stock and in obtaining voting instructions from those owners. BowX’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies. |
Q: |
Where can I find the voting results of the special meeting? |
A: | The preliminary voting results will be expected to be announced at the special meeting. BowX will publish final voting results of the special meeting in a Current Report on Form 8-K within four business days after the special meeting. |
Q: |
Who can help answer my questions? |
A: | If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus, any document incorporated by reference in this proxy statement/prospectus or the enclosed proxy card, you should contact: |
• | BowX’s ability to complete the Business Combination or, if BowX does not consummate such Business Combination, any other initial business combination; |
• | the inability to complete the PIPE Investment; |
• | the financial and business performance of New WeWork; |
• | satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things: the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective stockholders of BowX and WeWork, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part of, (iii) receipt of approval for listing on the NYSE, the shares of BowX common stock to be issued in connection with the Merger, (iv) that BowX have at least $5,000,001 of net tangible assets upon Closing, (v) if a merger control filing is required by COFECE, COFECE has provided clearance of the transaction contemplated by the Merger Agreement (which was provided on July 1, 2021) and (vi) the absence of any injunctions; |
• | that the amount of cash available in the trust account, after deducting the amount required to satisfy BowX’s obligations to its stockholders (if any) that exercise their rights to redeem their BowX Class A Common Stock pursuant to the Organizational Documents, plus the PIPE Investment Amount actually received by BowX at or prior to the Closing, is at least equal to the Minimum Available Cash Condition amount; |
• | the impact of the COVID-19 pandemic; |
• | the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | the projected financial information, anticipated growth rate, and market opportunity of New WeWork; |
• | the ability to obtain or maintain the listing of New WeWork Class A Common Stock and public warrants on the NYSE following the Business Combination; |
• | BowX’s public securities’ potential liquidity and trading; |
• | BowX’s ability to raise financing in the future; |
• | BowX’s success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination; |
• | BowX officers and directors allocating their time to other businesses and potentially having conflicts of interest with BowX’s business or in approving the Business Combination; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
• | the impact of the regulatory environment and complexities with compliance related to such environment; |
• | the ability of New WeWork to maintain an effective system of internal controls over financial reporting; |
• | the ability of New WeWork to grow market share in its existing markets or any new markets it may enter; |
• | the ability of New WeWork to respond to general economic conditions; |
• | the health of the commercial real estate industry; |
• | risks associated with New WeWork’s real estate assets and increased competition in the commercial real estate industry; |
• | the ability of New WeWork to manage its growth effectively; |
• | the ability of New WeWork to achieve and maintain profitability in the future; |
• | the ability of New WeWork to access sources of capital, including debt financing and securitization funding to finance its real estate inventories and other sources of capital to finance operations and growth; |
• | the ability of New WeWork to maintain and enhance its products and brand and to attract customers |
• | the ability of New WeWork to manage, develop and refine its platform for managing and powering flexible work spaces and access to New WeWork’s customer base; |
• | the success of strategic relationships with third parties; |
• | the outcome of any known and unknown litigation and regulatory proceedings; |
• | consummation and anticipated benefits of our non-binding partnership with Cushman & Wakefield plc (“Cushman”); and |
• | other factors detailed under the section entitled “Risk Factors.” |
• | by written consent of WeWork and BowX; |
• | by WeWork or BowX if any governmental order has become final and nonappealable which has the effect of making consummation of the First Merger illegal or otherwise preventing or prohibiting the First Merger; |
• | by WeWork or BowX if the Condition Precedent Approvals have not been obtained by reason of the failure to obtain the required vote at a meeting of BowX’s stockholders duly convened therefor or at any adjournment thereof; |
• | by WeWork if there has been a BowX Modification in Recommendation with respect to any of the Condition Precedent Proposals; |
• | by BowX if there has been a WeWork Modification in Recommendation with respect to any of the Condition Precedent Proposals; |
• | by written notice to WeWork from BowX in the event of certain uncured breaches on the part of WeWork or if the Closing has not occurred on or before October 31, 2021, unless BowX is in material breach of the Merger Agreement; provided that the applicable date will be extended automatically once for sixty (60) days, to December 29, 2021, if all of the conditions set forth in Section 9.1, Section 9.2 and Section 9.3 of the Merger Agreement have been satisfied or waived as of October 31, 2021, other than (i) the condition, set forth above, that if a merger control filing is required by COFECE, COFECE has provided clearance of the transactions contemplated by the Merger Agreement (which was provided on July 1, 2021), and (ii) those conditions which by their terms would be satisfied at the Closing; |
• | by BowX, if WeWork has not obtained approval from its stockholders of the Merger Agreement and the transactions contemplated within seven business days after the Registration Statement has been declared effective by the SEC and delivered or otherwise made available to stockholders; provided however |
• | by written notice to BowX from WeWork in the event of certain uncured breaches on the part of BowX or Merger Sub or if the Closing has not occurred on or before October 31, 2021, unless WeWork is in material breach of the Merger Agreement, provided that the applicable date will be extended automatically once for sixty (60) days, to December 29, 2021, if all of the conditions set forth in Section 9.1, Section 9.2 and Section 9.3 of the Merger Agreement have been satisfied or waived as of October 31, 2021, other than (i) the condition, set forth above, that if a merger control filing is required by COFECE, COFECE has provided clearance of the transactions contemplated by the Merger Agreement (which was provided on July 1, 2021), and (ii) those conditions which by their terms would be satisfied at the Closing. |
Share Ownership in New WeWork (1) |
||||||||||||||||
No Additional Redemptions |
Assuming Maximum Redemption |
|||||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
WeWork Stockholders |
655,300,000 | 82.7 | % | 655,300,000 | 87.4 | % | ||||||||||
Initial Stockholders |
9,075,000 | 1.1 | % | 9,075,000 | 1.2 | % | ||||||||||
BowX’s Public Stockholders (excluding PIPE Shares) |
48,300,000 | 6.1 | % | 5,068,902 | 0.7 | % | ||||||||||
PIPE Investors |
80,000,000 | 10.1 | % | 80,000,000 | 10.7 | % | ||||||||||
Total |
792,675,000 | 100 | % | 749,443,902 | 100 | % |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. In the event that shares of BowX Class A Common Stock are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will fall in between the two scenarios. For example, if we assume that the number of shares of BowX Class A Common Stock redeemed in connection with the Business Combination total 21,615,549, BowX public stockholders will hold a total of 26,684,451 shares of New WeWork Common Stock at Closing, representing a 3.5% ownership interest. |
Share Ownership in New WeWork (1) |
||||||||||||||||
No Additional Redemptions |
Assuming Maximum Redemption |
|||||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
WeWork Stockholders |
655,300,000 | 80.3 | % | 655,300,000 | 84.7 | % | ||||||||||
Initial Stockholders |
16,848,333 | 2.1 | % | 16,848,333 | 2.2 | % | ||||||||||
BowX’s Public Stockholders (excluding PIPE Shares) |
64,400,000 | 7.9 | % | 21,168,902 | 2.7 | % | ||||||||||
PIPE Investors |
80,000,000 | 9.8 | % | 80,000,000 | 10.3 | % | ||||||||||
Total |
816,548,333 | 100 | % | 773,317,235 | 100 | % |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. In the event that shares of BowX Class A Common Stock are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will fall in between the two scenarios. For example, if we assume that the number of shares of BowX Class A Common Stock redeemed in connection with the Business Combination total 21,615,549, BowX public stockholders will hold a total of 42,784,451 shares of New WeWork Common Stock at Closing, representing a 5.4% ownership interest. |
• | The BCA Proposal—a proposal to approve and adopt the Merger Agreement and the Business Combination; |
• | The Organizational Documents Proposals – four proposals to amend BowX’s Existing Charter: |
• | Organizational Documents Proposal A — non-economic voting security without rights to dividends or on liquidation; |
• | Organizational Documents Proposal B — with respect to any vote or election submitted to the holders of shares of New WeWork Capital Stock for approval, to restrict the SoftBank Holders (as defined in the Proposed Charter), for a period of at least two years, from exercising voting rights over more than 49.9% of the voting securities present (in person or by proxy) and voting at any such meeting of the stockholders (as defined in the Proposed Charter); |
• | Organizational Documents Proposal C — to provide for only one class of board of directors and direct that board vacancies be filled by the majority of directors then in office, unless specified otherwise in the Stockholders Agreement (as defined below); and |
• | Organizational Documents Proposal D — to approve and adopt the additional changes in the Proposed Charter, including changing BowX’s name from “BowX Acquisition Corp.” to “WeWork Inc.,” which our board of directors believes are necessary to adequately address the needs of New WeWork immediately following the consummation of the Business Combination and approval of the Proposed Charter; |
• | The Director Election Proposal — a proposal to approve the election of nine directors, who, upon consummation of the Business Combination, will be the directors of New WeWork; |
• | The Stock Issuance Proposal — a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, the issuance of (a) shares of BowX Class A Common Stock to the PIPE Investors pursuant to the PIPE Investment and (b) shares of New WeWork Common Stock to the WeWork Stockholders pursuant to the Merger Agreement; |
• | The Equity Incentive Plan Proposal — a proposal to approve and adopt the 2021 Plan; |
• | The ESPP Proposal — a proposal to approve and adopt the ESPP; and |
• | The Adjournment Proposal—a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the special meeting. |
(i) |
BCA Proposal: |
(ii) |
Organizational Documents Proposals: |
(iii) |
Director Election Proposal: |
(iv) |
Stock Issuance Proposal: |
(v) |
Equity Incentive Plan Proposal: |
(vi) |
ESPP Proposal: |
(vii) |
Adjournment Proposal: |
• | (a) hold public stock or (b) if you hold public stock through units, you elect to separate your units into the underlying public stock and public warrants prior to exercising your redemption rights with respect to the public stock; |
• | submit a written request to Continental, that BowX redeem all or a portion of your public stock for cash; and |
• | deliver your public stock to Continental physically or electronically through DTC. |
• | the beneficial ownership of our initial stockholders of an aggregate of 12,075,000 shares of BowX Class B Common Stock and 7,773,000 private placement warrants, which shares and warrants would become worthless if BowX does not complete a business combination within the applicable time period, as our initial stockholders have waived any redemption right with respect to these shares. Our initial stockholders paid an aggregate of $25,000 for the BowX Class B Common Stock, and $11,660,000 for the private placement warrants, and such shares and warrants have an aggregate market value of approximately $ million and $ million, respectively, based on the closing price of BowX Class A Common Stock of $ on Nasdaq on , 2021, the record date for the special meeting of stockholders. Each of our officers and directors is a member of the Sponsor. Vivek Ranadivé and Murray Rode are the managing members of the Sponsor, and as such Messrs. Ranadivé and Rode have voting and investment discretion with respect to the BowX Common Stock and warrants held of record by the Sponsor; |
• | the anticipated continuation of Mr. Ranadivé as a director of New WeWork; |
• | the fact that our Sponsor, officers and directors have agreed not to redeem any of their shares in connection with a stockholder vote to approve the Business Combination; |
• | the fact that our initial stockholders, including our Sponsor, and our directors and officers, paid an aggregate of approximately $11,660,000 for their 7,773,333 private placement warrants to purchase shares of BowX Class A Common Stock and that such private placement warrants will expire worthless if a business combination is not consummated by August 7, 2022; |
• | the fact that our initial stockholders, including our Sponsor and its affiliates, who purchased Class B Common Stock and private placement warrants at the time of our IPO may experience a positive rate of return on their investment, even if our public shareholders experience a negative rate of return on their investment; |
• | that, at the Closing, we will enter into the Registration Rights Agreement, which provides for registration rights to the initial stockholders, including the Sponsor, and BowX’s directors and officers and their permitted transferees; |
• | the continued indemnification of current directors and officers of BowX and the continuation of directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed. |
• | The WeWork Business |
• | Large and Growing Addressable Market. COVID-19 pandemic continues to accelerate the shift away from traditional office space, information reviewed by the BowX board of directors suggested that flexible workspaces could potentially represent up to 22.2% of the U.S. office real-estate market by 2030, positioning WeWork for substantial revenue growth, even assuming WeWork’s market share of the flexible workspace market share remains constant. WeWork also plans to continue to diversify across geographies, while maintaining a strong presence in the United States. |
• | Portfolio of Product Offerings. pay-as-you-go co-location. |
• | Platform Business Opportunity |
• | Experienced and Proven Management Team Management of New WeWork Following the Business Combination — Executive Officers |
• | Attractive Initial Valuation pre-transaction enterprise value of $8.8 billion. |
• | Results of Due Diligence. |
• | extensive virtual meetings and calls with WeWork’s management team regarding its operations, business plan and the proposed transaction; and |
• | review of materials related to WeWork and its business, made available by WeWork and deemed appropriate for review in the context of the size of the transaction and the scope of WeWork’s operations, including financial statements, material contracts, key metrics and performance |
• | indicators, benefit plans, employee compensation and labor matters, intellectual property matters, real property matters, information technology, privacy and personal data, litigation information, environmental matters and other regulatory and compliance matters and other legal and business information. |
• | Continued Ownership By Current WeWork Stockholders. BCA Proposal—Ownership of New WeWork After the Closing. |
• | Stockholder Liquidity. |
• | PIPE Investment top-tier institutional investors, are investing an additional $800 million in the combined company pursuant to their participation in the PIPE |
Investment. The BowX board of directors considered this a strong sign of confidence in WeWork following the Business Combination and the benefits expected to be realized as a result of the Business Combination. |
• | Use of Proceeds. |
• | Terms of the Merger Agreement BCA Proposal |
• | Other Alternatives |
• | The price of New WeWork’s Common Stock and warrants may be volatile. |
• | If analysts do not publish research about New WeWork’s business or if they publish inaccurate or unfavorable research, New WeWork’s stock price and trading volume could decline. |
• | New WeWork may be subject to securities litigation, which is expensive and could divert management attention. |
• | WeWork may not be able to continue to retain existing members, many of whom enter into membership agreements with short-term commitments, or to attract new members in sufficient numbers or at sufficient rates to sustain and increase its memberships or at all. |
• | WeWork has a history of losses and it may be unable to achieve profitability (as determined in accordance with GAAP). |
• | WeWork’s success depends on its ability to maintain the value and reputation of its brand and the success of its strategic partnerships. |
• | WeWork has reduced and may continue to reduce the overall size of its organization and is likely to experience voluntary attrition, which may present challenges in managing its business. |
• | WeWork’s internal controls, financial systems and procedures need further development for a public company and a company of its global scale. |
• | WeWork relies on a combination of proprietary and third-party technology systems to support its business and member experience, and, if these systems experience difficulties, WeWork’s business, financial condition, results of operations and prospects may be materially adversely affected. |
• | WeWork and its subsidiaries may not be able to generate sufficient cash to service all of their indebtedness and other obligations and may be forced to take other actions to satisfy their obligations, which may not be successful. |
• | Failure to comply with anti-money laundering requirements could subject WeWork to enforcement actions, fines, penalties, sanctions and other remedial actions. |
• | WeWork’s only material assets are its indirect interests in the WeWork Partnership (defined below), and WeWork is accordingly dependent upon distributions from the WeWork Partnership to pay dividends and taxes and other expenses. WeWork’s debt facilities also impose or may in the future impose certain restrictions on WeWork’s subsidiaries making distributions to WeWork. |
• | The announcement of the proposed Business Combination could disrupt New WeWork’s relationships with its customers, suppliers, business partners and others, as well as its operating results and business generally. |
• | Since the Sponsor and BowX’s directors and executive officers have interests that are different than the interests of BowX’s stockholders, a conflict of interest may have existed in determining whether the Business Combination with WeWork is appropriate. |
• | The exercise of BowX’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest. |
• | The NYSE, may not list New WeWork’s securities on its exchange, which could limit investors’ ability to make transactions in New WeWork’s securities and subject New WeWork to additional trading restrictions. |
• | BowX is not obtaining an opinion from an independent valuation provider, and consequently, you have no assurance from an independent source that the Business Combination is fair to BowX from a financial point of view. |
• | BowX does not have a specified maximum redemption threshold, but cannot consummate the Business Combination if its net tangible assets fall below $5,000,001. This threshold and the Minimum Available Cash Condition (as defined below) may make it more difficult for it to complete the Business Combination as contemplated. |
• | Public stockholders will experience immediate dilution as a consequence of the issuance of New WeWork Common Stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the 2021 Plan, the First Warrant, the LC Warrant and the exercise of public warrants and private warrants. Having a minority stock ownership position may reduce the influence that BowX’s current stockholders have on the management of New WeWork. |
• | Warrants will become exercisable for New WeWork Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. Such dilution will increase if more of our shares are redeemed. |
Statement of Operations Data |
For the Six Months Ended June 30, 2021 |
For the Period from May 19, 2020, (inception) to December 31, 2020 |
||||||
(in thousands) | (in thousands) | |||||||
Operating Expenses |
||||||||
General and administrative expenses |
$ | 4,090,515 | $ | 219,771 | ||||
Franchise tax expense |
99,178 | 122,242 | ||||||
|
|
|
|
|||||
Total operating expenses |
$ | (4,189,693 | ) | $ | (342,013 | ) | ||
Change in fair value of warrant liabilities |
(12,670,532 | ) | (4,664,000 | ) | ||||
Offering costs associated with private placement warrants |
(9,344 | ) | ||||||
Net gain from investments held in the trust account |
$ | 59,364 | $ | 277,051 | ||||
|
|
|
|
|||||
Loss before income tax expense |
$ | — | $ | (4,788,306 | ) | |||
Income tax expense |
$ | — | $ | 22,010 | ||||
Net loss |
$ | (16,800,861 | ) | $ | (4,810,316 | ) | ||
Weighted average shares outstanding of Class A Common Stock, basic and diluted |
48,300,000 | 48,042,857 | ||||||
Basic and diluted net income per share, Class A |
$ | 0.00 | $ | 0.00 | ||||
Weighted average shares outstanding of Class B Common Stock, basic and diluted |
12,075,000 | 11,509,432 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per share, Class B |
$ | (1.39 | ) | $ | (0.43 | ) | ||
|
|
|
|
For the Six Months Ended June 30, 2021 |
As of December 31, 2020 |
|||||||
(in thousands) | (in thousands) | |||||||
Total cash |
$ | 506,334 | $ | 921,049 | ||||
Total assets |
$ | 483,900,536 | $ | 484,520,512 | ||||
Total liabilities |
$ | 46,589,547 | $ | 30,408,662 | ||||
Total stockholders’ equity |
$ | 5,000,009 | $ | 5,000,010 | ||||
Total liabilities and stockholders’ equity |
$ | 483,900,536 | $ | 484,520,512 |
Six Months Ended June 30, 2021 |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands, except for per share data) |
2020 |
2019 |
2018 |
|||||||||||||
Revenue (including related party revenue of $87,694, $169,783, |
$ | 1,191,331 | $ | 3,415,865 | $ | 3,458,592 | $ | 1,821,751 | ||||||||
Total expenses (including related party expenses of $38,253, $80,524, $290,748 and $21,098 for the six months ended June 30, 2021 and for the years ended 2020, 2019 and 2018, respectively.) |
3,547,124 | 7,762,628 | 7,378,090 | 3,512,750 | ||||||||||||
Loss from operations |
(2,355,793 | ) | (4,346,763 | ) | (3,919,498 | ) | (1,690,999 | ) | ||||||||
Total interest and other income (expense), net |
(621,630 | ) | 532,412 | 190,248 | (237,270 | ) | ||||||||||
Net loss |
(2,984,705 | ) | (3,833,857 | ) | (3,774,887 | ) | (1,927,419 | ) | ||||||||
Net loss attributable to WeWork |
(2,921,200 | ) | (3,129,358 | ) | (3,264,738 | ) | (1,610,792 | ) | ||||||||
Net loss per share attributable to Class A and Class B common stockholders |
||||||||||||||||
Basic |
$ | (16.81 | ) | $ | (18.38 | ) | $ | (19.38 | ) | $ | (9.87 | ) | ||||
Diluted |
$ | (16.81 | ) | $ | (18.38 | ) | $ | (19.38 | ) | $ | (9.87 | ) | ||||
Weighted-average shares used to compute net loss per share attributable to Class A and Class B common Stockholders, basic and diluted |
173,751,116 | 170,275,761 | 168,436,109 | 163,148,918 |
Six Months Ended June 30, 2021 |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||||||
Net loss |
$ | (2,984,705 | ) | $ | (3,833,857 | ) | $ | (3,774,887 | ) | $ | (1,927,419 | ) | ||||
Comprehensive loss |
(2,966,385 | ) | (3,977,321 | ) | (3,791,901 | ) | (1,919,753 | ) | ||||||||
Net (income) loss attributable to noncontrolling interests |
63,505 | 704,499 | 510,149 | 316,627 | ||||||||||||
Other comprehensive (income) loss attributable to noncontrolling interests |
24,221 | (23,161 | ) | (1,108 | ) | 18,931 | ||||||||||
Comprehensive loss attributable to WeWork |
$ | (2,878,659 | ) | (3,295,983 | ) | (3,282,860 | ) | (1,584,195 | ) |
Six Months Ended June 30, 2021 |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||||||
Net cash provided by (used in) operating activities |
(1,158,957 | ) | $ | (857,008 | ) | $ | (448,244 | ) | $ | (176,729 | ) | |||||
Net cash provided by (used in) investing activities |
(186,628 | ) | (444,087 | ) | (4,775,520 | ) | (2,475,798 | ) | ||||||||
Net cash provided by (used in) financing activities |
1,349,710 | (46,814 | ) | 5,257,271 | 2,658,469 |
June 30, 2021 |
December 31, |
|||||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||||||
Total current assets |
$ | 1,397,610 | $ | 1,329,228 | $ | 2,128,275 | ||||||
Total assets (1) |
23,186,310 | 25,356,334 | 31,147,814 | |||||||||
Total current liabilities |
2,336,769 | 2,189,267 | 3,087,532 | |||||||||
Total liabilities (1) |
24,474,225 | 24,981,917 | 28,016,842 | |||||||||
Total shareholders’ deficit |
(9,964,996 | ) | (7,673,785 | ) | (4,696,897 | ) | ||||||
Total liabilities and equity |
23,186,310 | 25,356,334 | 31,147,814 |
(1) | WeWork’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). As of June 30, 2021, December 31, 2020 and December 31, 2019, total assets of consolidated VIEs, after intercompany eliminations, were $1.9 billion, $2.1 billion and $6.7 billion respectively, including $102.6 million, $166.6 million and $417.7 million of cash and cash equivalents, respectively, and $10.1 million $10.0 million and $94.0 million of restricted cash, respectively. Total liabilities of consolidated VIEs, after intercompany eliminations, were $1.6 billion, $1.7 billion and $5.4 billion as of June 30, 2021, December 31, 2020 and December 31, 2019, respectively. Creditors of VIEs do not have recourse against the general credit of the Company, except relating to certain lease guarantees totaling $13.6 million, $14.6 million and $36.3 million as of June 30, 2021, December 31, 2020 and December 31, 2019, respectively, provided by WeWork Inc. to certain landlords of the VIEs. See Note 5 and Note 6 of the notes to WeWork’s unaudited interim condensed consolidated and annual audited consolidated financial statements, respectively, included elsewhere in this proxy statement/prospectus. |
|
|
Six Months Ended June 30, 2021 |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||||||
Adjusted EBITDA (1) |
$ | (894,579 | ) | $ | (1,883,444 | ) | $ | (2,200,591 | ) | $ | (1,171,597 | ) | ||||
Free Cash Flow (2) |
(1,312,099 | ) | (2,298,240 | ) | (3,936,330 | ) | (2,231,749 | ) |
(1) | A reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA is set forth in the section entitled “ WeWork’s Management’s Discussion and Analysis of Financial Condition and Results of Operation – Non-GAAP Financial Measures – Adjusted EBITDA |
(2) | A reconciliation of net cash provided by (used in) operating activities, the most comparable GAAP measure, to Free Cash Flow is set forth in the section entitled “ WeWork’s Management’s Discussion and Analysis of Financial Condition and Results of Operation – Non-GAAP Financial Measures – Free Cash Flow |
• | The merger of WeWork with and into BowX Merger Sub, a wholly owned subsidiary of BowX, with WeWork surviving the merger as a wholly owned subsidiary of BowX; |
• | The issuance and sale of 80,000,000 shares of New WeWork Class A Common Stock for $10.00 per share and an aggregate purchase price of $800 million in the PIPE Investment pursuant to the Subscription Agreements, executed concurrently with the Merger Agreement; |
• | The conversion of 9,075,000 shares of BowX Class B Common Stock into 9,075,000 shares of New WeWork Class A Common Stock in connection with the transaction in accordance with the terms of the Merger Agreement; |
• | The exchange of all issued and outstanding WeWork Preferred Stock into a number of shares of New WeWork Class A Common Stock based on the Exchange Ratio; |
• | The issuance of the First Warrant to SBWW and/or its designees to purchase New WeWork Class A Common Stock based on the Exchange Ratio; |
• | The exchange of all issued and outstanding WeWork Common Stock into a number of shares of New WeWork Common Stock based on the Exchange Ratio. |
• | Assuming No Redemption: |
• | Assuming Maximum Possible Redemption: |
$432.3 million. The Merger Agreement includes as a condition to closing the business combination that, at the closing, BowX will have a minimum of $800 million in cash comprising (i) the amount of cash available in the trust account immediately prior to closing, after deducting the amount required to satisfy the share redemption amount (but prior to payment of any (a) deferred underwriting commissions held in the trust account and (b) any transaction expenses of WeWork and BowX), and (ii) the PIPE investment amount received by BowX prior to or substantially concurrently with the closing. The proceeds from the PIPE investment are expected to satisfy the minimum cash requirement. |
Pro Forma Combined |
||||||||
(Amounts in thousands) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||
Total current assets |
$ | 2,604,424 | $ | 2,172,113 | ||||
Total assets |
24,392,609 | 23,960,298 | ||||||
Total current liabilities |
2,335,524 | 2,335,524 | ||||||
Total liabilities |
24,440,999 | 24,440,999 | ||||||
Total equity/(deficit) |
(346,289 | ) | (778,600 | ) |
Pro Forma Combined |
||||||||
(Amounts in thousands, except per share amounts) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||
Revenue |
$ | 1,191,331 | $ | 1,191,331 | ||||
|
|
|
|
|||||
Net loss attributable to New WeWork |
(2,587,790 | ) | (2,587,790 | ) | ||||
|
|
|
|
|||||
Pro forma net loss per share attributable to Class A common stockholders – basic and diluted |
$ | (4.17 | ) | $ | (4.44 | ) | ||
|
|
|
|
• | Assuming No Redemption: |
• | Assuming Maximum Possible Redemption: |
(Amounts in thousands, except share and per share data) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||
Numerator: |
||||||||
Pro forma combined net loss attributable to New WeWork |
$ | (2,587,790 | ) | $ | (2,587,790 | ) | ||
Fair value of contingently issuable shares related to warrants issued to principal stockholders |
(390,571 | ) | (390,571 | ) | ||||
|
|
|
|
|||||
Net loss attributable to New WeWork Class A Common Stockholders |
$ | (2,978,361 | ) | $ | (2,978,361 | ) | ||
|
|
|
|
|||||
Denominator: |
||||||||
Basic shares: |
||||||||
Pro forma WeWork Inc. weighted-average shares outstanding used for basic net loss per share computation |
143,414,171 | 143,414,171 | ||||||
Pro forma BowX Sponsor & Sponsor Persons shares |
9,075,000 | 9,075,000 | ||||||
Pro forma BowX Public Stockholders shares |
48,300,000 | 5,068,902 | ||||||
Pro forma PIPE Investor Shares |
80,000,000 | 80,000,000 | ||||||
Pro forma adjustment to reflect warrants issued to principal stockholder |
44,141,292 | 44,141,292 | ||||||
Pro forma adjustment to reflect assumed conversion of Series A, B, C, D-1, D-2, E, F, G, G-1, H-1, Acquisition and Junior preferred stock to New WeWork Class A Common Stock |
387,503,518 | 387,503,518 | ||||||
Pro forma adjustment to reflect assumed conversion of convertible notes to Class A Common Stock |
568,522 | 568,522 | ||||||
Pro forma adjustment to reflect assumed conversion of vested liquidity-based RSUs |
382,473 | 382,473 | ||||||
|
|
|
|
|||||
Number of shares used for pro forma basic net loss per share computation |
713,384,976 | 670,153,878 | ||||||
|
|
|
|
|||||
Diluted shares: |
||||||||
Weighted-average shares - Diluted |
713,384,976 | 670,153,878 | ||||||
|
|
|
|
|||||
Pro forma net loss per share attributable to New WeWork Class A Common Stockholders: |
||||||||
Basic |
$ | (4.17 | ) | $ | (4.44 | ) | ||
|
|
|
|
|||||
Diluted |
$ | (4.17 | ) | $ | (4.44 | ) | ||
|
|
|
|
Historical |
Pro Forma combined |
|||||||||||||||
BowX |
WeWork |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||
Book Value per share (1) |
$ | 0.29 | $ | (49.64 | ) | $ | (0.48 | ) | $ | (1.16 | ) |
(1) | Pro forma book value per share is the total equity of New WeWork (excluding noncontrolling interests) divided by total number of shares of New WeWork expected to be outstanding after the close of the Business Combination. |
• | the need to adapt the design and features of its locations and products and services to accommodate specific cultural norms and language differences; |
• | difficulties in understanding and complying with local laws and regulations in foreign jurisdictions, including local labor laws, tax laws, environmental regulations and rules and regulations related to occupancy of its locations; |
• | varying local building codes and regulations relating to building design, construction, safety, environmental protection and related matters; |
• | significant reliance on third parties with whom the Company may engage in joint ventures, strategic alliances or ordinary course contracting relationships whose interests and incentives may be adverse to or different from the Company’s or may be unknown to the Company; |
• | varying laws, rules, regulations and practices regarding protection and enforcement of intellectual property rights, including trademarks; |
• | varying marketing and consumer protection laws, regulations and related practices |
• | laws and regulations regarding consumer and data protection, telecommunications requirements, privacy and security, and encryption that may be more restrictive than comparable laws and regulations in the United States; |
• | corrupt or unethical practices in foreign jurisdictions that may subject the Company to compliance costs, including competitive disadvantages, or exposure under applicable anti-corruption and anti-bribery laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”); |
• | compliance with applicable export and import controls and economic and trade sanctions, such as sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control; |
• | fluctuations in currency exchange rates and compliance with foreign exchange controls and limitations on repatriation of funds; and |
• | unpredictable disruptions as a result of security threats or political or social unrest and economic instability. |
• | inability to find potential partners; |
• | inability to obtain favorable terms for the Company’s regional joint venture agreements; |
• | failure to effectively transfer liabilities, contracts, facilities and employees to buyers or partners; |
• | requirements that the Company retain or indemnify buyers or partners against certain liabilities and obligations; |
• | the possibility that the Company will become subject to third-party claims arising out of such divestitures or regional joint venture arrangements; |
• | inability to reduce fixed costs previously associated with the divested assets or business or in markets where the Company enters into a regional joint venture arrangement; |
• | disruption of the Company’s ongoing business and distraction of management; |
• | loss of key employees who leave as a result of a divestiture or regional joint venture arrangement; and |
• | loss of members from WeWork locations to other flex workspace providers in similar locations. |
• | limiting its ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements, and increasing its cost of borrowing; |
• | requiring a substantial portion of its cash flows to be dedicated to payments on its obligations instead of for other purposes; and |
• | increasing its vulnerability to general adverse economic and industry conditions and limiting its flexibility in planning for and reacting to changes in the industry in which the Company competes. |
• | the beneficial ownership of our initial stockholders of an aggregate of 12,075,000 shares of BowX Class B Common Stock and 7,773,000 private placement warrants, which shares and warrants would become worthless if BowX does not complete a business combination within the applicable time period, as our initial stockholders have waived any redemption right with respect to these shares. Our initial stockholders paid an aggregate of $25,000 for the BowX Class B Common Stock, and $11,660,000 for the private placement warrants, and such shares and warrants have an aggregate market value of approximately $ million and $ million, respectively, based on the closing price of BowX Class A Common Stock of $ on Nasdaq on , 2021, the record date for the special meeting of stockholders. Each of our officers and directors is a member of the Sponsor. Vivek Ranadivé and Murray Rode are the managing members of the Sponsor, and as such Messrs. Ranadivé and Rode have voting and investment discretion with respect to the BowX Common Stock and warrants held of record by the Sponsor; |
• | the anticipated continuation of Mr. Ranadivé as a director of New WeWork; |
• | the fact that our Sponsor, officers and directors have agreed not to redeem any of their shares in connection with a stockholder vote to approve the Business Combination; |
• | the fact that our initial stockholders, including our Sponsor, and our directors and officers, paid an aggregate of approximately $11,660,000 for their 7,773,333 private placement warrants to purchase shares of BowX Class A Common Stock and that such private placement warrants will expire worthless if a business combination is not consummated by August 7, 2022; |
• | the fact that our initial stockholders, including our Sponsor and its affiliates, who purchased Class B Common Stock and private placement warrants at the time of our IPO may experience a positive rate of return on their investment, even if our public shareholders experience a negative rate of return on their investment; |
• | that, at the Closing, we will enter into the Registration Rights Agreement, which provides for registration rights to the initial stockholders, including the Sponsor, and BowX’s directors and officers and their permitted transferees; |
• | the continued indemnification of current directors and officers of BowX and the continuation of directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed. |
• | a limited availability of market quotations for New WeWork’s securities; |
• | reduced liquidity for New WeWork’s securities; |
• | a determination that New WeWork Common Stock is a “penny stock” which will require brokers trading in New WeWork Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New WeWork’s securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | its employees may experience uncertainty about their future roles, which might adversely affect New WeWork’s ability to retain and hire key personnel and other employees; |
• | customers, suppliers, business partners and other parties with which New WeWork maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with New WeWork or fail to extend an existing relationship with New WeWork; and |
• | WeWork has expended and New WeWork will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination. |
• | changes in the valuation of New WeWork’s deferred tax assets and liabilities; |
• | expected timing and amount of the release of any tax valuation allowances; |
• | tax effects of stock-based compensation; |
• | costs related to intercompany restructurings; |
• | changes in tax laws, regulations or interpretations thereof; or |
• | lower than anticipated future earnings in jurisdictions where New WeWork has lower statutory tax rates and higher than anticipated future earnings in jurisdictions where New WeWork has higher statutory tax rates. |
• | may significantly dilute the equity interest of investors from the initial public offering; |
• | may subordinate the rights of existing holders of BowX Common Stock if preferred stock is issued with rights senior to those afforded to BowX Common Stock; |
• | could cause a change of control if a substantial number of shares of BowX 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; |
• | may adversely affect prevailing market prices for our BowX Units, BowX Class A Common Stock and/or BowX warrants; and |
• | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us. |
• | Approximately 655,300,000 shares of New WeWork Common Stock are anticipated to be issued as consideration in the Business Combination, valued at $10.00 per share. This represents approximately 82.7% or 87.6% of the number of shares of New WeWork Common Stock that will be outstanding following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. |
• | 80,000,000 shares of New WeWork Common Stock are anticipated to be issued to the PIPE Investors pursuant to the PIPE Investment, at a price of $10.00 per share. This represents approximately 10.1% or 10.7% of the number of shares of New WeWork Common Stock that will be outstanding following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. |
• | 23,873,333 warrants will be outstanding following the Business Combination. The warrants, which will not be redeemed in connection with the redemption by a public shareholder of a public share, will be exercisable at any time commencing on the later of 30 days after the completion of the Business Combination and 12 months from the closing of our initial public offering. The shares of New WeWork Common Stock underlying these warrants, represent approximately 3.0% or 2.9% of the fully-diluted number of shares of New WeWork Common Stock immediately following the consummation of the Business Combination, assuming the no redemption scenario and the maximum redemption scenario, respectively. See “ —Warrants will become exercisable for New WeWork Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. |
• | New WeWork will reserve 5% of the number of outstanding shares of New WeWork Common Stock on a fully diluted basis (as of immediately following the Business Combination) pursuant to the 2021 Plan and expects to grant equity awards under the 2021 Plan. The granted awards, when vested and settled or exercisable, may result in the issuance of additional shares up to the amount of the share reserve under the 2021 Plan. |
• | New WeWork will reserve 1% of the number of outstanding shares of New WeWork Common Stock on a fully diluted basis (as of immediately following the Business Combination) pursuant to the ESPP, and New WeWork expects that holders of purchase rights under the ESPP may purchase shares of New WeWork Common Stock pursuant to the ESPP. As a result, New WeWork may issue additional shares of New WeWork Common Stock up to the amount of the share reserve under the ESPP. |
• | Certain former members of WeWork’s senior management hold approximately 24,132,575 WeWork Partnership Profits Interest Units, which, after the Business Combination can be exchanged for New WeWork Common Stock pursuant to their terms as further described in “ Certain Relationships and Related Person Transactions—WeWork Partnership Profits Interest Units |
• | BowX will issue to SBWW or its designees and the SoftBank Obligor or its designees the First Warrant and the LC Warrant, respectively, with the issuance of the LC Warrant contingent upon the LC Facility Termination Extension, as described in “ Certain Relationships and Related Person Transactions—WeWork—SoftBank Transactions—Warrants |
• | your proportionate ownership interest in New WeWork will decrease; |
• | the relative voting strength of each previously outstanding share of New WeWork Common Stock will be diminished; or |
• | the market price of New WeWork Common Stock may decline. |
• | changes in the industries in which New WeWork and its customers operate; |
• | developments involving New WeWork’s competitors; |
• | changes in laws and regulations affecting its business; |
• | variations in its operating performance and the performance of its competitors in general; |
• | actual or anticipated fluctuations in New WeWork’s quarterly or annual operating results; |
• | publication of research reports by securities analysts about New WeWork or its competitors or its industry; |
• | the public’s reaction to New WeWork’s press releases, its other public announcements and its filings with the SEC; |
• | actions by stockholders, including the sale by the PIPE Investors of any of their shares of our common stock; |
• | additions and departures of key personnel; |
• | commencement of, or involvement in, litigation involving the combined company; |
• | changes in its capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of New WeWork Common Stock available for public sale; and |
• | general economic and political conditions, such as the effects of the COVID-19 outbreak, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism. |
• | limited review controls currently in place and lack of sufficient accounting personnel with proper experience and qualifications to account for complex transactions; |
• | accounting for impairment testing of its intangible assets; |
• | accounting for the valuation of warrant liabilities; |
• | accounting for valuation of contingent consideration; and |
• | accounting for income taxes. |
• | The BCA Proposal — |
• | The Organizational Documents Proposals — |
• | Organizational Documents Proposal A — non-economic security without rights to dividends or on liquidation; |
• | Organizational Documents Proposal B — |
• | Organizational Documents Proposal C — |
• | Organizational Documents Proposal D — |
• | The Director Election Proposal — |
• | The Stock Issuance Proposal — |
issuance of (a) shares of BowX Class A Common Stock to the PIPE Investors pursuant to the PIPE Investment and (b) shares of New WeWork Common Stock to the WeWork Stockholders pursuant to the Merger Agreement; |
• | The Equity Incentive Plan Proposal — |
• | The ESPP Proposal — |
• | The Adjournment Proposal — |
• | You can vote by signing and returning the enclosed proxy card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your |
shares will be voted as recommended by BowX’s board “FOR” the BCA Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Equity Incentive Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the special meeting. Votes received after a matter has been voted upon at the special meeting will not be counted. |
• | You can attend the special meeting and vote virtually. You will receive a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a valid legal proxy from the broker, bank or other nominee. That is the only way BowX can be sure that the broker, bank or nominee has not already voted your shares. |
• | you may send another proxy card with a later date; |
• | you may notify BowX’s Secretary in writing before the special meeting that you have revoked your proxy; or |
• | you may attend the special meeting online, revoke your proxy, and vote virtually, as indicated above. |
(i) | (a) hold BowX Class A Common Stock, or (b) if you hold BowX Class A Common Stock through units, you elect to separate your units into the underlying BowX Class A Common Stock and public warrants prior to exercising your redemption rights with respect to the BowX Class A Common Stock; |
(ii) | submit a written request to Continental, BowX’s transfer agent, that BowX redeem all or a portion of your public stock for cash; and |
(iii) | deliver your public stock to Continental, physically or electronically through DTC. |
• | change or amend the governing documents of WeWork or any of its subsidiaries; |
• | make or declare any dividend or distribution to stockholders of WeWork or make any other distributions in respect of any WeWork Capital Stock or equity interests of WeWork; |
• | split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of WeWork’s or any of its subsidiaries’ capital stock or equity interests, except for any such transaction by a wholly owned subsidiary of WeWork or the WeWork Partnership that remains a wholly owned subsidiary of WeWork or the WeWork Partnership, respectively, after consummation of such transaction; |
• | purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, membership interests or other equity interests of WeWork or its subsidiaries, except for (i) the acquisition by WeWork or any of its subsidiaries of any shares of capital stock, membership interests or other equity interests (other than WeWork Awards) of WeWork or its subsidiaries in connection with the forfeiture or cancellation of such interests, (ii) any exchange or redemption of WeWork Partnerships Profits Interest Units required under the Partnership Agreement, (iii) transactions between WeWork and any wholly owned subsidiary of WeWork or the WeWork Partnership or between wholly owned subsidiaries of WeWork or the WeWork Partnership, or (iv) purchases or redemptions pursuant to exercises or settlements of WeWork Options, WeWork Restricted Stock Awards, WeWork Restricted Stock Unit Awards or WeWork Warrants issued and outstanding as of the date hereof or the conversion of the WeWork Series C Convertible Note or the withholding of shares to satisfy net settlement or tax obligations with respect to WeWork Awards outstanding as of the date hereof in accordance with the terms of such WeWork Awards; |
• | enter into, modify in any material respect or terminate (other than expiration in accordance with its terms) any material contracts other than in the ordinary course of business or as required by law; |
• | sell, assign, transfer, convey, lease or otherwise dispose of any material tangible assets or properties of WeWork or its subsidiaries, except for (i) dispositions of obsolete or worthless equipment or the liquidation of furniture, fixtures and equipment in connection with contemplated building closure, (ii) transactions among WeWork and its wholly owned subsidiaries or among its wholly owned subsidiaries and (iii) transactions among WeWork and the WeWork Partnership or wholly owned subsidiaries of the WeWork Partnership or among the WeWork Partnerships’s wholly owned subsidiaries, (iv) transactions among the Partnership and its wholly owned subsidiaries, (v) transactions in the ordinary course of business consistent with past practice, and (vi) any transaction whereby WeWork or its subsidiaries sells, assigns, transfers, conveys, or otherwise disposes of all or a portion of the equity interests in, or assets of, one or more of WeWork’s subsidiaries to any Person (other than WeWork or its subsidiaries) and provides such Person or its affiliates with the right to (x) operate a business that is identified or associated with the WeWork brand and proprietary systems and/or (y) sell or distribute services that are identified or associated with the WeWork brand and proprietary systems, including any such transactions currently contemplated or ongoing in Latin America, Asia and Israel; |
• | acquire, purchase, obtain, assume, or otherwise obtain, or sell, assign or otherwise dispose of, directly or indirectly, any fee simple ownership interest or leasehold estate in any real property (other than in the ordinary course of business consistent with past practice), nor engage, hire, or otherwise retain, or compensate or pay for, any Person to provide brokerage services with respect to any of the foregoing activities; |
• | other than as required by law, an existing WeWork benefit plan, or certain contractual obligations, (i) grant any severance, retention, change in control or termination or similar pay, except in connection with the promotion, hiring or termination of employment of any employee of WeWork or its subsidiaries (other than in connection with the promotion, hiring or termination of employment of any of certain specified employees in the ordinary course of business consistent with past practice), |
(ii) make any change in the key management structure of WeWork or any of WeWork’s subsidiaries with respect to such specified employees, including the hiring of additional officers or the termination of existing officers, except for terminations (x) for cause or due to death or disability, or (y) voluntarily by an officer or member of key management in the ordinary course of business consistent with past practices, (iii) terminate, adopt, enter into or materially amend any benefit plan except in the ordinary |
course consistent with past practices, (iv) increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider of WeWork or its subsidiaries, except in the ordinary course of business consistent with past practice, (v) establish any trust or take any other action to secure the payment of any compensation payable by WeWork or any of WeWork’s subsidiaries to any of their respective employees or (vi) take any action to amend or waive any performance or vesting criteria or to accelerate the time of payment of vesting of any compensation or benefit payable by WeWork or any of WeWork’s subsidiaries, except in the ordinary course of business consistent with past practice; |
• | acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof, other than any such transaction for consideration not exceeding $1 million individually or $10 million in the aggregate; |
• | (i) issue or sell any debt securities or warrants or other rights to acquire any debt securities of WeWork or any subsidiary of WeWork or otherwise incur or assume any indebtedness, or (ii) guarantee any indebtedness of another person, except, in each case of (i) and (ii) hereof, (x) in the ordinary course of business consistent with past practice, (y) in connection with Franchise Transactions and (z) Indebtedness incurred pursuant to the Company Credit Agreement and the Company/SBG Reimbursement Agreement as in effect as of the date hereof; |
• | (i) make or change any material election in respect of material taxes, (ii) amend, modify or otherwise change any filed material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (iv) enter into any closing agreement in respect of material taxes or enter into any tax sharing or similar agreement, (v) settle any claim or assessment in respect of material taxes, (vi) surrender or allow to expire any right to claim a refund of material taxes or (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material taxes or in respect of any material tax attribute that would give rise to any claim or assessment of taxes, other than pursuant to extensions of time to file tax returns obtained in the ordinary course of business; |
• | take or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the First Merger, taken together with the Second Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations; |
• | issue any additional shares of WeWork Capital Stock or securities exercisable for or convertible into WeWork Capital Stock, other than the issuance of WeWork Common Stock upon the exercise or settlement of WeWork Awards, WeWork Warrants or the conversion of the WeWork Series C Convertible Note in the ordinary course of business and in the terms of the applicable WeWork Incentive Plan, WeWork Warrant, the WeWork Series C Convertible Note and applicable award agreement or exchange or redemption of WeWork Partnerships Profits Interest Units in the ordinary course of business and in accordance with the terms of the Partnership Agreement, and applicable award agreement, in each case, outstanding on the date of the Merger Agreement in accordance with their terms as in effect as of the date of the Merger Agreement, or grant any additional WeWork Awards or other equity or equity-based compensation; |
• | adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of WeWork or its subsidiaries (other than the Mergers); |
• | waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, action, litigation or other legal proceedings, except where such waivers, releases, settlements or compromises involve only the payment of monetary damages by WeWork or its subsidiaries in an amount less than $2,000,000 individually and $20,000,000 in the aggregate; |
• | grant to, or agree to grant to, any person rights to any intellectual property that is material to WeWork and its subsidiaries, taken as a whole, except for non-exclusive licenses to intellectual property granted |
in the ordinary course of business consistent with past practice, or dispose of, abandon or permit to lapse any rights to any intellectual property that is material to WeWork and its subsidiaries except for the expiration of WeWork’s registered intellectual property in accordance with the applicable statutory term (or in the case of domain names, applicable registration period) or in the reasonable exercise of WeWork’s or any of its subsidiaries’ business judgment as to the costs and benefits of maintaining the item; |
• | disclose or agree to disclose to any person (other than BowX or any of its representatives) any trade secret or any other material confidential or proprietary information, know-how or process of WeWork or any of its subsidiaries other than in the ordinary course of business consistent with past practice and pursuant to obligations to maintain the confidentiality thereof; |
• | make or commit to make capital expenditures other than in an amount not in excess of the amount disclosed in the WeWork disclosure letter, in the aggregate; |
• | materially amend or change any of WeWork’s or any of its subsidiaries’ accounting policies or procedures, other than reasonable and usual amendments in the ordinary course of business consistent with past practice or as required by a change in GAAP; |
• | other than as required by applicable law, enter into or extend any collective bargaining agreement or similar labor agreement, or recognize or certify any labor union, labor organization, works council or group of employees of WeWork or its subsidiaries as the bargaining representative for any employees of WeWork or its subsidiaries; |
• | terminate without replacement or fail to use reasonable efforts to maintain any license that is material to the conduct of the business of WeWork and its subsidiaries, taken as a whole; |
• | waive material restrictive covenant obligations of any current employee of WeWork or any of WeWork’s subsidiaries; |
• | limit the right of WeWork or any of WeWork’s subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any person or (ii) grant any exclusive or similar rights to any person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially adversely affect, or materially disrupt, the ordinary course operation of the businesses of WeWork and its subsidiaries, taken as a whole; |
• | terminate without replacement or amend in a manner materially detrimental to WeWork and its subsidiaries, taken as a whole, any insurance policy insuring the business of WeWork or any of WeWork’s subsidiaries; or |
• | enter into any agreement to take any of the above actions prohibited under the Merger Agreement. |
• | seek any approval from BowX’s stockholders to change, modify or amend the Trust Agreement or the governing documents of BowX or Merger Sub, except as otherwise contemplated by the Transaction Proposals; |
• | (x) make or declare any dividend or distribution to the stockholders of BowX or make any other distributions in respect of any of BowX’s or Merger Sub’s capital stock, share capital or equity interests, (y) split, combine, reclassify or otherwise amend any terms of any shares or series of BowX’s or Merger Sub’s capital stock or equity interests or (z) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, share capital or membership interests, warrants or other equity interests of BowX or Merger Sub other than a redemption of shares of BowX Class A Common Stock effected in connection with the First Merger; |
• | (A) make or change any material election in respect of material taxes, (B) amend, modify or otherwise change any filed material tax return and related activities (C) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (D) enter into any closing agreement in respect of material taxes or enter into any tax sharing or similar agreement, (E) settle any claim or assessment in respect of material taxes, (F) surrender or allow to expire any right to claim a refund of material taxes or (G) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material taxes or in respect of any material tax attribute that would give rise to any claim or assessment of taxes, other than pursuant to extensions of time to file tax returns obtained in the ordinary course of business; |
• | take or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the First Merger, taken together with the Second Merger, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations; |
• | other than as expressly required by the Sponsor Support Agreement, enter into, renew or amend in any material respect, any transaction or contract with an affiliate of BowX or Merger Sub (including, for the avoidance of doubt, (x) the Sponsor and (y) any Person in which Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater); |
• | incur or assume any indebtedness or guarantee any indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of WeWork or any of WeWork’s subsidiaries or guaranty any debt security of another person, other than fees and expenses for professional services incurred in support of the transactions contemplated by the Merger Agreement and the Ancillary Agreements (as defined below) or in support of the ordinary course operations of BowX; |
• | (i) issue any securities of BowX or securities exercisable for or convertible into securities of BowX, other than the issuance of the Aggregate Merger Consideration, (ii) grant any options, warrants or other equity-based awards with respect to securities of BowX, not outstanding on the date of the Merger Agreement or (iii) amend, modify or waive any of the material terms or rights set forth in any warrant or the Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein; or |
• | enter into any agreement to do any of the above actions prohibited under the Merger Agreement. |
• | prior to the Closing Date, obtain approval for and adopt the 2021 Plan and the ESPP; |
• | within two business days following the expiration of the sixty-day period after BowX has filed current Form 10 information with the SEC, file an effective registration statement on Form S-8 (or other applicable form, including Form S-3) with respect to New WeWork’s common stock issuable under the 2021 Plan and/or the ESPP and use reasonable efforts to maintain the effectiveness of such registration statement(s) (and the current status of the prospectus or prospectuses contained therein) for so long as awards granted thereunder remain outstanding; |
• | take certain actions so that the Trust Amount will be released from the trust account and so that the trust account will terminate thereafter, in each case, pursuant to the terms and subject to the terms and conditions of the Trust Agreement; |
• | during the Interim Period, ensure BowX remains listed as a public company on the Nasdaq; provided that if WeWork requests in writing no later than sixty (60) days prior to the expected Closing Date, BowX will delist the BowX Class A Common Stock from the Nasdaq, effective as of no later than the Effective Time, and obtain approval for the listing of such shares on the NYSE from and after the Effective Time; |
• | during the Interim Period, not, and cause its subsidiaries not to, and instruct its and their representatives not to, initiate or engage in any negotiations or enter into any agreements for certain alternative transactions, approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any offer or proposal that constitutes or could reasonably be expected to result in or lead to an offer for an alternative transaction, or propose, resolve or agree to do any of the foregoing or otherwise knowingly facilitate any such inquiries, proposals, discussions, or negotiations or any effort or attempt by any Person to make an offer for an alternative transaction, and to terminate any such negotiations ongoing as of the date of the Merger Agreement; |
• | subject to the terms of BowX’s governing documents, take all such action within its power as may be necessary or appropriate such that immediately following the Effective Time: |
• | the board of directors of New WeWork will consist of nine directors, which will initially be comprised of (i) three director nominees (the “SBG Representatives”) designated by SBWW, (ii) one director nominee (the “SVF Representative”) designated by SVFE, (iii) one director nominee (the “PIPE Representative”) designated by Insight Partners, (iv) one director nominee (the “BowX Representative”) to be designated by BowX, (v) one director nominee (the “Benchmark Capital Representative”) designated by Benchmark Capital Partners, (vi) the Chief Executive Officer of the Company (the “CEO Director”), and (vii) one director nominee to be mutually agreed by the parties. |
• | Starwood Capital will be entitled to one (1) board observer; |
• | the board of directors of New WeWork will have a majority of “independent” directors for the purposes of the NYSE or Nasdaq, as applicable, each of whom will serve in such capacity in accordance with the terms of the governing documents of New WeWork following the Effective Time; and |
• | the initial officers of New WeWork will be as set forth in WeWork’s disclosure letter, who will serve in such capacity in accordance with the terms of the governing documents of New WeWork following the Effective Time; |
• | after the Effective Time, indemnify and hold harmless each present and former director, officer and employee of WeWork and BowX and each of their respective subsidiaries against any costs, expenses, judgments, fines, losses, claims, damages or liabilities incurred in connection with any legal proceeding arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, to the fullest extent that would have been permitted under applicable law and the applicable governing documents to indemnify such person; (i) maintain, and cause its subsidiaries to maintain for a period of not less than six years from the Effective Time provisions in its governing documents and those of its |
subsidiaries concerning the indemnification and exoneration of WeWork and its subsidiaries’ former and current officers, directors, employees and agents that are no less favorable to those persons than as contemplated by the applicable governing documents of WeWork immediately prior to the Effective Time and (ii) not amend, repeal, or otherwise modify such provisions in any respect that would adversely affect the rights of those persons thereunder, in each case, except as required by law; |
• | WeWork will purchase, at or prior to the Closing, and both BowX and New WeWork will maintain, or cause to be maintained, in effect for a period of six (6) years immediately following the Effective Time, without any lapse in coverage, prepaid and noncancelable “tail” insurance providing directors’ and officers’ liability insurance coverage for the benefit of the directors and officers of BowX (the “BowX D&O Tail Insurance”). The BowX D&O Tail Insurance will provide coverage on terms (with respect to scope of coverage, limits and retentions) that are substantially the same as (and no less favorable in the aggregate to the Persons covered thereby) the coverage provided under BowX’s current directors’ and officers’ liability insurance policies as of the date of the Merger Agreement; provided that New WeWork will not be required to pay an aggregate premium for the BowX D&O Tail Insurance in excess of (i) two hundred percent (200%) of the annual premium paid for the BowX’s current directors’ and officers’ liability insurance policies as of the date of the Merger Agreement if Closing occurs prior to August 5, 2021, or (ii) two hundred fifty percent (250%) of the annual premium paid for the BowX’s current directors’ and officers’ liability insurance policies as of the date of the Merger Agreement if Closing occurs on or after August 5, 2021, (the “BowX Maximum Amount”); provided further |
• | New WeWork will purchase and maintain, at its cost and expense, in effect for a period of six (6) years immediately following the Effective Time, without any lapse in coverage, directors’ and officers’ liability insurance coverage with respect to claims arising from acts, omissions, facts or events that occurred at or before the Effective Time, for the benefit of Persons covered by such policies currently maintained by WeWork as of the date of this Agreement (the “WeWork D&O Insurance”). The WeWork D&O Insurance will provide coverage on terms (with respect to scope of coverage, limits and retentions) that are substantially the same as (and not less favorable in the aggregate to the Persons covered thereby) the coverage provided under the WeWork’s current directors’ and officers’ liability insurance policies as of the date of the Merger Agreement; provided that the Company will not be required to pay for any annual period of the WeWork D&O Insurance an aggregate premium in excess of three hundred fifty (350%) of the aggregate premium paid for WeWork’s current directors’ and officers’ liability insurance policies as of the date of this Agreement (the “WeWork Maximum Amount”); provided further |
• | on the Closing Date, enter into customary indemnification agreements reasonably satisfactory to each of WeWork and BowX with the post-Closing directors and officers of New WeWork, which indemnification agreements will continue to be effective following the Closing; |
• | from the date of the Merger Agreement through the Effective Time, keep current and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable law; |
• | except as otherwise approved by WeWork (which approval will not be unreasonably withheld, conditioned or delayed) or as would not increase conditionality or impose any new obligation on WeWork or BowX, reduce the PIPE Investment Amount or the subscription amount under any Subscription Agreement or reduce or impair the rights of BowX or the third-party beneficiary rights of WeWork under any PIPE Subscription Agreement, not permit any amendment or modification to be made to, any waiver (in whole or in part) of, or provide consent to modify (including consent to terminate), any provision or remedy under, or any replacements of, any of the PIPE Subscription Agreements, in each case, other than any assignment or transfer contemplated therein or expressly permitted thereby (without any further amendment, modification or waiver to such assignment or transfer provision) and so long as the initial party to such Subscription Agreement remains bound by its obligations with respect thereto in the event that the transferee or assignee, as applicable, does not comply with its obligations to consummate the purchase of shares of New WeWork Common Stock contemplated thereby; |
• | use its reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that it deems to be proper or advisable to consummate the transaction contemplated by the PIPE Subscription Agreements on the terms described therein, including using its reasonable best efforts to enforce its rights under the PIPE Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) New WeWork the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms; |
• | prior to the Closing Date, promptly notify and keep WeWork reasonably informed of the status of any litigation brought or, to a party’s knowledge, threatened in writing against a party or its board of directors by any of such party’s stockholders in connection with the Merger Agreement, any Ancillary Agreement or the transactions contemplated therein, and will keep the other party reasonable informed on a current basis with respect to any such litigation and provide the other party with the opportunity to participate in the defense of such litigation and will not settle or any such litigation without the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed); and |
• | Promptly following the Closing, BowX will cause the Second Merger to be consummated in accordance with the terms of the Second Merger Agreement by filing the certificate of merger between Merger Sub II and WeWork (the “Second Certificate of Merger”) with the Secretary of State of the State of Delaware, with the Second Merger becoming effective upon the effectiveness of the filing of the Second Certificate of Merger or at such later time as may be agreed by BowX and the Company in writing and specified in the Second Certificate of Merger (the “Second Merger Effective Time”). At the Second Merger Effective Time, WeWork will be merged with and into Merger Sub II. As a result of the Second Merger, the separate corporate existence of WeWork will cease and Merger Sub II will continue as the surviving entity of the Second Merger. |
• | subject to confidentiality obligations that may be applicable to information furnished to WeWork or any of its subsidiaries by third parties and except for any information that is subject to attorney-client privilege, and to the extent permitted by applicable law, afford BowX and its accountants, counsel and other representatives reasonable access during the Interim Period for the purpose of consummating the transactions contemplated by the Merger Agreement, in such manner as to not materially interfere with the ordinary course of business of WeWork and its Subsidiaries, to all of WeWork’s properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and furnish such representatives with all financial and operating data and other information concerning the affairs of WeWork and its subsidiaries that are in the possession of WeWork or its subsidiaries as such representatives may reasonably request; |
• | if the Effective Time has not occurred prior to May 14, 2021, as soon as reasonably practicable following May 14, 2021, deliver to BowX the unaudited condensed consolidated balance sheets and statements of operations and comprehensive loss, stockholders’ deficit, and cash flow of the Company and its Subsidiaries as of and for the three-month period ended March 31, 2021, (the “Q1 Financial Statements”), which comply with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act applicable to a registrant; provided Financial Statements |
• | as of or prior to the Closing, use reasonable best efforts to terminate, assign, transfer, convey or otherwise dispose of, or cause the termination, assignment, transfer, conveyance or disposal of, the Affiliate Agreements set forth on Section 6.4 of the WeWork Disclosure Letter effective as of or prior to the Closing without further liability to BowX, WeWork, or any of WeWork’s subsidiaries; and |
• | from the date of the Merger Agreement until the Closing Date or, if earlier, the termination of the Merger Agreement in accordance with Article X ( Termination/Effectiveness non-public information or data concerning WeWork or any WeWork’s subsidiaries to any Person relating to, any inquiry, offer or proposal that constitutes or could reasonably be expected to result in or lead to certain alternative transactions or afford to any Person access to the business, properties, assets or personnel of WeWork or any of the WeWork’s subsidiaries in connection with an offer or proposal that constitutes or could reasonably be expected to result in or lead to an alternative transaction, (ii) enter into any acquisition agreement, merger agreement or similar definitive agreement, or any letter of intent, memorandum of understanding or agreement in principle, or any other agreement relating to an alternative transaction, (iii) grant any waiver, amendment or release under any confidentiality agreement or the anti-takeover laws of any state, in each case, in connection with certain alternative transactions, (iv) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any offer or proposal that constitutes or could reasonably be expected to result in or lead to certain alternative transactions or (v) propose, resolve or agree to do any of the foregoing or otherwise knowingly facilitate any such inquiries, proposals, discussions, or negotiations or any effort or attempt by any Person to make an offer for certain alternative transactions. From and after the date hereof, WeWork will, and will instruct its officers and directors to, and WeWork will instruct and use reasonable best efforts to cause its representatives, its subsidiaries and their respective representatives to, immediately cease and terminate all discussions and negotiations with any Persons that may be ongoing with respect to certain alternative transactions (other than BowX and its representatives). |
• | Each of BowX and WeWork will (and, to the extent required, will cause its affiliates to) comply promptly, but in no event later than ten business days after the date of the Merger Agreement, with the notification and reporting requirements of the HSR Act, and will promptly submit any notification required to obtain all consents, approvals and authorizations set forth in the WeWork Disclosure Letter, including a filing with the Mexican Federal Economic Competition Commission (the Comisión Federal de Competencia Económica, or “ COFECE |
• | Each of BowX and WeWork will substantially comply with any information or document requests with respect to antitrust matters as contemplated by the Merger Agreement. |
• | Each of BowX and WeWork will (and, to the extent required, will cause its affiliates to) (x) request early termination of any waiting period or periods under the HSR Act (unless any announcement from the applicable governmental authorities to the effect that early termination of any waiting period under the HSR Act is temporarily suspended remains in effect) and exercise its reasonable best efforts to (i) obtain termination or expiration of the waiting period or periods under the HSR Act and (ii) prevent the entry, in any legal proceeding brought by an antitrust authority or any other person, of any governmental order which would prohibit, make unlawful or delay the consummation of the transactions contemplated by the Merger Agreement and (y) take certain other actions to cooperate to avoid any governmental order from an antitrust authority that would delay, enjoin, prevent, restrain or otherwise prohibit the consummation of the First Merger, including sharing relevant information with the other parties thereto for such purposes and each pay one-half of any applicable antitrust filing fees (subject to, as applicable, a requirement to obtain WeWork’s prior written consent with respect to certain such actions identified above as contemplated by the Merger Agreement). |
• | BowX and WeWork will jointly prepare and BowX will file with the SEC the proxy statement/prospectus in connection with the registration under the Securities Act of the shares of New WeWork Common Stock that constitute the Aggregate Merger Consideration. |
• | Each of BowX and WeWork will use its reasonable best efforts to cause the proxy statement/prospectus statement to comply with the rules and regulations promulgated by the SEC, to have the Registration Statement (as defined below) declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the transactions contemplated by the Merger Agreement |
• | BowX will, as promptly as practicable after the registration statement is declared effective under the Securities Act, (i) disseminate proxy statement to stockholders of BowX, (ii) give notice, convene and hold a meeting of the stockholders to vote on the Transaction Proposals, in each case in accordance with its governing documents then in effect and Section 710 of the NYSE Listing Rules or Nasdaq Listing Rule 5620(b), as applicable, for a date no later than 30 business days following the date the registration statement is declared effective, and (iii) solicit proxies from the stockholders of BowX to vote in favor of the Transaction Proposals. |
• | The board of directors of BowX has agreed not to withdraw, amend, qualify or modify its recommendation to the stockholders of BowX that they vote in favor of the Transaction Proposals (a “BowX Modification in Recommendation”). To the fullest extent permitted by applicable law, (x) BowX’s obligations to establish a record date for, duly call, give notice of, convene and hold the BowX stockholder’s meeting will not be affected by any BowX Modification in Recommendation and (y) BowX agrees to establish a record date for, duly call, give notice of, convene and hold the BowX stockholders’ meeting and submit for approval the Transaction Proposals. BowX may only adjourn the BowX stockholders’ meeting (i) to solicit additional proxies for the purpose of obtaining the BowX Stockholder Approval, (ii) for the absence of a quorum and (iii) to allow reasonable additional time for the filing or mailing of any supplemental or amended disclosure that BowX has determined in good faith after consultation with outside legal counsel is required under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by BowX stockholders prior to the BowX stockholders’ meeting; provided that the BowX stockholders’ meeting (x) may not be adjourned to a date that is more than fifteen (15) days after the date for which the BowX stockholders’ meeting was originally scheduled (excluding any adjournments required by applicable Law) and (y) will not be held later than three (3) business days prior to October 31, 2021. BowX agrees that it will provide the holders of shares of BowX Class A Common Stock the opportunity to elect redemption of such shares of BowX Class A Common Stock in connection with the BowX stockholders’ meeting, as required by BowX’s Governing Documents. |
• | WeWork will use its reasonable best efforts to solicit and obtain the requisite stockholder approval necessary to consummate the Merger Agreement and the transactions contemplated thereby, including |
the Mergers (the “WeWork Stockholder Approvals”), either by (i) irrevocable written consent of each of the Requisite Company Stockholders (as defined in the Merger Agreement) promptly following the time at which the registration statement will have been declared effective under the Securities Act and delivered or otherwise made available to stockholders or (ii) in the event WeWork is unable to obtain such written consent, by calling and holding a meeting of the stockholders of WeWork for the purpose of voting solely upon the adoption of the Merger Agreement and the transactions contemplated thereby, including the Mergers, as soon as reasonably practicable after the registration statement is declared effective under the Securities Act. |
• | As promptly as practicable after the execution of the Merger Agreement, WeWork (with the assistance and cooperation of BowX as reasonably requested) will prepare an information statement relating to the action to be taken by WeWork’s stockholders pursuant to the written consent or by vote at a such meeting of the stockholders of the Company (the “Consent Solicitation Statement”). As promptly as practicable after the date on which the registration statement becomes effective, WeWork will deliver the Consent Solicitation Statement to its stockholders. WeWork will, through its board of directors, recommend to its stockholders (A) the adoption and approval of the Merger Agreement in accordance with applicable Law, (B) the adoption and approval of any other proposals as reasonably agreed by BowX and WeWork to be necessary or appropriate in connection with the transactions contemplated hereby and (C) in the event WeWork is not able to obtain written consent, adjournment of such meeting of the WeWork Stockholders, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing, and include such recommendation in the Consent Solicitation Statement. The board of directors of WeWork will not withdraw, amend, qualify or modify its recommendation to the stockholders of WeWork that they vote in favor of the Condition Precedent Proposals (a “WeWork Modification in Recommendation”). To the fullest extent permitted by applicable Law, WeWork’s obligations to establish a record date for and obtain the written consent, or to establish a record date for, duly call, give notice of, convene and hold such a meeting of the stockholders of the WeWork, as applicable, will not be affected by any WeWork Modification in Recommendation. |
• | BowX and WeWork will each, and will each cause their respective subsidiaries to use reasonable best efforts to obtain all material consents and approvals of third parties that any of BowX, WeWork, or their respective affiliates are required to obtain in order to consummate the Mergers. |
• | Each of WeWork and BowX will, prior to the Closing, take all such steps as may be required (to the extent permitted under applicable law) to cause any dispositions of shares of WeWork Capital Stock or acquisitions of shares of New WeWork Common Stock (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities) resulting from the transactions contemplated by the Merger Agreement by each individual who may become subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with the transactions contemplated thereby to be exempt under Rule 16b-3 promulgated under the Exchange Act. |
• | WeWork and BowX will each, and each will cause their respective subsidiaries and its and their representatives to, prior to the Closing, reasonably cooperate in a timely manner in connection with any financing arrangement the parties mutually agree to seek in connection with the transactions contemplated by the Merger Agreement. |
• | BowX will use its reasonable best efforts to, and will instruct its financial advisors to, keep WeWork and its financial advisors reasonably informed with respect to the PIPE Investment and the trading of the shares of New WeWork Common Stock during the period commencing on the date of announcement of the Merger Agreement or the transactions contemplated thereby until the Closing Date. |
• | the Condition Precedent Approvals will have been obtained; |
• | WeWork Stockholder Approval will have been obtained; |
• | the registration statement of which this proxy statement/prospectus forms a part (the “Registration Statement”) will have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn; |
• | the waiting period or periods under the HSR Act applicable to the transactions contemplated by the Merger Agreement, or the Ancillary Agreements, will have expired or been terminated; |
• | if a merger control filing is required by COFECE, COFECE will have provided clearance of the transactions contemplated by the Merger Agreement (which was provided on July 1, 2021); |
• | there will not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award (entered by or with any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal (a “Governmental Order”), in each case, to the extent such governmental authority has jurisdiction over the parties to the Merger Agreement and the transactions contemplated thereby), statute, rule or regulation enjoining or prohibiting the consummation of the First Merger; |
• | BowX will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the payment of the aggregate amount payable following the election of eligible (as determined in accordance with BowX’s governing documents) holder of BowX Class A Common Stock to redeem all or a portion of the shares of BowX Class A Common Stock held by such holder at a per-share price, payable in cash, equal to a pro rata share of the aggregate amount on deposit in the trust account (including any interest earned on the funds held in the trust account) (as determined in accordance with BowX’s governing documents) in connection with the Condition Precedent Proposals; and |
• | the shares of New WeWork Common Stock to be issued in connection with the First Merger will have been approved for listing on Nasdaq or, if requested by WeWork, the NYSE. |
• | certain of the representations and warranties of WeWork pertaining to the capitalization of WeWork will be true and correct in all but de minimis respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all but de minimis respects at and as of such date; |
• | each of certain fundamental representations of the Company (other than those portions of the capitalization representations referenced in the bullet above) (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect and WeWork Material Adverse Effect or any similar qualification or exception) will be true and correct in all material respects, in each case as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date; |
• | each of the remaining representations and warranties of WeWork contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception, and other than the representations and warranties of WeWork in Section 4.24 of the Merger Agreement relating to the absence of a WeWork Material Adverse Effect) will be true and correct as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a WeWork Material Adverse Effect; and |
• | each of the covenants to be performed by WeWork as of or prior to the Closing will have been performed in all material respects; provided |
• | each of the representations and warranties of BowX regarding its capitalization, as provided for in the Merger Agreement, will be true and correct in all but de minimis respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all but de minimis respects at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger Agreement; |
• | each of the other representations and warranties of BowX contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date, except for inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of BowX or Merger Sub to perform their obligations under the Merger Agreement; |
• | each of the covenants of BowX to be performed as of or prior to the Closing will have been performed in all material respects; and |
• | the Minimum Available Cash Condition. For more information, see the section entitled “— Minimum Available Cash Condition |
• | by written consent of WeWork and BowX; |
• | by WeWork or BowX if any governmental order has become final and nonappealable which has the effect of making consummation of the First Merger illegal or otherwise preventing or prohibiting the First Merger; |
• | by WeWork or BowX if the Condition Precedent Approvals have not been obtained by reason of the failure to obtain the required vote at a meeting of BowX’s stockholders duly convened therefor or at any adjournment thereof; |
• | by WeWork if there has been a BowX Recommendation Modification with respect to any of the Condition Precedent Proposals; |
• | by BowX if there has been a WeWork Recommendation Modification with respect to any of the Condition Precedent Proposals; |
• | by written notice to WeWork from BowX in the event of certain uncured breaches on the part of WeWork or if the Closing has not occurred on or before October 31, 2021, unless BowX is in material breach of the Merger Agreement; provided that the applicable date will be extended automatically once for sixty (60) days, to December 29, 2021, if all of the conditions set forth in Section 9.1, Section 9.2 and Section 9.3 of the Merger Agreement have been satisfied or waived as of October 31, 2021, other than (i) the condition, set forth above, that if a merger control filing is required by COFECE, COFECE has provided clearance of the transactions contemplated by the Merger Agreement (which was provided on July 1, 2021), and (ii) those conditions which by their terms would be satisfied at the Closing; |
• | by BowX, if WeWork has not obtained approval from its stockholders of the Merger Agreement and the transactions contemplated within seven business days after the Registration Statement has been declared effective by the SEC and delivered or otherwise made available to stockholders; provided however |
• | by written notice to BowX from WeWork in the event of certain uncured breaches on the part of BowX or Merger Sub or if the Closing has not occurred on or before October 31, 2021, unless WeWork is in material breach of the Merger Agreement; provided that the applicable date will be extended automatically once for sixty (60) days, to December 29, 2021, if all of the conditions set forth in Section 9.1, Section 9.2 and Section 9.3 of the Merger Agreement have been satisfied or waived as of October 31, 2021, other than (i) the condition, set forth above, that if a merger control filing is required by COFECE, COFECE has provided clearance of the transactions contemplated by the Merger Agreement (which was provided on July 1, 2021), and (ii) those conditions which by their terms would be satisfied at the Closing. |
• | The authorized number of directors on the board of directors of New WeWork will be nine; |
• | Three directors will be designated by SBWW, who initially will be Michel Combes, Marcelo Claure and Véronique Laury, with Mr. Claure initially serving as executive chairman of the board; |
• | One director will be designated by SVFE, who initially will be Kirthiga Reddy; |
• | One director will be designated by Benchmark Capital Partners, who initially will be Bruce Dunlevie; |
• | One director will be designated by Insight Partners, who initially shall be Deven Parekh; |
• | One director will be designated by the Sponsor, who initially will be Vivek Ranadivé; |
• | The Chief Executive Officer of New WeWork, who initially shall be Sandeep Mathrani; and |
• | Jeff Sine. |
• | If 25% or greater of New WeWork Class A and Class C Common Stock, three SBWW Directors; |
• | If less than 25% but greater than or equal to 15% of New WeWork Class A and Class C Common Stock, two SBWW Directors; |
• | If less than 15% but greater than or equal to 1% of New WeWork Class A and Class C Common Stock, one SBWW Director; |
• | If less than 1% of New WeWork Class A and Class C Common Stock, zero SBWW Directors. |
• | The WeWork Business |
• | Large and Growing Addressable Market. |
the fallout from the COVID-19 pandemic continues to accelerate the shift away from traditional office space, information reviewed by the BowX board of directors suggested that flexible workspaces could potentially represent up to 22.2% of the U.S. office real-estate market by 2030, positioning WeWork for substantial revenue growth, even assuming WeWork’s market share of the flexible workspace market share remains constant. WeWork also plans to continue to diversify across geographies, while maintaining a strong presence in the United States. |
• | Size. |
• | Visible revenue |
• | Strong competitive position |
• | Proprietary technology platform |
• | Visionary management team |
• | Scaled, high-growth asset with path to profitability |
• | Public readiness |
• | Appropriate valuation |
• | M&A platform |
• | The WeWork Business |
• | Large and Growing Addressable Market. COVID-19 pandemic continues to accelerate the shift away from traditional office space, information reviewed by the BowX board of directors suggested that flexible workspaces could potentially represent up to 22.2% of the U.S. office real-estate market by 2030, positioning WeWork for substantial revenue growth, even assuming WeWork’s market share of the flexible workspace market share remains constant. WeWork also plans to continue to diversify across geographies, while maintaining a strong presence in the United States. |
• | Portfolio of Product Offerings. pay-as-you-go co-location. |
• | Platform Business Opportunity |
• | Experienced and Proven Management Team Management of New WeWork Following the Business Combination — Executive Officers |
• | Attractive Initial Valuation pre-transaction enterprise value of $8.8 billion. |
• | Results of Due Diligence |
• | extensive virtual meetings and calls with WeWork’s management team regarding its operations, business plan and the proposed transaction; and |
• | review of materials related to WeWork and its business, made available by WeWork and deemed appropriate for review in the context of the size of the transaction and the scope of WeWork’s operations, including financial statements, material contracts, key metrics and performance indicators, benefit plans, employee compensation and labor matters, intellectual property matters, real property matters, information technology, privacy and personal data, litigation information, environmental matters and other regulatory and compliance matters and other legal and business information. |
• | Continued Ownership By Current WeWork Stockholders |
in WeWork, which would represent approximately 82.4% of the pro forma ownership of the combined company after Closing, after giving effect to the PIPE Investment and assuming none of BowX’s current public shareholders exercise their redemption rights in connection with the Business Combination. See “ BCA Proposal—Ownership of New WeWork After the Closing |
• | Stockholder Liquidity. |
• | PIPE Investment top-tier institutional investors, are investing an additional $800 million in the combined company pursuant to their participation in the PIPE Investment. The BowX board of directors considered this a strong sign of confidence in WeWork following the Business Combination and the benefits expected to be realized as a result of the Business Combination. |
• | Use of Proceeds. |
• | Terms of the Merger Agreement BCA Proposal |
• | Other Alternatives |
• | Potential Inability to Complete the Merger |
• | Potential Stockholder Redemptions. |
• | Liquidation of BowX. |
• | WeWork’s Business Risks |
the BowX board of directors considered that there were risks associated with successful implementation of WeWork’s long term business plan and strategy and WeWork realizing the anticipated benefits of the Business Combination on the timeline expected or at all, including due to factors outside of the parties’ control such as the potential impact of the COVID-19 pandemic and related macroeconomic uncertainty. The BowX board of directors considered that the failure of any of these activities to be completed successfully may decrease the actual benefits of the Business Combination and that BowX shareholders may not fully realize these benefits to the extent that they expected to retain the public shares following the completion of the Business Combination. For additional description of these risks, please see the section entitled “Risk Factors |
• | Post-Business Combination Corporate Governance Organizational Documents Proposals |
• | Limitations of Review |
• | No Survival of Remedies for Breach of Representations, Warranties or Covenants of WeWork |
• | Litigation |
• | Fees and Expenses |
• | Exclusivity/Non-Solicit. non-solicit provision prohibiting BowX from initiating, discussing, or making certain proposals which could lead to an alternative business combination. |
• | Minority Position. |
• | Risk Factors. Risk Factors |
• | Diversion of Management |
(i) | revenues and expenses based on historical operating trends; |
(ii) | average revenue per member, estimated based on historic trends by region and projected using a ~2-3% annual growth rate tied to inflation; |
(iii) | membership levels and occupancy rate, estimated assuming a recovery from COVID-19 beginning in the second half of 2021, with longer-term forecasts based on historical occupancy curves; |
(iv) | the growth of the business, estimated based on future workstation projections; |
(v) | cost savings from our restructuring efforts and lease portfolio optimization; and |
(vi) | the impact of new business lines, including WeWork All Access, Marketplace, and Platform, estimated based on growth of these business lines to date, and expectations of increased desire for flexible workspaces broadly as the impacts of the COVID-19 pandemic subside. |
(i) | expectations regarding average revenue per member were reduced in earlier periods, particularly in the United States and Canada, due to a delay in the recovery of our business from the effects of the COVID-19 pandemic; |
(ii) | expectations regarding membership levels for the second half 2021 were reduced due to a delay in the recovery of the Company’s business from the effects of the COVID-19 pandemic; |
(iii) | workstation capacity was decreased based on continued progress from the Company’s restructuring efforts, which we expect will result in reduced expenses; |
(iv) | projected revenue was increased for new business lines, estimated based on sales and market data from the first half of 2021; and |
(v) | the results of our Israel locations, previously included in our Initial Projections, were removed because we closed a franchise transaction on June 1, 2021 to divest these Israel locations, which are no longer consolidated in the Company’s results of operations and are excluded from the Current Projections from June 1, 2021 and onward. |
2019A |
2020A |
2021E |
2022E |
2023E |
2024E |
|||||||||||||||||||
Physical Workstations |
697k | 865k | 730k | 823k | 894k | 971k | ||||||||||||||||||
Physical Memberships |
517k | 380k | 541k | 706k | 776k | 839k | ||||||||||||||||||
Physical Occupancy |
74 | % | 44 | % | 74 | % | 86 | % | 87 | % | 86 | % | ||||||||||||
All Access Memberships |
— | 7k | 50k | 67k | 131k | 134k | ||||||||||||||||||
Total Physical and All Access Memberships |
517k | 387k | 591k | 772k | 907k | 937k | ||||||||||||||||||
Total Occupancy |
74 | % | 45 | % | 81 | % | 94 | % | 101 | % | 100 | % | ||||||||||||
Core + New Leased Net ARPM (2) |
$ | 510 | $ | 494 | $ | 463 | $ | 494 | $ | 528 | $ | 547 |
(1) | Excludes ChinaCo, IndiaCo. Israel is included only with respect to Core + New Leased Net ARPM in 2019A and 2020A and is otherwise excluded. |
(2) | Net ARPM is equal to net leased revenue divided by cumulative leased physical memberships. |
Revenue and Adjusted EBITDA (1) |
||||||||||||||||||||||||
($ in Millions) |
2019A |
2020A |
2021E |
2022E |
2023E |
2024E |
||||||||||||||||||
Revenue |
$ | 3,230 | $ | 3,210 | $ | 3,246 | $ | 4,584 | $ | 5,822 | $ | 6,967 | ||||||||||||
Adjusted EBITDA (3) |
($ | 1,943 | ) | ($ | 1,754 | ) | ($ | 909 | ) | $ | 485 | $ | 1,359 | $ | 1,988 |
Revenue and Adjusted EBITDA (2) |
||||||||||||||||||||||||||||
($ in Millions) |
2019A |
2020A |
1H 2021A |
2H 2021E |
2022E |
2023E |
2024E |
|||||||||||||||||||||
Revenue |
$ | 3,230 | $ | 3,210 | $ | 1,191 | $ | 1,464 | $ | 4,348 | $ | 5,650 | $ | 6,785 | ||||||||||||||
Adjusted EBITDA (3) |
($ | 1,943 | ) | ($ | 1,754 | ) | ($ | 895 | ) | ($ | 568 | ) | $ | 243 | $ | 1,256 | $ | 1,996 |
(1) | Excluding ChinaCo and IndiaCo. |
(2) | Excluding ChinaCo and IndiaCo. Excluding Israel from June 1, 2021 and onward. |
(3) | We supplement our GAAP results by evaluating Adjusted EBITDA, a non-GAAP measure. We define “Adjusted EBITDA” as net loss before income tax (benefit) provision, interest and other (income) expense, depreciation and amortization expense, stock-based compensation expense, expense related to stock-based payments for services rendered by consultants, income or expense relating to the changes in fair value of assets and liabilities remeasured to fair value on a recurring basis, expense related to costs associated with mergers, acquisitions, divestitures and capital raising activities, legal, tax and regulatory reserves or settlements, significant legal costs incurred by the Company in connection with the Company’s regulatory investigations and litigation regarding the Company’s 2019 withdrawn initial public offering and the related execution of the SoftBank Transactions, net of any insurance or other recoveries, significant non-ordinary course asset impairment charges and, to the extent applicable, any impact of discontinued operations, restructuring charges, and other gains and losses on operating assets. A reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA is set forth in the section entitled “WeWork’s Management’s Discussion and Analysis of Financial Condition and Results of Operations–Non-GAAP Financial Measures |
Sources ($ in millions) |
Uses ($ in millions) |
|||||||||
Proceeds from trust account |
$ | 483 | Cash to New WeWork Balance Sheet | $ | 1,873 | |||||
Existing Pre-Deal Cash on Balance Sheet |
665 | Estimated Total Fees and Expenses | 75 | |||||||
Proceeds from PIPE Investment |
800 | |||||||||
Total sources |
$ |
1,948 |
Total uses |
$ |
1,948 |
Sources ($ in millions) |
Uses ($ in millions) |
|||||||||
Proceeds from trust account (1) |
$ | 0 | Cash to New WeWork Balance Sheet | $ | 1,390 | |||||
Existing Pre-Deal Cash on Balance Sheet |
665 | Estimated Total Fees and Expenses | 75 | |||||||
Proceeds from PIPE Investment |
800 | |||||||||
|
|
|
|
|||||||
Total sources |
$ |
1,465 |
Total uses |
$ |
1,465 |
(1) | Assumes that all cash held in trust account will be used to fund redemption of 100% of public stock. |
* | Figures have been rounded for ease of presentation and may not sum due to rounding |
Share Ownership in New WeWork (1) | ||||||||||||||
No Additional Redemptions |
Assuming Maximum Redemption | |||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares | |||||||||||
WeWork Stockholders |
655,300,000 | 82.7 | % | 655,300,000 | 87.4% | |||||||||
Initial Stockholders |
9,075,000 | 1.1 | % | 9,075,000 | 1.2% | |||||||||
BowX’s Public Stockholders (excluding PIPE Shares) |
48,300,000 | 6.1 | % | 5,068,902 | 0.7% | |||||||||
PIPE Investors |
80,000,000 | 10.1 | % | 80,000,000 | 10.7% | |||||||||
Total |
792,675,000 | 100 | % | 749,443,902 | 100% |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. In the event that shares of BowX Class A Common Stock are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will fall in between the two scenarios. For example, if we assume that the number of shares of BowX Class A Common Stock redeemed in connection with the Business Combination total 21,615,549, BowX public stockholders will hold a total of 26,684,451 shares of New WeWork Common Stock at Closing, representing a 3.5% ownership interest. |
Share Ownership in New WeWork (1) |
||||||||||||||||
No Additional Redemptions |
Assuming Maximum Redemption |
|||||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
WeWork Stockholders |
655,300,000 | 80.3 | % | 655,300,000 | 84.7 | % | ||||||||||
Initial Stockholders |
16,848,333 | 2.1 | % | 16,848,333 | 2.2 | % | ||||||||||
BowX’s Public Stockholders (excluding PIPE Shares) |
64,400,000 | 7.9 | % | 21,168,902 | 2.7 | % | ||||||||||
PIPE Investors |
80,000,000 | 9.8 | % | 80,000,000 | 10.3 | % | ||||||||||
Total |
816,548,333 | 100 | % | 773,317,235 | 100 | % |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. In the event that shares of BowX Class A Common Stock are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will fall in between the two scenarios. For example, if we assume that the number of shares of BowX Class A Common Stock redeemed in connection with the Business Combination total 21,615,549, BowX public stockholders will hold a total of 42,784,451 shares of New WeWork Common Stock at Closing, representing a 5.4% ownership interest. |
Assuming No Redemptions (1) |
Assuming 50% Redemptions (2) |
Assuming Maximum Redemptions (3) |
||||||||||||||||||||||
Shares |
Value per Share (4) |
Shares |
Value per Share (5) |
Shares |
Value per Share (6) |
|||||||||||||||||||
Base Scenario (7) |
792,675,000 | $ | 10.00 | 771,059,451 | $ | 10.00 | 749,443,902 | $ | 10.00 | |||||||||||||||
Excluding Initial Stockholders (8) |
783,600,000 | 10.12 | 761,984,451 | 10.12 | 740,368,902 | 10.12 | ||||||||||||||||||
Exercising Public Warrants (9)(10) |
808,775,000 | 9.80 | 787,159,451 | 9.80 | 765,543,902 | 9.79 | ||||||||||||||||||
Exercising Private Warrants (9)(10) |
800,448,333 | 9.90 | 778,832,784 | 9.90 | 757,217,235 | 9.90 | ||||||||||||||||||
Exercising Warrants (9)(10) |
816,548,333 | 9.71 | 749,932,784 | 9.70 | 773,317,235 | 9.69 |
(1) | The figures in this table are presented only as illustrative examples and are based on the scenarios described below, which may be different from the actual amount of redemptions in connection with the Business Combination. |
(2) | Assumes the redemption of 21,615,549 shares of BowX Class A Common Stock in connection with the Business Combination, or half of the 43,231,098 shares redeemed in the maximum redemption scenario. |
(3) | Assumes the redemption of 43,231,098 shares of BowX Class A Common Stock in connection with the Business Combination. |
(4) | Based on a post-transaction equity value of New WeWork of $7.927 billion. |
(5) | Based on a post-transaction equity value of New WeWork of $7.711 billion, or $7.927 billion less the approximately $216.2 million that would be paid from the trust account to redeem 21,615,549 shares of BowX Class A Common Stock in connection with the Business Combination. |
(6) | Based on a post-transaction equity value of New WeWork of $7.494 billion, or $7.927 billion less the approximately $432.3 million that would be paid from the trust account to redeem 43,231,098 shares of BowX Class A Common Stock in connection with the Business Combination. |
(7) | Represents (a) the 655,300,000 shares of New WeWork Common Stock that would be issued to WeWork Stockholders assuming (i) the vesting of all shares of New WeWork Common Stock received in respect of the New WeWork Restricted Stock Awards, (ii) the vesting and net exercise of all in-the-money New WeWork Options for shares of New WeWork Common Stock and (iii) the vesting of all New WeWork Restricted Stock Units and the issuance of shares of New WeWork Common Stock in respect thereof, (b) the 80,000,000 shares of New WeWork Common Stock to be issued to the PIPE Investors, (c) the conversion of 9,075,000 shares of BowX Class B Common Stock held by the initial stockholders and (d) the public stock, less any redemptions described above. |
(8) | Represents the Base Scenario excluding the 9,075,000 shares of converted BowX Class B Common Stock held by the initial stockholders |
(9) | Represents the Base Scenario plus the full exercise of the public warrants and/or the private warrants |
(10) | Analysis does not account for exercise prices to be paid in connection with the exercise of warrants. |
(1) | Shares of New WeWork Class C Common Stock are held by the Partnership Class PI Common Unit holders identified below in this diagram (except in the case of The We Company PI L.P., the owners of which hold the shares of New WeWork Class C Common Stock corresponding to the Partnership Class PI Common Units held by The We Company PI L.P.). |
(2) | This person or entity (or, in the case of The We Company PI L.P., its owners) holds New WeWork Class C Common Stock identified above in this diagram. |
(3) | Following the Business Combination, Partnership Class PI Common Units can, at the election of the holder of the Partnership Class PI Common Units, be (a) converted into WeWork Partnerships Class A Common |
Units or (b) exchanged (along with the corresponding shares of New WeWork Class C Common Stock) for (at New WeWork’s election) shares of New WeWork Class A Common Stock or cash of an equivalent value. The economic interest represented by the Partnership Class PI Common Units varies based on the value of the WeWork Partnership and may be as high as 2.5%. For additional information, see the section entitled “ Certain Relationships and Related Person Transactions – WeWork Partnerships Profits Interest Units |
(4) | Adam Neumann beneficially owns 543,832 shares of New We Work Common Stock held, in the aggregate, by ANINCENTCO1 LLC, ANINCENTCO2 LLC and ANINCENTCO3 LLC, and beneficially owns 57,769,548 shares of New WeWork Common Stock held by WE Holdings LLC. Following the Business Combination, Adam Neumann will also hold 19,877,008 Partnership Class PI Common Units and an equal number of shares of New WeWork Class C Common Stock. |
• | the beneficial ownership of our initial stockholders of an aggregate of 12,075,000 shares of BowX Class B Common Stock and 7,773,000 private placement warrants, which shares and warrants would become worthless if BowX does not complete a business combination within the applicable time period, as our initial stockholders have waived any redemption right with respect to these shares. Our initial stockholders paid an aggregate of $25,000 for the BowX Class B Common Stock, and $11,660,000 for the private placement warrants, and such shares and warrants have an aggregate market value of approximately $ million and $ million, respectively, based on the closing price of BowX Class A Common Stock of $ on Nasdaq on , 2021, the record date for the special meeting of stockholders. Each of our officers and directors is a member of the Sponsor. Vivek Ranadivé and Murray Rode are the managing members of the Sponsor, and as such Messrs. Ranadivé and Rode have voting and investment discretion with respect to the BowX Common Stock and warrants held of record by the Sponsor; |
• | the anticipated continuation of Mr. Ranadivé as a director of New WeWork; |
• | the fact that our Sponsor, officers and directors have agreed not to redeem any of their shares in connection with a stockholder vote to approve the Business Combination; |
• | the fact that our initial stockholders, including our Sponsor, and our directors and officers, paid an aggregate of approximately $11,660,000 for their 7,773,333 private placement warrants to purchase shares of BowX Class A Common Stock and that such private placement warrants will expire worthless if a business combination is not consummated by August 7, 2022; |
• | the fact that our initial stockholders, including our Sponsor and its affiliates, who purchased Class B Common Stock and private placement warrants at the time of our IPO may experience a positive rate of return on their investment, even if our public shareholders experience a negative rate of return on their investment; |
• | that, at the Closing, we will enter into the Registration Rights Agreement, which provides for registration rights to the initial stockholders, including the Sponsor, and BowX’s directors and officers and their permitted transferees; |
• | the continued indemnification of current directors and officers of BowX and the continuation of directors’ and officers’ liability insurance after the Business Combination; |
• | the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses |
• | the fact that our Sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed. |
Existing Charter |
Proposed Charter | |||
Number of Authorized Shares (Proposal No. 2) | The Existing Charter provides that the total number of authorized shares of all classes of capital stock is 101,000,000 shares, each with a par value of $0.0001, consisting of (a) 100,000,000 shares of common stock, including (i) 87,500,000 shares of BowX Class A Common Stock, and (ii) 12,500,000 shares of BowX Class B Common Stock, and (b) 1,000,000 shares of preferred stock. | The Proposed Charter increases the total number of authorized shares of all classes of capital stock to 1,625,041,666 shares, consisting of (a) 1,500,000,000 shares of New WeWork Class A Common Stock, (b) 25,041,666 shares of New WeWork Class C Common Stock, and (c) 100,000,000 shares of NewWe Work Preferred Stock. | ||
See Article IV of the Existing Charter. |
See Article IV of the Proposed Charter. | |||
Removal of Class B common stock and creation of Class C common stock (Proposal No. 2) | The Existing Charter authorizes BowX Class B Common Stock, which votes alongside and is convertible into BowX Class A Common Stock pursuant to a conversion ratio defined therein. | The Proposed Charter authorizes New WeWork Class C Common Stock, which are “non-economic interests” in the company, without any rights to dividends or payments on liquidation, but with the right to vote one vote per share as a single class with the New WeWork Class A Common Stock on all matters unless otherwise required by law. | ||
See Article IV Section B.2 of the Existing Charter. |
See Article V Section B.2 of the Proposed Charter. | |||
SoftBank Holders Voting Restrictions (Proposal No. 3) | The Existing Charter does not apply any specific voting restrictions to BowX Class A Common Stock. | The Proposed Charter provides that, for a period of at least two years, the SoftBank Holders (as defined therein) will be restricted from exercising voting rights over more than 49.9% of the voting securities present (in person or by proxy) and voting at any stockholder meeting. |
Existing Charter |
Proposed Charter | |||
N/A |
See Article V Section 7 of the Proposed Charter. | |||
Director Election (Proposal No. 4) | The Existing Charter provides that holders of BowX Common Stock shall elect directors. It also provides that the board of directors be 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 directs that any vacancies on the board of directors, or new directorships, be filled exclusively by the affirmative vote of a majority of the directors then in office, not the stockholders, unless pursuant to rights under the Stockholders Agreement. As a result, BowX stockholders will not be entitled to elect directors in the future unless pursuant to rights under the Stockholders Agreement. | ||
See Article IV and Article VI Section J of the Existing Charter. |
See Article VI Section B of the Proposed Charter. | |||
Name (Proposal No. 5) | BowX Acquisition Corp. | WeWork Inc. | ||
See Article I of the Existing Charter. |
See Article I of the Proposed Charter. | |||
Purpose (Proposal No. 5) | The Existing Charter provides that the purpose of BowX is to engage in any lawful act or activity for which corporations may be organized under the DGCL. In addition to the powers and privileges conferred upon BowX by law and those incidental thereto, BowX shall possess and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment of the business or purposes of BowX, including, but not limited to, effecting a Business Combination (as defined therein). | The Proposed Charter provides that the purpose of New WeWork is to engage in any lawful act or activity for which a corporation may be organized under the DGCL. | ||
See Article III of the Existing Charter. |
See Article III of the Proposed Charter. | |||
Duration of Existence (Proposal No. 5) | The Existing Charter provides that if BowX does not consummate the Business Combination and fail to complete an initial business combination within 24 months of the consummation of the initial public offering (subject to the requirements of law), it will be required to dissolve and liquidate our trust account by returning the then remaining funds in such account to the public Stockholders. | The Proposed Charter deletes the liquidation provision in the Existing Charter and retains the default of perpetual existence under the DGCL. |
Existing Charter |
Proposed Charter | |||
See Article VI Section F of the Existing Charter. |
Default rule under the DGCL. | |||
Provisions Specific to a Blank Check Company (Proposal No. 5) | Under the Existing Charter, Article VI sets forth various provisions related to our operations as a blank check company prior to the consummation of an initial business combination (“IPO”). | The Proposed Charter deletes the provisions previously included as Article VI in the Existing Charter in their entirety because, upon consummation of the Business Combination, BowX will cease to be a blank check company. In addition, the provisions requiring that the proceeds from the IPO be held in a trust account until a business combination or liquidation of BowX and the terms governing BowX’s consummation of a proposed business combination will not be applicable following consummation of the Business Combination and thus will be deleted. | ||
See Article VI of the Existing Charter. |
N/A | |||
Forum for Actions Arising Under the Securities Act (Proposal No. 5) | Under the Existing Charter, Article X provides that the Court of Chancery in the State of Delaware and the federal district court for the District of Delaware shall have concurrent jurisdiction over any action arising under the Securities Act. | The Proposed Charter provides that, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. | ||
See Article X of the Existing Charter. |
See Article X of the Proposed Charter. |
• | The greater number of authorized shares (Proposal No. 2) of capital stock is desirable for New WeWork to have sufficient shares to complete the Business Combination. Absent the approval of this proposal (Proposal No. 2), there will not be a sufficient number of authorized shares of capital stock of BowX to issue the shares required to be issued in the Merger. Additionally, the BowX board of directors believes that it is important for New WeWork to have available for issuance a number of authorized shares sufficient to support its growth and to provide flexibility for future corporate needs (including, if needed, as part of financing for future growth acquisitions). The shares would be issuable for any proper corporate purpose, including future acquisitions, capital raising transactions consisting of equity or convertible debt, stock dividends or issuances under current and any future stock incentive plans, pursuant to which we may provide equity incentives to employees, officers and directors, as well as any shares issuable upon the exchange of Partnership Profits Interest Units and in satisfaction of the obligations under the WeWork Warrants, the First Warrant and the LC Warrant. The BowX board of directors believes that these additional shares will provide us with needed flexibility to issue shares in |
the future in a timely manner and under circumstances we consider favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance. BowX does not currently have any plans, proposals or arrangements, other than in connection with the Business Combination and the BowX Proposals contemplated herein, to issue any of the additional authorized shares of capital stock; however, New WeWork may decide to issue shares at any time, including shortly thereafter the consummation of the Business Combination, for any proper corporate purpose. |
• | The authorization of New WeWork Class C Common Stock (Proposal No. 2) is desirable in order to effectuate the Business Combination because the shares of this non-economic voting class issued in exchange for the WeWork Class C Common Stock will be associated with outstanding WeWork Partnerships Profits Interest Units as required by the Partnership Agreement. |
• | The voting restrictions with respect to SoftBank Holders, as defined in the Proposed Charter, (Proposal No. 3) were added to restrict the SoftBank Holders, for a period of at least two years, from exercising voting rights over more than 49.9% of the voting securities present (in person or by proxy) and voting in any stockholder vote. |
• | The additional changes to the Existing Charter (Proposal No. 5), including the name change from “BowX Acquisition Corp.” to “WeWork Inc.,” are necessary to adequately address the needs of New WeWork following the Closing. The elimination of certain provisions related to BowX’s status as a blank check company is desirable because these provisions will serve no purpose following the Business Combination. For example, these proposed amendments remove the requirement to dissolve BowX and allow it to continue as a corporate entity with perpetual existence following consummation of the Business Combination. Perpetual existence is the usual period of existence for corporations and the BowX board of directors believes it is the most appropriate period following the Business Combination. In addition, certain other provisions in the Existing Charter require that proceeds from BowX’s initial public offering be held in the trust account until a business combination or liquidation of BowX has occurred. These provisions cease to apply once the Business Combination is consummated. The revision to provide that, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act is desirable to assist New WeWork in avoiding multiple lawsuits in multiple jurisdictions regarding the same matter. The ability to require such claims to be brought in a federal district court will help to assure consistent consideration of the issues, the application of a relatively known body of case law and level of expertise and should promote efficiency and cost-savings in the resolutions of such claims. |
(i) | three (3) director nominees (the “SBG Representatives”) designated by SBWW, which SBG Representatives will initially be Michel Combes, Marcelo Claure and Véronique Laury, and will thereafter be designated, nominated and elected as contemplated by the Proposed Organizational Documents; |
(ii) | one (1) director nominee (the “SVF Representative”) designated by SVFE, which SVF Representative will initially be Kirthiga Reddy and will thereafter be designated, nominated and elected as contemplated by the Proposed Organizational Documents; |
(iii) | one (1) director nominee (the “PIPE Representative”) designated by Insight Partners, which PIPE Representative will initially be Deven Parekh and will thereafter be designated, nominated and elected as contemplated by the Proposed Organizational Documents; |
(iv) | one (1) director nominee (the “BowX Representative”) to be designated by the Sponsor, which BowX Representative will initially be Vivek Ranadivé and will thereafter be designated, nominated and elected as contemplated by the Proposed Organizational Documents; |
(v) | one (1) director nominee (the “Benchmark Capital Representative”) designated by Benchmark Capital Partners, which Benchmark Capital Representative will initially be Bruce Dunlevie and will thereafter be designated, nominated and elected as contemplated by the Proposed Organizational Documents; |
(vi) | the Chief Executive Officer of New WeWork (the “CEO Director”), who is currently Sandeep Mathrani; and |
(vii) | one (1) director nominee to mutually agreed by BowX and WeWork (the “Mutually Agreed Director”), which Mutually Agreed Director will initially be Jeff Sine and will thereafter be designated, nominated and elected as contemplated by the Proposed Organizational Documents. |
• | Stock Options and SARs |
deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. SARs entitle their holder, upon exercise, to receive from us an amount (which may be payable in cash or shares) equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a stock option or SAR may not be less than 100% of the fair market value of New WeWork Common Stock on the grant date (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain adjusted or substitute awards granted or adjusted in connection with a corporate transaction or subject to the 2021 Plan’s anti-dilution provisions discussed below under “Certain Transactions.” The term of a stock option or SAR may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders). Options which do not meet the requirements for ISO treatment will be NSOs. |
• | Restricted Stock |
• | RSUs |
• | Other Stock-Based Awards |
• | Stock Bonuses |
• | Cash Awards |
• | Non-Qualified Stock Options |
• | Incentive Stock Options |
exercise and otherwise satisfies the ISO requirements, the gain or loss (in an amount equal to the difference between the fair market value on the date of disposition and the exercise price) upon disposition of the stock will be treated as a capital gain or loss, and we will not be entitled to any deduction. If the holding period requirements are not met at the time of a disposition of the stock, the ISO will be treated as one that does not meet the requirements of the Code for ISOs and the participant will recognize compensation taxable as ordinary income in the year of the disposition equal to the lesser of (i) the excess of the amount realized upon the disposition over the exercise price, or (ii) the excess of the fair market value of the shares on the date the ISO is exercised over the exercise price. Any additional gain or loss on the disposition of the stock is treated as capital gain or capital loss. We or our subsidiaries or affiliates generally are not entitled to a federal income tax deduction upon either the exercise of an ISO or upon disposition of the shares acquired pursuant to such exercise, except to the extent that the participant recognizes ordinary income on disposition of the shares. |
• | Other Awards |
• | U.S. expatriates and former citizens or long-term residents of the United States; |
• | persons holding BowX Class A Common Stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated transaction; |
• | banks, insurance companies and other financial institutions; |
• | brokers, dealers or traders in securities; |
• | “controlled foreign corporations,” “passive foreign investment companies” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | persons subject to special tax accounting rules as a result of any item of gross income with respect to BowX Class A Common Stock being taken into account in an applicable financial statement; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | regulated investment companies or real estate investment trusts; |
• | tax-qualified retirement plans; and |
• | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds. |
• | an individual who is a citizen or resident of the United States, |
• | a corporation organized in or under the laws of the United States, any state thereof or the District of Columbia, |
• | an estate, the income of which is subject to U.S. federal income tax regardless of its source, or |
• | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (2) was in existence on August 20, 1996 and has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
• | the gain is effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable); |
• | the Non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the redemption and certain other requirements are met; or |
• | we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held BowX Class A Common Stock, and, in the case where shares of BowX Class A Common Stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of BowX Class A Common Stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. holder’s holding period for the shares of BowX Class A Common Stock. There can be no assurance that BowX Class A Common Stock will be treated as regularly traded on an established securities market for this purpose. |
• | U.S. expatriates and former citizens or long-term residents of the United States; |
• | persons holding shares of WeWork Capital Stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated transaction; |
• | banks, insurance companies and other financial institutions; |
• | brokers, dealers or traders in securities; |
• | “controlled foreign corporations,” “passive foreign investment companies” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | persons subject to special tax accounting rules as a result of any item of gross income with respect to shares of WeWork Capital Stock being taken into account in an applicable financial statement; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | regulated investment companies or real estate investment trusts; |
• | tax-qualified retirement plans; |
• | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; |
• | stockholders who acquired their shares of WeWork Capital Stock pursuant to or in connection with options or other compensation arrangements; and |
• | stockholders that hold or have held, directly or pursuant to attribution rules, more than 5% of the WeWork Capital Stock at any time during the five-year period ending on the date of the consummation of the First Merger. |
• | an individual who is a citizen or resident of the United States, |
• | a corporation organized in or under the laws of the United States, any state thereof or the District of Columbia, |
• | an estate, the income of which is subject to U.S. federal income tax regardless of its source, or |
• | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (2) was in existence on August 20, 1996 and has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
• | The merger of WeWork with and into BowX Merger Sub, a wholly owned subsidiary of BowX, with WeWork surviving the merger as a wholly owned subsidiary of BowX; |
• | The issuance and sale of 80,000,000 shares of New WeWork Class A Common Stock for $10.00 per share and an aggregate purchase price of $800 million in the PIPE Investment pursuant to the Subscription Agreements, executed concurrently with the Merger Agreement; |
• | The conversion of 9,075,000 shares of BowX Class B Common Stock into 9,075,000 shares of New WeWork Class A Common Stock in connection with the transaction in accordance with the terms of the Merger Agreement; |
• | The exchange of all issued and outstanding WeWork Preferred Stock into a number of shares of New WeWork Class A Common Stock based on the Exchange Ratio (using the rounded exchange ratio of 0.8254); |
• | The issuance of the First Warrant to SBWW and/or its designees to purchase New WeWork Class A Common Stock based on the Exchange Ratio (using the rounded exchange ratio of 0.8254); |
• | The exchange of all issued and outstanding WeWork Common Stock into a number of shares of New WeWork Common Stock based on the Exchange Ratio (using the rounded exchange ratio of 0.8254). |
Pro Forma Combined Share Ownership in New WeWork |
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Assuming No Redemption |
Assuming Maximum Redemption (1) |
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Number of Shares |
% Ownership |
Number of Shares |
% Ownership |
|||||||||||||
WeWork Stockholders (2) |
578,066,457 | 80.8 | % | 578,066,457 | 86.0 | % | ||||||||||
BowX Sponsor & Sponsor Persons |
9,075,000 | 1.3 | % | 9,075,000 | 1.4 | % | ||||||||||
BowX Public Stockholders |
48,300,000 | 6.8 | % | 5,068,902 | 0.8 | % | ||||||||||
PIPE Investors |
80,000,000 | 11.2 | % | 80,000,000 | 11.9 | % | ||||||||||
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|
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Total (excluding certain WeWork shares) (2) |
715,441,457 | 100 | % | 672,210,359 | 100 | % | ||||||||||
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|
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|
|
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WeWork remaining consideration (2) |
77,233,543 | 77,233,543 | ||||||||||||||
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|
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Total shares at Closing (2) |
792,675,000 | 749,443,902 | ||||||||||||||
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|
(1) | Assumes that 43,231,098 of BowX’s outstanding public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to have at least $5,000,001 of net tangible assets upon Closing) are redeemed in connection with the Business Combination. In the event that BowX Class A shares are redeemed in connection with the Business Combination but the number of shares redeemed is less than 43,231,098, the ownership percentages set forth above will vary on approximately a proportional basis between the two scenarios. For example, if we assume that the number of BowX Class A shares redeemed in connection with the Business Combination total 21,615,549, BowX Public Stockholders will hold a total of 26,684,451 shares of New WeWork common stock at Closing, representing a 3.8% ownership interest. |
(2) | Total Consideration to be issued to WeWork is 655,300,000 shares of New WeWork Common Stock. The total shares of New WeWork Class A Common Stock to be issued includes shares of New WeWork Class A Common Stock to be issued in respect of outstanding WeWork Common Stock and WeWork Preferred Stock plus shares of New WeWork Class A Common Stock underlying or exchangeable for unvested and/or unexercised stock options, restricted stock units, restricted stock awards, warrants, WeWork Partnerships Profits Interest Units (including corresponding shares of New WeWork Class C Common Stock) and warrants, respectively, at the Closing. As of August 26, 2021, the Exchange Ratio is expected to be approximately 0.8254 and there are expected to be issued approximately 558,259,528 shares of New WeWork Class A Common Stock and 19,919,026 shares of New WeWork Class C Common Stock to WeWork stockholders as of the Closing (using the rounded exchange ratio of 0.8254 and not including shares of New WeWork Class A Common Stock underlying or exchangeable for unvested and/or unexercised stock options, restricted stock units, restricted stock awards, warrants and WeWork Partnerships Profits Interest Units). The numbers in this table reflect the pro forma combined share ownership in New WeWork using the expected Exchange Ratio as of August 26, 2021, and the number of shares as of June 30, 2021, based on the assumptions described above. Inclusion of all such securities would dilute the ownership of all stockholders of New WeWork. |
• | Assuming No Redemption: |
• | Assuming Maximum Possible Redemption: |
Assuming No Redemptions |
Assuming Maximum Redemptions |
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(Amounts in thousands, except share and per share amounts) |
WeWork Inc. (Historical) |
BowX (Historical) |
Reclassification Adjustments |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
Note |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 843,957 | $ | 506 | $ | — | $ | 1,185,568 | $ | 2,030,031 | $ | (432,311 | ) | $ | 1,597,720 | A | ||||||||||||||||
Accounts receivable and accrued revenue, net of allowance |
118,205 | — | — | — | 118,205 | — | 118,205 | |||||||||||||||||||||||||
Other current assets |
435,448 | — | 323 | 20,417 | 456,188 | — | 456,188 | B | ||||||||||||||||||||||||
Prepaid expense |
— | 323 | (323 | ) | — | — | — | — | ||||||||||||||||||||||||
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Total current assets |
1,397,610 | 829 | — | 1,205,985 | 2,604,424 | (432,311 | ) | 2,172,113 | ||||||||||||||||||||||||
Property and equipment, net |
5,991,011 | — | — | — | 5,991,011 | — | 5,991,011 | |||||||||||||||||||||||||
Lease right-of-use |
13,923,373 | — | — | — | 13,923,373 | — | 13,923,373 | |||||||||||||||||||||||||
Restricted cash |
11,528 | — | — | — | 11,528 | — | 11,528 | |||||||||||||||||||||||||
Equity method and other investments |
198,163 | — | — | — | 198,163 | — | 198,163 | |||||||||||||||||||||||||
Investments held in trust account |
— | 483,072 | — | (483,072 | ) | — | — | — | C | |||||||||||||||||||||||
Goodwill |
678,668 | — | — | — | 678,668 | — | 678,668 | |||||||||||||||||||||||||
Intangible assets, net |
53,806 | — | — | — | 53,806 | — | 53,806 | |||||||||||||||||||||||||
Other assets |
932,151 | — | — | (515 | ) | 931,636 | — | 931,636 | D | |||||||||||||||||||||||
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Total assets |
$ | 23,186,310 | $ | 483,901 | $ | — | $ | 722,398 | $ | 24,392,609 | $ | (432,311 | ) | $ | 23,960,298 | |||||||||||||||||
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Liabilities |
||||||||||||||||||||||||||||||||
Current liabilities: |
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Accounts payable and accrued expenses |
$ | 537,600 | $ | 3,674 | $ | — | $ | (4,967 | ) | $ | 536,307 | $ | — | $ | 536,307 | E | ||||||||||||||||
Members’ service retainers |
347,057 | — | — | — | 347,057 | — | 347,057 | |||||||||||||||||||||||||
Deferred revenue |
138,207 | — | — | — | 138,207 | — | 138,207 | |||||||||||||||||||||||||
Current lease obligations |
873,531 | — | — | — | 873,531 | — | 873,531 | |||||||||||||||||||||||||
Other current liabilities |
440,374 | — | 48 | — | 440,422 | — | 440,422 | |||||||||||||||||||||||||
Franchise tax payable |
— | 48 | (48 | ) | — | — | — | — | ||||||||||||||||||||||||
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Total current liabilities |
2,336,769 | 3,722 | — | (4,967 | ) | 2,335,524 | — | 2,335,524 | ||||||||||||||||||||||||
Long-term lease obligations |
18,977,544 | — | — | — | 18,977,544 | — | 18,977,544 | |||||||||||||||||||||||||
Unsecured related party debt |
2,200,000 | — | — | — | 2,200,000 | — | 2,200,000 |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||||||||||
(Amounts in thousands, except share and per share amounts) |
WeWork Inc. (Historical) |
BowX (Historical) |
Reclassification Adjustments |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
Note |
||||||||||||||||||||||||
Convertible related party liabilities, net |
57,944 | — | — | (57,944 | ) | — | — | — | F | |||||||||||||||||||||||
Long-term debt, net |
659,446 | — | — | 659,446 | — | 659,446 | ||||||||||||||||||||||||||
Other liabilities |
242,522 | — | — | — | 242,522 | — | 242,522 | |||||||||||||||||||||||||
Deferred underwriting commissions in connection with the initial public offering |
— | 16,905 | — | (16,905 | ) | — | — | — | G | |||||||||||||||||||||||
Warrant liabilities |
25,963 | — | — | 25,963 | — | 25,963 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities |
24,474,225 | 46,590 | — | (79,816 | ) | 24,440,999 | — | 24,440,999 | ||||||||||||||||||||||||
Convertible preferred stock |
8,379,182 | — | — | (8,379,182 | ) | — | — | — | H | |||||||||||||||||||||||
Redeemable noncontrolling interests |
291,901 | — | — | (291,901 | ) | — | — | — | I | |||||||||||||||||||||||
Redeemable BowX Class A Common Stock |
— | 432,311 | — | (432,311 | ) | — | — | — | J | |||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||||||
New WeWork shareholders’ equity (deficit): |
||||||||||||||||||||||||||||||||
WeWork Class A Common Stock |
177 | — | — | (177 | ) | — | — | — | K | |||||||||||||||||||||||
WeWork Class B Common Stock |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
WeWork Class C Common Stock |
24 | — | — | (24 | ) | — | — | — | L | |||||||||||||||||||||||
WeWork Class D Common Stock |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
BowX Class A Common Stock |
— | 1 | — | 69 | 70 | (4 | ) | 66 | M | |||||||||||||||||||||||
BowX Class B Common Stock |
— | 1 | — | (1 | ) | — | — | — | N | |||||||||||||||||||||||
BowX Class C Common Stock |
— | — | — | 2 | 2 | — | 2 | O | ||||||||||||||||||||||||
Additional paid-in capital |
2,775,762 | 26,609 | — | 9,611,360 | 12,413,731 | (432,307 | ) | 11,981,424 | P | |||||||||||||||||||||||
Accumulated other comprehensive income (loss) |
(116,269 | ) | — | — | — | (116,269 | ) | — | (116,269 | ) | ||||||||||||||||||||||
Accumulated deficit |
(12,624,690 | ) | (21,611 | ) | — | 2,478 | (12,643,823 | ) | — | (12,643,823 | ) | Q | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total New WeWork Shareholders’ equity (deficit) |
(9,964,996 | ) | 5,000 | — | 9,613,707 | (346,289 | ) | (432,311 | ) | (778,600 | ) | |||||||||||||||||||||
Noncontrolling interests |
5,998 | — | — | 291,901 | 297,899 | — | 297,899 | R | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total equity (deficit) |
(9,958,998 | ) | 5,000 | — | 9,905,608 | (48,390 | ) | (432,311 | ) | (480,701 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities and equity |
$ | 23,186,310 | $ | 483,901 | $ | — | $ | 722,398 | $ | 24,392,609 | $ | (432,311 | ) | $ | 23,960,298 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assuming No and Maximum Redemptions |
||||||||||||||||||||||||
(Amounts in thousands, except share and per share amounts) |
WeWork Inc. (Historical) |
BowX (Historical) |
Reclassification Adjustments |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||
Revenue |
$ | 1,191,331 | $ | — | $ | — | $ | — | $ | 1,191,331 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||
Location operating expenses |
1,598,812 | — | 1,598,812 | |||||||||||||||||||||
Pre-opening location expenses |
76,839 | — | 76,839 | |||||||||||||||||||||
Selling, general and administrative expenses |
499,502 | 4,091 | 99 | 551 | AA | 504,243 | ||||||||||||||||||
Franchise tax expense |
— | 99 | (99 | ) | — | |||||||||||||||||||
Restructuring and other related costs |
466,045 | — | 466,045 | |||||||||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
541,585 | — | 541,585 | |||||||||||||||||||||
Depreciation and amortization |
364,341 | — | 364,341 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total expenses |
3,547,124 | 4,190 | — | 551 | 3,551,865 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss from operations |
(2,355,793 | ) | (4,190 | ) | — | (551 | ) | (2,360,534 | ) | |||||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||||||
Income (loss) from equity method and other investments |
(24,510 | ) | — | (24,510 | ) | |||||||||||||||||||
Interest expense |
(217,828 | ) | — | (217,828 | ) | |||||||||||||||||||
Interest income |
9,455 | — | 9,455 | |||||||||||||||||||||
Change in fair value of warrant liabilities |
— | (12,671 | ) | (12,671 | ) | |||||||||||||||||||
Net gain from investments held in trust account |
— | 60 | (60 | ) | BB | — | ||||||||||||||||||
Foreign currency gain (loss) |
(37,925 | ) | — | (37,925 | ) | |||||||||||||||||||
Gain (loss) from change in fair value of related party financial instruments |
(350,822 | ) | — | 350,822 | CC | — | ||||||||||||||||||
Loss on extinguishment of debt |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total interest and other income (expense), net |
(621,630 | ) | (12,611 | ) | — | 350,762 | (283,479 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Pre-tax loss |
(2,977,423 | ) | (16,801 | ) | 350,211 | (2,644,013 | ) | |||||||||||||||||
Income tax benefit (provision) |
(7,282 | ) | — | — | DD | (7,282 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
(2,984,705 | ) | (16,801 | ) | — | 350,211 | (2,651,295 | ) | ||||||||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
64,120 | — | 64,120 | |||||||||||||||||||||
Noncontrolling interest — equity |
(615 | ) | — | (615 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss attributable to New WeWork |
$ | (2,921,200 | ) | $ | (16,801 | ) | $ | — | $ | 350,211 | $ | (2,587,790 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss per share attributable to New WeWork Class A common stockholders: |
||||||||||||||||||||||||
Basic |
$ | (16.81 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Diluted |
$ | (16.81 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Weighted-average shares used to compute net loss per share attributable to New WeWork Class A common stockholders, basic and diluted |
173,751,116 |
Assuming No and Maximum Redemptions |
||||||||||||||||||||||||
(Amounts in thousands, except share and per share amounts) |
WeWork Inc. (Historical) |
BowX (Historical) |
Reclassification Adjustments |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||
Assuming No Redemption |
||||||||||||||||||||||||
Pro forma net loss per share attributable to New WeWork Class A common stockholders |
||||||||||||||||||||||||
Basic |
$ | (4.17 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Diluted |
$ | (4.17 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Weighted-average shares used to compute net loss per share attributable to New WeWork Class A common stockholders, basic and diluted |
713,384,976 | |||||||||||||||||||||||
Assuming Maximum Redemption |
||||||||||||||||||||||||
Pro forma net loss per share attributable to New WeWork Class A common stockholders: |
||||||||||||||||||||||||
Basic |
$ | (4.44 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Diluted |
$ | (4.44 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Weighted-average shares used to compute net loss per share attributable to New WeWork Class A common stockholders, basic and diluted |
670,153,878 |
Assuming No and Maximum Redemptions |
||||||||||||||||||||||||
(Amounts in thousands, except share and per share amounts) |
WeWork Inc. (Historical) |
BowX (Historical) |
Reclassification Adjustments |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||
Revenue |
$ | 3,415,865 | $ | — | $ | — | $ | — | $ | 3,415,865 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Expenses: |
||||||||||||||||||||||||
Location operating expenses |
3,542,918 | — | 3,542,918 | |||||||||||||||||||||
Pre-opening location expenses |
273,049 | — | 273,049 | |||||||||||||||||||||
Selling, general and administrative expenses |
1,604,669 | 220 | 122 | 47,522 | AA | 1,652,533 | ||||||||||||||||||
Franchise tax expense |
— | 122 | (122 | ) | — | |||||||||||||||||||
Restructuring and other related costs |
206,703 | — | 206,703 | |||||||||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
1,355,921 | — | 1,355,921 | |||||||||||||||||||||
Depreciation and amortization |
779,368 | — | 779,368 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total expenses |
7,762,628 | 342 | — | 47,522 | 7,810,492 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss from operations |
(4,346,763 | ) | (342 | ) | — | (47,522 | ) | (4,394,627 | ) | |||||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||||||
Income (loss) from equity method and other investments |
(44,788 | ) | — | (44,788 | ) | |||||||||||||||||||
Interest expense |
(331,217 | ) | — | (331,217 | ) | |||||||||||||||||||
Interest income |
16,910 | — | 16,910 | |||||||||||||||||||||
Change in fair value of warrant liabilities |
— | (4,664 | ) | (4,664 | ) | |||||||||||||||||||
Offering costs associated with private placement warrants |
— | (9 | ) | (9 | ) | |||||||||||||||||||
Net gain from investments held in trust account |
— | 227 | (227 | ) | BB | — | ||||||||||||||||||
Foreign currency gain (loss) |
149,196 | — | 149,196 | |||||||||||||||||||||
Gain (loss) from change in fair value of related party financial instruments |
819,647 | — | (819,647 | ) | CC | — | ||||||||||||||||||
Loss on extinguishment of debt |
(77,336 | ) | — | (77,336 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total interest and other income (expense), net |
532,412 | (4,446 | ) | — | (819,874 | ) | (291,908 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Pre-tax loss |
(3,814,351 | ) | (4,788 | ) | (867,396 | ) | (4,686,535 | ) | ||||||||||||||||
Income tax benefit (provision) |
(19,506 | ) | (22 | ) | — | DD | (19,528 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss |
(3,833,857 | ) | (4,810 | ) | — | (867,396 | ) | (4,706,063 | ) | |||||||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
675,631 | — | 675,631 | |||||||||||||||||||||
Noncontrolling interest — equity |
28,868 | — | 28,868 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss attributable to New WeWork |
$ | (3,129,358 | ) | $ | (4,810 | ) | $ | — | $ | (867,396 | ) | $ | (4,001,564 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss per share attributable to New WeWork Class A common stockholders: |
||||||||||||||||||||||||
Basic |
$ | (18.38 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Diluted |
$ | (18.38 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Weighted-average shares used to compute net loss per share attributable to New WeWork Class A common stockholders, basic and diluted |
170,275,761 |
Assuming No and Maximum Redemptions |
||||||||||||||||||||||||
(Amounts in thousands, except share and per share amounts) |
WeWork Inc. (Historical) |
BowX (Historical) |
Reclassification Adjustments |
Pro Forma Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||||
Assuming No Redemption |
||||||||||||||||||||||||
Pro forma net loss per share attributable to New WeWork Class A common stockholders |
||||||||||||||||||||||||
Basic |
$ | (6.39 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Diluted |
$ | (6.39 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Weighted-average shares used to compute net loss per share attributable to New WeWork Class A common stockholders, basic and diluted |
687,572,719 | |||||||||||||||||||||||
Assuming Maximum Redemption |
||||||||||||||||||||||||
Pro forma net loss per share attributable to New WeWork Class A common stockholders: |
||||||||||||||||||||||||
Basic |
$ | (6.83 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Diluted |
$ | (6.83 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Weighted-average shares used to compute net loss per share attributable to New WeWork Class A common stockholders, basic and diluted |
642,661,535 |
• | Existing WeWork stockholders comprise a relative majority of the voting power of the combined company, |
• | WeWork’s operations prior to the acquisition comprise the only ongoing operations of New WeWork, |
• | The majority of New WeWork’s board of directors are being appointed by WeWork Stockholders, and |
• | The majority of New WeWork’s senior management are being comprised of WeWork’s senior management. |
(Amounts in thousands) |
Note |
No Redemption |
Maximum Redemption |
|||||||||
Cash balance of WeWork prior to Business Combination |
$ | 843,957 | $ | 843,957 | ||||||||
Cash balance of BowX prior to Business Combination |
506 | 506 | ||||||||||
|
|
|
|
|||||||||
Total Pre-adjustment cash balance |
844,463 | 844,463 | ||||||||||
Proceeds from cash held in trust account |
1 | 483,072 | 483,072 | |||||||||
Payment of underwriter fees |
2 | (16,905 | ) | (16,905 | ) | |||||||
PIPE Investment |
3 | 800,000 | 800,000 | |||||||||
Payment of transaction costs |
4 | (54,117 | ) | (54,117 | ) | |||||||
Payment of employee bonuses |
5 | (26,482 | ) | (26,482 | ) | |||||||
Payment to redeeming BowX Stockholders |
6 | — | (432,311 | ) | ||||||||
|
|
|
|
|||||||||
Adjustment to cash in connection with the Business Combination |
1,185,568 | 753,257 | ||||||||||
|
|
|
|
|||||||||
Ending cash and cash equivalents balance |
$ | 2,030,031 | $ | 1,597,720 | ||||||||
|
|
|
|
(1) | Reflects the reclassification of $483.1 million of cash and cash equivalents held in the trust account at the balance sheet date that becomes available to fund expenses in connection with the transaction or future needs of New WeWork. |
(2) | Reflects the payment of $16.9 million of deferred underwriters’ fees. The fees are expected to be paid at closing out of the monies in the trust account. |
(3) | Represents the proceeds from the PIPE subscription agreements of 80,000,000 shares of BowX Class A Common Stock at $10 per share. |
(4) | Represents expected settlement of BowX and WeWork transaction costs at close in connection with the Mergers. Of the total, $39.1 million relates to financial advisory, legal and other fees to be incurred, and $15.0 million relates to PIPE fees. Of the amount shown, $4.9 million was incurred or accrued on the balance sheet as of June 30, 2021. |
(5) | Represents the payment of $26.5 million in bonuses to employees upon closing of the transaction, of which $24.5 million is subject to clawback if the employee does not meet certain service conditions and is therefore presented as deferred compensation expense that will be amortized over the requisite service period. |
(6) | Represents the maximum redemption of 43,231,098 shares for aggregate redemption payments of $432.3 million at a redemption price of $10 per share. |
(Amounts in thousands) |
Note |
No Redemption |
Maximum Redemption |
|||||||||
Other assets balance of WeWork prior to Business Combination |
$ | 932,151 | $ | 932,151 | ||||||||
Other assets balance of BowX prior to Business Combination |
— | — | ||||||||||
|
|
|
|
|||||||||
Total Pre-adjustment other assets |
932,151 | 932,151 | ||||||||||
Deferred employee bonuses |
1 | 4,083 | 4,083 | |||||||||
Transaction costs incurred |
2 | (4,598 | ) | (4,598 | ) | |||||||
|
|
|
|
|||||||||
Adjustment to other assets with the Business Combination |
(515 | ) | (515 | ) | ||||||||
|
|
|
|
|||||||||
Ending other assets of New WeWork |
$ | 931,636 | $ | 931,636 | ||||||||
|
|
|
|
(1) | Represents the payment of $26.5 million in bonuses to employees upon closing of the transaction, of which $24.5 million is subject to clawback if the employee does not meet certain service conditions and is therefore presented as deferred compensation expense that will be amortized over the requisite service period. |
(2) | Represents WeWork transaction costs previously capitalized, including $3.2 million paid as of June 30, 2021. |
(Amounts in thousands) |
Note |
No Redemption |
Maximum Redemption |
|||||||||
Convertible Preferred Stock WeWork prior to Business Combination |
$ | 8,379,182 | $ | 8,379,182 | ||||||||
Convertible Preferred Stock of BowX prior to Business Combination |
— | — | ||||||||||
|
|
|
|
|||||||||
Total Pre-adjustment Convertible Preferred Stock |
8,379,182 | 8,379,182 | ||||||||||
Conversion of WeWork Preferred Stock to Class A Common Stock |
1 | (8,376,150 | ) | (8,376,150 | ) | |||||||
Cancellation and automatic conversion of WeWork Series C Convertible Note to BowX Class A Common Stock |
2 | (3,032 | ) | (3,032 | ) | |||||||
|
|
|
|
|||||||||
Adjustment to Convertible Preferred Stock with the Business Combination |
(8,379,182 | ) | (8,379,182 | ) | ||||||||
|
|
|
|
|||||||||
Ending Convertible Preferred Stock of New WeWork |
$ | — | $ | — | ||||||||
|
|
|
|
(1) | Represents conversion of 499,018,795 shares of Preferred Stock to 411,890,113 shares of BowX Class A Common Stock as part of recapitalization of WeWork equity and issuance of post-combination Common Stock to WeWork Preferred Stockholders as consideration for the reverse recapitalization. |
(2) | Represents cancellation and automatic conversion of WeWork Series C Convertible Notes (convertible into 566,933 shares of Series C Preferred Stock if converted prior to Closing) to 467,946 shares of BowX Class A Common Stock. |
(Amounts in thousands) |
Note |
No Redemption |
Maximum Redemption |
|||||||||
WeWork Class A Common Stock prior to Business Combination |
$ | — | $ | — | ||||||||
BowX Class A Common Stock prior to Business Combination |
1 | 1 | ||||||||||
|
|
|
|
|||||||||
Total Pre-adjustment Class A Common Stock |
1 | 1 | ||||||||||
PIPE Investment proceeds |
1 | 8 | 8 | |||||||||
Reclassification of BowX public shares to BowX Class A Common Stock |
2 | 4 | 4 | |||||||||
Conversion of WeWork Preferred Stock to BowX Class A Common Stock |
3 | 41 | 41 | |||||||||
Conversion of WeWork Series C Convertible Note to BowX Class A Common Stock |
4 | — | — | |||||||||
Conversion of WeWork Class A Common Stock to BowX Class A Common Stock |
5 | 15 | 15 | |||||||||
Forfeiture and conversion of BowX Class B Common Stock to BowX Class A Common Stock |
6 | 1 | 1 | |||||||||
Redemption of BowX public shares |
7 | — | (4 | ) | ||||||||
|
|
|
|
|||||||||
Adjustment to Class A Common Stock with the Business Combination |
69 | 65 | ||||||||||
|
|
|
|
|||||||||
Ending Class A Common Stock of New WeWork |
$ | 70 | $ | 66 | ||||||||
|
|
|
|
(1) | Represents the proceeds from the PIPE subscription agreements of 80,000,000 shares of BowX Class A Common Stock at $10 per share. |
(2) | Represents the reclassification of BowX public shares, subject to possible redemption, from temporary equity to permanent equity, assuming no redemptions. |
(3) | Represents conversion of 499,018,795 shares of Preferred Stock to 411,890,113 shares of BowX Class A Common Stock as part of recapitalization of WeWork equity and issuance of post-combination Common Stock to WeWork Preferred Stockholders as consideration for the reverse recapitalization. |
(4) | Represents cancellation and automatic conversion of WeWork Series C Convertible Notes (convertible into 566,933 shares of Series C Preferred Stock if converted prior to Closing) to 467,946 shares of BowX Class A Common Stock. |
(5) | Represents conversion of 176,628,752 WeWork Class A Common Stock to 145,789,371 shares of BowX Class A Common Stock as consideration for the reverse recapitalization. |
(6) | Represents sponsor’s forfeiture of 3,000,000 shares of BowX Class B Common Stock pursuant to the terms of the Sponsor Support Agreement, with such shares cancelled by BowX, and the conversion of the remaining 9,075,000 shares of BowX Class B Common Stock to a like number of shares of BowX Class A Common Stock. |
(7) | Represents the maximum redemption of 43,231,098 shares for aggregate redemption payments of $432.3 million at a redemption price of $10 per share. |
(Amounts in thousands) |
Note |
No Redemption |
Maximum Redemption |
|||||||||
Additional paid-in capital of WeWork prior to Business Combination |
$ | 2,775,762 | $ | 2,775,762 | ||||||||
Additional paid-in capital of BowX prior to Business Combination |
26,609 | 26,609 | ||||||||||
|
|
|
|
|||||||||
Total Pre-adjustment additional paid-in capital |
2,802,371 | 2,802,371 | ||||||||||
PIPE Investment proceeds |
1 | 799,992 | 799,992 | |||||||||
Reclassification of BowX public shares to BowX Class A Common Stock |
2 | 432,307 | 432,307 | |||||||||
Conversion of WeWork Preferred Stock to BowX Class A Common Stock |
3 | 8,376,109 | 8,376,109 | |||||||||
Cancellation and automatic conversion of WeWork Series C Convertible Note to BowX Class A Common Stock |
4 | 3,032 | 3,032 | |||||||||
Conversion of WeWork Class A Common Stock to BowX Class A Common Stock |
5 | 162 | 162 | |||||||||
Conversion of WeWork Class C Common Stock to BowX Class C Common Stock |
6 | 22 | 22 | |||||||||
Sponsor’s forfeiture of 3,000,000 BowX Class B Common Stock |
7 | — | — | |||||||||
Reclassification of BowX accumulated deficit |
8 | (18,079 | ) | (18,079 | ) | |||||||
Payment of transaction costs |
9 | (57,280 | ) | (57,280 | ) | |||||||
Exchange of WeWork Preferred Stock warrants into BowX Class A Common Stock warrants |
10 | 57,944 | 57,944 | |||||||||
Issuance of equity-classified warrant to an existing WeWork preferred shareholder |
11 | 390,571 | 390,571 | |||||||||
Fair value of contingently issuable shares related to warrants issued to principal stockholders |
11 | (390,571 | ) | (390,571 | ) | |||||||
Incremental stock-based compensation expense |
12 | 17,151 | 17,151 | |||||||||
Redemption of BowX public shares |
13 | — | (432,307 | ) | ||||||||
|
|
|
|
|||||||||
Adjustment to additional paid-in capital with the Business Combination |
9,611,360 | 9,179,053 | ||||||||||
|
|
|
|
|||||||||
Ending additional paid-in capital of New WeWork |
$ | 12,413,731 | $ | 11,981,424 | ||||||||
|
|
|
|
(1) | Represents the proceeds from the PIPE subscription agreements of 80,000,000 shares of BowX Class A Common Stock at $10 per share. |
(2) | Represents the reclassification of BowX public shares, subject to possible redemption, from temporary equity to permanent equity, assuming no redemptions. |
(3) | Represents conversion of 499,018,795 shares of Preferred Stock to 411,890,113 shares of BowX Class A Common Stock as part of recapitalization of WeWork equity and issuance of post-combination Common Stock to WeWork Preferred Stockholders as consideration for the reverse recapitalization. |
(4) | Represents cancellation and automatic conversion of WeWork Series C Convertible Notes (convertible into 566,933 shares of Series C Preferred Stock if converted prior to Closing) to 467,946 shares of BowX Class A Common Stock. |
(5) | Represents conversion of 176,628,752 WeWork Class A Common Stock to 145,789,371 shares of BowX Class A Common Stock as consideration for the reverse recapitalization. |
(6) | Represents conversion of 24,132,575 shares of WeWork Class C Common Stock to 19,919,026 shares of BowX Class C Common Stock as consideration for the reverse recapitalization. |
(7) | Represents sponsor’s forfeiture of 3,000,000 shares of BowX Class B Common Stock pursuant to the terms of the Sponsor Support Agreement, with such shares cancelled by BowX, and the conversion of the remaining 9,075,000 shares of BowX Class B Common Stock to a like number of shares of BowX Class A Common Stock. |
(8) | Represents the reclassification of BowX’s historical accumulated deficit. |
(9) | Represents expected settlement of BowX and WeWork transaction costs at close in connection with the Mergers. Of the total, $42.3 million relates to financial advisory, legal and other fees to be incurred, and $15.0 million relates to PIPE fees. Of the amount shown, $1.3 million was incurred or accrued on the balance sheet as of March 31, 2021. |
(10) | Reflects exchange of WeWork Preferred Stock warrants into BowX Class A Common Stock warrants, pursuant to the terms of the Merger Agreement. WeWork Preferred Stock warrants were previously redeemable, resulting in WeWork classifying such warrants as liabilities in its historical financial statements. The New WeWork Class A Common Stock warrants exchanged for WeWork Preferred Stock warrants are equity-classified warrants and the adjustment reflects the reclassification of the warrants from liability to additional paid-in capital. |
(11) | Represents issuance of equity-classified warrant to existing WeWork preferred shareholder, to purchase 39,096,230 shares of BowX Class A Common Stock (giving effect to the Exchange Ratio) at an exercise price of approximately $0.01 per share. The fair value of the warrants is also reflected as a charge to additional paid-in capital representing an inducement to exercise existing conversion rights of WeWork’s Convertible Preferred Stock by the shareholder. The fair value is calculated using a $10 per share reference price. The actual fair value of the warrants will be dependent on the value of BowX Class A Common Stock at Closing of the Mergers. The fair value of the warrants will fluctuate by approximately $39.1 million for every $1.00 change in share price. |
(12) | Reflects incremental stock-based compensation expense related to restricted stock units for which the performance condition is deemed to be satisfied upon Closing. |
(13) | Represents the maximum redemption of 43,231,098 shares for aggregate redemption payments of $432.3 million at a redemption price of $10 per share. |
(Amounts in thousands) |
Note |
No Redemption |
Maximum Redemption |
|||||||
Accumulated deficit of WeWork prior to Business Combination |
$ | (12,624,690 | ) | $ | (12,624,690 | ) | ||||
Accumulated deficit of BowX prior to Business Combination |
(21,611 | ) | (21,611 | ) | ||||||
|
|
|
|
|||||||
Total Pre-adjustment accumulated deficit |
(12,646,301 | ) | (12,646,301 | ) | ||||||
Reclassification of BowX accumulated deficit |
1 | 18,079 | 18,079 | |||||||
Non-recurring transaction costs incurred by BowX |
2 | 3,532 | 3,532 | |||||||
Payment of employee bonuses not subject to service conditions |
3 | (1,982 | ) | (1,982 | ) | |||||
Incremental stock-based compensation |
4 | (17,151 | ) | (17,151 | ) | |||||
|
|
|
|
|||||||
Adjustment to accumulated deficit with the Business Combination |
2,478 | 2,478 | ||||||||
|
|
|
|
|||||||
Ending accumulated deficit of New WeWork |
$ | (12,643,823 | ) | $ | (12,643,823 | ) | ||||
|
|
|
|
(1) | Represents the reclassification of BowX’s historical accumulated deficit. |
(2) | Represents BowX transaction costs incurred but not paid as of June 30, 2021. |
(3) | Represents the payment of bonuses to employee management upon closing of the transaction not subject to clawback discussed in (A), (B) and (D) above. |
(4) | Reflects incremental stock-based compensation expense related to restricted stock units for which the performance condition is deemed to be satisfied upon Closing. |
No and Maximum Redemptions |
||||||||||
(Amounts in thousands) |
Note |
For the Six Months Ended June 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||
Selling, general and administrative expenses of WeWork prior to Business Combination |
$ | 499,502 | $ | 1,604,669 | ||||||
Selling, general and administrative expenses of BowX prior to Business Combination |
4,091 | 220 | ||||||||
Reclassification of BowX franchise tax expense |
99 | 122 | ||||||||
|
|
|
|
|||||||
Total Pre-adjustment selling, general and administrative expenses |
503,692 | 1,605,011 | ||||||||
Incremental incentive compensation expense |
1 | 4,083 | 22,399 | |||||||
Non-recurring transaction costs incurred by BowX |
2 | (3,532 | ) | — | ||||||
Incremental stock-based compensation |
3 | — | 25,123 | |||||||
|
|
|
|
|||||||
Adjustment to Selling, general and administrative expenses with the Business Combination |
551 | 47,522 | ||||||||
|
|
|
|
|||||||
Ending Selling, general and administrative expenses of New WeWork |
$ | 504,243 | $ | 1,652,533 | ||||||
|
|
|
|
(1) | Reflects incremental incentive compensation expense related to bonus awards related to the Business Combination. |
(2) | Elimination of non-recurring transaction costs incurred by BowX in connection with the transaction. |
(3) | Reflects incremental stock-based compensation expense related to restricted stock units for which the performance condition is deemed to be satisfied upon Closing. |
• | include incremental incentive compensation expense related to bonus awards related to the Business Combination and Related Transactions; |
• | include incremental stock-based compensation expense related to restricted stock units for which the performance condition is deemed to be satisfied upon Closing; |
• | include incremental expense related to the fair value of contingently issuable shares related to warrants issued to principal stockholders; |
• | remove net gain from investments held in trust account; |
• | remove remeasurement gains on WeWork’s Convertible Preferred Stock warrant liability; and |
• | the conversion of 9,075,000 shares of BowX Class B Common Stock into 9,075,000 shares of New WeWork Class A Common Stock in connection with the transaction in accordance with the terms of the Merger Agreement; |
• | the issuance of 48,300,000 shares of New WeWork Class A Common Stock related to the BowX Public Stockholders assuming no redemption and the issuance of 5,068,902 and 3,388,816 shares of New WeWork Class A Common Stock related to the BowX Public Stockholders for the six months ended June 30, 2021 and year ended December 31, 2020, respectively, assuming maximum redemption pursuant to the Subscription Agreements, executed concurrently with the Merger Agreement; |
• | the issuance of 80,000,000 shares of New WeWork Class A Common Stock related to the PIPE Investment pursuant to the Subscription Agreements, executed concurrently with the Merger Agreement; |
• | the conversion of all outstanding convertible preferred stock into New WeWork Class A Common Stock based on the Exchange Ratio, which automatically converts in connection with the Business Combination. The Company used the if-converted method as though the conversion had occurred as of the beginning of the period or the original date of issuance, if later; |
• | the automatic conversion of the convertible note that is convertible into shares of New WeWork Class A Common Stock based on the Exchange Ratio, which automatically converts in connection with the Business Combination. The convertible note is convertible into 566,933 shares of WeWork Series C Preferred Stock if converted prior to Closing. The Company used the if-converted method as though the conversion had occurred as of the beginning of the period or the original date of issuance, if later; |
• | the automatic conversion of warrants issued to principal stockholder including contingently issuable shares, into shares of New WeWork Class A Common Stock based on the Exchange Ratio, which automatically converts in connection with the Business Combination. The Company used the if-converted method as though the conversion had occurred as of the beginning of the period or the original date of issuance, if later; |
• | the issuance of New WeWork Class A Common Stock upon the vesting and settlement of RSUs for which the service-based vesting condition was satisfied as of June 30, 2021 and December 31, 2020 and the qualifying liquidity-based vesting condition will be satisfied in connection with the Business Combination (“liquidity-based RSUs”). |
(Amounts in thousands, except share and per share data) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||
Numerator: |
||||||||
Pro forma combined net loss attributable to New WeWork |
$ | (2,587,790 | ) | $ | (2,587,790 | ) | ||
Fair value of contingently issuable shares related to warrants issued to principal stockholders |
(390,571 | ) | (390,571 | ) | ||||
|
|
|
|
|||||
Net loss attributable to New WeWork Class A Common Stockholders |
$ | (2,978,361 | ) | $ | (2,978,361 | ) | ||
|
|
|
|
|||||
Denominator: |
||||||||
Basic shares: |
||||||||
Pro forma WeWork Inc. weighted-average shares outstanding used for basic net loss per share computation |
143,414,171 | 143,414,171 | ||||||
Pro forma BowX Sponsor & Sponsor Persons shares |
9,075,000 | 9,075,000 | ||||||
Pro forma BowX Public Stockholders shares |
48,300,000 | 5,068,902 | ||||||
Pro forma PIPE Investor Shares |
80,000,000 | 80,000,000 | ||||||
Pro forma adjustment to reflect warrants issued to principal stockholder |
44,141,292 | 44,141,292 | ||||||
Pro forma adjustment to reflect assumed conversion of Series A, B, C, D-1, D-2, E, F, G, G-1, H-1, Acquisition and Junior preferred stock to New WeWork Class A Common Stock |
387,503,518 | 387,503,518 | ||||||
Pro forma adjustment to reflect assumed conversion of convertible notes to Class A Common Stock |
568,522 | 568,522 | ||||||
Pro forma adjustment to reflect assumed conversion of vested liquidity-based RSUs |
382,473 | 382,473 | ||||||
|
|
|
|
|||||
Number of shares used for pro forma basic net loss per share computation |
713,384,976 | 670,153,878 | ||||||
|
|
|
|
|||||
Diluted shares: |
||||||||
Weighted-average shares — Diluted |
713,384,976 | 670,153,878 | ||||||
|
|
|
|
|||||
Pro forma net loss per share attributable to New WeWork Class A Common Stockholders: |
||||||||
Basic |
$ | (4.17 | ) | $ | (4.44 | ) | ||
|
|
|
|
|||||
Diluted |
$ | (4.17 | ) | $ | (4.44 | ) | ||
|
|
|
|
(Amounts in thousands, except share and per share data) |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||
Numerator: |
||||||||
Pro forma combined net loss attributable to New WeWork |
$ | (4,001,564 | ) | $ | (4,001,564 | ) | ||
Fair value of contingently issuable shares related to warrants issued to principal stockholders |
(390,970 | ) | $ | (390,970 | ) | |||
|
|
|
|
|||||
Net loss attributable to New WeWork Class A Common Stockholders |
$ | (4,392,534 | ) | $ | (4,392,534 | ) | ||
|
|
|
|
|||||
Denominator: |
||||||||
Basic shares: |
||||||||
Pro forma WeWork Inc. weighted-average shares outstanding used for basic net loss per share computation |
140,688,917 | 140,688,917 | ||||||
Pro forma BowX Sponsor & Sponsor Persons shares |
9,075,000 | 9,075,000 | ||||||
Pro forma BowX Public Stockholders shares |
48,300,000 | 3,388,816 | ||||||
Pro forma PIPE Investor Shares |
80,000,000 | 80,000,000 | ||||||
Pro forma adjustment to reflect warrants issued to principal stockholder |
151,512,517 | 151,512,517 | ||||||
Pro forma adjustment to reflect assumed conversion of Series A, B, C, D-1, D-2, E, F, G, G-1, H-1, Acquisition and Junior preferred stock to New WeWork Class A Common Stock |
256,266,242 | 256,266,242 | ||||||
Pro forma adjustment to reflect assumed conversion of convertible notes to Class A Common Stock |
648,849 | 648,849 | ||||||
Pro forma adjustment to reflect assumed conversion of vested liquidity-based RSUs |
1,081,194 | 1,081,194 | ||||||
|
|
|
|
|||||
Number of shares used for pro forma basic net loss per share computation |
687,572,719 | 642,661,535 | ||||||
|
|
|
|
|||||
Diluted shares: |
||||||||
Weighted-average shares — Diluted |
687,572,719 | 642,661,535 | ||||||
|
|
|
|
|||||
Pro forma net loss per share attributable to New WeWork Class A Common Stockholders: |
||||||||
Basic |
$ | (6.39 | ) | $ | (6.83 | ) | ||
|
|
|
|
|||||
Diluted |
$ | (6.39 | ) | $ | (6.83 | ) | ||
|
|
|
|
• | 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. |
• | conducting 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 |
• | filing proxy materials with the SEC. |
Name |
Age |
Position | ||
Executive Officers |
||||
Vivek Ranadivé | 63 | Chairman and Co-Chief Executive Officer | ||
Murray Rode | 56 | Co-Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and Director | ||
Independent Directors |
||||
Eric C.W. Dunn | 63 | Director | ||
Lori Wright | 44 | Director | ||
Vijay Advani | 60 | Director |
• | 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 permitted 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 (i) the independent auditor’s internal quality-control procedures and (ii) 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; |
• | 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. |
• | should have demonstrated notable or significant achievements in business, education or public service; |
• | should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
• | should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders. |
• | 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 approving on an annual basis the compensation of all of our other officers; |
• | reviewing on an annual basis 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 executive officers and employees; |
• | if required, 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. |
• | Approximately $1.5 billion decrease in adjusted selling, general and administrative expenses, including divestitures of non-core assets, on an annualized basis, as of the second quarter of 2021 as compared to the fourth quarter of 2019; |
• | Nearly $440 million decrease in adjusted location operating expenses, annualized on a per square foot basis, as of the second quarter of 2021 as compared to the fourth quarter of 2019—adjusted location operating expenses increased $59 million for the second quarter of 2021 compared to the fourth quarter of 2019 as a result of our net increase of approximately 24 million quarterly cumulative square feet under management during this period, offset by meaningful headcount reductions and other operating efficiencies implemented into the business over the past 12+ months: |
Three Months Ended |
||||||||||||
(Amounts in thousands, except square foot amounts) |
June 30, 2021 |
December 31, 2019 |
$ |
|||||||||
Location operating expenses |
$ | 780,489 | $ | 823,958 | $ | (43,469 | ) | |||||
Stock-based compensation expense |
(734 | ) | (12,282 | ) | 11,548 | |||||||
ChinaCo location operating expenses |
— | (90,876 | ) | 90,876 | ||||||||
|
|
|
|
|
|
|||||||
Adjusted location operating expenses |
$ | 779,755 | $ | 720,800 | $ | 58,955 | ||||||
|
|
|
|
|
|
|||||||
Quarterly cumulative square feet, in millions (1) |
127.9 | 103.7 | 24.2 | |||||||||
|
|
|
|
|
|
(1) | Quarterly cumulative square feet is calculated by the summation of the monthly square feet under management during the quarter as of the first day of the month. |
• | Approximately $6.9 billion reduction in aggregate future lease payments from the amendment and/or exit of over approximately 500 leases, including ChinaCo prior to the ChinaCo Deconsolidation, as of December 31, 2019 as compared to June 30, 2021; and |
• | Nearly $1 Billion improvement to Free Cash Flow since 2019 based on annualized Q2 2021 Free Cash Flow compared to Free Cash Flow for the year ended December 31, 2019 (excluding approximately negative $400 million in Free Cash Flow attributable to ChinaCo, which has since been deconsolidated). See “ WeWork’s Management Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Indicators—Free Cash Flow |
1) | our core space-as-a-service |
2) | the digitization of our real estate through our WeWork On Demand, WeWork All Access, and marketplace products; and |
3) | the pursuit of asset-light growth and additional revenue streams through the development of technology and services for use by landlords, operators and other partners. |
2015 |
June 30, 2021 |
|||||||||||
Membership |
||||||||||||
Physical Memberships (1) |
35k+ | 495k+ | ||||||||||
Enterprise Mix (2) |
10%+ | 51% | ||||||||||
Commitment Length (3) |
||||||||||||
Month-to-Month |
100% | ~10% | ||||||||||
2 to 11 Months |
0% | ~20% | ||||||||||
12+ Months |
0% | ~70% | ||||||||||
Total Weighted Full Commitment Length |
~1 month | ~22 months |
1. | Physical memberships are defined as the number of people able to access WeWork’s locations and does not include WeWork All Access memberships or WeMemberships |
2. | Enterprise memberships are defined as organizations who have +500 full time employees globally. Enterprise membership percentage represents physical and All Access enterprise memberships divided by total physical and All Access memberships. WeMemberships are excluded. |
3. | Commitment length represents base contract terms, excluding the impact of any extension termination options. The commitment lengths disclosed may include periods for which members have an option to terminate their commitments with a less than 10% penalty. The total weighted full commitment length including the impact of any termination options is approximately 15 months. Commitment length metrics exclude ChinaCo. |
(1) | CBRE “Let’s Talk About Flex” (2019); growth is in terms of US RSF from 2019 (actual) to 2030 (expected) |
(2) | JLL “The impact of COVID-19 on flexible space” (2020) |
• | Under the guidance of Mr. Claure and Mr. Mathrani, WeWork’s management team has been revamped. The leadership team has decades of public market experience and, within the first twelve months at the Company, has delivered results focused on cost efficiency and managing the business through the pandemic. |
• | An improved cost structure, combined with strong demand from WeWork members globally presents a defined path to positive Adjusted EBITDA. |
• | Leadership has reset the Company’s core values. |
• | We have an extensive global footprint of flexible workspace, with a real estate portfolio of 763 locations in 38 countries, supporting approximately 517,000 memberships as of June 30, 2021. |
• | We have a competitive moat with over $15 billion of capital invested for the creation of our global network of locations. |
• | 57% of 2021 Fortune 100 companies were WeWork members as of the beginning of June 2021. |
• | We have established partnerships with, among others, Hudson’s Bay Company, RXR Realty, Columbia Property Trust, Allianz, and Lionstone in major markets and have a global network of over 600 landlord relationships. |
• | We plan to leverage the expertise in middleware of Vivek Ranadivé as a director nominee of New WeWork to help further develop our platform business opportunity. |
• | Our extensive global footprint maximizes member flexibility in terms of space, time and location needs. |
• | Members have fast access to high quality, pre-built office space and the ability to scale over time without the commitment of a long-term lease. |
• | The total weighted full commitment length of our memberships has increased from approximately one month in 2015 to ~22 months as of June 30, 2021, laying a foundation for what we believe will be predictable and prudent growth. |
• | Despite the COVID-19 pandemic, we maintained consistent revenue levels of $3.2 billion in fiscal year 2019 and fiscal year 2020. |
• | WeWork has reorganized our selling, general and administrative costs, as well as our operations costs, to match the needs of our current real estate portfolio. |
• | Our membership base is diverse and stable: 51% of our consolidated total memberships were with Enterprise Members as of June 30, 2021. |
• | We have improved the strength and composition of our real estate portfolio through strategic asset amendments and exits in 2020 and through the second quarter of 2021 and will continue to do so moving forward. |
• | As of June 30, 2021, we had access to $1.6 billion of liquidity in the form of cash and commitments from our lenders. |
• | Upon consummation of this transaction, we expect to receive approximately $1.3 billion in proceeds, including the fully committed $800 million PIPE Investment, and expect to have access to a $550 million senior secured note facility from an affiliate of the SoftBank Obligor. See “ Summary of this Proxy Statement / Prospectus—Commitment Letter for Secured Notes |
• | The transaction implies a pro forma initial enterprise value of approximately $9 billion for WeWork. |
• | We anticipate that as a public company we will have access to diverse sources of equity and debt capital. |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2020 |
2019 |
2018 |
|||||||||||||||
Net loss |
$ |
(2,984,705 |
) |
$ |
(1,666,077 |
) |
$ |
(3,833,857 |
) |
$ |
(3,774,887 |
) |
$ |
(1,927,419 |
) | |||||
Income tax (benefit) provision (a) |
7,282 | 16,115 | 19,506 | 45,637 | (850 | ) | ||||||||||||||
Interest and other (income) expenses, net (a) |
621,630 | (389,574 | ) | (532,412 | ) | (190,248 | ) | 237,270 | ||||||||||||
Depreciation and amortization (a) |
364,341 | 390,156 | 779,368 | 589,914 | 313,514 | |||||||||||||||
Restructuring and other related costs (a) |
466,045 | 136,216 | 206,703 | 329,221 | — | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets (a) |
541,585 | 555,959 | 1,355,921 | 335,006 | — | |||||||||||||||
Stock-based compensation expense (b) |
57,892 | 34,818 | 50,758 | 346,747 | 69,400 | |||||||||||||||
Stock-based payments for services rendered by consultants (b) |
(2,273 | ) | 9,834 | 7,893 | 20,367 | 18,957 | ||||||||||||||
Change in fair value of contingent consideration liabilities (c) |
— | (194 | ) | (122 | ) | (60,667 | ) | 76,439 | ||||||||||||
Legal, tax and regulatory reserves and settlements |
7,496 | 1,073 | 1,794 | 3,678 | 3,615 | |||||||||||||||
Legal costs related to regulatory investigations and litigation (d) |
22,319 | 21,017 | 53,048 | — | — | |||||||||||||||
Expense related to mergers, acquisitions, divestitures and capital raising activities |
3,809 | 6,339 | 7,956 | 154,641 | 37,477 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ |
(894,579 |
) |
$ |
(884,318 |
) |
$ |
(1,883,444 |
) |
$ |
(2,200,591 |
) |
$ |
(1,171,597 |
) | |||||
|
|
|
|
|
|
|
|
|
|
(a) | As presented on our consolidated statements of operations. |
(b) | Represents the non-cash expense of our equity compensation arrangements for employees, directors, and consultants. |
(c) | Represents the change in fair value of the contingent consideration associated with acquisitions as included in selling, general and administrative expenses on the consolidated statements of operations. |
(d) | Legal costs incurred by the Company in connection with regulatory investigations and litigation regarding the Company’s 2019 withdrawn initial public offering and the related execution of the SoftBank Transactions, net of any insurance or other recoveries. See section entitled “ Legal Matters |
• | it does not reflect changes in, or cash requirements for, our working capital needs; |
• | it does not reflect our interest expense or the cash requirements necessary to service interest or principal payments on our debt; |
• | it does not reflect our tax expense or the cash requirements to pay our taxes; |
• | it does not reflect historical capital expenditures or future requirements for capital expenditures or contractual commitments; |
• | although stock-based compensation expenses are non-cash charges, we rely on equity compensation to compensate and incentivize employees, directors and certain consultants, and we may continue to do so in the future; and |
• | although depreciation, amortization and impairments are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and this non-GAAP measure does not reflect any cash requirements for such replacements. |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2020 |
2019 |
2018 |
|||||||||||||||
Net cash provided by (used in) operating activities (a) |
$ | (1,158,957 | ) | $ | (168,552 | ) | $ | (857,008 | ) | $ | (448,244 | ) | $ | (176,729 | ) | |||||
Less: Cash purchases of property and equipment (a) |
(153,142 | ) | (985,011 | ) | (1,441,232 | ) | (3,488,086 | ) | (2,055,020 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Free Cash Flow |
$ | (1,312,099 | ) | $ | (1,153,563 | ) | $ | (2,298,240 | ) | $ | (3,936,330 | ) | $ | (2,231,749 | ) | |||||
|
|
|
|
|
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|
|
|
|
(a) | As presented on our consolidated statements of cash flows. |
• | it only includes cash outflows for purchases of property and equipment and not other investing cash flow activity, and financing cash flow activity is also excluded; |
• | it is subject to variation between periods as a result of changes in working capital and changes in timing of receipts and disbursements; |
• | although non-cash GAAP straight-line lease costs are non-cash adjustments, these charges generally reflect amounts we will be required to pay our landlords in cash over the lifetime of our leases; and |
• | although stock-based compensation expenses are non-cash charges, we rely on equity compensation to compensate and incentivize employees, directors and certain consultants, and we may continue to do so in the future. |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2020 |
2020 |
2019 |
2018 |
||||||||||||
Revenue |
$ | 136,921 | $ | 206,261 | $ | 228,537 | $ | 99,529 | ||||||||
Location operating expenses |
179,221 | 266,318 | 290,254 | 116,173 | ||||||||||||
Restructuring and other related costs |
28,982 | (18,660 | ) | 6,684 | — | |||||||||||
Impairments/(gain on sale) of goodwill, intangibles and other assets |
371,871 | 450,312 | — | — | ||||||||||||
Depreciation and amortization |
28,346 | 39,208 | 42,257 | 20,584 | ||||||||||||
Total Expenses |
670,000 | 819,527 | 496,113 | 341,237 | ||||||||||||
Pre-tax loss |
(540,290 | ) | (598,727 | ) | (266,230 | ) | (243,508 | ) | ||||||||
Net loss |
(543,599 | ) | (609,820 | ) | (274,019 | ) | (244,613 | ) | ||||||||
Net loss attributable to WeWork Inc. |
(30,264 | ) | (62,997 | ) | 39,072 | (48,569 | ) | |||||||||
Adjusted EBITDA (1) |
(94,637 | ) | (129,527 | ) | (258,033 | ) | (123,046 | ) |
(1) | A reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA is set forth below: |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2020 |
2020 |
2019 |
2018 |
||||||||||||
Net loss |
$ | (543,599 | ) | $ | (609,820 | ) | $ | (274,019 | ) | $ | (244,613 | ) | ||||
Income tax (benefit) provision |
3,309 | 11,093 | 7,789 | 1,105 | ||||||||||||
Interest and other (income) expenses, net |
7,211 | (14,539 | ) | (1,346 | ) | 1,800 | ||||||||||
Depreciation and amortization |
28,346 | 39,208 | 42,257 | 20,584 | ||||||||||||
Restructuring and other related costs |
28,982 | (18,660 | ) | 6,684 | — | |||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
371,871 | 450,312 | — | — | ||||||||||||
Stock-based compensation expense |
26 | 158 | 2,827 | 1,398 | ||||||||||||
Stock-based payments for services rendered by consultants |
8,926 | 13,653 | 17,958 | 14,417 | ||||||||||||
Change in fair value of contingent consideration liabilities |
(194 | ) | (122 | ) | (60,667 | ) | 76,439 | |||||||||
Legal, tax and regulatory reserves and settlements |
— | — | 2 | 5 | ||||||||||||
Expense related to mergers, acquisitions, divestitures and capital raising activities |
485 | (810 | ) | 482 | 5,819 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | (94,637 | ) | $ | (129,527 | ) | $ | (258,033 | ) | $ | (123,046 | ) | ||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
One-time employee terminations |
$ | 545,102 | $ | 153,031 | $ | 191,582 | $ | 139,330 | ||||||||
Consulting fees |
— | — | — | 185,000 | ||||||||||||
Ceased use buildings |
65,745 | — | — | — | ||||||||||||
Gains on lease terminations, net |
(179,995 | ) | (31,686 | ) | (37,354 | ) | 3,306 | |||||||||
Other, net |
35,193 | 14,871 | 52,475 | 1,585 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 466,045 | $ | 136,216 | $ | 206,703 | $ | 329,221 | ||||||||
|
|
|
|
|
|
|
|
(Amounts in thousands) |
One-time Employee Benefits |
Legal Settlement Benefits |
Other |
Total Restructuring Costs |
||||||||||||
Restructuring liability balance — December 31, 2020 |
$ | 16,119 | $ | — | $ | 12,756 | $ | 28,875 | ||||||||
Restructuring and other related costs expensed during the period |
14,832 | 530,271 | (79,058 | ) | 466,045 | |||||||||||
Cash payments of restructuring liabilities, net |
(23,898 | ) | — | (207,867 | ) | (231,765 | ) | |||||||||
Non-cash impact — primarily asset and liability write-offs and stock-based compensation |
(2,010 | ) | (530,271 | ) | 294,062 | (238,219 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Restructuring liability balance — June 30, 2021 |
$ | 5,043 | $ | — | $ | 19,893 | $ | 24,936 | ||||||||
|
|
|
|
|
|
|
|
(Amounts in thousands) |
One-time Employee Benefits |
Other |
Total Restructuring Costs |
|||||||||
Restructuring liability balance — January 1, 2020 |
$ | 89,872 | $ | 1,497 | $ | 91,369 | ||||||
Restructuring and other related costs expensed during the period |
191,582 | 15,121 | 206,703 | |||||||||
Cash payments of restructuring liabilities, net |
(254,456 | ) | (124,738 | ) | (379,194 | ) | ||||||
Non-cash impact — primarily asset and liability write-offs and stock-based compensation |
(10,879 | ) | 120,876 | 109,997 | ||||||||
|
|
|
|
|
|
|||||||
Restructuring liability balance — December 31, 2020 |
$ | 16,119 | $ | 12,756 | $ | 28,875 | ||||||
|
|
|
|
|
|
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Impairment and write-off of long-lived assets associated with restructuring |
$ | 510,940 | $ | 423,063 | $ | 796,734 | $ | 66,187 | ||||||||
Impairment of assets held for sale |
— | 120,005 | 120,273 | 2,559 | ||||||||||||
Impairment of goodwill |
— | — | — | 214,515 | ||||||||||||
Impairment of intangible assets |
— | — | — | 51,789 | ||||||||||||
Impairment of long-lived assets primarily associated with COVID-19 |
31,461 | 62,314 | 345,034 | — | ||||||||||||
Gain on sale of assets |
(816 | ) | (49,423 | ) | (59,165 | ) | (44 | ) | ||||||||
Loss on ChinaCo Deconsolidation |
— | — | 153,045 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 541,585 | $ | 555,959 | $ | 1,355,921 | $ | 335,006 | ||||||||
|
|
|
|
|
|
|
|
• | Flatiron School LLC and its affiliates (collectively “Flatiron”) acquired in 2017, were sold in August 2020; |
• | Effective Technology Solutions, Inc. (“SpaceIQ”), a workplace management software platform acquired in 2019, was sold in May 2020; |
• | Meetup Holdings, Inc. (“Meetup”), a web-based platform that brings people together for face to face interactions acquired in 2017, was sold in March 2020 with the Company retaining a 9% noncontrolling equity interest, accounted for as an equity method investment; |
• | Managed by Q Inc. (“Managed by Q”), a workplace management platform acquired in 2019, was sold in March 2020; |
• | The 424 Fifth Venture (as defined in “— Liquidity and Capital Resources |
• | Teem Technologies, Inc. (“Teem”), a software-as-a-service |
• | Proactively negotiating with landlords on a location-by-location |
• | Continuing our restructuring efforts and reorganizing our business and operating model with the goal of creating a leaner, more efficient organization to accelerate our path to positive Adjusted EBITDA. |
• | Temporarily delaying certain new location openings and the capital investment associated with the expansion of our portfolio. |
• | Taking steps to delay or reduce spending during this period of disruption in areas such as marketing, professional fees, personnel cost and maintenance capital. This is in addition to significant organic reductions in variable expenses such as consumables, utilities, sales commissions and broker referrals, among others, related to overall lower business activity. |
• | Lease cost contractually paid or payable represents cash payments due for base and contingent rent, common area maintenance amounts and real estate taxes payable under the Company’s lease agreements, recorded on an accrual basis of accounting, regardless of the timing of when such amounts were actually paid. |
• | Amortization of lease incentives represents the amortization of amounts received or receivable for tenant improvement allowances and broker commissions (collectively, “lease incentives”), amortized on a straight-line basis over the terms of our leases. |
• | Non-cash GAAP straight-line lease cost represents the adjustment required under GAAP to recognize the impact of “free rent” periods and lease cost escalation clauses on a straight-line basis over the term of the lease. Non-cash GAAP straight-line lease cost also includes the amortization of capitalized initial direct costs associated with obtaining a lease. |
(Amounts in thousands) |
Six Months Ended June 30, |
Year Ended December 31, |
||||||||||||||||||
2021 |
2020 |
2020 |
2019 |
2018 |
||||||||||||||||
Condensed Consolidated statements of operations information: |
||||||||||||||||||||
Revenue |
$ | 1,191,331 | $ | 1,938,617 | $ | 3,415,865 | $ | 3,458,592 | $ | 1,821,751 | ||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses—cost of revenue (1) |
1,598,812 | 1,804,802 | 3,542,918 | 2,758,318 | 1,491,783 | |||||||||||||||
Pre-opening location expenses |
76,839 | 165,919 | 273,049 | 571,968 | 357,831 | |||||||||||||||
Selling, general and administrative expenses (2) |
499,502 | 925,101 | 1,604,669 | 2,793,663 | 1,349,622 | |||||||||||||||
Restructuring and other related costs |
466,045 | 136,216 | 206,703 | 329,221 | — | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
541,585 | 555,959 | 1,355,921 | 335,006 | — | |||||||||||||||
Depreciation and amortization |
364,341 | 390,156 | 779,368 | 589,914 | 313,514 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
3,547,124 | 3,978,153 | 7,762,628 | 7,378,090 | 3,512,750 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(2,355,793 | ) | (2,039,536 | ) | (4,346,763 | ) | (3,919,498 | ) | (1,690,999 | ) | ||||||||||
Interest and other income (expense), net |
(621,630 | ) | 389,574 | 532,412 | 190,248 | (237,270 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(2,977,423 | ) | (1,649,962 | ) | (3,814,351 | ) | (3,729,250 | ) | (1,928,269 | ) | ||||||||||
Income tax benefit (provision) |
(7,282 | ) | (16,115 | ) | (19,506 | ) | (45,637 | ) | 850 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(2,984,705 | ) | (1,666,077 | ) | (3,833,857 | ) | (3,774,887 | ) | (1,927,419 | ) | ||||||||||
Noncontrolling interests |
63,505 | 618,379 | 704,499 | 510,149 | 316,627 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (2,921,200 | ) | $ | (1,047,698 | ) | $ | (3,129,358 | ) | $ | (3,264,738 | ) | $ | (1,610,792 | ) | |||||
|
|
|
|
|
|
|
|
|
|
(1) | Exclusive of depreciation and amortization shown separately on the depreciation and amortization line in the amount of $345.6 million and $351.6 million for the six months ended June 30, 2021 and June 30, 2020, respectively, and $715.4 million, $515.3 million and $281.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
(2) | Includes cost of revenue in the amount of $32.7 million and $142.5 million during the six months ended June 30, 2021 and June 30, 2020, respectively, and $248.8 million, $384.7 million, and $164.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Excludes depreciation and amortization of none and $0.2 million for the six months ended June 30, 2021 and June 30, 2020, respectively, and $0.2 million, $14.1 million, and $12.6 million for the years ended December 31, 2020, 2019 and 2018, respectively, shown separately below. |
June 1, |
December 1, |
June 1, |
December 1, |
|||||||||||||||||||||||||||||
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|
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|
|
|
|
|||||||||||||||||||||||
2021 |
2020 (2),(3) |
2020 (2)(3) |
2019 (2)(3) |
2018 (2)(3) |
2020 |
2019 |
2018 |
|||||||||||||||||||||||||
Other key performance indicators: |
||||||||||||||||||||||||||||||||
Consolidated Locations |
Impact of ChinaCo on Consolidated Locations (2) |
|||||||||||||||||||||||||||||||
Workstation capacity (in ones) |
770,000 | 936,000 | 865,000 | 802,000 | 444,000 | 115,000 | 106,000 | 52,000 | ||||||||||||||||||||||||
Memberships (in ones) (1) |
406,000 | 578,000 | 401,000 | 628,000 | 387,000 | 65,000 | 59,000 | 33,000 | ||||||||||||||||||||||||
Occupancy Rate |
52 | % | 58 | % | 46 | % | 73 | % | 80 | % | 57 | % | 56 | % | 64 | % | ||||||||||||||||
Enterprise Membership Percentage |
51 | % | 48 | % | 52 | % | 42 | % | 38 | % | 44 | % | 37 | % | 31 | % | ||||||||||||||||
Unconsolidated Locations |
|
|||||||||||||||||||||||||||||||
Workstation capacity (in ones) |
168,000 | 58,000 | 166,000 | 53,000 | 22,000 | |||||||||||||||||||||||||||
Memberships (in ones) |
111,000 | 34,000 | 89,000 | 34,000 | 14,000 | |||||||||||||||||||||||||||
Occupancy Rate |
66 | % | 59 | % | 54 | % | 65 | % | 63 | % | ||||||||||||||||||||||
Total Locations |
||||||||||||||||||||||||||||||||
Workstation capacity (in ones) |
937,000 | 994,000 | 1,030,000 | 855,000 | 466,000 | |||||||||||||||||||||||||||
Memberships (in ones) (1) |
517,000 | 613,000 | 490,000 | 662,000 | 401,000 | |||||||||||||||||||||||||||
Occupancy Rate |
55 | % | 58 | % | 47 | % | 72 | % | 80 | % |
(1) | Consolidated Locations and Total Locations Memberships include WeMemberships of 4,000 and 35,000 as of June 1, 2021 and 2020, respectively, and 6,000, 43,000 and 30,000 as of December 1, 2020, 2019 and 2018, respectively. WeMemberships are legacy products that provide member user login access to the WeWork member network online or through the mobile application as well as access to service offerings and the right to reserve space on an à la carte basis, among other benefits. WeMemberships are excluded from the calculation of our Occupancy. |
(2) | Effective October 2, 2020, the Company deconsolidated ChinaCo and as a result, beginning with the fourth quarter of 2020, the workstation capacity, memberships, occupancy and enterprise memberships percentages for Consolidated Locations as of June 1, 2021 and December 1, 2020 excludes the impact of ChinaCo locations, and they are included in the totals for Unconsolidated Locations presented as of June 1, 2021 and December 1, 2020, with no impact on Total Locations. Prior to October 2, 2020, ChinaCo was still consolidated and therefore the key performance indicators for ChinaCo are included in Consolidated Locations as of June 1, 2020, December 1, 2019 and 2018. |
(3) | On June 1, 2021, we closed a franchise agreement with Ampa and transferred the building operations and obligations of our Israel locations to Ampa. Beginning with June 1, 2021, our Israel locations are no longer Consolidated Locations and are classified as Unconsolidated Locations. Included in Consolidated Locations indicators above are 12,000 workstation capacity and 7,000 Memberships at Israel locations as of June 1, 2020. Included in Consolidated Locations indicators are 12,000, 10,000, and 6,000 workstation capacity and 8,000, 8,000, and 5,000 Memberships at Israel locations as of December 1, 2020, 2019 and 2018, respectively. |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||||||
2021 |
2020 |
2020 |
2019 |
2018 |
||||||||||||||||
Revenue |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses—cost of revenue (1) |
134 | % | 93 | % | 104 | % | 80 | % | 82 | % | ||||||||||
Pre-opening location expenses |
6 | % | 9 | % | 8 | % | 17 | % | 20 | % | ||||||||||
Selling, general and administrative expenses (1) |
42 | % | 48 | % | 47 | % | 81 | % | 74 | % | ||||||||||
Restructuring and other related costs |
39 | % | 7 | % | 6 | % | 10 | % | — | % | ||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
45 | % | 29 | % | 40 | % | 10 | % | — | % | ||||||||||
Depreciation and amortization |
31 | % | 20 | % | 23 | % | 17 | % | 17 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total operating expenses |
297 | % | 206 | % | 227 | % | 213 | % | 193 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(197 | )% | (106 | )% | (127 | )% | (113 | )% | (93 | )% | ||||||||||
Interest and other income (expense), net |
(52 | )% | 20 | % | 16 | % | 6 | % | (13 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(249 | )% | (86 | )% | (112 | )% | (108 | )% | (106 | )% | ||||||||||
Income tax benefit (provision) |
(1 | )% | (1 | )% | (1 | )% | (1 | )% | — | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(250 | )% | (87 | )% | (112 | )% | (109 | )% | (106 | )% | ||||||||||
Noncontrolling interests |
5 | % | 32 | % | 21 | % | 15 | % | 17 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
(245 | )% | (55 | )% | (92 | )% | (94 | )% | (88 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Exclusive of depreciation and amortization shown separately on the depreciation and amortization line. |
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Membership and service revenue |
$ | 1,144,428 | $ | 1,787,021 | $ | (642,593 | ) | (36 | )% | |||||||
Other revenue |
46,903 | 151,596 | (104,693 | ) | (69 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 1,191,331 | $ | 1,938,617 | $ | (747,286 | ) | (39 | )% | |||||||
ChinaCo Membership and service revenue |
— | 135,702 | (135,702 | ) | (100 | )% | ||||||||||
ChinaCo Other revenue |
— | 1,219 | (1,219 | ) | (100 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue excluding ChinaCo |
$ | 1,191,331 | $ | 1,801,696 | (610,365 | ) | (34 | )% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Membership and service revenue |
$ | 3,133,278 | $ | 3,058,693 | $ | 74,585 | 2 | % | ||||||||
Other revenue |
282,587 | 399,899 | (117,312 | ) | (29 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 3,415,865 | $ | 3,458,592 | $ | (42,727 | ) | (1 | )% | |||||||
ChinaCo Membership and service revenue |
204,291 | 225,377 | (21,086 | ) | (9 | )% | ||||||||||
ChinaCo Other revenue |
1,970 | 3,160 | (1,190 | ) | (38 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue excluding ChinaCo |
$ | 3,209,604 | $ | 3,230,055 | $ | (20,451 | ) | (1 | )% | |||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Membership and service revenue |
$ | 3,058,693 | $ | 1,697,336 | $ | 1,361,357 | 80 | % | ||||||||
Other revenue |
399,899 | 124,415 | 275,484 | 221 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 3,458,592 | $ | 1,821,751 | $ | 1,636,841 | 90 | % | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Location operating expenses |
$ | 1,598,812 | $ | 1,804,802 | $ | (205,990 | ) | (11 | )% | |||||||
ChinaCo location operating expenses |
— | 179,221 | (179,221 | ) | (100 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Location operating expenses excluding ChinaCo |
$ | 1,598,812 | $ | 1,625,581 | $ | (26,769 | ) | (2 | )% | |||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Lease cost contractually paid or payable |
$ | 1,300,034 | $ | 1,266,768 | $ | 33,266 | 3 | % | ||||||||
Non-cash GAAP straight-line lease cost |
131,283 | 228,901 | (97,618 | ) | (43 | )% | ||||||||||
Amortization of lease incentives |
(142,401 | ) | (143,483 | ) | 1,082 | (1 | )% | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total real estate operating lease cost |
$ | 1,288,916 | $ | 1,352,186 | $ | (63,270 | ) | (5 | )% | |||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change % |
||||||||||
Lease cost contractually paid or payable |
117 | % | 73 | % | 44 | % | ||||||
Non-cash GAAP straight-line lease cost |
12 | % | 13 | % | (1 | )% | ||||||
Amortization of lease incentives |
(13 | )% | (8 | )% | (5 | )% | ||||||
|
|
|
|
|
|
|||||||
Total real estate operating lease cost |
116 | % | 78 | % | 38 | % | ||||||
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Location operating expenses |
$ | 3,542,918 | $ | 2,758,318 | $ | 784,600 | 28 | % | ||||||||
ChinaCo location operating expenses |
266,318 | 290,254 | (23,936 | ) | (8 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Location operating expenses excluding ChinaCo |
$ | 3,276,600 | $ | 2,468,064 | $ | 808,536 | 33 | % | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Lease cost contractually paid or payable |
$ | 2,638,455 | $ | 1,686,431 | $ | 952,024 | 56% | |||||||||
Non-cash GAAP straight-line lease cost |
380,851 | 411,161 | (30,310 | ) | (7)% | |||||||||||
Amortization of lease incentives |
(297,828 | ) | (169,676 | ) | (128,152 | ) | 76% | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total real estate operating lease cost |
$ | 2,721,478 | $ | 1,927,916 | $ | 793,562 | 41% | |||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2020 |
2019 |
Change % |
||||||||||
Lease cost contractually paid or payable |
86% | 58% | 28% | |||||||||
Non-cash GAAP straight-line lease cost |
12% | 14% | (2)% | |||||||||
Amortization of lease incentives |
(10)% | (6)% | (4)% | |||||||||
|
|
|
|
|
|
|||||||
Total real estate operating lease cost |
89% | 66% | 23% | |||||||||
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Location operating expenses |
$ | 2,758,318 | $ | 1,491,783 | $ | 1,266,535 | 85% |
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Lease cost contractually paid or payable |
$ | 1,686,431 | $ | 824,650 | $ | 861,781 | 105% | |||||||||
Non-cash GAAP straight-line lease cost |
411,161 | 268,125 | 143,036 | 53% | ||||||||||||
Amortization of lease incentives |
(169,676 | ) | (88,867 | ) | (80,809 | ) | 91% | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total real estate operating lease cost |
$ | 1,927,916 | $ | 1,003,908 | $ | 924,008 | 92% | |||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2018 |
Change % |
||||||||||
Lease cost contractually paid or payable |
58% | 51% | 7% | |||||||||
Non-cash GAAP straight-line lease cost |
14% | 17% | (3)% | |||||||||
Amortization of lease incentives |
(6)% | (6)% | — % | |||||||||
|
|
|
|
|
|
|||||||
Total real estate operating lease cost |
66% | 62% | 4% | |||||||||
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Pre-opening location expenses |
$ | 76,839 | $ | 165,919 | $ | (89,080 | ) | (54)% | ||||||||
ChinaCo pre-opening location expenses |
— | 12,359 | (12,359 | ) | (100)% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pre-opening location expenses excluding ChinaCo |
$ | 76,839 | $ | 153,560 | $ | (76,721 | ) | (50)% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Lease cost contractually paid or payable |
$ | 55,945 | $ | 69,069 | $ | (13,124 | ) | (19)% | ||||||||
Non-cash GAAP straight-line lease cost |
25,534 | 112,126 | (86,592 | ) | (77)% | |||||||||||
Amortization of lease incentives |
(10,158 | ) | (23,562 | ) | 13,404 | (57)% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total pre-opening location real estate operating lease cost |
$ | 71,321 | $ | 157,633 | $ | (86,312 | ) | (55)% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Pre-opening location expenses |
$ | 273,049 | $ | 571,968 | $ | (298,919 | ) | (52)% | ||||||||
ChinaCo pre-opening location expenses |
13,465 | 71,681 | (58,216 | ) | (81)% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pre-opening location expenses excluding ChinaCo |
$ | 259,584 | $ | 500,287 | $ | (240,703 | ) | (48)% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Lease cost contractually paid or payable |
$ | 128,452 | $ | 119,220 | $ | 9,232 | 8% | |||||||||
Non-cash GAAP straight-line lease cost |
171,772 | 484,099 | (312,327 | ) | (65)% | |||||||||||
Amortization of lease incentives |
(40,550 | ) | (60,447 | ) | 19,897 | (33)% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total pre-opening location real estate operating lease cost |
$ | 259,674 | $ | 542,872 | $ | (283,198 | ) | (52)% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Pre-opening location expenses |
$ | 571,968 | $ | 357,831 | $ | 214,137 | 60% |
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Lease cost contractually paid or payable |
$ | 119,220 | $ | 80,736 | $ | 38,484 | 48% | |||||||||
Non-cash GAAP straight-line lease cost |
484,099 | 268,593 | 215,506 | 80% | ||||||||||||
Amortization of lease incentives |
(60,447 | ) | (3,759 | ) | (56,688 | ) | N/M | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total pre-opening location real estate operating lease cost |
$ | 542,872 | $ | 345,570 | $ | 197,302 | 57% | |||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Selling, general and administrative expenses |
$ | 499,502 | $ | 925,101 | $ | (425,599 | ) | (46)% | ||||||||
ChinaCo selling, general and administrative expenses |
— | 49,221 | (49,221 | ) | (100)% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expenses excluding ChinaCo |
$ | 499,502 | $ | 875,880 | $ | (376,378 | ) | (43)% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Selling, general and administrative expenses |
$ | 1,604,669 | $ | 2,793,663 | $ | (1,188,994 | ) | (43)% | ||||||||
ChinaCo selling, general and administrative expenses |
68,884 | 85,237 | (16,353 | ) | (19)% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative expenses excluding ChinaCo |
$ | 1,535,785 | $ | 2,708,426 | $ | (1,172,641 | ) | (43)% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Selling, general and administrative expenses |
$ | 2,793,663 | $ | 1,349,622 | $ | 1,444,041 | 107% |
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Restructuring and other related costs |
$ | 466,045 | $ | 136,216 | $ | 329,829 | 242 | % | ||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
$ | 541,585 | $ | 555,959 | $ | (14,374 | ) | (3 | )% |
Six Months Ended June 30, |
||||||||
(Amounts in thousands) |
2021 |
2020 |
||||||
Impairment of assets held for sale |
$ | — | $ | 120,005 | ||||
Impairment and write-off of long-lived assets associated with restructuring |
510,940 | 423,063 | ||||||
Impairment of long-lived assets primarily associated with COVID-19 |
31,461 | 62,314 | ||||||
Gain on sale of assets |
(816 | ) | (49,423 | ) | ||||
|
|
|
|
|||||
Total |
$ | 541,585 | $ | 555,959 | ||||
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Restructuring and other related costs |
$ | 206,703 | $ | 329,221 | $ | (122,518 | ) | (37)% | ||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
$ | 1,355,921 | $ | 335,006 | $ | 1,020,915 | 305% |
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Impairment of assets held for sale |
$ | 120,273 | $ | 2,559 | ||||
Impairment of goodwill |
— | 214,515 | ||||||
Impairment of intangible assets |
— | 51,789 | ||||||
Impairment and write-off of long-lived assets associated with restructuring |
796,734 | 66,187 | ||||||
Impairment of long-lived assets primarily associated with COVID-19 |
345,034 | — | ||||||
Gain on sale of assets |
(59,165 | ) | (44 | ) | ||||
Loss on ChinaCo Deconsolidation |
153,045 | — | ||||||
|
|
|
|
|||||
Total |
$ | 1,355,921 | $ | 335,006 | ||||
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Restructuring and other related costs |
$ | 329,221 | $ | — | $ | 329,221 | N/M | |||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
$ | 335,006 | $ | — | $ | 335,006 | N/M |
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Depreciation and amortization expense |
$ | 364,341 | $ | 390,156 | $ | (25,815 | ) | (7)% |
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Depreciation and amortization expense |
$ | 779,368 | $ | 589,914 | $ | 189,454 | 32% |
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Depreciation and amortization expense |
$ | 589,914 | $ | 313,514 | $ | 276,400 | 88% |
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Income (loss) from equity method investments |
$ | (24,510 | ) | $ | (47,111 | ) | $ | 22,601 | (48 | )% | ||||||
Interest expense |
(217,828 | ) | (138,090 | ) | (79,738 | ) | 58 | % | ||||||||
Interest income |
9,455 | 8,742 | 713 | 8 | % | |||||||||||
Foreign currency gain (loss) |
(37,925 | ) | (149,985 | ) | 112,060 | (75 | )% | |||||||||
Gain on change in fair value of related party financial instruments |
(350,822 | ) | 792,313 | (1,143,135 | ) | (144 | )% | |||||||||
Loss on extinguishment of debt |
— | (76,295 | ) | 76,295 | (100 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest and other income (expense), net |
$ | (621,630 | ) | $ | 389,574 | $ | (1,011,204 | ) | (260 | )% | ||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Income (loss) from equity method investments |
$ | (44,788 | ) | $ | (32,206 | ) | $ | (12,582 | ) | 39% | ||||||
Interest expense |
(331,217 | ) | (99,587 | ) | (231,630 | ) | 233% | |||||||||
Interest income |
16,910 | 53,244 | (36,334 | ) | (68)% | |||||||||||
Foreign currency gain (loss) |
149,196 | 29,652 | 119,544 | 403% | ||||||||||||
Gain on change in fair value of related party financial instruments |
819,647 | 239,145 | 580,502 | 243% | ||||||||||||
Loss on extinguishment of debt |
(77,336 | ) | — | (77,336 | ) | N/M | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest and other income (expense), net |
$ | 532,412 | $ | 190,248 | $ | 342,164 | 180% | |||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Income (loss) from equity method investments |
$ | (32,206 | ) | $ | (12,638 | ) | $ | (19,568 | ) | 155% | ||||||
Interest expense |
(99,587 | ) | (183,697 | ) | 84,110 | (46)% | ||||||||||
Interest income |
53,244 | 37,663 | 15,581 | 41% | ||||||||||||
Foreign currency gain (loss) |
29,652 | (78,598 | ) | 108,250 | (138)% | |||||||||||
Gain on change in fair value of related party financial instruments |
239,145 | — | 239,145 | N/M | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest and other income (expense), net |
$ | 190,248 | $ | (237,270 | ) | $ | 427,518 | (180)% | ||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Income tax benefit (provision) |
$ | (7,282 | ) | $ | (16,115 | ) | $ | 8,833 | (55)% |
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Income tax benefit (provision) |
$ | (19,506 | ) | $ | (45,637 | ) | $ | 26,131 | (57)% |
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Income tax benefit (provision) |
$ | (45,637 | ) | $ | 850 | $ | (46,487 | ) | N/M |
• | Cash on hand, including $844.0 million of cash and cash equivalents as of June 30, 2021, including $102.6 million held by our consolidated variable interest entities (“VIEs”) that will be used first to settle obligations of the VIE and are also subject to the restrictions discussed below; |
• | Draws on the $1.1 billion SoftBank Senior Secured Notes (defined below) or the $550.0 million A&R Senior Secured Notes (defined below). On the earlier of the Closing and September 30, 2021, the Company and the Note Purchaser (as defined section entitled “Summary of the Proxy Statement/Prospectus — The Business Combination — Closing and Effective Time” |
• | The 2020 LC Facility (defined below) which became available in February 2020 to provide $1.75 billion in letters of credit which may be used as lease security for the Company’s leases in lieu of providing cash security deposits and for general corporate purposes and other obligations of WeWork Companies LLC or its business. As of June 30, 2021, there was $84.7 million in remaining letter of credit availability under the 2020 LC Facility. In March 2021, the Company, the SoftBank Obligor, and BowX entered into a letter agreement (the “Credit Support Letter Agreement”), pursuant to which SBG has committed to consent to an extension of the termination date of the 2020 LC Facility from February 10, 2023 to no later than February 10, 2024, subject to the terms and conditions set forth therein; and |
• | In May 2021, the Company entered into a loan agreement with a third party to raise up to $350.0 million of cash in exchange for letters of credit issued from the 2020 LC Facility. The Company drew $349.0 million of loans under the LC Debt Facility (as defined below) in the second quarter of 2021 which mature in September 2021. |
June 30, 2021 |
||||||||
(Amounts in thousands) |
Asia JVs (1) |
Other VIEs (2) |
||||||
Cash and cash equivalents |
$ | 94,540 | $ | 8,065 | ||||
Restricted cash |
10,059 | — | ||||||
Total assets |
1,871,367 | 15,741 | ||||||
Total liabilities |
1,554,760 | 1,705 | ||||||
Redeemable stock issued by VIEs |
500,000 | — | ||||||
Total net assets (3) |
(183,393 | ) | 14,036 |
(1) | The “Asia JVs” as of June 30, 2021 includes only JapanCo. As of June 30, 2021, JapanCo was prohibited from declaring dividends (including to us) without approval of an affiliate of SoftBank Group Capital Limited. As a result, any net assets of JapanCo would be considered restricted net assets to the Company as of June 30, 2021. The net assets of JapanCo include the equivalent of preferred stock issued to affiliates of SBG and other investors with aggregate liquidation preferences totaling $0.5 billion as of June 30, 2021, which preferred stock is redeemable upon the occurrence of an event that is not solely within our control. The initial issuance price of such redeemable preferred stock equals the liquidation preference for each share issued as of June 30, 2021. After reducing the net assets of JapanCo by the liquidation preference associated with such redeemable preferred stock, the remaining net assets of each Asia JV is negative. |
(2) | “Other VIEs” includes all other consolidated VIEs, other than the Asia JVs discussed separately in (1) and as of June 30, 2021 includes the WeCap Manager and WeCap Holdings Partnership. |
(3) | Total net assets represents total assets less total liabilities and redeemable stock issued by VIEs after the total assets and total liabilities have both been reduced to remove amounts that eliminate in consolidation. |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||||||
|
|
|
|
|||||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2020 |
2019 |
2018 |
|||||||||||||||
Gross capital expenditures |
$ | 153,142 | $ | 985,011 | $ | 1,441,232 | $ | 3,488,086 | $ | 2,055,020 | ||||||||||
Cash collected for tenant improvement allowances |
(233,339 | ) | (737,392 | ) | (1,331,660 | ) | (1,134,216 | ) | (673,415 | ) | ||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
Net capital expenditures |
$ | (80,197 | ) | $ | 247,619 | $ | 109,572 | $ | 2,353,870 | $ | 1,381,605 | |||||||||
|
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|
|
|
|
|
|
|
|
Six Months Ended June 30, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2021 |
2020 |
$ |
% |
||||||||||||
Cash provided by (used in): |
||||||||||||||||
Operating activities |
$ | (1,158,957 | ) | $ | (168,552 | ) | $ | (990,405 | ) | 588% | ||||||
Investing activities |
(186,628 | ) | (7,072 | ) | (179,556 | ) | 2,539% | |||||||||
Financing activities |
1,349,710 | (1,155,128 | ) | 2,504,838 | (217)% | |||||||||||
Effects of exchange rate changes |
(2,793 | ) | (22,610 | ) | 19,817 | (88)% | ||||||||||
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|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
1,332 | (1,353,362 | ) | 1,354,694 | (100)% | |||||||||||
Cash, cash equivalents and restricted cash - Beginning of period |
854,153 | 2,200,688 | (1,346,535 | ) | (61)% | |||||||||||
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|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash - End of period |
$ | 855,485 | $ | 847,326 | $ | 8,159 | 1% | |||||||||
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|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2020 |
2019 |
$ |
% |
||||||||||||
Cash provided by (used in): |
||||||||||||||||
Operating activities |
$ | (857,008 | ) | $ | (448,244 | ) | $ | (408,764 | ) | 91% | ||||||
Investing activities |
(444,087 | ) | (4,775,520 | ) | 4,331,433 | 91% | ||||||||||
Financing activities |
(46,814 | ) | 5,257,271 | (5,304,085 | ) | (101)% | ||||||||||
Effects of exchange rate changes |
1,374 | 3,239 | (1,865 | ) | (58)% | |||||||||||
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|
|
|
|
|
|||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,346,535 | ) | 36,746 | (1,383,281 | ) | N/M | ||||||||||
Cash, cash equivalents and restricted cash—Beginning of period |
2,200,688 | 2,163,942 | 36,746 | 2% | ||||||||||||
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|
|
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|
|
|||||||||
Cash, cash equivalents and restricted cash—End of period |
$ | 854,153 | $ | 2,200,688 | $ | (1,346,535 | ) | (61)% | ||||||||
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|
Year Ended December 31, |
Change |
|||||||||||||||
(Amounts in thousands, except percentages) |
2019 |
2018 |
$ |
% |
||||||||||||
Cash provided by (used in): |
||||||||||||||||
Operating activities |
$ | (448,244 | ) | $ | (176,729 | ) | $ | (271,515 | ) | 154% | ||||||
Investing activities (1) |
(4,775,520 | ) | (2,475,798 | ) | (2,299,722 | ) | 93% | |||||||||
Financing activities (1) |
5,257,271 | 2,658,469 | 2,598,802 | 98% | ||||||||||||
Effects of exchange rate changes |
3,239 | (13,119 | ) | 16,358 | (125)% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
36,746 | (7,177 | ) | 43,923 | N/M | |||||||||||
Cash, cash equivalents and restricted cash—Beginning of period |
2,163,942 | 2,171,119 | (7,177 | ) | N/M | |||||||||||
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|
|
|
|
|
|
|
|||||||||
Cash, cash equivalents, and restricted cash—End of period |
$ | 2,200,688 | $ | 2,163,942 | $ | 36,746 | 2% | |||||||||
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(1) | Investing activities and financing activities during the year ended December 31, 2019, included $795.5 million in cash outflows and $942.2 million in cash inflows, respectively, relating to the acquisition, development and related financing of the real estate acquired by the 424 Fifth Venture. |
(Amounts in thousands) |
Remainder of 2021 |
2022 |
2023 |
2024 |
2025 |
2026 and beyond |
Total |
|||||||||||||||||||||
Non-cancelable operating lease commitments(1) |
$ | 1,244,849 | $ | 2,517,258 | $ | 2,597,497 | $ | 2,653,586 | $ | 2,680,086 | $ | 22,446,916 | $ | 34,140,192 | ||||||||||||||
Finance lease commitments, including interest |
4,598 | 9,191 | 8,849 | 7,335 | 6,334 | 32,470 | 68,777 | |||||||||||||||||||||
Construction commitments (2) |
39,852 | — | — | — | — | — | 39,852 | |||||||||||||||||||||
Asset retirement obligations (3) |
— | 3,979 | 1,582 | 2,979 | 857 | 210,786 | 220,183 | |||||||||||||||||||||
Debt obligations, including interest (4) |
386,541 | 81,440 | 52,684 | 52,684 | 695,342 | — | 1,268,691 | |||||||||||||||||||||
Unsecured related party debt, including interest (5) |
55,000 | 110,000 | 110,000 | 110,000 | 2,255,000 | — | 2,640,000 | |||||||||||||||||||||
Convertible related party liabilities (6) |
57,944 | — | — | — | — | — | 57,944 | |||||||||||||||||||||
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|
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Total |
$ | 1,788,784 | $ | 2,721,868 | $ | 2,770,612 | $ | 2,826,584 | $ | 5,637,619 | $ | 22,690,172 | $ | 38,435,639 | ||||||||||||||
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(1) | Future undiscounted fixed minimum lease cost payments for non-cancelable operating leases, inclusive of escalation clauses and exclusive of lease incentive receivables and contingent lease cost payments, that have initial or remaining lease terms in excess of one year as of June 30, 2021. Excludes an additional $2.4 billion relating to executed non-cancelable leases that have not yet commenced as of June 30, 2021. See Note 13 of the notes to WeWork’s unaudited interim condensed consolidated financial statements included elsewhere in this proxy statement/prospectus for additional details. |
(2) | In the ordinary course of our business, we enter into certain agreements to purchase construction and related contracting services related to the build-outs of our locations that are enforceable and legally binding and that specify all significant terms and the approximate timing of the purchase transaction. Our purchase orders are based on current needs and are fulfilled by the vendors as needed in accordance with our construction schedule. |
(3) | Certain lease agreements contain provisions that require us to remove leasehold improvements at the end of the lease term. When such an obligation exists, we record an asset retirement obligation at the inception of the lease at its estimated fair value. These obligations are recorded as liabilities on our condensed consolidated balance sheet as of June 30, 2021. |
(4) | Primarily represents principal and interest payments on Senior Notes, LC Debt Facility and other loans as of June 30, 2021. |
(5) | Primarily represents principal and interest payments on SoftBank Senior Unsecured Notes as of June 30, 2021. |
(6) | Represents the fair value as of June 30, 2021, of the Company’s obligation to deliver 6,121,239 shares of the Company’s Series H-3 Convertible Preferred Stock or Series H-4 Convertible Preferred Stock to be issued pursuant to the requirements of the “Penny Warrants”, as defined and as further described in Note 9 of the notes to WeWork’s unaudited interim condensed consolidated financial statements included elsewhere in this proxy statement/prospectus. The Penny Warrants became exercisable in April 2020 and expire on December 27, 2024. These obligations are recorded as liabilities on the Company’s condensed consolidated balance sheet as of June 30, 2021 in accordance with ASC 480, as they include a potential cash settlement obligation to repurchase shares that is outside of our control. |
Name |
Age |
Position | ||
Sandeep Mathrani | 59 | Director Nominee and Chief Executive Officer | ||
Benjamin “Ben” Dunham | 44 | Chief Financial Officer | ||
Anthony Yazbeck | 43 |
President and Chief Operating Officer | ||
Jared DeMatteis | 38 | Chief Legal Officer | ||
Lauren Fritts | 39 | Chief Communications Officer | ||
Peter Greenspan | 47 | Global Head of Real Estate | ||
Hamid Hashemi | 62 | Chief Product & Experience Officer | ||
Maral Kazanjian | 48 | Chief People Officer | ||
Scott Morey | 56 | President of Technology and Innovation | ||
Roger Solé Rafols | 47 |
Chief Marketing Officer | ||
Marcelo Claure | 50 | Director Nominee | ||
Michel Combes | 59 | Director Nominee | ||
Bruce Dunlevie | 64 | Director Nominee | ||
Véronique Laury | 56 | Director Nominee | ||
Deven Parekh | 51 | Director Nominee | ||
Vivek Ranadivé | 63 | Director Nominee | ||
Kirthiga Reddy | 50 |
Director Nominee | ||
Jeffrey “Jeff” Sine | 66 | Director Nominee |
• | appointing, compensating, retaining, evaluating, terminating and overseeing New WeWork’s independent registered public accounting firm; |
• | discussing with New WeWork’s independent registered public accounting firm their independence from management; |
• | reviewing with New WeWork’s independent registered public accounting firm the scope and results of their audit; |
• | pre-approving all audit and permissible non-audit services to be performed by New WeWork’s independent registered public accounting firm; |
• | overseeing the financial reporting process and discussing with management and New WeWork’s independent registered public accounting firm the interim and annual financial statements that New WeWork files with the SEC; |
• | reviewing and monitoring New WeWork’s accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; |
• | reviewing related party transactions; and |
• | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters. |
• | reviewing and approving, either alone or together with the other independent members of the board of directors, the compensation of New WeWork’s Chief Executive Officer and our other executive officers; |
• | reviewing and recommending to our board of directors the compensation of New WeWork’s non-employee directors; |
• | selecting compensation consultants and advisors and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors; and |
• | reviewing any equity plans proposed to be adopted by New WeWork. |
• | identifying individuals qualified to become members of New WeWork’s board of directors, consistent with criteria approved by New WeWork’s board of directors; |
• | recommending to New WeWork’s board of directors the nominees for election to New WeWork’s board of directors at annual meetings of New WeWork’s stockholders; |
• | overseeing an evaluation of New WeWork’s board of directors and its committees; and |
• | developing and recommending to New WeWork’s board of directors a set of corporate governance guidelines. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
• | Sandeep Mathrani, our Chief Executive Officer (“CEO”) |
• | Benjamin (“Ben”) Dunham, our Chief Financial Officer (“CFO”) |
• | Anthony Yazbeck, our President & Chief Operating Officer (“COO”), International |
• | Shyam Gidumal, our President & COO*, Americas; and |
• | Samad (“Matt”) Jahansouz, our Chief People Officer * |
• | Arthur Minson, former Co-CEO |
• | Sebastian Gunningham, former Co-CEO |
• | Kimberly Ross, former CFO |
• | Eugen Miropolski, former President & COO, International |
* |
Due to changes in management structure in 2021, Messrs. Gidumal and Jahansouz are not expected to be executive officers of New WeWork following the Business Combination. |
1. Purposeful |
Be intentional about our compensation programs so that we can recruit and reward the talent we need to drive our business over both the short and long-term | |
2. External Competitiveness |
Align total compensation to comparable jobs within the relevant external labor market, while providing enough flexibility to attract and retain the best people | |
3. Internal Comparability |
Ensure that similar jobs and similar performance are paid equitably across the company | |
4. Results Orientated |
Tie short and long-term rewards to our business goals and financial achievements to ensure we maximize the impact of each compensation dollar spent |
Objective |
Performance Period |
Performance Measure | ||||
Base Salary |
Attracts and retains talented executives, differentiates individual roles and responsibilities and provides stable income to executives | Ongoing | N/A | |||
Annual Cash Incentive |
Directly ties pay to key strategic company priorities, rewarding both company performance and individual achievement. | 1 Year | Achievement of 2020 goals set by our CEO related to employee and member satisfaction, committed memberships, reduction of operating and lease costs, increase in earnings, improved liquidity position, and the launch of products to drive 2021 revenue |
Objective |
Performance Period |
Performance Measure | ||||
Time-Based Option Awards |
Reinforces the importance of long-term retention, an ownership culture, and creates alignment with our shareholders | 3 Years | Increase, if any, in stock price | |||
Performance-Based Option Awards |
5 Years | Increase, if any, in stock price Also only vests if unlevered operating free cash flow and/or share price goals are met |
Base Salary |
x |
Target Percentage* |
x |
Company Performance Multiplier |
= |
Annual Incentive Award** |
* | Target percentages are reviewed and approved by the Compensation Committee for NEOs other than the CEO and by the Board for the CEO. |
** | The 2020 company performance multiplier could not exceed 150% and had a minimum of 50%. |
* |
Solely for purposes of this program, unlevered operating FCF means Adjusted EBITDA Excluding Non-Cash GAAP Straight-Line Lease Cost and Amortization less Net Capital Expenditures, in each case measured for the trailing four calendar quarters as of the measurement date.Unlevered Operating Free Cash Flow is measured on a quarterly basis as of the last day of each calendar quarter. “ Adjusted EBITDA Excluding Non-Cash GAAP Straight-Line Lease Cost and Amortization” means net loss before income tax (benefit) provision, interest and other (income) expense, depreciation and amortization expense, stock-based compensation expense, expense related to stock-based payments for services rendered by consultants, income or expense relating to the changes in fair value of assets and liabilities remeasured to fair value on a recurring basis, expense related to costs associated with mergers, acquisitions, divestitures and capital raising activities, legal, tax and regulatory reserves or settlements, significant non-ordinary course asset impairment charges and, to the extent applicable, any impact of discontinued operations, restructuring chargers, and other gains and losses on operating assets.This figure also excludes the impact of non-cash GAAP straight-line lease cost and amortization of lease incentives.“ Net Capital Expenditures ” means the gross purchases of property and equipment, as reported in “ cash flows from investment activities ” in the consolidated statements of cash flows, less cash collected from landlords for tenant improvement allowances, as reported in the “ supplemental cash flow disclosures ” schedules in the cash flow statement. |
Metric |
How Is It Measured |
% of Award Amount Earned | ||||||||
| ||||||||||
16% |
33% |
66% (Target) |
100% (Max) | |||||||
Unlevered Operating FCF |
Measured on the last day of each quarter for the trailing four calendar quarters as of the measurement date. | — | $0.8 billion | $1.0 billion | $1.3 billion | |||||
Stock Price* |
If WeWork is publicly listed, measured on a continuous basis during the period beginning on the first day after the nine-month anniversary of a public listing and ending on December 31, 2024, and defined as the volume-weighted average price of one share of WeWork Class A Common Stock over the 90 day period immediately before a measurement date. If WeWork is not publicly listed, measured on the closing date of qualifying capital raise transaction that occurs no later than December 31, 2024, and defined as the per share issue or purchase price of relevant WeWork securities. |
$12.00 | $15.00 | $20.00 | $25.00 |
* | Prior to the 2021 modification, the awards would have been earned 33%, 66% and 100% of target at a stock price of $20.30, $25.80 and $31.30, respectively, with no level of achievement resulting in 16% of the award being earned. |
When Metric is Achieved |
% of Earned Award That Becomes Fully Vested* | |
On or before December 31, 2022** | 50% on December 31, 2022; 50% on December 31, 2022 | |
In 2023 | 100% on December 31, 2023 | |
In 2024 | 100% on December 31, 2024 |
* | The dates shown above apply to any earned portion resulting from achievement of the stock price metric. Because unlevered operating FCF performance cannot be certified by the Compensation Committee until our financial statements are available, for any earned portion resulting from achievement of that metric, the relevant dates will be March 31st immediately following the dates shown above. |
** | If the stock price metric is achieved at the $12.00 level, 100% of the earned portion of the award resulting from that achievement will vest on December 31, 2022. |
Name and Principal Position |
Year | Salary ($) |
Bonus ($) |
Option Awards ($) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||
Sandeep Mathrani Chief Executive Officer |
2020 | $ | 1,280,769 | $ | 1,500,000 | $ | 4,761,205 | $ | 1,800 | $ | 7,543,774 | |||||||||||||
Benjamin Dunham Chief Financial Officer |
2020 | $ | 446,154 | $ | 790,000 | $ | 1,293,278 | $ | 1,800 | $ | 2,531,232 | |||||||||||||
Anthony Yazbeck (1) President & COO, International |
2020 | $ | 788,670 | $ | 1,572,525 | $ | 1,241,111 | $ | 23,660 | $ | 3,625,966 | |||||||||||||
Shyam Gidumal President & COO, Americas |
2020 | $ | 567,692 | $ | 316,675 | $ | 1,299,001 | $ | 1,800 | $ | 2,185,16 | |||||||||||||
Samad Jahansouz Chief People Officer |
2020 | $ | 600,000 | $ | 1,290,000 | $ | 1,493,201 | $ | 1,800 | $ | 3,385,00 | |||||||||||||
Arthur Minson (2) Former Co-Chief Executive Officer |
2020 | $ | 403,846 | $ | 0 | $ | 0 | $ | 8,333,082 | $ | 8,736,928 | |||||||||||||
2019 | $ | 402,185 | $ | 0 | $ | 7,772,737 | $ | 1,938,291 | $ | 10,113,213 | ||||||||||||||
2018 | $ | 51,000 | $ | 0 | $ | 0 | $ | 625,000 | $ | 676,000 | ||||||||||||||
Sebastian Gunningham Former Co-Chief Executive Officer |
2020 | $ | 403,846 | $ | 0 | $ | 341,000 | $ | 10,559,426 | $ | 11,304,272 | |||||||||||||
Kimberly Ross Former Chief Financial Officer |
2020 | $ | 634,615 | $ | 0 | $ | 1,531,001 | $ | 27,231 | $ | 2,192,847 | |||||||||||||
Eugen Miropolski (1) Former President & COO, International |
2020 | $ | 877,504 | $ | 0 | $ | 2,532,451 | $ | 28,689,549 | $ | 32,099,504 |
(1) | For Messrs. Yazbeck and Miropolski, all cash amounts were originally paid in British pounds and converted for purposes of this presentation at an exchange rate of USD $1.36 per GBP £1.00, which was the currency conversion rate as of December 31, 2020. |
(2) | As required by SEC rules, the compensation awarded to or earned by or paid to Mr. Minson in 2018 and 2019 is also disclosed as he was a named executive officer in a prior SEC filing. This is not applicable to any of the other named executive officers. |
Name |
Grant or Approval Date |
Estimated Future Payouts Under Non-equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Option Awards: Number of Securities Underlying Options (#) |
Exercise Price of Option Awards ($/Share) |
Grant Date Fair Value of Option Awards |
||||||||||||||||||||||||||||||||||
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||
Sandeep Mathrani |
3/17/2020 | — | — | — | 500,000 | 1,000,000 | 1,500,000 | — | $ | 2.10 | $ | 1,815,800 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | — | — | — | 1,500,000 | $ | 2.10 | $ | 2,945,405 | |||||||||||||||||||||||||||||
— | — | $ | 1,500,000 | $ | 2,250,000 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
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Benjamin Dunham |
2/10/2020 | — | — | — | — | — | — | 24,000 | $ | 2.10 | $ | 48,446 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | 100,000 | 200,000 | 300,000 | — | $ | 2.10 | $ | 363,160 | |||||||||||||||||||||||||||||
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11/18/2020 | — | — | — | — | — | — | 300,000 | $ | 2.07 | $ | 335,162 | |||||||||||||||||||||||||||||
11/18/2020 | — | — | — | 150,000 | 300,000 | 450,000 | — | $ | 2.07 | $ | 546,510 | |||||||||||||||||||||||||||||
— | $ | 300,000 | $ | 600,000 | $ | 900,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
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Anthony Yazbeck |
2/10/2020 | — | — | — | — | — | — | 300,000 | $ | 2.10 | $ | 605,581 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | 175,000 | 350,000 | 525,000 | — | $ | 2.10 | $ | 635,530 | |||||||||||||||||||||||||||||
— | $ | 394,335 | $ | 788,669 | $ | 1,183,004 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
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Shyam Gidumal |
3/17/2020 | — | — | — | 250,000 | 500,000 | 750,000 | — | $ | 2.10 | $ | 907,900 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | — | — | — | 200,000 | $ | 2.10 | $ | 391,101 | |||||||||||||||||||||||||||||
— | $ | 281,250 | $ | 562,500 | $ | 843,750 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
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Samad Jahansouz |
2/10/2020 | — | — | — | — | — | — | 200,000 | $ | 2.10 | $ | 403,721 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | 300,000 | 600,000 | 900,000 | — | $ | 2.10 | $ | 1,089,480 | |||||||||||||||||||||||||||||
— | $ | 300,000 | $ | 600,000 | $ | 900,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
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Arthur Minson |
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Sebastian Gunningham |
2/10/2020 | — | — | — | — | — | — | 200,000 | $ | 4.00 | $ | 341,000 | ||||||||||||||||||||||||||||
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Kimberly Ross |
3/17/2020 | — | — | — | 375,000 | 750,000 | 1,125,000 | — | $ | 2.10 | $ | 944,350 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | — | — | — | 300,000 | $ | 2.10 | $ | 586,651 | |||||||||||||||||||||||||||||
— | $ | 500,000 | $ | 1,000,000 | $ | 1,500,000 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
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Eugen Miropolski |
2/10/2020 | — | — | — | — | — | — | 400,000 | $ | 2.10 | $ | 807,441 | ||||||||||||||||||||||||||||
3/17/2020 | — | — | — | 475,000 | 950,000 | 1,425,000 | — | $ | 2.10 | $ | 1,725,010 | |||||||||||||||||||||||||||||
— | $ | 520,200 | $ | 1,040,400 | $ | 1,560,600 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
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Option Awards | ||||||||||||||||||||||||
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 (#) |
Exercise Price |
Expiration Date |
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Sandeep Mathrani |
3/17/2020 | (1) |
0 | 1,500,000 | — | $ | 2.10 | 3/17/2030 | ||||||||||||||||
3/17/2020 | (2) |
— | — | 1,500,000 | $ | 2.10 | 3/17/2030 | |||||||||||||||||
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Benjamin Dunham |
6/12/2018 | (3) |
6,035 | 4,310 | — | $ | 26.75 | 6/12/2028 | ||||||||||||||||
3/29/2019 | (4) |
1,114 | 21,159 | — | $ | 38.36 | 3/29/2029 | |||||||||||||||||
2/10/2020 | (5) |
0 | 24,000 | — | $ | 2.10 | 2/10/2030 | |||||||||||||||||
3/17/2020 | (2) |
— | — | 300,000 | $ | 2.10 | 3/17/2030 | |||||||||||||||||
11/18/2020 | (6) |
0 | 300,000 | — | $ | 2.07 | 11/18/2030 | |||||||||||||||||
11/18/2020 | (2) |
— | — | 450,000 | $ | 2.07 | 11/18/2030 | |||||||||||||||||
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Anthony Yazbeck |
8/4/2016 | (7) |
2,052 | 249 | — | $ | 4.12 | 8/4/2026 | ||||||||||||||||
5/21/2017 | (8) |
500 | 166 | — | $ | 4.12 | 5/21/2027 | |||||||||||||||||
2/8/2018 | (9) |
3,832 | 1,915 | — | $ | 4.12 | 2/8/2028 | |||||||||||||||||
2/11/2019 | (10) |
6,621 | 8,657 | — | $ | 4.12 | 2/11/2029 | |||||||||||||||||
3/29/2019 | (4) |
667 | 12,666 | — | $ | 4.12 | 3/29/2029 | |||||||||||||||||
2/10/2020 | (5) |
0 | 300,000 | — | $ | 2.10 | 2/10/2030 | |||||||||||||||||
3/17/2020 | (2) |
0 | — | 525,000 | $ | 2.10 | 3/17/2030 | |||||||||||||||||
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Shyam Gidumal |
3/17/2020 | (5) |
— | 200,000 | — | $ | 2.10 | 3/17/2030 | ||||||||||||||||
3/17/2020 | (2) |
— | — | 750,000 | $ | 2.10 | 3/17/2030 | |||||||||||||||||
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Samad Jahansouz |
2/11/2019 | (11) |
2,727 | 6,364 | — | $ | 4.12 | 2/11/2029 | ||||||||||||||||
2/10/2020 | (5) |
0 | 200,000 | — | $ | 2.10 | 2/10/2030 | |||||||||||||||||
3/17/2020 | (2) |
0 | — | 900,000 | $ | 2.10 | 3/17/2030 | |||||||||||||||||
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Arthur Minson (12) |
6/2/2015 | 1,773,205 | 0 | — | $ | 7.28 | 6/1/2025 | |||||||||||||||||
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Sebastian Gunningham |
— | — | — | — | — | — | ||||||||||||||||||
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Kimberly Ross |
— | — | — | — | — | — | ||||||||||||||||||
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Eugen Miropolski |
1/21/2016 | 7,992 | 0 | — | $ | 4.12 | 1/21/2026 | |||||||||||||||||
5/21/2017 | 478 | 0 | — | $ | 4.12 | 5/21/2027 | ||||||||||||||||||
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(1) | The stock option vests over a three-year period from January 15, 2020, with 100% vesting on the third anniversary thereof, subject to continued employment through the vesting date. |
(2) | These performance-based stock options vest based on certain free cash flow and/or valuation metrics to the extent achieved on or prior to December 31, 2024, subject to continued employment through certain dates depending on when the metric is met. For more information about these awards, see the Equity Grants section of the Compensation Discussion and Analysis above. |
(3) | The stock option vests over a five-year period from January 16, 2018, with 20% vesting on the first anniversary thereof and the remainder in equal monthly installments, subject to continued employment through each vesting date. |
(4) | The stock option vests over a seven-year period from March 16, 2019, with 5% vesting on the first and second anniversary thereof, 15% vesting on the third, fourth, fifth, and sixth anniversary thereof, and 30% vesting on the seventh anniversary thereof, subject to continued employment through each vesting date. |
(5) | The stock option vests over a three-year period from January 15, 2020, with 33% vesting on the first anniversary thereof and the remainder in equal quarterly installments, subject to continued employment through each vesting date. The option grant held by Mr. Jahansouz is expected to become fully vested in connection with his departure from employment pursuant to the terms of a transition agreement executed by him on July 15, 2021. |
(6) | The stock option vests over a three-year period from November 15, 2020, with 33% vesting on the first anniversary thereof and the remainder in equal quarterly installments, subject to continued employment through each vesting date. |
(7) | The stock option vests over a five-year period from March 14, 2016, with 20% vesting on the first anniversary thereof and the remainder in equal monthly installments, subject to continued employment through each vesting date. |
(8) | The stock option vests over a five-year period from March 9, 2017, in equal monthly installments, subject to continued employment through each vesting date. |
(9) | The stock option vests over a five-year period from August 1, 2017, in equal monthly installments, subject to continued employment through each vesting date. |
(10) | The stock option vests over a five-year period from October 1, 2018, in equal monthly installments, subject to continued employment through each vesting date. |
(11) | The stock option vests over a five-year period from February 18, 2019, with 20% vesting on the first anniversary thereof and the remainder in equal quarterly installments, subject to continued employment through each vesting date. |
(12) | Mr. Minson also holds 22,727 vested WeWork Partnerships Profits Interest Units with a “catch-up base amount” of $38.36. For more information about the WeWork Partnership and WeWork Partnerships Profits Interest Units granted to our former senior management team, see the section entitled “Certain Relationships and Related Person Transactions — WeWork. ” |
Name |
Termination Scenario |
Cash Severance ($) (1) |
Continued Healthcare ($) (2) |
Value of Option Exercise Extension ($) (3) |
Value of Accelerated Equity Vesting ($) |
Total ($) |
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Sandeep Mathrani |
Termination without Cause or Resignation for Good Reason | $ | 3,000,000 | $ | 9,021 | — | — | (4) |
$ | 3,009,021 | ||||||||||||
Death | $ | 1,500,000 | $ | 9,021 | — | — | (4) |
$ | 1,509,021 | |||||||||||||
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Benjamin Dunham |
Termination without Cause or Resignation for Good Reason | $ | 1,200,000 | $ | 15,596 | $ | 257 | — | $ | 1,215,853 | ||||||||||||
Death | $ | 600,000 | $ | 15,596 | $ | 257 | — | $ | 615,853 | |||||||||||||
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Anthony Yazbeck (5) |
Termination without Cause | $ | 1,145,609 | — | $ | 7,274 | — | $ | 1,152,883 | |||||||||||||
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Shyam Gidumal |
Termination without Cause or Resignation for Good Reason | $ | 1,312,500 | $ | 852 | — | — | (6) |
— | |||||||||||||
Death | $ | 750,000 | $ | 852 | — | — | — | |||||||||||||||
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Samad Jahansouz |
Termination without Cause or Resignation for Good Reason | $ | 1,200,000 | $ | 15,596 | $ | 1,584 | — | $ | 1,217,180 | ||||||||||||
Death | $ | 600,000 | $ | 15,596 | $ | 1,584 | — | $ | 617,180 | |||||||||||||
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(1) | The amounts in this column reflect 12 months of base salary (or, for Mr. Yazbeck, 6 months of base salary plus pay in lieu of 6 months’ notice) in the event of an involuntary termination, and a pro-rated bonus payment for the year of termination in the event of an involuntary termination or upon death. |
(2) | The amounts in this column reflect 12 months of continued health care coverage at active employee rates. |
(3) | The amounts in this column reflect the incremental value that would have been recognized for accounting purposes as a result of an extension of the exercise period applicable to each individual’s vested and outstanding stock options as of December 31, 2020, until 10 days following the lock-up period after a public listing. Neither Mr. Mathrani nor Mr. Gidumal had any vested stock options as of December 31, 2020. |
(4) | Although 1,500,000 time-based options to purchase shares of WeWork’s Class A common stock at $2.10 per share would have become vested upon an involuntary termination or upon death, no amount is reported in this column because the fair value of a share of WeWork Class A Common Stock, as of December 31, 2020, was $2.09 based on a third-party valuation report and, as a result, these options were all underwater. In addition, no incremental value would have been recognized for accounting purposes as a result of the accelerated vesting. |
(5) | For Mr. Yazbeck, the amounts above would have been paid or provided in British pounds and have been converted for purposes of this presentation at an exchange rate of USD $1.36 per GBP £1.00, which was the currency conversion rate as of December 31, 2020. |
(6) | No amount is reported in this column, because Mr. Gidumal was not entitled to any accelerated equity vesting as of December 31, 2021. On August 2, 2021, Mr. Gidumal’s employment agreement was amended to provide that, upon an involuntary termination, any unmet service-based vesting condition with respect to his equity awards will be deemed satisfied as of the termination date as described above. |
• | each person who is known to be the beneficial owner of more than 5% of BowX Common Stock or is expected to be the beneficial owner of more than 5% of shares of New WeWork Class A Common Stock post-Business Combination; |
• | each of BowX’s current executive officers and directors; |
• | each person who will become an executive officer or director of New WeWork; |
• | all executive officers and directors of BowX pre-Business Combination, as a group; and |
• | all executive officers and directors of New WeWork, as a group. |
(i) | a “no redemption” scenario where (i) no public stockholders exercise their redemption rights in connection with the Business Combination or our extension proposal and (ii) New WeWork issues 558,230,678 shares of New WeWork Class A Common Stock and 19,919,026 shares of New WeWork Class C Common Stock to WeWork Stockholders as consideration for shares of WeWork Common Stock held by WeWork Stockholders immediately prior to the Business Combination; and |
(ii) | a “redemption” scenario where (i) all 48,300,000 outstanding shares of BowX Class A Common Stock are redeemed in connection with the Business Combination and (ii) New WeWork issues 558,230,678 shares of New WeWork Class A Common Stock and 19,919,026 shares of New WeWork Class C Common Stock to WeWork Stockholders as consideration for shares of WeWork Common Stock held by WeWork Stockholders immediately prior to the Business Combination. |
Pre-Business Combination and PIPE |
Post-Business Combination and PIPE |
|||||||||||||||||||||||||||||||
Investment |
Investment |
|||||||||||||||||||||||||||||||
Assuming No Redemption |
Assuming Redemption |
|||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(1) |
Shares of BowX Common Stock(2) |
% of BowX Class A Common Stock |
% of BowX Class B Common Stock |
% of BowX Common Stock |
Number of Shares of New WeWork Common Stock |
% |
Number of Shares of New WeWork Common Stock |
% |
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5% Holders |
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BowX Sponsor, LLC(3) |
7,920,934 | — | 65.6 | 13.1 | 4,920,934 | * | 4,920,934 | * | ||||||||||||||||||||||||
Morgan Stanley(4) |
7,304,000 | 15.1 | — | 12.1 | 7,304,000 | 1.0 | — | — | ||||||||||||||||||||||||
FMR LLC(5) |
7,244,966 | 15.0 | — | 12.0 | 7,244,966 | 1.0 | — | — | ||||||||||||||||||||||||
Iridian Asset Management LLC(6) |
4,323,522 | 9.0 | — | 7.2 | 4,323,522 | * | — | — | ||||||||||||||||||||||||
BlackRock Financial Management, Inc.(7) |
4,158,000 | 8.6 | — | 6.9 | 4,158,000 | * | — | * | ||||||||||||||||||||||||
Pacific Investment Management Co. LLC(8) |
4,158,000 | 8.6 | — | 6.9 | 4,158,000 | * | — | — | ||||||||||||||||||||||||
SBG(9) |
— | — | — | — | 364,156,769 | 49.2 | 364,156,769 | 52.7 | ||||||||||||||||||||||||
SVFE(10) |
— | — | — | — | 81,000,391 | 11.6 | 81,000,391 | 12.5 | ||||||||||||||||||||||||
Adam Neumann(11) |
— | — | — | — | 58,313,380 | 8.4 | 58,313,380 | 9.0 | ||||||||||||||||||||||||
Directors and Executive Officers Pre-Business Combination |
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Vivek Ranadivé(12)(13) |
9,732,184 | — | 80.6 | 16.1 | 6,732,184 | 1.0 | 6,732,184 | 1.0 | ||||||||||||||||||||||||
Murray Rode(14) |
9,347,254 | — | 77.4 | 15.5 | 6,347,254 | * | 6,347,254 | 1.0 | ||||||||||||||||||||||||
Eric C.W. Dunn |
36,000 | — | * | * | 36,000 | * | 36,000 | * | ||||||||||||||||||||||||
Lori Wright |
36,000 | — | * | * | 36,000 | * | 36,000 | * | ||||||||||||||||||||||||
Vijay Advani |
36,000 | — | * | * | 36,000 | * | 36,000 | * | ||||||||||||||||||||||||
All BowX directors and executive officers as a group (five individuals) |
11,266,504 | — | 93.3 | 18.7 | 8,266,504 | 1.2 | 8,266,504 | 1.3 | ||||||||||||||||||||||||
Directors and Executive Officers Post-Business Combination |
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Vivek Ranadivé(12)(13) |
9,732,184 | — | 80.6 | 16.1 | 6,732,184 | 1.0 | 6,732,184 | 1.0 | ||||||||||||||||||||||||
Sandeep Mathrani |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Bruce Dunlevie(14) |
— | — | — | — | 19,452,692 | 2.8 | 19,452,692 | 3.0 | ||||||||||||||||||||||||
Jeff Sine |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Michel Combes |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Marcelo Claure |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Véronique Laury |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Kirthiga Reddy |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Deven Parekh |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Benjamin “Ben” Dunham(15) |
— | — | — | — | 19,798 | * | 19,798 | * |
Pre-Business Combination and PIPE |
Post-Business Combination and PIPE |
|||||||||||||||||||||||||||||||
Investment |
Investment |
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Assuming No Redemption |
Assuming Redemption |
|||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(1) |
Shares of BowX Common Stock(2) |
% of BowX Class A Common Stock |
% of BowX Class B Common Stock |
% of BowX Common Stock |
Number of Shares of New WeWork Common Stock |
% |
Number of Shares of New WeWork Common Stock |
% |
||||||||||||||||||||||||
Anthony Yazbeck(16) |
— | — | — | — | 133,973 | * | 133,973 | * | ||||||||||||||||||||||||
Maral Kazanjian(17) |
— | — | — | — | 48,938 | * | 48,938 | * | ||||||||||||||||||||||||
Jared DeMatteis(18) |
— | — | — | — | 83,619 | * | 83,619 | * | ||||||||||||||||||||||||
Lauren Fritts(19) |
— | — | — | — | 37,886 | * | 37,886 | * | ||||||||||||||||||||||||
Peter Greenspan(20) |
— | — | — | — | 128,932 | * | 128,932 | * | ||||||||||||||||||||||||
Hamid Hashemi(21) |
— | — | — | — | 80,995 | * | 80,995 | * | ||||||||||||||||||||||||
Scott Morey |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Roger Solé Rafols(22) |
— | — | — | — | 171,958 | * | 171,958 | * | ||||||||||||||||||||||||
All New WeWork directors and executive officers as a group (eighteen individuals) |
9,732,184 | — | 80.6 | 16.1 | 26,890,975 | 3.9 | |
26,890,975 |
|
4.1 |
* | Less than one percent |
(1) | Unless otherwise noted, the business address of each of those listed in the table above pre-Business Combination is c/o BowX Acquisition Corp., 2400 Sand Hill Rd., Suite 200 Menlo Park, CA 94025 and post-Business Combination is c/o WeWork Inc., 575 Lexington Avenue, New York NY 10022. |
(2) | Prior to the Closing, holders of record of BowX Class A Common Stock and BowX Class B Common Stock are entitled to one vote for each share held on all matters to be voted on by BowX stockholders and vote together as a single class, except as required by law. Upon the filing of the Proposed Charter, each share of the then issued and outstanding BowX Common Stock will convert automatically, on a one-for-one basis, |
(3) | Represents shares held by BowX Sponsor, LLC, our Sponsor. Vivek Ranadivé and Murray Rode are the managing members of our Sponsor, and as such Messrs. Ranadivé and Rode have voting and investment discretion with respect to the BowX Common Stock held of record by our Sponsor and may be deemed to have shared beneficial ownership of the BowX Common Stock held directly by our Sponsor. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. |
(4) | Represents shares held by various funds and accounts managed by Morgan Stanley. Based on information contained in an amended and restated Form 13F filed with the Securities and Exchange Commission on August 23, 2021. |
(5) | Represents shares held by various funds and accounts managed by FMR LLC. Based on information contained in a Form 13F filed with the Securities and Exchange Commission on August 13, 2021. |
(6) | Represents shares held by various funds and accounts managed by Iridian Asset Management LLC. Based on information contained in a Form 13F filed with the Securities and Exchange Commission on August 11, 2021. |
(7) | Represents shares held by various funds and accounts managed by BlackRock Financial Management, Inc. Based on information contained in a Form 13F filed with the Securities and Exchange Commission on August 11, 2021. Excludes up to 1,811,250 shares held by Mr. Ranadivé that he has agreed to transfer to the BlackRock funds upon consummation of the Business Combination. |
(8) | Represents securities held by investment advisory clients or discretionary accounts of which the Pacific Investment Management Co. LLC (“PIMCO”) is the investment adviser. Based on information contained in a Form 13F filed by Allianz Asset Management GmbH (in part with respect to PIMCO) with the Securities and Exchange Commission on August 16, 2021. |
(9) | Represents (i) 320,008,070 shares held by SB WW Holdings (Cayman) Limited, (ii) 39,096,229 shares issuable to SB WW Holdings (Cayman) Limited, or its designee, upon exercise of the First Warrant and (iii) 5,052,470 shares issuable to a subsidiary of SoftBank Group Corp. upon exercise of the Penny Warrants. The address for SB WW Holdings (Cayman) Limited is Walkers Corporate Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands. The address for SoftBank Group Corp. is 1-7-1 Kaigan, Minato-ku, Tokyo, Japan 105-7529. |
(10) | Represents 81,000,391 shares held by SVF Endurance (Cayman) Limited. The address for SVF Endurance (Cayman) Limited is Walkers Corporate Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands. SB Investment Advisers (UK) Limited, an indirect, wholly-owned subsidiary of SBG, is the investment adviser to SVF Endurance (Cayman) Limited. SBG disclaims beneficial ownership over these shares. |
(11) | Represents 543,832 shares held, in the aggregate, by ANINCENTCO1 LLC, ANINCENTCO2 LLC and ANINCENTCO3 LLC, of which Adam Neumann is the managing member, and 57,769,548 shares held by WE Holdings LLC. Adam Neumann and Miguel McKelvey are the managing members of WE Holdings LLC and have shared dispositive power over all of the shares held by WE Holdings LLC, and Miguel McKelvey may be deemed to be a beneficial owner of such shares on that basis. Adam Neumann has sole voting power over all of the shares held by WE Holdings LLC. The address for WE Holdings LLC is 154 Grand Street, New York, New York 10013. Following the Business Combination, Adam Neumann will also hold 19,877,008 WeWork Partnerships Profits Interest Units and an equal number of shares of New WeWork Class C Common Stock, which carry one vote per share. See “Certain Relationships and Related Person Transactions — WeWork — WeWork Partnership” and “Certain Relationships and Related Person Transactions — WeWork — WeWork Partnerships Profits Interest Units” for a description of WeWork Partnerships Profits Interest Units and the corresponding shares of New WeWork Class C Common Stock. Including such shares of New WeWork Class C Common Stock, Mr. Neumann’s total voting power following the Business Combination would be 10.9% in the “no redemption” scenario and 11.7% in the “redemption” scenario. |
(12) | Includes up to 1,811,250 shares held by Mr. Ranadivé that he has agreed to transfer to the BlackRock funds upon consummation of the Business Combination. |
(13) | Includes shares held by our sponsor, BowX Sponsor, LLC, of which each of Mr. Ranadivé and Mr. Rode is a managing member. Each of these individuals shares voting and dispositive control over such shares and may be deemed the beneficial owner of such shares. Each of these individuals disclaims beneficial ownership over any securities owned by our sponsor in which he does not have any pecuniary interest. |
(14) | Represents shares held by Benchmark Capital Partners VII (AIV), L.P. (“BCP AIV”), as nominee for BCP AIV, Benchmark Founders’ Fund VII, L.P. (“BFF VII”) and Benchmark Founders’ Fund VII-B, L.P. (“BFF VII-B”). Benchmark Capital Management Co. VII, L.L.C. (“BCMC VII”) is the general partner of each of BCP AIV, BFF VII and BFF VII-B and may be deemed to have shared voting and dispositive power over the shares held by BCP AIV. Matthew R. Cohler, Bruce W. Dunlevie, Peter H. Fenton, J. William Gurley, Kevin R. Harvey, Mitchell H. Lasky and Steven M. Spurlock, the managing members of BCMC VII, may be deemed to have shared voting and dispositive power over the shares held by BCP AIV, although each of such managing members disclaims beneficial ownership of any such shares except to the extent of its pecuniary interest therein. The address for each of these entities is c/o Benchmark, 2965 Woodside Road, Woodside, CA 94062. |
(15) | Represents shares over which Mr. Dunham has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(16) | Represents 57,045 shares over which Mr. Yazbeck has dispositive power and 76,928 shares over which Mr. Yazbeck has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(17) | Represents shares over which Ms. Kazanjian has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(18) | Represents 438 shares over which Mr. DeMatteis has dispositive power and 83,181 shares over which Mr. DeMatteis has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(19) | Represents shares over which Ms. Fritts has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(20) | Represents shares over which Mr. Greenspan has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(21) | Represents shares over which Mr. Hashemi has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
(22) | Represents shares over which Mr. Rafols has the right to acquire dispositive power upon the exercise of stock options exercisable as of or within 60 days after August 26, 2021. |
• | In 2019, Mr. Langman was appointed by Rhône Group to the management committee of the investment adviser of the WPI Fund and other investment vehicles, WeWork Capital Advisors LLC (“WeCap” (formerly known as “ARK Capital Advisors LLC”), as one of two designees of Rhône Group on such committee. Mr. Langman was also appointed to serve on the investment committee for the Ark Master Fund LP, including its parallel and related vehicles (the “Ark Master Fund”) in addition to continuing to serve on the investment committee for the WPI Fund. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the last reported sale price of the BowX Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which BowX sends the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares of Class A Common Stock to be determined by reference to an agreed table based on the redemption date and the “fair market value” of the Company’s Class A Common Stock; |
• | if, and only if, the last reported sale price of the Class A Common Stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which BowX sends the notice of redemption to the warrant holders; |
• | if, and only if, the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above; and |
• | if, and only if, there is an effective registration statement covering the issuance of the shares of Class A Common Stock (or a security other than the Class A Common Stock into which the Class A Common Stock has been converted or exchanged for in the event the Company is not the surviving company in the initial Business Combination) issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given. |
Fair Market Value of BowX 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 |
³ $18.00 |
|||||||||||||||||||||||||||
57 months |
0.233 | 0.255 | 0.275 | 0.293 | 0.309 | 0.324 | 0.338 | 0.350 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.229 | 0.251 | 0.272 | 0.291 | 0.307 | 0.323 | 0.337 | 0.350 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.225 | 0.248 | 0.269 | 0.288 | 0.305 | 0.321 | 0.336 | 0.349 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.220 | 0.243 | 0.265 | 0.285 | 0.303 | 0.320 | 0.335 | 0.349 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.214 | 0.239 | 0.261 | 0.282 | 0.301 | 0.318 | 0.334 | 0.348 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.208 | 0.234 | 0.257 | 0.278 | 0.298 | 0.316 | 0.333 | 0.348 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.202 | 0.228 | 0.252 | 0.275 | 0.295 | 0.314 | 0.331 | 0.347 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.195 | 0.222 | 0.247 | 0.271 | 0.292 | 0.312 | 0.330 | 0.346 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.187 | 0.215 | 0.241 | 0.266 | 0.288 | 0.309 | 0.328 | 0.345 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.179 | 0.208 | 0.235 | 0.261 | 0.284 | 0.306 | 0.326 | 0.345 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.170 | 0.199 | 0.228 | 0.255 | 0.280 | 0.303 | 0.324 | 0.343 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.159 | 0.190 | 0.220 | 0.248 | 0.274 | 0.299 | 0.322 | 0.342 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.148 | 0.179 | 0.210 | 0.240 | 0.268 | 0.295 | 0.319 | 0.341 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.135 | 0.167 | 0.200 | 0.231 | 0.261 | 0.289 | 0.315 | 0.339 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.120 | 0.153 | 0.187 | 0.220 | 0.253 | 0.283 | 0.311 | 0.337 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.103 | 0.137 | 0.172 | 0.207 | 0.242 | 0.275 | 0.306 | 0.335 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.083 | 0.117 | 0.153 | 0.191 | 0.229 | 0.266 | 0.300 | 0.332 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.059 | 0.092 | 0.130 | 0.171 | 0.213 | 0.254 | 0.292 | 0.328 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.030 | 0.060 | 0.100 | 0.145 | 0.193 | 0.240 | 0.284 | 0.324 | 0.361 | |||||||||||||||||||||||||||
0 months |
0.000 | 0.000 | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.324 | 0.361 |
• | 1% of the total number of BowX Common Stock then outstanding; or |
• | the average weekly reported trading volume of BowX Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | not earlier than the 90th day; |
• | not later than the 120th day; and |
• | before the one-year anniversary of the preceding year’s annual meeting. |
F-3 |
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F-5 |
||||
F-6 |
||||
F-7 |
||||
F-9 |
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F-11 |
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F-14 |
Page |
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F-98 | ||||
F-101 | ||||
F-103 | ||||
F-104 | ||||
F-105 | ||||
F-106 | ||||
F-107 | ||||
F-108 | ||||
F-112 |
F-223 | ||||
F-224 | ||||
F-225 | ||||
F-226 | ||||
F-227 |
F-242 | ||||
Balance Sheet as of December 31, 2020 (Restated) |
F-243 | |||
F-244 | ||||
F-245 | ||||
F-246 | ||||
F-247 |
(Amounts in thousands, except share and per share amounts) |
June 30, 2021 |
December 31, 2020 |
||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents (1) |
$ | 843,957 | $ | 800,535 | ||||
Accounts receivable and accrued revenue, net of allowance of $99,674 and $107,806 as of June 30, 2021 and December 31, 2020, respectively |
118,205 | 176,521 | ||||||
Other current assets (including related party amounts of $0 and $780 as of June 30, 2021 and December 31, 2020, respectively) |
435,448 | 352,172 | ||||||
|
|
|
|
|||||
Total current assets |
1,397,610 | 1,329,228 | ||||||
Property and equipment, net |
5,991,011 | 6,859,163 | ||||||
Lease right-of-use |
13,923,373 | 15,107,880 | ||||||
Restricted cash (1) |
11,528 | 53,618 | ||||||
Equity method and other investments |
198,163 | 214,940 | ||||||
Goodwill |
678,668 | 679,351 | ||||||
Intangible assets, net |
53,806 | 49,896 | ||||||
Other assets (including related party amounts of $596,534 and $699,478 as of June 30, 2021 and December 31, 2020, respectively) |
932,151 | 1,062,258 | ||||||
|
|
|
|
|||||
Total assets (1) |
$ | 23,186,310 | $ | 25,356,334 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses (including amounts due to related parties of $72,010 and $14,497 as of June 30, 2021 and December 31, 2020, respectively) |
$ | 537,600 | $ | 723,411 | ||||
Members’ service retainers |
347,057 | 358,566 | ||||||
Deferred revenue (including amounts from related parties of $2,706 and $9,717 as of June 30, 2021 and December 31, 2020, respectively) |
138,207 | 176,004 | ||||||
Current lease obligations (including amounts due to related parties of $13,217 and $10,148 as of June 30, 2021 and December 31, 2020, respectively) |
873,531 | 847,531 | ||||||
Other current liabilities (including amounts due to related parties of $0 and $900 as of June 30, 2021 and December 31, 2020, respectively) |
440,374 | 83,755 | ||||||
|
|
|
|
|||||
Total current liabilities |
2,336,769 | 2,189,267 | ||||||
Long-term lease obligations (including amounts due to related parties of $558,062 and $436,074 as of June 30, 2021 and December 31, 2020, respectively) |
18,977,544 | 20,263,606 | ||||||
Unsecured related party debt |
2,200,000 | 1,200,000 | ||||||
Convertible related party liabilities, net |
57,944 | 418,908 | ||||||
Long-term debt, net |
659,446 | 688,356 | ||||||
Other liabilities |
242,522 | 221,780 | ||||||
|
|
|
|
|||||
Total liabilities (1) |
24,474,225 | 24,981,917 | ||||||
Commitments and contingencies (Note 16) |
||||||||
Convertible preferred stock; 959,370,218 shares authorized as of June 30, 2021, and 499,018,795 and 368,912,507 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
8,379,182 | 7,666,098 | ||||||
Redeemable noncontrolling interests |
291,901 | 380,242 |
(Amounts in thousands, except share and per share amounts) |
June 30, 2021 |
December 31, 2020 |
||||||
Equity |
||||||||
WeWork Inc. shareholders’ equity (deficit): |
||||||||
Common stock Class A; par value $0.001; 941,647,617 shares authorized as of June 30, 2021, and 176,628,752 and 41,512,605 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
177 | 42 | ||||||
Common stock Class B; par value $0.001; 234,910,597 shares authorized as of June 30, 2021 and zero and 129,382,459 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
— | 129 | ||||||
Common stock Class C; par value $0.001; 50,967,800 shares authorized as of June 30, 2021, and 24,132,575 and 25,168,938 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
24 | 25 | ||||||
Common stock Class D; par value $0.001; 234,910,597 shares authorized as of June 30, 2021, and zero shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
— | — | ||||||
Additional paid-in capital |
2,775,762 | 2,188,319 | ||||||
Accumulated other comprehensive income (loss) |
(116,269 | ) | (158,810 | ) | ||||
Accumulated deficit |
(12,624,690 | ) | (9,703,490 | ) | ||||
|
|
|
|
|||||
Total WeWork Inc. shareholders’ deficit |
(9,964,996 | ) | (7,673,785 | ) | ||||
Noncontrolling interests |
5,998 | 1,862 | ||||||
|
|
|
|
|||||
Total equity |
(9,958,998 | ) | (7,671,923 | ) | ||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 23,186,310 | $ | 25,356,334 | ||||
|
|
|
|
(1) | The Company’s condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). As of June 30, 2021 and December 31, 2020, total assets of consolidated VIEs, after intercompany eliminations, were $1.9 billion and $2.1 billion respectively, including $102.6 million and $166.6 million of cash and cash equivalents, respectively, and $10.1 million and $10.0 million of restricted cash, respectively. Total liabilities of consolidated VIEs, after intercompany eliminations, were $1.6 billion and $1.7 billion as of June 30, 2021 and December 31, 2020, respectively. Creditors of VIEs do not have recourse against the general credit of the Company, except relating to certain lease guarantees totaling $13.6 million and $14.6 million as of June 30, 2021 and December 31, 2020, respectively, provided by WeWork Inc. to certain landlords of the VIEs. See Note 5 for additional details. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenue (including related party revenue of $38,758 and $45,375 for the three months and $87,694 and $92,637 for the six months ended June 30, 2021 and 2020, respectively. See Note 17) |
$ | 593,478 | $ | 881,734 | $ | 1,191,331 | $ | 1,938,617 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Expenses: |
||||||||||||||||
Location operating expenses — cost of revenue (exclusive of depreciation and amortization of $170,319 and $176,804 for the three months and $345,626 and $351,618 for the six months ended June 30, 2021 and 2020, respectively, shown separately below) |
780,489 | 881,468 | 1,598,812 | 1,804,802 | ||||||||||||
Pre-opening location expenses |
43,435 | 78,184 | 76,839 | 165,919 | ||||||||||||
Selling, general and administrative expenses (1) |
225,082 | 392,818 | 499,502 | 925,101 | ||||||||||||
Restructuring and other related costs |
(27,794 | ) | 80,529 | 466,045 | 136,216 | |||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
242,104 | 280,476 | 541,585 | 555,959 | ||||||||||||
Depreciation and amortization |
180,157 | 195,797 | 364,341 | 390,156 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses (including related party expenses of $14,793 and $24,281 for the three months and $38,253 and $45,526 for the six months ended June 30, 2021 and 2020, respectively. See Note 17) |
1,443,473 | 1,909,272 | 3,547,124 | 3,978,153 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(849,995 | ) | (1,027,538 | ) | (2,355,793 | ) | (2,039,536 | ) | ||||||||
Interest and other income (expense), net: |
||||||||||||||||
Income (loss) from equity method and other investments |
6,068 | (43,204 | ) | (24,510 | ) | (47,111 | ) | |||||||||
Interest expense (including related party expenses of $(96,399) and $(71,361) for the three months and $(184,275) and $(95,032) for the six months ended June 30, 2021 and 2020, respectively. See Note 9 and Note 17) |
(113,259 | ) | (93,249 | ) | (217,828 | ) | (138,090 | ) | ||||||||
Interest income |
4,358 | 1,978 | 9,455 | 8,742 | ||||||||||||
Foreign currency gain (loss) |
33,025 | 54,473 | (37,925 | ) | (149,985 | ) | ||||||||||
(Loss) gain from change in fair value of related party financial instruments (See Note 9) |
1,309 | 4,197 | (350,822 | ) | 792,313 | |||||||||||
Loss on extinguishment of debt |
— | — | — | (76,295 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest and other income (expense), net |
(68,499 | ) | (75,805 | ) | (621,630 | ) | 389,574 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Pre-tax loss |
(918,494 | ) | (1,103,343 | ) | (2,977,423 | ) | (1,649,962 | ) | ||||||||
Income tax benefit (provision) |
(4,015 | ) | (7,095 | ) | (7,282 | ) | (16,115 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
(922,509 | ) | (1,110,438 | ) | (2,984,705 | ) | (1,666,077 | ) | ||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
34,134 | 244,706 | 64,120 | 603,763 | ||||||||||||
Noncontrolling interest — equity |
(470 | ) | 1,903 | (615 | ) | 14,616 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to WeWork Inc. |
$ | (888,845 | ) | $ | (863,829 | ) | $ | (2,921,200 | ) | $ | (1,047,698 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to Class A and Class B common stockholders (see Note 15): |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ | (5.05 | ) | $ | (5.06 | ) | $ | (16.81 | ) | $ | (6.14 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ | (5.05 | ) | $ | (5.06 | ) | $ | (16.81 | ) | $ | (6.14 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
175,941,649 | 170,754,546 | 173,751,116 | 170,691,538 |
(1) | Includes cost of revenue in the amount of $20.6 million and $50.1 million for the three months and $32.7 million and $142.5 million for the six months ended June 30, 2021 and 2020, respectively. Excludes depreciation and amortization of none for the three months and none and $0.2 million for the six months ended June 30, 2021 and 2020, respectively shown separately below. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Net loss |
$ | (922,509 | ) | $ | (1,110,438 | ) | $ | (2,984,705 | ) | $ | (1,666,077 | ) | ||||
Other comprehensive income (loss), net of tax: |
||||||||||||||||
Foreign currency translation adjustments, net of tax of $0 for the three and six months ended June 30, 2021 and 2020, respectively |
(17,748 | ) | (25,040 | ) | 20,583 | 66,906 | ||||||||||
Unrealized (loss) gain on available-for-sale |
(2,429 | ) | 3,595 | (2,263 | ) | 3,595 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss), net of tax |
(20,177 | ) | (21,445 | ) | 18,320 | 70,501 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
(942,686 | ) | (1,131,883 | ) | (2,966,385 | ) | (1,595,576 | ) | ||||||||
Net (income) loss attributable to noncontrolling interests |
33,664 | 246,609 | 63,505 | 618,379 | ||||||||||||
Other comprehensive (income) loss attributable to noncontrolling interests |
(273 | ) | (586 | ) | 24,221 | (12,304 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to WeWork Inc. |
$ | (909,295 | ) | $ | (885,860 | ) | $ | (2,878,659 | ) | $ | (989,501 | ) | ||||
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—March 31, 2021 |
498,800,426 | $ | 8,379,182 | $ | 325,762 | |||||||
Issuance of shares in connection with convertible note conversion |
218,369 | — | — | |||||||||
Net income (loss) |
— | — | (34,134 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | 273 | |||||||||
|
|
|
|
|
|
|||||||
Balance—June 30, 2021 |
499,018,795 | $ | 8,379,182 | $ | 291,901 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Common Stock Class A |
Common Stock Class B |
Common Stock Class C |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
Total |
||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||
Balance—March 31, 2021 |
171,833,523 | $ | 172 | — | $ | — | 25,041,666 | $ | 25 | $ | 2,683,770 | $ | (95,819 | ) | $ | (11,735,845 | ) | $ | 2,007 | $ | (9,145,690 | ) | ||||||||||||||||||||||
Forfeiture of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | (909,091 | ) | (1 | ) | 1 | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock for services rendered, net of forfeitures |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation |
873,142 | 1 | — | — | — | — | 91,594 | — | — | — | 91,595 | |||||||||||||||||||||||||||||||||
Exercise of stock options |
4,457,773 | 4 | — | — | — | — | 10,596 | — | — | — | 10,600 | |||||||||||||||||||||||||||||||||
Cancellation of shares |
(536,180 | ) | (1 | ) | — | — | — | — | (10,198 | ) | — | — | — | (10,199 | ) | |||||||||||||||||||||||||||||
Exercise of warrants |
4494 | 1 | — | — | — | — | (1 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | — | — | (888,845 | ) | 470 | (888,375 | ) | |||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | — | — | (20,450 | ) | — | — | (20,450 | ) | |||||||||||||||||||||||||||||||
Other |
— | — | — | — | — | — | — | — | — | 3,521 | 3,521 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance—June 30, 2021 |
176,628,752 | $ | 177 | — | $ | — | 24,132,575 | $ | 24 | $ | 2,775,762 | $ | (116,269 | ) | $ | (12,624,690 | ) | $ | 5,998 | $ | (9,958,998 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—December 31, 2020 |
368,912,507 | $ | 7,666,098 | $ | 380,242 | |||||||
Issuance of shares in connection with convertible note conversion |
218,369 | — | — | |||||||||
Exercise of warrants, net |
129,887,919 | 713,084 | — | |||||||||
Net income (loss) |
— | — | (64,120 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | (24,221 | ) | ||||||||
|
|
|
|
|
|
|||||||
Balance—June 30, 2021 |
499,018,795 | $ | 8,379,182 | $ | 291,901 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Common Stock Class A |
Common Stock Class B |
Common Stock Class C |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
|||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||||||||||||||||||
Balance—December 31, 2020 |
41,512,605 | $ | 42 | 129,382,459 | $ | 129 | 25,168,938 | $ | 25 | $ | 2,188,319 | $ | (158,810 | ) | $ | (9,703,490 | ) | $ | 1,862 | $ | (7,671,923 | ) | ||||||||||||||||||||||
Forfeiture of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | (1,036,363 | ) | (1 | ) | 1 | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock for services rendered, net of forfeitures |
— | — | — | — | — | — | (2,143 | ) | — | — | — | (2,143 | ) | |||||||||||||||||||||||||||||||
Transfer from Class B to Class A |
129,382,459 | 129 | (129,382,459 | ) | (129 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation |
|
873,142 |
|
1 | — | — | — | — | 159,785 | — | — | — | 159,786 | |||||||||||||||||||||||||||||||
Exercise of stock options |
5,396,232 | 5 | — | — | — | — | 11,710 | — | — | — | 11,715 | |||||||||||||||||||||||||||||||||
Cancellation of shares |
(536,180 | ) | (1 | ) | — | — | — | — | (10,198 | ) | — | — | — | (10,199 | ) | |||||||||||||||||||||||||||||
Exercise of warrants |
494 | 1 | — | — | — | — | (1 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||
Transaction with principal shareholder |
— | — | — | — | — | — | 428,289 | — | — | — | 428,289 | |||||||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | — | — | (2,921,200 | ) | 615 | (2,920,585 | ) | |||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | — | — | 42,541 | — | — | 42,541 | |||||||||||||||||||||||||||||||||
Other |
— | — | — | — | — | — | — | — | — | 3,521 | 3,521 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance—June 30, 2021 |
176,628,752 | $ | 177 | — | $ | — | 24,132,575 | $ | 24 | $ | 2,775,762 | $ | (116,269 | ) | $ | (12,624,690 | ) | $ | 5,998 | $ | (9,958,998 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—March 31, 2020 |
222,329,647 | $ | 6,473,861 | $ | 684,741 | |||||||
Issuance of noncontrolling interests |
— | — | 101 | |||||||||
Stock-based compensation |
— | — | ||||||||||
Acquisition of Noncontrolling interest |
34,482,759 | 280,345 | (92,822 | ) | ||||||||
Exercise of warrants, net |
112,068,966 | 911,121 | — | |||||||||
Net income (loss) |
— | — | (244,706 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | 586 | |||||||||
|
|
|
|
|
|
|||||||
Balance—June 30, 2020 |
368,881,372 | $ | 7,665,327 | $ | 347,900 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Common Stock Class A |
Common Stock Class B |
Common Stock Class C |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
|||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||||||||||||||||||
Balance—March 31, 2020 |
41,415,205 | $ | 41 | 129,285,737 | $ | 129 | 27,252,322 | $ | 27 | $ | 1,859,685 | $ | 77,617 | $ | (6,758,001 | ) | $ | 38,453 | $ | (4,782,049 | ) | |||||||||||||||||||||||
Forfeiture of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | (2,022,929 | ) | (2 | ) | 2 | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock for services rendered, net of forfeitures |
— | — | — | — | — | — | 4,103 | — | — | 934 | 5,037 | |||||||||||||||||||||||||||||||||
Stock-based compensation |
86,526 | — | 26,416 | — | — | — | 153,401 | — | — | 32 | 153,433 | |||||||||||||||||||||||||||||||||
Exercise of stock options |
5,819 | — | 29,719 | — | — | — | 40 | — | — | — | 40 | |||||||||||||||||||||||||||||||||
Settlement of stockholder notes receivable (see Note 14) |
(141,658 | ) | — | — | — | — | — | 6,129 | — | — | — | 6,129 | ||||||||||||||||||||||||||||||||
Issuance of noncontrolling interests |
— | — | — | — | — | — | — | — | — | 244 | 244 | |||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest |
— | — | — | — | — | — | (197,949 | ) | 10,426 | — | — | (187,523 | ) | |||||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | — | — | (863,829 | ) | (1,903 | ) | (865,732 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | — | — | (22,031 | ) | — | — | (22,031 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance—June 30, 2020 |
41,365,892 | $ | 41 | 129,341,872 | $ | 129 | 25,229,393 | $ | 25 | $ | 1,825,411 | $ | 66,012 | $ | (7,621,830 | ) | $ | 37,760 | $ | (5,692,452 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—December 31, 2019 |
222,329,647 | $ | 6,473,604 | $ | 1,032,080 | |||||||
Issuance of noncontrolling interests |
— | — | 101 |
|||||||||
Stock-based compensation |
— | 257 |
— | |||||||||
Acquisition of Noncontrolling interest |
34,482,759 | 280,345 | (92,822 | ) | ||||||||
Exercise of warrants, net |
112,068,966 |
911,121 |
— | |||||||||
Net income (loss) |
— | — | (603,763 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | 12,304 | |||||||||
|
|
|
|
|
|
|||||||
Balance—June 30, 2020 |
368,881,372 | $ | 7,665,327 | $ | 347,900 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Common Stock Class A |
Common Stock Class B |
Common Stock Class C |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
|||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Total |
||||||||||||||||||||||||||||||||||||||
Balance—December 31, 2019 |
41,304,381 | $ | 41 | 129,220,654 | $ | 129 | 27,752,323 | $ | 28 | $ | 1,879,838 | $ | (2,611 | ) | $ | (6,574,322 | ) | $ | 322,185 | $ | (4,374,712 | ) | ||||||||||||||||||||||
Adoption of ASC 326 (Note 2) |
— | — | — | — | — | — | — | — | 190 | — | 190 | |||||||||||||||||||||||||||||||||
Forfeiture of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | (2,522,930 | ) | (3 | ) | 3 | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock for services rendered, net of forfeitures |
— | — | — | — | — | — | 8,204 | — | — | 1,867 | 10,071 | |||||||||||||||||||||||||||||||||
Stock-based compensation |
251,324 | — | 52,832 | — | — | — | 166,851 | — | — | 10 | 166,861 | |||||||||||||||||||||||||||||||||
Exercise of stock options |
16,334 | — | 68,386 | — | — | — | 125 | — | — | — | 125 | |||||||||||||||||||||||||||||||||
Settlement of stockholder notes receivable (see Note 14) |
(206,147 | ) | — | — | — | — | — | 11,140 | — | — | — | 11,140 | ||||||||||||||||||||||||||||||||
Issuance of noncontrolling interests |
— | — | — | — | — | — | — | — | — | 528 | 528 | |||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (42,801 | ) | — | — | (272,214 | ) | (315,015 | ) | ||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest |
— | — | — | — | — | — | (197,949 | ) | 10,426 | — | — | (187,523 | ) | |||||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | — | — | (1,047,698 | ) | (14,616 | ) | (1,062,314 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | — | — | 58,197 | — | — | 58,197 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance—June 30, 2020 |
41,365,892 | $ | 41 | 129,341,872 | $ | 129 | 25,229,393 | $ | 25 | $ | 1,825,411 | $ | 66,012 | $ | (7,621,830 | ) | $ | 37,760 | $ | (5,692,452 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
(Amounts in thousands) |
2021 |
2020 |
||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ | (2,984,705 | ) | $ | (1,666,077 | ) | ||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||
Depreciation and amortization |
364,341 | 390,156 | ||||||
Impairment of property and equipment |
— | 2,825 | ||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
541,585 | 555,959 | ||||||
Non-cash transaction with principal shareholder |
428,289 | — | ||||||
Loss on extinguishment of debt |
— | 76,295 | ||||||
Stock-based compensation expense |
159,874 | 44,961 | ||||||
Issuance of stock for services rendered, net of forfeitures |
(2,273 | ) | 9,834 | |||||
Non-cash interest expense |
105,137 | 67,390 | ||||||
Provision for allowance for doubtful accounts |
17,247 | 20,956 | ||||||
(Income) loss from equity method and other investments |
24,510 | 47,111 | ||||||
Distribution of income from equity method and other investments |
3,210 | — | ||||||
Foreign currency (gain) loss |
37,925 | 148,854 | ||||||
Change in fair value of financial instruments |
350,822 | (792,313 | ) | |||||
Contingent consideration fair market value adjustment |
— | (194 | ) | |||||
Changes in operating assets and liabilities: |
||||||||
Operating lease right-of-use |
830,935 | 234,284 | ||||||
Current and long-term lease obligations |
(909,490 | ) | 752,026 | |||||
Accounts receivable and accrued revenue |
11,630 | (69,988 | ) | |||||
Other assets |
(58,838 | ) | (13,638 | ) | ||||
Accounts payable and accrued expenses |
(40,704 | ) | (30,901 | ) | ||||
Deferred revenue |
(36,684 | ) | 36,233 | |||||
Other liabilities |
(3,488 | ) | 17,959 | |||||
Deferred income taxes |
1,720 | (284 | ) | |||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
(1,158,957 | ) | (168,552 | ) | ||||
Cash Flows from Investing Activities: |
||||||||
Purchases of property and equipment |
(153,142 | ) | (985,011 | ) | ||||
Capitalized software |
(17,986 | ) | (12,705 | ) | ||||
Change in security deposits with landlords |
2,885 | (4,875 | ) | |||||
Proceeds from asset divestitures and sale of investments, net of cash divested |
8,319 | 1,088,876 | ||||||
Contributions to investments |
(26,704 | ) | (93,357 | ) | ||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities |
(186,628 | ) | (7,072 | ) | ||||
|
|
|
|
Six Months Ended June 30, |
||||||||
(Amounts in thousands) |
2021 |
2020 |
||||||
Cash Flows from Financing Activities: |
||||||||
Principal payments for property and equipment acquired under finance leases |
(2,184 | ) | (2,144 | ) | ||||
Proceeds from issuance of debt |
— | 32,445 | ||||||
Proceeds from unsecured related party debt |
1,000,000 | — | ||||||
Proceeds from LC Debt Facility |
349,011 | — | ||||||
Repayments of debt |
— | (759,196 | ) | |||||
Repayment of security deposit loan |
(2,615 | ) | — | |||||
Debt and equity issuance costs |
— | (4,124 | ) | |||||
Proceeds from exercise of stock options and warrants |
2,413 | 149 | ||||||
Proceeds from issuance of noncontrolling interests |
— | 629 | ||||||
Distributions to noncontrolling interests |
— | (315,015 | ) | |||||
Payments for contingent consideration and holdback of acquisition proceeds |
(2,523 | ) | (32,792 | ) | ||||
Proceeds relating to contingent consideration and holdbacks of disposition proceeds |
12,177 | — | ||||||
Additions to members’ service retainers |
198,194 | 205,734 | ||||||
Refunds of members’ service retainers |
(204,763 | ) | (280,814 | ) | ||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
1,349,710 | (1,155,128 | ) | |||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
(2,793 | ) | (22,610 | ) | ||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
1,332 | (1,353,362 | ) | |||||
Cash, cash equivalents and restricted cash—Beginning of period |
854,153 | 2,200,688 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash—End of period |
$ | 855,485 | $ | 847,326 | ||||
|
|
|
|
June 30, |
||||||||
(Amounts in thousands) |
2021 |
2020 |
||||||
Cash and cash equivalents |
$ | 843,957 | $ | 713,984 | ||||
Restricted cash |
11,528 | 132,342 | ||||||
Cash and cash equivalents held for sale |
— | 1,000 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash |
$ | 855,485 | $ | 847,326 | ||||
|
|
|
|
Six Months Ended June 30, |
||||||||
(Amounts in thousands) |
2021 |
2020 |
||||||
Supplemental Cash Flow Disclosures: |
||||||||
Cash paid during the period for interest (net of capitalized interest of $0 and $2,981 during 2021 and 2020, respectively) |
$ | 87,907 | $ | 48,368 | ||||
Cash received for operating lease incentives — tenant improvement allowances |
233,339 | 737,392 | ||||||
Cash received for operating lease incentives — broker commissions |
670 | 14,904 | ||||||
Supplemental Disclosure of Non-cash Investing & Financing Activities: |
||||||||
Property and equipment included in accounts payable and accrued expenses |
85,877 | 306,503 | ||||||
Conversion of related party liabilities to into Preferred Stock |
711,786 | — |
Six Months Ended June 30, |
||||||||
(Amounts in thousands) |
2021 |
2020 |
||||||
Cash paid for fixed operating lease costs included in the measurement of lease obligations in operating activities |
$ | 1,133,455 | $ | 964,093 | ||||
Cash paid for interest relating to finance leases in operating activities |
2,170 | 2,368 | ||||||
Cash paid for principal relating to finance leases in financing activities |
2,184 | 2,144 | ||||||
Right-of-use |
— | 920 | ||||||
Right-of-use |
(1,011,144 | ) | (469,083 | ) |
• | at the closing of the transactions contemplated by the Merger Agreement (the Closing), upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Delaware General Corporation Law, as amended (the “DGCL”), Merger Sub will merge with and into the Company, the separate corporate existence of Merger Sub will cease and the Company will be the surviving corporation and a wholly owned subsidiary of BowX (the “Merger”); |
• | as promptly as practicable following the Closing, the Company will merge with and into BowX Merger Subsidiary II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of BowX (Merger Sub II and such transaction, the “Second Merger”), with Merger Sub II being the surviving entity of the Second Merger; |
• | as a result of the Merger, among other things, all outstanding shares of capital stock of the Company (other than shares of Class C common stock of the Company, treasury shares, shares held by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to the DGCL and shares of Company stock subject to options, warrants and RSUs) will be cancelled in exchange for the right to receive a number of newly issued shares of Class A common stock, par value $0.0001 per share, of BowX (“BowX Class A Common Stock”) determined using an exchange ratio (the “Exchange Ratio”) which is determined based on a pre-money enterprise valuation of the Company of approximately $9.0 billion, a $10.00 price per share of BowX Class A Common Stock and the fully diluted equity capitalization of the Company immediately prior to the Closing (which is subject to change between signing and Closing), as described below; |
• | shares of Class C common stock of the Company will be cancelled in exchange for the right to receive a number of newly issued shares of Class C common stock, par value $0.0001 per share, of BowX (“Bow X Class C Common Stock”) determined using the Exchange Ratio; |
• | outstanding options and warrants to purchase Company stock and RSUs will be converted into the right to receive options or warrants to purchase shares of BowX Class A Common Stock or restricted stock units representing the right to receive shares of BowX Class A Common Stock, as applicable, on the same terms and conditions that are in effect with respect to such options, warrants or RSUs on the day of Closing, subject to adjustments using the Exchange Ratio, as described below; and |
• | BowX will immediately be renamed “WeWork Inc.” or such other name as agreed to by the Company and BowX prior to Closing. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
One-time employee terminations (1) |
$ | 7,076 | $ | 106,910 | $ | 545,102 | $ | 153,031 | ||||||||
Ceased use buildings |
41,495 | — | 65,745 | — | ||||||||||||
Gains on lease terminations, net |
(96,415 | ) | (39,193 | ) | (179,995 | ) | (31,686 | ) | ||||||||
Other, net |
20,050 | 12,812 | 35,193 | 14,871 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | (27,794 | ) | $ | 80,529 | $ | 466,045 | $ | 136,216 | |||||||
|
|
|
|
|
|
|
|
(1) | In connection with the Settlement Agreement, as described in Note 15, SBG purchased 30,139,971 shares of Class B Common Stock of the Company from We Holdings LLC, which is Adam Neumann’s affiliated investment vehicle, for a price per share of $19.19, |
representing an aggregate purchase price of approximately $578.4 million. The Company recorded $428.3 million of restructuring and other related costs in its consolidated statement of operations for the six-months ended June 30, 2021, which represents the excess between the amount paid from a principal shareholder of the Company to We Holding LLC and the fair value of the stock purchased. Also, in connection with the Settlement Agreement the WeWork Partnerships Profits Interest Units held by Adam Neumann in the WeWork Partnership became fully vested and were amended to have a catch-up base amount of $0. The per unit distribution thresholds for the WeWork Partnerships Profits Interest Units were also amended to initially be $10.00 and may be subject to upward adjustment based on a third party valuation of fair market value and may be subject to downward adjustment based on closing date pricing if a de-SPAC or initial public offering were to occur. WeWork has received a third party valuation of fair market value of the WeWork Partnerships Profits Interest Units, which confirmed that no upward adjustment is needed to be $10.00 per unit distribution threshold. As a result of this modification, the Company recorded $102.0 million of restructuring and other related costs in its consolidated statement of operations for the three-months ended March 31, 2021. |
(Amounts in thousands) |
One-time Employee Benefits |
Legal Settlement Benefits (1) |
Other |
Total Restructuring Costs |
||||||||||||
Restructuring liability balance — December 31, 2020 |
$ | 16,119 | $ | — | $ | 12,756 | $ | 28,875 | ||||||||
Restructuring and other related costs expensed during the period |
14,832 | 530,271 | (79,058 | ) | 466,045 | |||||||||||
Cash payments of restructuring liabilities, net (2) |
(23,898 | ) | — | (207,867 | ) | (231,765 | ) | |||||||||
Non-cash impact — primarily asset and liability write-offs and stock-based compensation |
(2,010 | ) | (530,271 | ) | 294,062 | (238,219 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Restructuring liability balance — June 30, 2021 |
$ | 5,043 | $ | — | $ | 19,893 | $ | 24,936 | ||||||||
|
|
|
|
|
|
|
|
(1) | For further details on the costs in connection with the Settlement Agreement recorded in restructuring and other related costs for the six months ended June 30, 2021, see footnote 1 to the preceding table. |
(2) | Includes cash payments received from the landlord for terminated leases of $18.0 million for the six months ended June 30, 2021. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Impairment of assets held for sale |
$ | — | $ | 17,462 | $ | — | $ | 120,005 | ||||||||
Impairment and write-off of long-lived assets associated with restructuring |
230,489 | 231,306 | 510,940 | 423,063 | ||||||||||||
Impairment of long-lived assets primarily associated with COVID-19 |
12,436 | 34,669 | 31,461 | 62,314 | ||||||||||||
Gain on sale of assets |
(821 | ) | (2,961 | ) | (816 | ) | (49,423 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 242,104 | $ | 280,476 | $ | 541,585 | $ | 555,959 | ||||||||
|
|
|
|
|
|
|
|
(Amounts in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
Net receivable for value added tax (“VAT”) |
$ | 144,439 | $ | 107,104 | ||||
Prepaid lease cost |
50,328 | 61,232 | ||||||
Deposits held by landlords |
48,315 | 25,574 | ||||||
Straight-line revenue receivable |
34,885 | 35,418 | ||||||
Prepaid software |
33,249 | 19,981 | ||||||
Prepaid member referral fees |
27,861 | 31,617 | ||||||
Disposition proceeds holdback amounts receivable (Note 5 and 3) |
5,323 | 17,500 | ||||||
Deposits on property and equipment |
3,275 | 3,161 | ||||||
Other prepaid expenses and current assets |
87,773 | 50,585 | ||||||
|
|
|
|
|||||
Total other current assets |
$ | 435,448 | $ | 352,172 | ||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenue |
$ | — | $ | 68,068 | $ | — | $ | 136,921 | ||||||||
Location operating expenses |
— | 84,265 | — | 179,221 | ||||||||||||
Restructuring and other related costs |
— | (131,238 | ) | — | 28,982 | |||||||||||
Impairments/(gain on sale) of goodwill, intangibles and other assets |
— | 335,489 | — | 371,871 | ||||||||||||
Depreciation and amortization |
— | 14,571 | — | 28,346 | ||||||||||||
Total Expenses |
— | 329,269 | — | 670,000 | ||||||||||||
Pre-tax loss |
— | (260,151 | ) | — | (540,290 | ) | ||||||||||
Net loss |
— | (263,060 | ) | — | (543,599 | ) | ||||||||||
Net (loss) income attributable to WeWork Inc. |
— | (29,832 | ) | — | (30,264 | ) |
June 30, 2021 |
December 31, 2020 |
|||||||||||||||
(Amounts in thousands) |
Asia JVs (1) |
Other VIEs (2) |
Asia JVs (1) |
Other VIEs (2) |
||||||||||||
Consolidated VIE balance sheets information: |
||||||||||||||||
Cash and cash equivalents |
$ | 94,540 | $ | 8,065 | $ | 161,411 | $ | 5,194 | ||||||||
Property and equipment, net |
399,514 | — | 445,599 | — | ||||||||||||
Restricted cash |
10,059 | — | 10,000 | — | ||||||||||||
Total assets |
1,871,367 | 15,741 | 2,096,389 | 13,834 | ||||||||||||
Long-term debt, net |
632 | — | 30,638 | — | ||||||||||||
Total liabilities |
1,554,760 | 1,705 | 1,693,267 | 573 | ||||||||||||
Redeemable stock issued by VIEs |
500,000 | — | 500,000 | — | ||||||||||||
Total net assets (3) |
(183,393 | ) | 14,036 | (96,878 | ) | 13,261 |
June 30, 2021 |
June 30, 2020 |
|||||||||||||||
(Amounts in thousands) |
Asia JVs (1) |
Other VIEs (2) |
Asia JVs (1) |
Other VIEs (2) |
||||||||||||
Consolidated VIE statements of operations information: |
||||||||||||||||
Net income (loss) for the three months ended |
$ | (34,174 | ) | $ | 455 | $ | (243,433 | ) | $ | (1,038 | ) | |||||
Net income (loss) for the six months ended |
$ | (64,079 | ) | $ | 284 | $ | (599,762 | ) | $ | (11,777 | ) |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||||
(Amounts in thousands) |
Asia JVs (1) |
Other VIEs (2) |
Asia JVs (1) |
Other VIEs (2) |
||||||||||||
Consolidated VIE statements of operations information: |
||||||||||||||||
Net cash provided by (used in) operating activities |
$ | (42,752) | $ | 610 | $ | (2,812) | $ | (333 | ) | |||||||
Net cash used in investing activities |
(10,901 | ) | — | (123,714 | ) | (222 | ) | |||||||||
Net cash provided by (used in) financing activities |
(998 | ) | 2,261 | (20,975 | ) | 4,480 |
(1) | The “Asia JVs” include ChinaCo, JapanCo and PacificCo as of and for the periods that each represented a consolidated VIE. The ChinaCo deconsolidation occurred on October 2, 2020 and as a result, ChinaCo results and balances are not included above for the period subsequent to deconsolidation. The PacificCo Roll-up occurred on April 17, 2020 and as a result, PacificCo results and balances are not included above for the period subsequent to April 17, 2020. The consent of an affiliate of SoftBank Group Capital Limited is required for any dividends to be distributed by JapanCo. As a result, any net assets of JapanCo would be considered restricted net assets to the Company as of June 30, 2021. The net assets of the Asia JVs include preferred stock issued to affiliates of SBG and other investors with aggregate liquidation preferences totaling $0.5 billion and $0.5 billion, respectively as of June 30, 2021 and December 31, 2020, which preferred stock is redeemable upon the occurrence of an event that is not solely within the control of the Company. The initial issuance price of such redeemable preferred stock equals the liquidation preference for each share issued as of June 30, 2021 and December 31, 2020, respectively. After reducing the net assets of each Asia JV by the liquidation preference associated with such redeemable preferred stock, the remaining net assets of each Asia JV is negative. |
(2) | For the three and six months ended June 30, 2020, “Other VIEs” includes all other consolidated VIEs, other than the Asia JVs discussed separately in (1) and include WeWork Waller Creek, WeCap Manager and WeCap Holdings Partnership, 424 Fifth Venture and the Creator Fund in the periods prior to any disposal or deconsolidation as discussed above. For the three and six months ended June 30, 2021, “Other VIEs” includes WeCap Manager and WeCap Holdings Partnership. |
(3) | Total net assets represents total assets less total liabilities and redeemable stock issued by VIEs after the total assets and total liabilities have both been reduced to remove amounts that eliminate in consolidation. |
June 30, 2021 |
December 31, 2020 |
|||||||||||||||
(Amounts in thousands, except percentages) Investee |
Investment Type |
Carrying Value |
Cost Basis |
Percentage Ownership |
Carrying Value |
|||||||||||
Investments held by WeCap Holdings Partnership (1) |
Equity method investments / Note receivable |
$ | 72,769 | $ | 74,147 | Various | $ | 61,688 | ||||||||
WPI Fund (2) |
Equity method investment | 82,261 | 52,805 | 8% | 63,301 | |||||||||||
IndiaCo (3) |
Investment in convertible notes |
39,275 | 105,248 | N/A | 49,849 | |||||||||||
ChinaCo (4) |
Equity method investment | — | 29,323 | 21.6% | 29,323 | |||||||||||
Other (5) |
Various | 3,858 | 4,066 | Various | 10,779 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total equity method and other investments |
$ | 198,163 | $ | 265,589 | $ | 214,940 | ||||||||||
|
|
|
|
|
|
(1) | As discussed in Note 5, subsequent to the August 2019 reorganization of the WeCap Investment Group real estate acquisition platform, the following investments are owned through the WeCap Holdings Partnership in which Rhône has a 20% equity interest: |
• | “DSQ” — a venture in which WeCap Holdings Partnership owns a 10% equity interest. DSQ owns a commercial real estate portfolio located in London, United Kingdom. The investment balance as of June 30, 2021 also includes a note receivable with an outstanding balance of $43.1 million that accrues interest at a rate of 5.77% and matures in April 2028. |
• | “WPI Fund” — a real estate investment fund in which WeCap Holdings Partnership holds the 0.5% general partner interest. The WPI Fund’s focus is acquiring, developing and managing office assets with current or expected vacancy suitable for WeWork occupancy, currently primarily focusing on opportunities in North America and Europe. |
• | “ARK Master Fund” — an investment fund in which WeCap Holdings Partnership holds the general partner and a limited partner interest totaling 2% of the fund’s invested capital. ARK Master Fund invests in real estate and real estate-related investments that it expects could benefit from the Company’s occupancy or involvement or the involvement of the limited partners of the ARK Master Fund. |
(2) | In addition to the general partner interest in the WPI Fund held by WeCap Holdings Partnership described above, a wholly owned subsidiary of the WeCap Investment Group also owns an 8% limited partner interest in the WPI Fund. |
(3) | In June 2020, the Company entered into an agreement with WeWork India Management Private Limited (“IndiaCo”), an affiliate of Embassy Property Developments Private Limited (“Embassy”), to subscribe for new convertible debentures to be issued by IndiaCo in an aggregate principal amount of $100.0 million (the “2020 Debentures”). During June 2020, $85.0 million of the principal had been funded, with the remaining $15.0 million to be funded over time based on milestones achieved by IndiaCo. The remaining $15.0 million was funded in April 2021. The 2020 Debentures earn interest at a coupon rate of 12.5% per annum for the 18-month period beginning from June 2020 which then gets reduced to 0.001% per annum and have a maximum term of 10 years. The 2020 Debentures are convertible into equity at the Company’s option after 18 months from June 2020 or upon mutual agreement between the Company, IndiaCo, and Embassy. The Company’s investment balance as of June 30, 2021 also includes an aggregate principal amount of approximately $5.4 million in other convertible debentures issued by IndiaCo that earn interest at a coupon rate of 0.001% per annum and have a maximum term of ten years. During the three months ended June 30, 2021 and 2020, the Company recorded a credit loss valuation allowance on its investments in IndiaCo totaling $12.9 million and $36.5 million, respectively, included in income (loss) from equity method and other investments. During the six months ended June 30, 2021 and 2020, the Company recorded a credit loss valuation allowance on its investments in IndiaCo totaling $15.3 million and $38.6 million, respectively. As of June 30, 2021 and December 31, 2020, the Company had recorded a liability of none and $7.9 million respectively, included in other current liabilities, relating to the fair value of the credit loss on the forward contract associated with the obligation on the $15.0 million unfunded commitment associated with the 2020 Debentures (the “IndiaCo Forward Liability”) with such credit loss also included in income (loss) from equity method and other investments during the three and six months ended June 30, 2021. During the three months ended June 30, 2021 and 2020, the Company recorded $(2.4) million and $3.6 million, in unrealized gain (loss) on available-for-sale available-for-sale |
(4) | In October 2020, the Company deconsolidated ChinaCo and its retained 21.6% ordinary share equity method investment was recorded at a fair value of $26.3 million plus capitalized legal cost for a total initial cost basis and carrying value as of December 31, 2020 of $29.3 million. Pursuant to ASC 323-10-35-20, |
(5) | The Company holds various other investments as of June 30, 2021 and December 31, 2020. On June 30, 2021, the Company sold its 5.7% interest in Sound Ventures II, LLC for total consideration of $6.1 million. During the six months ended June 30, 2021, the Company recorded a loss on the sale of $4.1 million, included in income (loss) from equity method and other investments in the condensed consolidated statements of operations. See Note 17 for details regarding the remaining profit-sharing arrangement between the Company and SB Fast Holdings (Cayman) Limited (“Buyer”) as part of the Creator Fund sale in 2020. The Buyer assumed the Company’s remaining capital commitments of $1.9 million. |
(Amounts in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
Deferred financing costs, net — SoftBank Senior Unsecured Notes Warrant (1) |
$ | 434,833 | $ | 488,312 | ||||
Deferred financing costs, net — 2020 LC Facility Warrant issued to SBG (1) |
152,503 | 199,832 | ||||||
Deferred financing costs, net — Other SoftBank Debt Financing Costs paid or payable to SBG (1) |
9,198 | 11,334 | ||||||
Deferred financing costs, net — Other SoftBank Debt Financing Costs paid or payable to third parties (1) |
4,613 | 5,440 | ||||||
Other deferred financing costs, net |
6,088 | 64 | ||||||
Security deposits with landlords |
251,734 | 274,822 | ||||||
Other security deposits |
3,172 | 3,271 | ||||||
Straight-line revenue receivable |
45,623 | 46,313 | ||||||
Deferred income tax assets, net |
— | 1,377 | ||||||
Other long-term prepaid expenses and other assets |
24,387 | 31,493 | ||||||
|
|
|
|
|||||
Total other assets |
$ | 932,151 | $ | 1,062,258 | ||||
|
|
|
|
(1) | See Note 9 for details. Amounts are net of accumulated amortization totaling $273.7 million and $169.7 million as of June 30, 2021 and December 31, 2020, respectively. |
(Amounts in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
2021 LC Debt Facility (See Note 16) |
$ | 349,011 | $ | — | ||||
Current portion of long-term debt (See Note 10) |
37,534 | 13,114 | ||||||
Refunds payable to former members |
36,485 | 35,761 | ||||||
Current portion of acquisition holdbacks |
— | 1,593 | ||||||
IndiaCo Forward Liability (See Note 6) |
— | 7,907 | ||||||
Other current liabilities |
17,344 | 25,380 | ||||||
|
|
|
|
|||||
Total other current liabilities |
$ | 440,374 | $ | 83,755 | ||||
|
|
|
|
(Amounts in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
SoftBank Debt Financing Warrant Liability: |
||||||||
SoftBank Senior Unsecured Notes Warrant liability capitalized as deferred financing cost at issuance |
$ | 568,877 | $ | 568,877 | ||||
Plus: Cumulative (gain)/loss from change in fair value of related party financial instruments |
(54,793 | ) | (288,674 | ) | ||||
Less: Senior Unsecured Notes Warrant liability deferred financing cost adjustment |
(934 | ) | (934 | ) | ||||
Less: Exercise of warrants into Series H-3 Convertible Preferred Stock |
(474,521 | ) | — | |||||
|
|
|
|
|||||
Total SoftBank Senior Unsecured Notes Warrant Liability, at fair value |
38,629 | 279,269 | ||||||
2020 LC Facility Warrant liability capitalized as deferred financing cost at issuance |
284,440 | 284,440 | ||||||
Plus: Cumulative (gain)/loss from change in fair value of related party financial instruments |
(27,394 | ) | (144,335 | ) | ||||
Less: 2020 LC Facility Warrant liability deferred financing cost adjustment |
(466 | ) | (466 | ) | ||||
Less: Exercise of warrants into Series H-3 Convertible Preferred Stock |
(237,265 | ) | — | |||||
|
|
|
|
|||||
Total LC Facility Warrant Liability, at Fair Value |
19,315 | 139,639 | ||||||
|
|
|
|
|||||
Total SoftBank Debt Financing Warrant Liability, at fair value |
57,944 | 418,908 | ||||||
|
|
|
|
|||||
Total convertible related party liabilities, net |
$ | 57,944 | $ | 418,908 | ||||
|
|
|
|
(Amounts in thousands, except percentages) |
Maturity Year |
Interest Rate |
June 30, 2021 |
December 31, 2020 |
||||||||||||
Senior Notes: |
||||||||||||||||
Outstanding principal balance |
2025 | 7.875% | $ | 669,000 | $ | 669,000 | ||||||||||
Less: Unamortized debt issuance costs |
(10,251 | ) | (11,363 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Total Senior Notes, net |
658,749 | 657,637 | ||||||||||||||
|
|
|
|
|||||||||||||
Other Loans: |
||||||||||||||||
Outstanding principal balance |
2021 - 2022 |
2.5% - 3.0% |
38,231 | 43,833 | ||||||||||||
Less: Current portion of Other Loans (See Note 8) |
(37,534 | ) | (13,114 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Total non-current portion Other Loans, net |
697 | 30,719 | ||||||||||||||
|
|
|
|
|||||||||||||
Total long-term debt, net |
$ | 659,446 | $ | 688,356 | ||||||||||||
|
|
|
|
(Amounts in thousands) |
Total |
|||
Remainder of 2021 |
$ | 9,730 | ||
2022 |
28,501 | |||
2023 |
— | |||
2024 |
— | |||
2025 |
669,000 | |||
2026 and beyond |
— | |||
|
|
|||
Total minimum payments |
$ | 707,231 | ||
|
|
June 30, 2021 |
||||||||||||||||
(Amounts in thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
Assets: |
||||||||||||||||
Cash equivalents — money market funds and time deposits |
$ | 415,027 | $ | — | $ | — | $ | 415,027 | ||||||||
Other investments — available-for-sale |
— | — | 39,275 | 39,275 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets measured at fair value |
$ | 415,027 | $ | — | $ | 39,275 | $ | 454,302 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Convertible related party liabilities — SoftBank Senior Unsecured Notes Warrant |
$ |
— |
|
$ |
— |
|
$ |
38,629 |
|
$ |
38,629 |
| ||||
Convertible related party liabilities — 2020 LC Facility Warrant |
|
— |
|
|
— |
|
|
19,315 |
|
|
19,315 |
| ||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities measured at fair value |
$ | — | $ | — | $ | 57,944 | $ | 57,944 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||
(Amounts in thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
Assets: |
||||||||||||||||
Cash equivalents — money market funds and time deposits |
$ | 330,049 | $ | — | $ | — | $ | 330,049 | ||||||||
Other investments — available-for-sale |
— | — | 49,849 | 49,849 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets measured at fair value |
$ | 330,049 | $ | — | $ | 49,849 | $ | 379,898 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Other current liabilities — IndiaCo Forward Contract Liability |
$ |
— |
|
$ |
— |
|
$ |
7,907 |
|
$ |
7,907 |
| ||||
Convertible related party liabilities — SoftBank Senior Unsecured Notes Warrant |
|
— |
|
|
— |
|
|
279,269 |
|
|
279,269 |
| ||||
Convertible related party liabilities — 2020 LC Facility Warrant |
|
— |
|
|
— |
|
|
139,639 |
|
|
139,639 |
| ||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities measured at fair value |
$ | — | $ | — | $ | 426,815 | $ | 426,815 | ||||||||
|
|
|
|
|
|
|
|
(Amounts in thousands) |
Six Months Ended June 30, 2021 |
Year Ended December 31, 2020 |
||||||
Assets: |
||||||||
Balance at beginning of period |
$ | 49,849 | $ | 5,541 | ||||
Purchases |
15,000 | 85,000 | ||||||
Credit loss valuation allowance included in income (loss) from equity method and other investments |
(15,265 | ) | (43,857 | ) | ||||
Reclassification of forward contract liability to credit valuation allowance upon funding of commitment |
(8,499 | ) | — | |||||
Unrealized (loss) gain on available-for-sale |
(2,263 | ) | 4,369 | |||||
Accrued interest income |
5,603 | 5,840 | ||||||
Accrued interest collected |
(5,269 | ) | (2,678 | ) | ||||
Foreign currency translation (losses) gain included in other comprehensive income |
119 | 3,810 | ||||||
Foreign currency gain (loss) included in net income |
— | (8,176 | ) | |||||
|
|
|
|
|||||
Balance at end of period |
$ | 39,275 | $ | 49,849 | ||||
|
|
|
|
Six Months Ended June 30, 2021 |
||||||||||||||||||||||||
(Amounts in thousands) |
Balance at Beginning of Period |
Additions |
Settlements |
Change in Fair Value (1) |
Foreign Currency Translation Gains (Losses) Included in Other Comprehensive Income |
Balance at End of Period |
||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
IndiaCo Forward Contract Liability |
$ | 7,907 | $ | — | $ | (8,499 | ) | $ | 592 | $ | — | $ |
— |
| ||||||||||
SoftBank Senior Unsecured Notes Warrant |
|
279,269 |
|
|
— |
|
|
(474,521 |
) |
|
233,881 |
|
|
— |
|
|
38,629 |
| ||||||
2020 LC Facility Warrant |
139,639 | — | (237,265 | ) | 116,941 | — | 19,315 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 426,815 | $ | — | $ | (720,285 | ) | $ | 351,414 | $ | — | $ | 57,944 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | During the six months ended June 30, 2021, $0.6 million of the change in fair value was included as a loss within income (loss) from equity method and other investments on the accompanying condensed consolidated statements of operations and $350.8 million was included as a loss from change in fair value of related party financial instruments on the accompanying condensed consolidated statements of operations. |
Year Ended December 31, 2020 |
||||||||||||||||||||||||
(Amounts in thousands) |
Balance at Beginning of Period |
Additions |
Settlements |
Change in Fair Value (1) |
Foreign Currency Translation Gains (Losses) Included in Other Comprehensive Income |
Balance at End of Period |
||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Contingent consideration payable in stock |
$ | 445 | $ | — | $ | (319 | ) | $ | (122 | ) | $ | (4 | ) | $ | — | |||||||||
IndiaCo Forward Contract Liability |
— | 9,507 | — | (1,600 | ) | — | 7,907 | |||||||||||||||||
2019 Warrant |
1,297,758 | — | (911,120 | ) | (386,638 | ) | — | — | ||||||||||||||||
SoftBank Senior Unsecured Notes Warrant |
568,877 | — | (934 | ) | (288,674 | ) | — | 279,269 | ||||||||||||||||
2020 LC Facility Warrant |
284,440 | — | (466 | ) | (144,335 | ) | — | 139,639 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 2,151,520 | $ | 9,507 | $ | (912,839 | ) | $ | (821,369 | ) | $ | (4 | ) | $ | 426,815 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | During the year ended December 31, 2020, $0.1 million of the change in fair value was included as a reduction of selling, general and administrative expenses, $1.6 million was included as a gain within income (loss) from equity method and other investments on the accompanying condensed consolidated statements of operations and $819.6 million was included as a gain from change in fair value of related party financial instruments on the accompanying condensed consolidated statements of operations. |
June 30, 2021 |
||||||||||||||
Fair Value (in thousands) |
Valuation Technique |
Significant Unobservable Inputs |
Range (Weighted Average) |
|||||||||||
Level 3 Assets: |
||||||||||||||
Other investments — available-for-sale |
$ | 39,275 | Discounted cash flow | Price per share | $ | 2.25 | ||||||||
Level 3 Liabilities: |
||||||||||||||
Convertible related party liabilities |
$ | 57,944 | Discounted cash flow | |
Preferred share fair values |
|
$ | 9.48 |
December 31, 2020 |
||||||||||||||
Fair Value (in thousands) |
Valuation Technique |
Significant Unobservable Inputs |
Range (Weighted Average) |
|||||||||||
Level 3 Assets: |
||||||||||||||
Other investments — available-for-sale |
$ | 49,849 | Discounted cash flow/Market approach |
Price per share | $ | 2.97 | ||||||||
Level 3 Liabilities: |
||||||||||||||
IndiaCo Forward Contract Liability |
$ | 7,907 | Discounted cash flow |
Price per share | $ | 2.97 | ||||||||
Convertible related party liabilities |
$ | 418,908 | Discounted cash flow |
|
Preferred share fair values |
|
$ | 3.09 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
ASC 606 membership and service revenue |
$ | 341,592 | $ | 638,640 | $ | 701,202 | $ | 1,483,304 | ||||||||
ASC 842 rental and service revenue |
223,572 | 187,291 | 443,226 | 303,717 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total membership and service revenue |
565,164 | 825,931 | 1,144,428 | 1,787,021 | ||||||||||||
Other revenue |
28,314 | 55,803 | 46,903 | 151,596 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 593,478 | $ | 881,734 | $ | 1,191,331 | $ | 1,938,617 | ||||||||
|
|
|
|
|
|
|
|
(Amounts in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
Contract assets (included in accounts receivable and accrued revenue, net) |
$ | 19,894 | $ | 36,284 | ||||
Contract assets (included in other current assets) |
$ | 8,467 | $ | 13,111 | ||||
Contract assets (included in other assets) |
$ | 14,679 | $ | 22,300 | ||||
Deferred revenue |
$ | (56,439 | ) | $ | (74,645 | ) |
(Amounts in thousands) |
ASC 842 Revenue |
|||
2021 |
$ | 308,654 | ||
2022 |
446,769 | |||
2023 |
288,467 | |||
2024 |
146,649 | |||
2025 |
69,171 | |||
2026 and beyond |
41,743 | |||
|
|
|||
Total |
$ | 1,301,453 | ||
|
|
Three Months Ended June 30, 2021 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period |
$ | 600,694 | $ | 24,909 | $ | 10,620 | $ | 50,288 | $ | 686,511 | ||||||||||
Non-cash GAAP straight-line lease cost |
97,628 | 21,199 | 324 | 3,883 | 123,034 | |||||||||||||||
Amortization of lease incentives |
(67,375 | ) | (5,417 | ) | (966 | ) | (6,533 | ) | (80,291 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 630,947 | $ | 40,691 | $ | 9,978 | $ | 47,638 | $ | 729,254 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | — | $ | — | $ | — | $ | (96,415 | ) | $ | (96,415 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period |
$ | 1,300,034 | $ | 55,945 | $ | 20,134 | $ | 87,486 | $ | 1,463,599 | ||||||||||
Non-cash GAAP straight-line lease cost |
131,283 | 25,534 | 902 | 2,021 | 159,740 | |||||||||||||||
Amortization of lease incentives |
(142,401 | ) | (10,158 | ) | (1,794 | ) | (10,495 | ) | (164,848 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 1,288,916 | $ | 71,321 | $ | 19,242 | $ | 79,012 | $ | 1,458,491 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | — | $ | — | $ | — | $ | (179,995 | ) | $ | (179,995 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period |
$ | 651,370 | $ | 36,322 | $ | 16,984 | $ | 275 | $ | 704,951 | ||||||||||
Non-cash GAAP straight-line lease cost |
99,036 | 49,878 | 4,697 | — | 153,611 | |||||||||||||||
Amortization of lease incentives |
(78,658 | ) | (11,323 | ) | (1,504 | ) | 175 | (91,310 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 671,748 | $ | 74,877 | $ | 20,177 | $ | 450 | $ | 767,252 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | — | $ | — | $ | — | $ | (39,193 | ) | $ | (39,193 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period |
$ | 1,266,768 | $ | 69,069 | $ | 34,579 | $ | 376 | $ | 1,370,792 | ||||||||||
Non-cash GAAP straight-line lease cost |
228,901 | 112,126 | 12,147 | — | 353,174 | |||||||||||||||
Amortization of lease incentives |
(143,483 | ) | (23,562 | ) | (3,327 | ) | 120 | (170,252 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 1,352,186 | $ | 157,633 | $ | 43,399 | $ | 496 | $ | 1,553,714 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | — | $ | — | $ | — | $ | (31,686 | ) | $ | (31,686 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2021 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Fixed real estate lease costs |
$ | 516,535 | $ | 35,411 | $ | 8,944 | $ | 43,270 | $ | 604,160 | ||||||||||
Fixed equipment and other lease costs |
289 | 6 | 4 | — | 299 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed lease costs |
$ | 516,824 | $ | 35,417 | $ | 8,948 | $ | 43,270 | $ | 604,459 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Variable real estate lease costs |
$ | 114,412 | $ | 5,280 | $ | 1,034 | $ | 4,368 | $ | 125,094 | ||||||||||
Variable equipment and other lease costs |
1,493 | 32 | 24 | 1,106 | 2,655 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total variable lease costs |
$ | 115,905 | $ | 5,312 | $ | 1,058 | $ | 5,474 | $ | 127,749 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Fixed real estate lease costs |
$ | 1,057,898 | $ | 61,313 | $ | 17,159 | $ | 69,830 | $ | 1,206,200 | ||||||||||
Fixed equipment and other lease costs |
659 | 7 | 8 | 18 | 692 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed lease costs |
$ | 1,058,557 | $ | 61,320 | $ | 17,167 | $ | 69,848 | $ | 1,206,892 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Variable real estate lease costs |
$ | 231,018 | $ | 10,008 | $ | 2,083 | $ | 9,182 | $ | 252,291 | ||||||||||
Variable equipment and other lease costs |
679 | (32 | ) | 72 | 840 | 1,559 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total variable lease costs |
$ | 231,697 | $ | 9,976 | $ | 2,155 | $ | 10,022 | $ | 253,850 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Fixed real estate lease costs |
$ | 566,228 | $ | 71,312 | $ | 18,065 | $ | 362 | $ | 655,967 | ||||||||||
Fixed equipment and other lease costs |
518 | — | 8 | — | 526 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed lease costs |
$ | 566,746 | $ | 71,312 | $ | 18,073 | $ | 362 | $ | 656,493 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Variable real estate lease costs |
$ | 105,520 | $ | 3,565 | $ | 2,112 | $ | 88 | $ | 111,285 | ||||||||||
Variable equipment and other lease costs |
946 | — | 15 | — | 961 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total variable lease costs |
$ | 106,466 | $ | 3,565 | $ | 2,127 | $ | 88 | $ | 112,246 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
| |||||||||||||||||||
Six Months Ended June 30, 2020 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
(Amounts in thousands) |
Location Operating Expenses |
Pre-opening Location Expenses |
Selling, General and Administrative Expenses |
Restructuring and Other Related Costs |
Total |
|||||||||||||||
Fixed real estate lease costs |
$ | 1,125,402 | $ | 148,150 | $ | 39,334 | $ | 410 | $ | 1,313,296 | ||||||||||
Fixed equipment and other lease costs |
1,094 | — | 17 | — | 1,111 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed lease costs |
$ | 1,126,496 | $ | 148,150 | $ | 39,351 | $ | 410 | $ | 1,314,407 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Variable real estate lease costs |
$ | 226,784 | $ | 9,483 | $ | 4,065 | $ | 86 | $ | 240,418 | ||||||||||
Variable equipment and other lease costs |
1,823 | — | 79 | — | 1,902 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total variable lease costs |
$ | 228,607 | $ | 9,483 | $ | 4,144 | $ | 86 | $ | 242,320 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||||||||||||
Reported in: |
Reported in: |
|||||||||||||||||||||||
(Amounts in thousands) |
Depreciation and Amortization |
Interest Expense |
Total |
Depreciation and Amortization |
Interest Expense |
Total |
||||||||||||||||||
Total finance lease cost |
$ | 1,232 | $ | 1,068 | $ | 2,300 | $ | 1,332 | $ | 1,178 | $ | 2,510 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||||||||||||
Reported in: |
Reported in: |
|||||||||||||||||||||||
(Amounts in thousands) |
Depreciation and Amortization |
Interest Expense |
Total |
Depreciation and Amortization |
Interest Expense |
Total |
||||||||||||||||||
Total finance lease cost |
$ | 2,515 | $ | 2,170 | $ | 4,685 | $ | 2,660 | $ | 2,368 | $ | 5,028 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
Balance Sheet Captions |
June 30, 2021 |
December 31, 2020 |
|||||||||
Assets: |
||||||||||||
Operating lease right-of-use |
Lease right-of-use assets, net |
$ | 13,923,373 | $ | 15,107,880 | |||||||
Finance lease right-of-use (1) |
Property and equipment, net | 47,821 | 48,116 | |||||||||
|
|
|
|
|||||||||
Total leased assets |
$ | 13,971,194 | $ | 15,155,996 | ||||||||
|
|
|
|
|||||||||
Liabilities: |
||||||||||||
Current liabilities |
||||||||||||
Operating lease liabilities |
Current lease obligations | $ | 868,348 | $ | 842,680 | |||||||
Finance lease liabilities |
Current lease obligations | 5,183 | 4,851 | |||||||||
|
|
|
|
|||||||||
Total current liabilities |
873,531 | 847,531 | ||||||||||
|
|
|
|
|||||||||
Non-current liabilities |
||||||||||||
Operating lease obligations |
Long-term lease obligations | 18,936,572 | 20,220,274 | |||||||||
Finance lease obligations |
Long-term lease obligations | 40,972 | 43,332 | |||||||||
|
|
|
|
|||||||||
Total non-current liabilities |
18,977,544 | 20,263,606 | ||||||||||
|
|
|
|
|||||||||
Total lease obligations |
$ | 19,851,075 | $ | 21,111,137 | ||||||||
|
|
|
|
(1) | Finance lease right-of-use |
June 30, 2021 |
December 31, 2020 |
|||||||||||||||
Operating |
Finance |
Operating |
Finance |
|||||||||||||
Weighted average remaining lease term (in years) |
13 | 9 | 13 | 10 | ||||||||||||
Weighted average discount rate percentage |
8.8 | % | 7.5 | % | 8.7 | % | 7.5 | % |
(Amounts in thousands) |
Finance Leases |
Operating Leases |
Total |
|||||||||
Remainder of 2021 |
$ | 4,598 | $ | 1,244,849 | $ | 1,249,447 | ||||||
2022 |
9,191 | 2,517,258 | 2,526,449 | |||||||||
2023 |
8,849 | 2,597,497 | 2,606,346 | |||||||||
2024 |
7,335 | 2,653,586 | 2,660,921 | |||||||||
2025 |
6,334 | 2,680,086 | 2,686,420 | |||||||||
2026 and beyond |
32,470 | 22,446,916 | 22,479,386 | |||||||||
|
|
|
|
|
|
|||||||
Total undiscounted fixed minimum lease cost payments |
68,777 | 34,140,192 | 34,208,969 | |||||||||
Less amount representing lease incentive receivables (1) |
— | (476,877 | ) | (476,877 | ) | |||||||
Less amount representing interest |
(22,622 | ) | (13,858,395 | ) | (13,881,017 | ) | ||||||
|
|
|
|
|
|
|||||||
Present value of future lease payments |
46,155 | 19,804,920 | 19,851,075 | |||||||||
Less current portion of lease obligation |
(5,183 | ) | (868,348 | ) | (873,531 | ) | ||||||
|
|
|
|
|
|
|||||||
Total long-term lease obligation |
$ | 40,972 | $ | 18,936,572 | $ | 18,977,544 | ||||||
|
|
|
|
|
|
(1) | Lease incentives receivable primarily represent amounts expected to be received by the Company relating to payments for leasehold improvements that are reimbursable pursuant to lease provisions with relevant landlords and receivables for broker commissions earned for negotiating certain of the Company’s leases. |
Number of WeWork Partnerships Profits Interest Units |
Weighted- Average Distribution Threshold |
Weighted- Average Preference Amount |
Aggregate Intrinsic Value (In thousands) |
|||||||||||||
Outstanding, December 31, 2020 |
25,168,938 | $ | 21.64 | $ | 0.47 | $ | — | |||||||||
Granted |
— | $ | — | $ | — | — | ||||||||||
Exchanged/redeemed |
— | $ | — | $ | — | — | ||||||||||
Forfeited/canceled |
(1,036,363 | ) | $ | 49.28 | $ | 10.92 | — | |||||||||
|
|
|
|
|||||||||||||
Outstanding, June 30, 2021 |
24,132,575 | $ | 10.08 | $ | 10.00 | $ | — | |||||||||
|
|
|
|
|||||||||||||
Exercisable, June 30, 2021 |
24,132,575 | $ | 10.08 | $ | 10.00 | $ | — | |||||||||
|
|
|
|
|||||||||||||
Vested and expected to vest, June 30, 2021 |
24,132,575 | $ | 10.08 | $ | 10.00 | $ | — | |||||||||
|
|
|
|
|||||||||||||
Vested and exercisable, June 30, 2021 |
24,132,575 | $ | 10.08 | $ | 10.00 | $ | — | |||||||||
|
|
|
|
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life in Years |
Aggregate Intrinsic Value (In thousands) |
|||||||||||||
Outstanding, December 31, 2020 |
34,077,898 | $ | 4.74 | 6.4 | $ | 12,534 | ||||||||||
Granted |
— | $ | — | |||||||||||||
Exercised |
(5,395,515 | ) | $ | 2.17 | ||||||||||||
Forfeited/canceled |
(2,411,986 | ) | $ | 6.93 | ||||||||||||
Outstanding, June 30, 2021 |
26,270,397 | $ | 5.05 | 5.9 | $ | 162,428 | ||||||||||
|
|
|
|
|||||||||||||
Exercisable June 30, 2021 |
18,044,420 | $ | 6.21 | 4.7 | $ | 103,098 | ||||||||||
|
|
|
|
|||||||||||||
Vested and expected to vest, June 30, 2021 |
26,010,655 | $ | 5.05 | 5.9 | $ | 162,428 | ||||||||||
|
|
|
|
|||||||||||||
Vested and exercisable, June 30, 2021 |
18,044,420 | $ | 6.21 | 4.7 | $ | 103,098 | ||||||||||
|
|
|
|
December 31, 2020 |
||||
Fair value of common stock |
$ | 2.07 - 2.10 |
||
Weighted average expected term (years) |
6.22 | |||
Weighted average expected volatility |
51.0 | % | ||
Risk-free interest rate |
0.30% - 1.02 |
% | ||
Dividend yield |
— |
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life in Years |
Aggregate Intrinsic Value (In thousands) |
|||||||||||||
Outstanding, December 31, 2020 |
15,562,500 | $ | 2.09 | 9.4 | $ | — | ||||||||||
Granted |
— | $ | — | |||||||||||||
Exercised |
— | $ | — | |||||||||||||
Forfeited/canceled |
(1,950,000 | ) | $ | 2.09 | ||||||||||||
Outstanding, June 30, 2021 |
13,612,500 | $ | 2.09 | 8.9 | $ | 100 | ||||||||||
|
|
|
|
|||||||||||||
Exercisable June 30, 2021 |
— | $ | — | — | $ | — | ||||||||||
|
|
|
|
|||||||||||||
Vested and expected to vest, June 30, 2021 |
4,537,500 | $ | 2.09 | 8.9 | $ | 33 | ||||||||||
|
|
|
|
|||||||||||||
Vested and exercisable, June 30, 2021 |
— | $ | — | — | $ | — | ||||||||||
|
|
|
|
December 31, 2020 | ||
Fair value of common stock |
$2.07 - $2.10 | |
Weighted average expected term (years) |
5.56 | |
Weighted average expected volatility |
50.0% | |
Risk-free interest rate |
0.20% - 0.80% | |
Dividend yield |
— % |
Shares |
Weighted Average Grant Date Value |
|||||||
Unvested, December 31, 2020 |
2,819,146 | $ | 16.85 | |||||
Granted |
12,972,493 | 4.12 | ||||||
Vested |
(165,434 | ) | 10.41 | |||||
2021 Tender Offer (1) |
(594,097 | ) | 11.40 | |||||
Forfeited/canceled |
(2,385,153 | ) | 4.80 | |||||
|
|
|
|
|||||
Unvested, June 30, 2021 (2) |
12,646,955 | $ | 6.37 | |||||
|
|
|
|
(1) | As noted in the 2021 Tender Offer section below, during the six months ended June 30, 2021 and in connection with the 2021 Tender Offer, the Company modified the liquidity event condition with respect to 594,097 restricted stock units held by 1,774 grantees, such that those restricted stock units became fully vested immediately prior to the closing of the 2021 Tender Offer. |
Refer therein for more details. |
(2) | The unvested balance includes (a) 9,586,956 restricted stock units granted, which will vest annually over a three to seven year employment service period, only if and when an initial public offering or Acquisition (as defined in the 2015 Plan) occurs within seven to ten years of the date of grant, (b) 1,560,000 RSUs as described above, and (c) 1,500,000 RSUs as described above. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Stock-based compensation included in: |
||||||||||||||||
Location operating expenses |
$ | 734 | $ | 3,287 | $ | 9,565 | $ | 6,906 | ||||||||
Selling, general and administrative expenses |
3,560 | 8,706 | 48,327 | 27,912 | ||||||||||||
Restructuring and other related costs |
— | 10,143 | 101,982 | 10,143 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total stock-based compensation expense |
$ | 4,294 | $ | 22,136 | $ | 159,874 | $ | 44,961 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands, except share and per share data) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Numerator: |
||||||||||||||||
Net loss attributed to WeWork Inc. |
$ | (888,845 | ) | $ | (863,829 | ) | $ | (2,921,200 | ) | $ | (1,047,698 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Class A and Class B Common Stockholders (1) |
$ | (888,845 | ) | $ | (863,829 | ) | $ | (2,921,200 | ) | $ | (1,047,698 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Denominator: |
||||||||||||||||
Basic shares: |
||||||||||||||||
Weighted-average shares - Basic |
175,941,649 | 170,754,546 | 173,751,116 | 170,691,538 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted shares: |
||||||||||||||||
Weighted-average shares - Diluted |
175,941,649 | 170,754,546 | 173,751,116 | 170,691,538 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to Class A and Class B Common Stockholders: |
||||||||||||||||
Basic |
$ | (5.05 | ) | $ | (5.06 | ) | $ | (16.81 | ) | $ | (6.14 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ | (5.05 | ) | $ | (5.06 | ) | $ | (16.81 | ) | $ | (6.14 | ) | ||||
|
|
|
|
|
|
|
|
(1) | The three and six months ended June 30, 2021 are comprised of only Class A Common Shares as noted above |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Convertible Preferred Stock Series A, B, C, D-1, D-2, E, F, G, G-1, H-1, H-3 and Acquisition |
498,988,499 | 343,135,729 | 469,472,111 | 282,743,534 | ||||||||||||
Convertible Preferred Stock Series Junior |
1,500 | 1,500 | 1,500 | 1,500 | ||||||||||||
Convertible notes |
593,329 | 785,302 | 688,785 | 785,302 | ||||||||||||
Stock options not subject to performance conditions |
15,936,465 | 5,957,464 | 14,317,839 | 7,771,586 | ||||||||||||
Vested RSUs with non-forfeitable dividend rights |
549,753 | 573,973 | 622,067 | 553,742 | ||||||||||||
Warrants |
6,364,895 | 135,611,308 | 35,741,210 | 135,803,608 |
• | The launch of a new tender offer |
• | Certain governance changes |
• | Adam Neumann settlement payment |
• | Adam Neumann sale of stock to SBG paid-in capital, representing a deemed capital contribution by SBG in its consolidated balance sheet. Refer to Note 3 for more information. |
• | Adam Neumann proxy changes |
• | SBG proxy agreement |
• | WeWork Partnerships Profits Interest Units amendments catch-up base amount of $0. The per unit distribution thresholds for the WeWork Partnerships Profits Interest Units were also amended to initially be $10.00 and may be subject to downward adjustment based on closing date pricing if a de-SPAC or initial public offering were to occur. As a result of this modification, the Company recorded $102.0 million of restructuring and other related costs in its consolidated statement of operations for the three-months ended March 31, 2021. Refer to Note 14 for more information. |
(Amounts in thousands) |
Six Months Ended June 30, 2021 |
Year Ended December 31, 2020 |
||||||
Balance at beginning of period |
$ | 205,965 | $ | 131,989 | ||||
Liabilities incurred in the current period |
3,635 | 8,842 | ||||||
Liabilities settled in the current period |
(10,089 | ) | (5,475 | ) | ||||
Accretion of liability |
8,347 | 9,888 | ||||||
Revisions in estimated cash flows |
19,770 | 64,630 | ||||||
ChinaCo Deconsolidation (Note 5) |
— | (8,883 | ) | |||||
Effect of foreign currency exchange rate changes |
(7,445 | ) | 4,974 | |||||
|
|
|
|
|||||
Balance at end of period |
220,183 | 205,965 | ||||||
Less: Current portion of asset retirement obligations |
(113 | ) | (113 | ) | ||||
|
|
|
|
|||||
Total non-current portion of asset retirement obligations |
$ | 220,070 | $ | 205,852 | ||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
(Amounts in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenue: |
||||||||||||||||
United States |
$ | 250,118 | $ | 433,259 | $ | 506,955 | $ | 982,104 | ||||||||
United Kingdom |
76,104 | 108,857 | 154,946 | 241,481 | ||||||||||||
Japan |
52,555 | 62,640 | 112,216 | 124,913 | ||||||||||||
Greater China (1) |
— | 68,067 | — | 136,921 | ||||||||||||
Other foreign countries |
214,701 | 208,911 | 417,214 | 453,198 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 593,478 | $ | 881,734 | $ | 1,191,331 | $ | 1,938,617 | ||||||||
|
|
|
|
|
|
|
|
(1) | The amounts for Greater China relate solely to the consolidated amounts of ChinaCo which was deconsolidated on October 2, 2020. |
(Amounts in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||
Property and equipment: |
||||||||
United States |
$ | 2,135,248 | $ | 4,752,834 | ||||
United Kingdom |
742,830 | 1,020,575 | ||||||
Japan |
254,183 | 525,046 | ||||||
Other foreign countries |
4,743,624 | 2,288,306 | ||||||
|
|
|
|
|||||
Total property and equipment |
$ | 7,875,885 | $ | 8,586,761 | ||||
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 843,552 | $ | 405 | $ | — | $ | — | $ | 843,957 | ||||||||||
Accounts receivable and accrued revenue, net |
118,205 | — | — | — | 118,205 | |||||||||||||||
Other current assets |
435,125 | — | 323 | — | 435,448 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
1,396,882 | 405 | 323 | — | 1,397,610 | |||||||||||||||
Investments in and advances to/(from) consolidated subsidiaries |
(15,783 | ) | (1,513,876 | ) | (1,528,757 | ) | 3,058,416 | — | ||||||||||||
Property and equipment, net |
5,991,011 | — | — | — | 5,991,011 | |||||||||||||||
Lease right-of-use |
13,923,373 | — | — | — | 13,923,373 | |||||||||||||||
Restricted cash |
11,528 | — | — | — | 11,528 | |||||||||||||||
Equity method and other investments |
198,163 | — | — | — | 198,163 | |||||||||||||||
Goodwill |
678,668 | — | — | — | 678,668 | |||||||||||||||
Intangible assets, net |
53,806 | — | — | — | 53,806 | |||||||||||||||
Other assets |
933,381 | — | (1,230 | ) | — | 932,151 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 23,171,029 | $ | (1,513,471 | ) | $ | (1,529,664 | ) | $ | 3,058,416 | $ | 23,186,310 | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued expenses |
$ | 526,045 | $ | 11,560 | $ | (5 | ) | $ | — | $ | 537,600 | |||||||||
Members’ service retainers |
347,057 | — | — | — | 347,057 | |||||||||||||||
Deferred revenue |
138,207 | — | — | — | 138,207 | |||||||||||||||
Current lease obligations |
873,531 | — | — | — | 873,531 | |||||||||||||||
Other current liabilities |
437,535 | 2,839 | — | — | 440,374 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
2,322,375 | 14,399 | (5 | ) | — | 2,336,769 | ||||||||||||||
Long-term lease obligations |
18,977,544 | — | — | — | 18,977,544 | |||||||||||||||
Unsecured related party debt |
2,200,000 | — | — | — | 2,200,000 | |||||||||||||||
Convertible related party liabilities, net |
— | 57,944 | — | — | 57,944 | |||||||||||||||
Long-term debt, net |
659,446 | — | — | — | 659,446 | |||||||||||||||
Other liabilities |
242,522 | — | — | — | 242,522 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
24,401,887 | 72,343 | (5 | ) | — | 24,474,225 | ||||||||||||||
Convertible preferred stock |
— | 8,379,182 | — | — | 8,379,182 | |||||||||||||||
Redeemable noncontrolling interests |
291,901 | — | — | — | 291,901 | |||||||||||||||
Equity |
||||||||||||||||||||
Total WeWork Inc. shareholders’ equity (deficit) |
(1,528,757 | ) | (9,964,996 | ) | (1,529,659 | ) | 3,058,416 | (9,964,996 | ) | |||||||||||
Noncontrolling interests |
5,998 | — | — | — | 5,998 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total equity (deficit) |
(1,522,759 | ) | (9,964,996 | ) | (1,529,659 | ) | 3,058,416 | (9,958,998 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 23,171,029 | $ | (1,513,471 | ) | $ | (1,529,664 | ) | $ | 3,058,416 | $ | 23,186,310 | ||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 800,531 | $ | 4 | $ | — | $ | — | $ | 800,535 | ||||||||||
Accounts receivable and accrued revenue, net |
176,521 | — | — | — | 176,521 | |||||||||||||||
Other current assets |
349,672 | — | 2,500 | — | 352,172 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
1,326,724 | 4 | 2,500 | — | 1,329,228 | |||||||||||||||
Investments in and advances to/(from) consolidated subsidiaries |
(28,632 | ) | 436,385 | 405,255 | (813,008 | ) | — | |||||||||||||
Property and equipment, net |
6,859,163 | — | — | — | 6,859,163 | |||||||||||||||
Lease right-of-use |
15,107,880 | — | — | — | 15,107,880 | |||||||||||||||
Restricted cash |
53,618 | — | — | — | 53,618 | |||||||||||||||
Equity method and other investments |
214,940 | — | — | — | 214,940 | |||||||||||||||
Goodwill |
679,351 | — | — | — | 679,351 | |||||||||||||||
Intangible assets, net |
49,896 | — | — | — | 49,896 | |||||||||||||||
Other assets |
1,062,258 | — | — | — | 1,062,258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 25,325,198 | $ | 436,389 | $ | 407,755 | $ | (813,008 | ) | $ | 25,356,334 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued expenses |
$ | 698,241 | $ | 25,168 | $ | 2 | $ | — | $ | 723,411 | ||||||||||
Members’ service retainers |
358,566 | — | — | — | 358,566 | |||||||||||||||
Deferred revenue |
176,004 | — | — | — | 176,004 | |||||||||||||||
Current lease obligations |
847,531 | — | — | — | 847,531 | |||||||||||||||
Other current liabilities |
83,755 | — | — | — | 83,755 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
2,164,097 | 25,168 | 2 | — | 2,189,267 | |||||||||||||||
Long-term lease obligations |
20,263,606 | — | — | — | 20,263,606 | |||||||||||||||
Unsecured related party debt |
1,200,000 | — | — | — | 1,200,000 | |||||||||||||||
Convertible related party liabilities, net |
— | 418,908 | — | — | 418,908 | |||||||||||||||
Long-term debt, net |
688,356 | — | — | — | 688,356 | |||||||||||||||
Other liabilities |
221,780 | — | — | — | 221,780 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
24,537,839 | 444,076 | 2 | — | 24,981,917 | |||||||||||||||
Convertible preferred stock |
— | 7,666,098 | — | — | 7,666,098 | |||||||||||||||
Redeemable noncontrolling interests |
380,242 | — | — | — | 380,242 | |||||||||||||||
Equity |
||||||||||||||||||||
Total WeWork Inc. shareholders’ equity (deficit) |
405,255 | (7,673,785 | ) | 407,753 | (813,008 | ) | (7,673,785 | ) | ||||||||||||
Noncontrolling interests |
1,862 | — | — | — | 1,862 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total equity (deficit) |
407,117 | (7,673,785 | ) | 407,753 | (813,008 | ) | (7,671,923 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 25,325,198 | $ | 436,389 | $ | 407,755 | $ | (813,008 | ) | $ | 25,356,334 | |||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Revenue |
$ | 593,478 | $ | — | $ | — | $ | — | $ | 593,478 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses |
780,489 | — | — | — | 780,489 | |||||||||||||||
Pre-opening location expenses |
43,435 | — | — | — | 43,435 | |||||||||||||||
Selling, general and administrative expenses |
224,915 | 168 | (1 | ) | — | 225,082 | ||||||||||||||
Restructuring and other related costs |
(27,794 | ) | — | — | — | (27,794 | ) | |||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
242,105 | — | (1 | ) | — | 242,104 | ||||||||||||||
Depreciation and amortization |
180,157 | — | — | — | 180,157 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
1,443,307 | 168 | (2 | ) | — | 1,443,473 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(849,829 | ) | (168 | ) | 2 | — | (849,995 | ) | ||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | (889,987 | ) | (888,759 | ) | 1,778,746 | — | |||||||||||||
Income (loss) from equity method and other investments |
6,068 | — | — | — | 6,068 | |||||||||||||||
Interest expense |
(113,259 | ) | — | — | — | (113,259 | ) | |||||||||||||
Interest income |
4,358 | — | — | — | 4,358 | |||||||||||||||
Foreign currency gain (loss) |
33,025 | — | — | — | 33,025 | |||||||||||||||
Gain from change in fair value of related party financial instruments |
— | 1,310 | (1 | ) | — | 1,309 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest and other income (expense), net |
(69,808 | ) | (888,677 | ) | (888,760 | ) | 1,778,746 | (68,499 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(919,637 | ) | (888,845 | ) | (888,758 | ) | 1,778,746 | (918,494 | ) | |||||||||||
Income tax benefit (provision) |
(2,786 | ) | — | (1,229 | ) | — | (4,015 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(922,423 | ) | (888,845 | ) | (889,987 | ) | 1,778,746 | (922,509 | ) | |||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
34,134 | — | — | — | 34,134 | |||||||||||||||
Noncontrolling interest — equity |
(470 | ) | — | — | — | (470 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (888,759 | ) | $ | (888,845 | ) | $ | (889,987 | ) | $ | 1,778,746 | $ | (888,845 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Revenue |
$ | 881,734 | $ | — | $ | — | $ | — | $ | 881,734 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses |
881,468 | — | — | — | 881,468 | |||||||||||||||
Pre-opening location expenses |
78,184 | — | — | — | 78,184 | |||||||||||||||
Selling, general and administrative expenses |
390,776 | 2,042 | — | — | 392,818 | |||||||||||||||
Restructuring and other related costs |
80,529 | — | — | — | 80,529 | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
280,390 | — | 86 | — | 280,476 | |||||||||||||||
Depreciation and amortization |
195,797 | — | — | — | 195,797 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
1,907,144 | 2,042 | 86 | — | 1,909,272 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(1,025,410 | ) | (2,042 | ) | (86 | ) | — | (1,027,538 | ) | |||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | (865,984 | ) | (865,898 | ) | 1,731,882 | — | |||||||||||||
Income (loss) from equity method and other investments |
(43,204 | ) | — | — | — | (43,204 | ) | |||||||||||||
Interest expense |
(93,249 | ) | — | — | — | (93,249 | ) | |||||||||||||
Interest income |
1,978 | — | — | — | 1,978 | |||||||||||||||
Foreign currency gain (loss) |
54,473 | — | — | — | 54,473 | |||||||||||||||
Gain from change in fair value of related party financial instruments |
— | 4,197 | — | — | 4,197 | |||||||||||||||
Loss on extinguishment of debt |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest and other income (expense), net |
(80,002 | ) | (861,787 | ) | (865,898 | ) | 1,731,882 | (75,805 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(1,105,412 | ) | (863,829 | ) | (865,984 | ) | 1,731,882 | (1,103,343 | ) | |||||||||||
Income tax benefit (provision) |
(7,095 | ) | — | — | — | (7,095 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(1,112,507 | ) | (863,829 | ) | (865,984 | ) | 1,731,882 | (1,110,438 | ) | |||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
244,706 | — | — | — | 244,706 | |||||||||||||||
Noncontrolling interest — equity |
1,903 | — | — | — | 1,903 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (865,898 | ) | $ | (863,829 | ) | $ | (865,984 | ) | $ | 1,731,882 | $ | (863,829 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Revenue |
$ | 1,191,331 | $ | — | $ | — | $ | — | $ | 1,191,331 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses |
1,598,812 | — | — | — | 1,598,812 | |||||||||||||||
Pre-opening location expenses |
76,839 | — | — | — | 76,839 | |||||||||||||||
Selling, general and administrative expenses |
499,025 | 476 | 1 | 499,502 | ||||||||||||||||
Restructuring and other related costs |
466,163 | (117 | ) | (1 | ) | — | 466,045 | |||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
541,585 | — | — | — | 541,585 | |||||||||||||||
Depreciation and amortization |
364,341 | — | — | — | 364,341 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
3,546,765 | 359 | — | — | 3,547,124 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(2,355,434 | ) | (359 | ) | — | — | (2,355,793 | ) | ||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | (2,570,018 | ) | (2,568,789 | ) | 5,138,807 | — | |||||||||||||
Income (loss) from equity method and other investments |
(24,510 | ) | — | — | — | (24,510 | ) | |||||||||||||
Interest expense |
(217,828 | ) | — | — | — | (217,828 | ) | |||||||||||||
Interest income |
9,455 | — | — | — | 9,455 | |||||||||||||||
Foreign currency gain (loss) |
(37,924 | ) | (1 | ) | — | — | (37,925 | ) | ||||||||||||
Gain from change in fair value of related party financial instruments |
— | (350,822 | ) | — | — | (350,822 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest and other income (expense), net |
(270,807 | ) | (2,920,841 | ) | (2,568,789 | ) | 5,138,807 | (621,630 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(2,626,241 | ) | (2,921,200 | ) | (2,568,789 | ) | 5,138,807 | (2,977,423 | ) | |||||||||||
Income tax benefit (provision) |
(6,053 | ) | — | (1,229 | ) | — | (7,282 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(2,632,294 | ) | (2,921,200 | ) | (2,570,018 | ) | 5,138,807 | (2,984,705 | ) | |||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
64,120 | — | — | — | 64,120 | |||||||||||||||
Noncontrolling interest — equity |
(615 | ) | — | — | — | (615 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (2,568,789 | ) | $ | (2,921,200 | ) | $ | (2,570,018 | ) | $ | 5,138,807 | $ | (2,921,200 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Revenue |
$ | 1,938,617 | $ | — | $ | — | $ | — | $ | 1,938,617 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses |
1,804,802 | — | — | — | 1,804,802 | |||||||||||||||
Pre-opening location expenses |
165,919 | — | — | — | 165,919 | |||||||||||||||
Selling, general and administrative expenses |
922,281 | 2,820 | — | — | 925,101 | |||||||||||||||
Restructuring and other related costs |
136,216 | — | — | 136,216 | ||||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
602,073 | — | (46,114 | ) | — | 555,959 | ||||||||||||||
Depreciation and amortization |
390,156 | — | — | — | 390,156 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
4,021,447 | 2,820 | (46,114 | ) | — | 3,978,153 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(2,082,830 | ) | (2,820 | ) | 46,114 | — | (2,039,536 | ) | ||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | (1,837,191 | ) | (1,883,305 | ) | 3,720,496 | — | |||||||||||||
Income (loss) from equity method and other investments |
(47,111 | ) | — | — | — | (47,111 | ) | |||||||||||||
Interest expense |
(138,090 | ) | — | — | — | (138,090 | ) | |||||||||||||
Interest income |
8,742 | — | — | — | 8,742 | |||||||||||||||
Foreign currency gain (loss) |
(149,985 | ) | — | — | — | (149,985 | ) | |||||||||||||
Gain (loss) from change in fair value of related party financial instruments |
— | 792,313 | — | — | 792,313 | |||||||||||||||
Foreign currency gain (loss) |
(76,295 | ) | (76,295 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest and other income (expense), net |
(402,739 | ) | (1,044,878 | ) | (1,883,305 | ) | 3,720,496 | 389,574 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(2,485,569 | ) | (1,047,698 | ) | (1,837,191 | ) | 3,720,496 | (1,649,962 | ) | |||||||||||
Income tax benefit (provision) |
(16,115 | ) | — | — | — | (16,115 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(2,501,684 | ) | (1,047,698 | ) | (1,837,191 | ) | 3,720,496 | (1,666,077 | ) | |||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
603,763 | — | — | — | 603,763 | |||||||||||||||
Noncontrolling interest — equity |
14,616 | — | — | — | 14,616 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (1,883,305 | ) | $ | (1,047,698 | ) | $ | (1,837,191 | ) | $ | 3,720,496 | $ | (1,047,698 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Operating Activities: |
||||||||||||||||||||
Net loss |
(2,632,294 | ) | $ | (2,921,200 | ) | $ | (2,570,018 | ) | $ | 5,138,807 | $ | (2,984,705 | ) | |||||||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||||||||||||||
Depreciation and amortization |
364,341 | — | — | — | 364,341 | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
541,585 | — | — | — | 541,585 | |||||||||||||||
Non-cash transaction with principal shareholder |
428,289 | — | — | — | 428,289 | |||||||||||||||
Stock-based compensation expense |
159,874 | — | — | — | 159,874 | |||||||||||||||
Issuance of stock for services rendered, net of forfeitures |
(2,273 | ) | — | — | — | (2,273 | ) | |||||||||||||
Non-cash interest expense |
105,137 | — | — | — | 105,137 | |||||||||||||||
Provision for allowance for doubtful accounts |
17,247 | — | — | — | 17,247 | |||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | 2,570,018 | 2,568,789 | (5,138,807 | ) | — | ||||||||||||||
(Income) loss from equity method and other investments |
24,510 | — | — | — | 24,510 | |||||||||||||||
Distribution of income from equity method and other investments |
3,210 | 3,210 | ||||||||||||||||||
Foreign currency (gain) loss |
37,924 | 1 | — | — | 37,925 | |||||||||||||||
Change in fair value of financial instruments |
— | 350,822 | — | 350,822 | ||||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||
Operating lease right-of-use |
830,935 | — | — | — | 830,935 | |||||||||||||||
Current and long-term lease obligations |
(909,490 | ) | — | — | — | (909,490 | ) | |||||||||||||
Accounts receivable and accrued revenue |
11,630 | — | — | — | 11,630 | |||||||||||||||
Other assets |
(60,068 | ) | — | 1,230 | — | (58,838 | ) | |||||||||||||
Accounts payable and accrued expenses |
(27,091 | ) | (13,608 | ) | (5 | ) | — | (40,704 | ) | |||||||||||
Deferred revenue |
(36,684 | ) | — | — | — | (36,684 | ) | |||||||||||||
Other liabilities |
(6,327 | ) | 2,839 | — | — | (3,488 | ) | |||||||||||||
Deferred income taxes |
1,720 | — | — | — | 1,720 | |||||||||||||||
Advances to/from consolidated subsidiaries |
(10,220 | ) | 10,216 | 4 | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) operating activities |
(1,158,045 | ) | (912 | ) | — | — | (1,158,957 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Investing Activities: |
||||||||||||||||||||
Purchases of property and equipment |
(153,142 | ) | — | — | — | (153,142 | ) | |||||||||||||
Capitalized software |
(17,986 | ) | — | — | — | (17,986 | ) | |||||||||||||
Change in security deposits with landlords |
2,885 | — | — | — | 2,885 | |||||||||||||||
Proceeds from asset divestitures and sale of investments, net of cash divested |
8,319 | — | — | 8,319 | ||||||||||||||||
Contributions to investments |
(26,704 | ) | — | — | — | (26,704 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) investing activities |
(186,628 | ) | — | — | — | (186,628 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Flows from Financing Activities: |
||||||||||||||||||||
Principal payments for property and equipment acquired under finance leases |
(2,184 | ) | — | — | — | (2,184 | ) | |||||||||||||
Proceeds from unsecured related party debt |
1,000,000 | — | — | — | 1,000,000 | |||||||||||||||
Proceeds from Commercial Paper Facility |
349,011 | 349,011 | ||||||||||||||||||
Repayments of security deposit loan |
(2,615 | ) | — | — | — | (2,615 | ) | |||||||||||||
Proceeds from exercise of stock options and warrants |
1,100 | 1,313 | — | — | 2,413 | |||||||||||||||
Payments for contingent consideration and holdback of acquisition proceeds |
(2,523 | ) | — | — | — | (2,523 | ) | |||||||||||||
Proceeds relating to contingent consideration and holdbacks of disposition proceeds |
12,177 | 12,177 | ||||||||||||||||||
Additions to members’ service retainers |
198,194 | — | — | — | 198,194 | |||||||||||||||
Refunds of members’ service retainers |
(204,763 | ) | — | — | — | (204,763 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) financing activities |
1,348,397 | 1,313 | — | — | 1,349,710 | |||||||||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
(2,793 | ) | — | — | — | (2,793 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
931 | 401 | — | 1,332 | ||||||||||||||||
Cash, cash equivalents and restricted cash—Beginning of period |
854,149 | 4 | — | — | 854,153 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash, cash equivalents and restricted cash—End of period |
$ 855,080 | $ | 405 | $ | — | $ | — | $ | 855,485 | |||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Operating Activities: |
||||||||||||||||||||
Net loss |
$ | (2,501,684 | ) | $ | (1,047,698 | ) | $ | (1,837,191 | ) | $ | 3,720,496 | $ | (1,666,077 | ) | ||||||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||||||||||||||
Depreciation and amortization |
390,156 | — | — | — | 390,156 | |||||||||||||||
Impairment of property and equipment |
2,825 | — | — | — | 2,825 | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
602,073 | — | (46,114 | ) | — | 555,959 | ||||||||||||||
Loss on extinguishment of debt |
76,295 | — | — | 76,295 | ||||||||||||||||
Stock-based compensation expense |
44,961 | — | — | — | 44,961 | |||||||||||||||
Issuance of stock for services rendered |
9,834 | — | — | — | 9,834 | |||||||||||||||
Non-cash interest expense |
67,390 | — | — | — | 67,390 | |||||||||||||||
Provision for allowance for doubtful accounts |
20,956 | — | — | — | 20,956 | |||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | 1,837,191 | 1,883,305 | (3,720,496 | ) | — | ||||||||||||||
(Income) loss from equity method and other investments |
47,111 | — | — | — | 47,111 | |||||||||||||||
Foreign currency (gain) loss |
148,854 | — | — | — | 148,854 | |||||||||||||||
Change in fair value of financial instruments |
— | (792,313 | ) | — | (792,313 | ) | ||||||||||||||
Contingent consideration fair market value adjustment |
(194 | ) | — | — | — | (194 | ) | |||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||
Operating lease right-of-use |
163,684 | — | — | — | 163,684 | |||||||||||||||
Current and long-term lease obligations |
752,026 | — | — | — | 752,026 | |||||||||||||||
Accounts receivable and accrued revenue |
(69,988 | ) | — | — | — | (69,988 | ) | |||||||||||||
Other assets |
(13,638 | ) | — | — | (13,638 | ) | ||||||||||||||
Accounts payable and accrued expenses |
7,314 | (38,215 | ) | — | — | (30,901 | ) | |||||||||||||
Deferred revenue |
36,233 | — | — | — | 36,233 | |||||||||||||||
Other liabilities |
17,675 | — | — | — | 17,675 | |||||||||||||||
Advances to/from consolidated subsidiaries |
(41,034 | ) | 41,034 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) operating activities |
(239,151 | ) | (1 | ) | — | — | (239,152 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Investing Activities: |
||||||||||||||||||||
Purchases of property and equipment |
(914,411 | ) | — | — | — | (914,411 | ) | |||||||||||||
Capitalized software |
(12,705 | ) | — | — | — | (12,705 | ) | |||||||||||||
Change in security deposits with landlords |
(4,875 | ) | — | — | — | (4,875 | ) | |||||||||||||
Proceeds from asset divestitures and sale of investments, net of cash divested |
994,627 | — | 94,249 | — | 1,088,876 | |||||||||||||||
Sale/distribution of acquisitions among consolidated subsidiaries |
94,249 | — | (94,249 | ) | — | — | ||||||||||||||
Contributions to investments |
(93,357 | ) | — | — | — | (93,357 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) investing activities |
63,528 | — | — | — | 63,528 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Flows from Financing Activities: |
||||||||||||||||||||
Principal payments for property and equipment acquired under finance leases |
(2,144 | ) | — | — | — | (2,144 | ) | |||||||||||||
Proceeds from issuance of debt |
32,445 | — | — | — | 32,445 | |||||||||||||||
Repayments of debt |
(759,196 | ) | — | — | — | (759,196 | ) | |||||||||||||
Debt and equity issuance costs |
(4,124 | ) | — | — | — | (4,124 | ) | |||||||||||||
Proceeds from exercise of stock options and warrants |
149 | — | — | — | 149 | |||||||||||||||
Proceeds from issuance of noncontrolling interests |
629 | — | — | — | 629 | |||||||||||||||
Distribution to noncontrolling interests |
(315,015 | ) | — | — | — | (315,015 | ) | |||||||||||||
Payments for contingent consideration and holdback of acquisition proceeds |
(32,792 | ) | — | — | — | (32,792 | ) | |||||||||||||
Additions to members’ service retainers |
205,734 | — | — | — | 205,734 | |||||||||||||||
Refunds of members’ service retainers |
(280,814 | ) | — | — | — | (280,814 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) financing activities |
(1,155,128 | ) | — | — | — | (1,155,128 | ) | |||||||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
(22,610 | ) | — | — | — | (22,610 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,353,361 | ) | (1 | ) | — | — | (1,353,362 | ) | ||||||||||||
Cash, cash equivalents and restricted cash—Beginning of period |
2,200,687 | 1 | — | — | 2,200,688 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash, cash equivalents and restricted cash—End of period |
$ 847,326 | $ | — | $ | — | $ | — | $ | 847,326 | |||||||||||
|
|
|
|
|
|
|
|
|
|
Impairment of Long-lived assets | ||
Description of the Matter |
As more fully described in Notes 2 and 3 to the consolidated financial statements, long-lived assets are evaluated for recoverability when events or changes in circumstances indicate that |
the asset may have been impaired. As a result of the COVID-19 pandemic the Company experienced declines in revenue and operating income at certain locations. In addition, the Company implemented its operational restructuring program, which included the termination of certain leases throughout 2020. Based on these events, the Company evaluated its long-lived assets for recoverability and determined that certain assets were not recoverable and were impaired. As a result, the Company recognized a $1,142 million impairment loss. Auditing the Company’s recoverability and impairment tests involved a high degree of subjectivity due to the significant estimation required in determining the future cash flows of the asset groups. The Company developed its estimates and assumptions related to each locations’ future cash flows and performed a comprehensive review of the locations’ long-lived assets for impairment. Significant assumptions used in the Company’s estimates included, but were not limited to, revenue and related costs, market rental rates, and discount rates in local real estate markets in which the Company operates. | ||
How We Addressed the Matter in Our Audit |
Our testing of the Company’s recoverability and impairment tests included, among other procedures, evaluating the significant assumptions and operating data used to assess recoverability and estimate fair value of the asset group. For example, we compared the significant assumptions used to estimate cash flows, including revenue and related costs, to historical results of that location, operating results of locations in the same geography, and assumptions around growth expected at the building and overall portfolio level. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses over significant cash flow assumptions to evaluate the change in the impairment analysis resulting from changing those specific assumptions. We also involved our valuation specialists to assist in our evaluation of the market rent and discount rates used in the fair value estimates for the overall asset group as well as the underlying operating lease right-of-use assets. | |
Valuation of the Company’s equity instruments | ||
Description of the Matter |
As described in Note 16 to the financial statements, the fair value of the Company’s convertible related party liabilities, including the 2019 Warrant, SoftBank Senior Unsecured Notes Warrant, and the 2020 LC Facility Warrant, were linked to the underlying fair value of the Company’s preferred stock equity instruments. These liabilities were characterized as Level III in the fair value hierarchy and totaled $419 million as of December 31, 2020. Management determined the fair value of its equity instruments by applying the methodologies described in Notes 2 and 16 to the financial statements and using significant unobservable inputs. Determining the fair value of each equity instrument required management to make significant judgments, including the unobservable inputs and other assumptions and estimates used in the measurements. In addition, as described in Notes 2 and 22, the Company used its determination of the fair value of its equity instruments as a significant assumption in the valuation of its equity awards. For the year ended December 31, 2020, the Company recognized stock-based compensation expense of $63 million, which is linked to the fair value of its equity instruments. Auditing the fair value of the Company’s equity instruments involved complex judgment due to the estimations used by the Company in determining fair value. In particular, in estimating the fair value of stock, the significant assumptions utilized, included but were not limited to, revenue and EBITDA growth expectations and the weighted average cost of capital. |
How We Addressed the Matter in Our Audit |
Our audit procedures included, among others, evaluating the valuation methodologies used by the Company and testing significant assumptions and the mathematical accuracy of the Company’s valuations. For each valuation, we independently performed comparative calculations and compared them to the Company’s estimates. We involved our valuation specialists to assist with the application of these procedures. We compared significant assumptions and underlying data used in the Company’s valuations to information available from third-party sources and market data. Where applicable, we obtained projections utilized in supporting valuations and assessed the reasonableness of significant underlying assumptions such as revenue and EBITDA growth expectations. Our procedures with regard to the projections included assessing the historical accuracy of management’s estimates and performing sensitivity testing over certain of the underlying assumptions utilized in the projections. |
December 31, |
||||||||
(Amounts in thousands, except share and per share amounts) |
2020 |
2019 |
||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents (1) |
$ | 800,535 | $ | 1,340,140 | ||||
Accounts receivable and accrued revenue, net of allowance of $107,806 and $16,658 as of December 31, 2020 and 2019, respectively |
176,521 | 230,239 | ||||||
Assets held for sale |
— | 134,958 | ||||||
Other current assets (including related party amounts of $780 and none as of December 31, 2020 and 2019, respectively) |
352,172 | 422,938 | ||||||
|
|
|
|
|||||
Total current assets |
1,329,228 | 2,128,275 | ||||||
Property and equipment, net |
6,859,163 | 8,399,541 | ||||||
Lease right-of-use |
15,107,880 | 17,496,004 | ||||||
Restricted cash (1) |
53,618 | 856,255 | ||||||
Equity method and other investments |
214,940 | 203,719 | ||||||
Goodwill |
679,351 | 698,416 | ||||||
Intangible assets, net |
49,896 | 79,865 | ||||||
Other assets (including related party amounts of $699,478 and $873,317 as of December 31, 2020 and 2019, respectively) |
1,062,258 | 1,285,739 | ||||||
|
|
|
|
|||||
Total assets (1) |
$ | 25,356,334 | $ | 31,147,814 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses (including amounts due to related parties of $14,497 and $51,500 as of December 31, 2020 and 2019, respectively) |
$ | 723,411 | $ | 1,371,677 | ||||
Members’ service retainers |
358,566 | 605,574 | ||||||
Deferred revenue (including amounts from related parties of $9,717 and $22,876 as of December 31, 2020 and 2019, respectively) |
176,004 | 180,390 | ||||||
Current lease obligations (including amounts due to related parties of $10,148 and $10,190 as of December 31, 2020 and 2019, respectively) |
847,531 | 685,629 | ||||||
Liabilities related to assets held for sale |
— | 25,442 | ||||||
Other current liabilities (including amounts due to related parties of $900 and none as of December 31, 2020 and 2019, respectively) |
83,755 | 218,820 | ||||||
|
|
|
|
|||||
Total current liabilities |
2,189,267 | 3,087,532 | ||||||
Long-term lease obligations (including amounts due to related parties of $436,074 and $587,417 as of December 31, 2020 and 2019, respectively) |
20,263,606 | 21,251,163 | ||||||
Unsecured related party debt |
1,200,000 | — | ||||||
Convertible related party liabilities, net |
418,908 | 2,151,075 | ||||||
Long-term debt, net |
688,356 | 1,389,431 | ||||||
Other liabilities |
221,780 | 137,641 | ||||||
|
|
|
|
|||||
Total liabilities (1) |
24,981,917 | 28,016,842 | ||||||
Commitments and contingencies (Note 24) |
||||||||
Convertible preferred stock; 947,127,740 shares authorized as of December 31, 2020, and 368,912,507 and 222,329,647 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
7,666,098 | 6,473,604 | ||||||
Redeemable noncontrolling interests |
380,242 | 1,032,080 |
December 31, |
||||||||
(Amounts in thousands, except share and per share amounts) |
2020 |
2019 |
||||||
Equity |
||||||||
WeWork Inc. shareholders’ equity (deficit): |
||||||||
Common stock Class A; par value $0.001; 941,647,617 shares authorized as of December 31, 2020, and 41,512,605 and 41,304,381 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
$ | 42 | $ | 41 | ||||
Common stock Class B; par value $0.001; 234,910,597 shares authorized as of December 31, 2020 and 129,382,459 and 129,220,654 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
129 | 129 | ||||||
Common stock Class C; par value $0.001; 50,967,800 shares authorized as of December 31, 2020, and 25,168,938 and 27,752,323 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
25 | 28 | ||||||
Common stock Class D; par value $0.001; 234,910,597 shares authorized as of December 31, 2020, and zero shares issued and outstanding as of December 31, 2020 and 2019 |
— | — | ||||||
Additional paid-in capital |
2,188,319 | 1,879,838 | ||||||
Accumulated other comprehensive income (loss) |
(158,810 | ) | (2,611 | ) | ||||
Accumulated deficit |
(9,703,490 | ) | (6,574,322 | ) | ||||
|
|
|
|
|||||
Total WeWork Inc. shareholders’ deficit |
(7,673,785 | ) | (4,696,897 | ) | ||||
Noncontrolling interests |
1,862 | 322,185 | ||||||
|
|
|
|
|||||
Total deficit |
(7,671,923 | ) | (4,374,712 | ) | ||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 25,356,334 | $ | 31,147,814 | ||||
|
|
|
|
(1) | The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). As of December 31, 2020 and 2019, total assets of consolidated VIEs, after intercompany eliminations, were $2.1 billion and $6.7 billion respectively, including $166.6 million and $417.7 million of cash and cash equivalents, respectively, and $10.0 million and $94.0 million of restricted cash, respectively. Total liabilities of consolidated VIEs, after intercompany eliminations, were $1.7 billion and $5.4 billion as of December 31, 2020 and 2019, respectively. Creditors of VIEs do not have recourse against the general credit of the Company, except relating to certain lease guarantees totaling $14.6 million and $36.3 million as of December 31, 2020 and 2019, respectively, provided by WeWork Inc. to certain landlords of the VIEs. See Note 6 for additional details. |
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Revenue (including related party revenue of $169,783, |
$ | 3,415,865 | $ | 3,458,592 | $ | 1,821,751 | ||||||
|
|
|
|
|
|
|||||||
Expenses: |
||||||||||||
Location operating expenses—cost of revenue (exclusive of depreciation and amortization of $715,413, $515,309 and $281,502 for the years ended 2020, 2019 and 2018 respectively, shown separately below) |
3,542,918 | 2,758,318 | 1,491,783 | |||||||||
Pre-opening location expenses |
273,049 | 571,968 | 357,831 | |||||||||
Selling, general and administrative expenses |
1,604,669 | 2,793,663 | 1,349,622 | |||||||||
Restructuring and other related costs |
206,703 | 329,221 | — | |||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
1,355,921 | 335,006 | — | |||||||||
Depreciation and amortization |
779,368 | 589,914 | 313,514 | |||||||||
|
|
|
|
|
|
|||||||
Total expenses (including related party expenses of $80,524, $290,748 and $21,098 the years ended 2020, 2019 and 2018, respectively. See Note 25) |
7,762,628 | 7,378,090 | 3,512,750 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(4,346,763 | ) | (3,919,498 | ) | (1,690,999 | ) | ||||||
Interest and other income (expense), net: |
||||||||||||
Income (loss) from equity method and other investments |
(44,788 | ) | (32,206 | ) | (12,638 | ) | ||||||
Interest expense (including related party expenses of $(246,875), $(11,024) and $(122,852) for the years ended 2020, 2019 and 2018, respectively. See Note 14 and Note 25) |
(331,217 | ) | (99,587 | ) | (183,697 | ) | ||||||
Interest income |
16,910 | 53,244 | 37,663 | |||||||||
Foreign currency gain (loss) |
149,196 | 29,652 | (78,598 | ) | ||||||||
Gain from change in fair value of related party financial instruments (See Note 14) |
819,647 | 239,145 | — | |||||||||
Loss on extinguishment of debt |
(77,336 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Total interest and other income (expense), net |
532,412 | 190,248 | (237,270 | ) | ||||||||
|
|
|
|
|
|
|||||||
Pre-tax loss |
(3,814,351 | ) | (3,729,250 | ) | (1,928,269 | ) | ||||||
Income tax benefit (provision) |
(19,506 | ) | (45,637 | ) | 850 | |||||||
|
|
|
|
|
|
|||||||
Net loss |
(3,833,857 | ) | (3,774,887 | ) | (1,927,419 | ) | ||||||
Net loss attributable to noncontrolling interests: |
||||||||||||
Redeemable noncontrolling interests — mezzanine |
675,631 | 493,047 | 292,134 | |||||||||
Noncontrolling interest — equity |
28,868 | 17,102 | 24,493 | |||||||||
|
|
|
|
|
|
|||||||
Net loss attributable to WeWork Inc. |
$ | (3,129,358 | ) | $ | (3,264,738 | ) | $ | (1,610,792 | ) | |||
|
|
|
|
|
|
|||||||
Net loss per share attributable to Class A and Class B common stockholders (see Note 23): |
||||||||||||
Basic |
$ | (18.38 | ) | $ | (19.38 | ) | $ | (9.87 | ) | |||
|
|
|
|
|
|
|||||||
Diluted |
$ | (18.38 | ) | $ | (19.38 | ) | $ | (9.87 | ) | |||
|
|
|
|
|
|
|||||||
Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
170,275,761 | 168,436,109 | 163,148,918 |
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Net loss |
$ | (3,833,857 | ) | $ | (3,774,887 | ) | $ | (1,927,419 | ) | |||
Other comprehensive income (loss), net of tax: |
||||||||||||
Foreign currency translation adjustments, net of tax of $0 for years ended 2020, 2019 and 2018 |
(146,737 | ) | (17,014 | ) | 7,666 | |||||||
Unrealized (loss) gain on available-for-sale |
3,273 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income (loss), net of tax |
(143,464 | ) | (17,014 | ) | 7,666 | |||||||
|
|
|
|
|
|
|||||||
Comprehensive loss |
(3,977,321 | ) | (3,791,901 | ) | (1,919,753 | ) | ||||||
Net (income) loss attributable to noncontrolling interests |
704,499 | 510,149 | 316,627 | |||||||||
Other comprehensive (income) loss attributable to noncontrolling interests |
(23,161 | ) | (1,108 | ) | 18,931 | |||||||
|
|
|
|
|
|
|||||||
Comprehensive loss attributable to WeWork Inc. |
$ | (3,295,983 | ) | $ | (3,282,860 | ) | $ | (1,584,195 | ) | |||
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—December 31, 2019 |
222,329,647 | $ | 6,473,604 | $ | 1,032,080 | |||||||
Issuance of noncontrolling interests |
— | — | 100,100 | |||||||||
Stock-based compensation |
31,135 | 1,028 | — | |||||||||
Acquisition of noncontrolling interests |
34,482,759 | 280,345 | (92,822 | ) | ||||||||
Exercise of warrants, net |
112,068,966 | 911,121 | — | |||||||||
Distributions to noncontrolling interests |
— | — | (6,646 | ) | ||||||||
Net income (loss) |
— | — | (675,631 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | 23,161 | |||||||||
|
|
|
|
|
|
|||||||
Balance—December 31, 2020 |
368,912,507 | $ | 7,666,098 | $ | 380,242 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||
Common Stock |
Common Stock |
Common Stock |
Additional |
Accumulated Other Comprehensive |
||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Class A |
Class B |
Class C |
Paid-In |
Accumulated |
Noncontrolling |
||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
Income (Loss) |
Deficit |
Interests |
Total |
||||||||||||||||||||||||||||||||||
Balance—December 31, 2019 |
41,304,381 | $ | 41 | 129,220,654 | $ | 129 | 27,752,323 | $ | 28 | $ | 1,879,838 | $ | (2,611 | ) | $ | (6,574,322 | ) | $ | 322,185 | $ | (4,374,712 | ) | ||||||||||||||||||||||
Adoption of ASC 326 (Note 2) |
— | — | — | — | — | — | — | — | 190 | — | 190 | |||||||||||||||||||||||||||||||||
Forfeiture of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | (2,583,385 | ) | (3 | ) | 3 | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock for services rendered |
— | — | — | — | — | — | 12,874 | — | — | (4,659 | ) | 8,215 | ||||||||||||||||||||||||||||||||
Stock-based compensation |
251,324 | — | 62,048 | — | — | — | 182,007 | — | — | 38 | 182,045 | |||||||||||||||||||||||||||||||||
Exercise of stock options |
33,808 | 1 | 99,757 | — | — | — | 219 | — | — | — | 220 | |||||||||||||||||||||||||||||||||
Settlement of stockholder notes receivable (see Note 22) |
(206,147 | ) | — | — | — | — | — | 16,667 | — | — | — | 16,667 | ||||||||||||||||||||||||||||||||
Issuance of stock in connection with acquisitions |
129,239 | — | — | — | — | — | 217 | — | — | — | 217 | |||||||||||||||||||||||||||||||||
Issuance of noncontrolling interests |
— | — | — | — | — | — | — | — | — | 544 | 544 | |||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | (42,801 | ) | — | — | (274,463 | ) | (317,264 | ) | ||||||||||||||||||||||||||||||
Deconsolidation of consolidated subsidiaries |
— | — | — | — | — | — | 315,604 | — | — | (12,915 | ) | 302,689 | ||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest |
— | — | — | — | — | — | (197,949 | ) | 10,426 | — | — | (187,523 | ) | |||||||||||||||||||||||||||||||
Transactions with principal shareholder |
— | — | — | — | — | — | 21,640 | — | — | — | 21,640 | |||||||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | — | — | (3,129,358 | ) | (28,868 | ) | (3,158,226 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | — | — | (166,625 | ) | — | — | (166,625 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance—December 31, 2020 |
41,512,605 | $ | 42 | 129,382,459 | $ | 129 | 25,168,938 | $ | 25 | $ | 2,188,319 | $ | (158,810 | ) | $ | (9,703,490 | ) | $ | 1,862 | $ | (7,671,923 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—December 31, 2018 |
171,757,571 | $ | 3,498,696 | $ | 1,320,637 | |||||||
Issuance of noncontrolling interests |
— | — | 203,382 | |||||||||
Settlement of stockholder notes receivable (see Note 22) |
(97,229 | ) | (2,732 | ) | — | |||||||
Stock-based compensation |
— | 391 | — | |||||||||
Issuance of stock in connection with acquisitions |
1,609,744 | 134,826 | — | |||||||||
Issuance of shares in connection with convertible note conversion |
9,090,909 | 722,977 | — | |||||||||
Exercise of warrants, net |
39,968,652 | 2,119,446 | — | |||||||||
Net income (loss) |
— | — | (493,047 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | 1,108 | |||||||||
|
|
|
|
|
|
|||||||
Balance—December 31, 2019 |
222,329,647 | $ | 6,473,604 | $ | 1,032,080 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Common Stock Class A |
Common Stock Class B |
Common Stock Class C |
Additional Paid-In |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
Total |
||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
||||||||||||||||||||||||||||||||||||||
Balance—December 31, 2018 |
30,979,421 | $ | 31 | 133,660,176 | $ | 134 | — | $ | — | $ | 797,963 | $ | 15,511 | $ | (3,311,285 | ) | $ | 39,070 | $ | (2,458,576 | ) | |||||||||||||||||||||||
Adoption of ASC 606 (Note 2) |
— | — | — | — | — | — | — | — | 1,701 | — | 1,701 | |||||||||||||||||||||||||||||||||
Issuance of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | 70,641,226 | 71 | (71 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||
Forfeiture of noncontrolling WeWork Partnerships Profits Interest Units in the WeWork Partnership and Common Stock Class C |
— | — | — | — | (42,888,903 | ) | (43 | ) | 43 | — | — | — | — | |||||||||||||||||||||||||||||||
Transfer of Common Stock Class B to Class A |
6,957,164 | 7 | (6,957,164 | ) | (7 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock for services rendered |
7,588 | — | — | — | — | — | 17,613 | — | — | 3,774 | 21,387 | |||||||||||||||||||||||||||||||||
Stock-based compensation |
400,700 | — | 105,664 | — | — | — | 236,107 | — | — | 530 | 236,637 | |||||||||||||||||||||||||||||||||
Exercise of stock options |
1,547,658 | 1 | 2,411,978 | 2 | — | — | 38,300 | — | — | — | 38,303 | |||||||||||||||||||||||||||||||||
Exercise of warrants |
187 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of stock in connection with acquisitions |
1,713,293 | 2 | — | — | — | — | 61,415 | — | — | 5,469 | 66,886 | |||||||||||||||||||||||||||||||||
Settlement of stockholder notes receivable (see Note 22) |
(301,630 | ) | — | — | — | — | — | 9,210 | — | — | — | 9,210 | ||||||||||||||||||||||||||||||||
Issuance of noncontrolling interests |
— | — | — | — | — | — | 9,329 | — | — | 330,444 | 339,773 | |||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | — | — | — | (40,000 | ) | (40,000 | ) | |||||||||||||||||||||||||||||||
Transactions with principal shareholder (see Notes 3 and 14) |
— | — | — | — | — | — | 709,929 | — | — | — | 709,929 | |||||||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | — | — | (3,264,738 | ) | (17,102 | ) | (3,281,840 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | — | — | (18,122 | ) | — | — | (18,122 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balance—December 31, 2019 |
41,304,381 | $ | 41 | 129,220,654 | $ | 129 | 27,752,323 | $ | 28 | $ | 1,879,838 | $ | (2,611 | ) | $ | (6,574,322 | ) | $ | 322,185 | $ | (4,374,712 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Redeemable Noncontrolling Interests |
|||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
||||||||||
Balance—December 31, 2017 |
170,300,623 | $ | 3,405,435 | $ | 854,577 | |||||||
Issuance of noncontrolling interests |
— | — | 720,513 | |||||||||
Issuance of stock for services rendered |
— | — | 1,798 | |||||||||
Issuance of stock in connection with acquisitions |
1,456,948 | 93,261 | 55,105 | |||||||||
Net loss |
— | — | (292,134 | ) | ||||||||
Other comprehensive income (loss), net of tax |
— | — | (19,222 | ) | ||||||||
|
|
|
|
|
|
|||||||
Balance—December 31, 2018 |
171,757,571 | $ | 3,498,696 | $ | 1,320,637 | |||||||
|
|
|
|
|
|
WeWork Inc. Shareholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||||||
Common Stock Class A |
Common Stock Class B |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interests |
Total |
||||||||||||||||||||||||||||||
(Amounts in thousands, except share amounts) |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||||||||
Balance—December 31, 2017 |
30,299,542 | $ | 30 | 131,787,453 | $ | 132 | $ | 407,804 | $ | (9,924 | ) | $ | (1,700,493 | ) | $ | — | $ | (1,302,451 | ) | |||||||||||||||||
Transfer of Common Stock Class B to Class A |
18,182 | — | (18,182 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of stock for services rendered |
62,351 | — | — | — | 15,663 | — | — | 2,557 | 18,220 | |||||||||||||||||||||||||||
Stock-based compensation |
419,217 | 1 | 74,538 | — | 85,657 | — | — | 184 | 85,842 | |||||||||||||||||||||||||||
Exercise of stock options |
114,614 | — | 443,513 | — | 2,934 | — | — | — | 2,934 | |||||||||||||||||||||||||||
Exercise of warrants |
— | — | 1,577,434 | 2 | 569 | — | — | — | 571 | |||||||||||||||||||||||||||
Issuance of stock in connection with acquisitions |
65,515 | — | — | — | 119,530 | 1,098 | — | 4,198 | 124,826 | |||||||||||||||||||||||||||
Issuance of stockholder notes receivable (see Note 22) |
— | — | — | — | (19,599 | ) | — | — | — | (19,599 | ) | |||||||||||||||||||||||||
Issuance of noncontrolling interests |
— | — | — | — | 24,666 | (2,260 | ) | — | 56,333 | 78,739 | ||||||||||||||||||||||||||
Transactions with principal shareholder (see Note 14) |
— | — | — | — | 169,961 | — | — | — | 169,961 | |||||||||||||||||||||||||||
Gain on transfer to consolidated variable interest entity |
— | — | — | — | 1,217 | — | — | — | 1,217 | |||||||||||||||||||||||||||
Common share repurchase and retirement |
— | — | (204,580 | ) | — | (10,439 | ) | — | — | — | (10,439 | ) | ||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (1,610,792 | ) | (24,493 | ) | (1,635,285 | ) | ||||||||||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | — | — | 26,597 | — | 291 | 26,888 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance—December 31, 2018 |
30,979,421 | $ | 31 | 133,660,176 | $ | 134 | $ | 797,963 | $ | 15,511 | $ | (3,311,285 | ) | $ | 39,070 | $ | (2,458,576 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Cash Flows from Operating Activities: |
||||||||||||
Net loss |
$ | (3,833,857 | ) | $ | (3,774,887 | ) | $ | (1,927,419 | ) | |||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||||||
Depreciation and amortization |
779,368 | 589,914 | 313,514 | |||||||||
Impairment of property and equipment |
3,066 | 63,128 | 29,572 | |||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
1,355,921 | 335,006 | — | |||||||||
Non-cash transaction with principal shareholder |
— | 185,000 | — | |||||||||
Loss on extinguishment of debt |
77,336 | — | — | |||||||||
Stock-based compensation expense |
62,776 | 358,969 | 69,400 | |||||||||
Cash paid to settle employee stock awards |
(3,141 | ) | — | (13,939 | ) | |||||||
Issuance of stock for services rendered |
7,893 | 20,367 | 18,957 | |||||||||
Non-cash interest expense |
172,112 | 14,917 | 127,716 | |||||||||
Provision for allowance for doubtful accounts |
67,482 | 22,221 | 6,722 | |||||||||
(Income) loss from equity method and other investments |
44,788 | 32,206 | 12,638 | |||||||||
Distribution of income from equity method and other investments |
4,191 | — | — | |||||||||
Foreign currency (gain) loss |
(149,196 | ) | (30,915 | ) | 80,587 | |||||||
Change in fair value of financial instruments |
(819,647 | ) | (239,145 | ) | — | |||||||
Contingent consideration fair market value adjustment |
(122 | ) | (60,667 | ) | 76,439 | |||||||
Changes in operating assets and liabilities: |
||||||||||||
Operating lease right-of-use |
1,024,709 | (5,850,744 | ) | — | ||||||||
Current and long-term lease obligations |
502,025 | 7,672,358 | — | |||||||||
Deferred rent |
— | — | 1,278,348 | |||||||||
Lease incentive receivable |
— | — | (121,734 | ) | ||||||||
Deferred lease acquisition costs |
— | — | (40,352 | ) | ||||||||
Accounts receivable and accrued revenue |
(32,749 | ) | (175,262 | ) | (69,403 | ) | ||||||
Other assets |
(28,148 | ) | (126,870 | ) | (211,690 | ) | ||||||
Accounts payable and accrued expenses |
(164,190 | ) | 390,609 | 147,627 | ||||||||
Deferred revenue |
32,803 | 90,445 | 54,782 | |||||||||
Other liabilities |
39,731 | 38,840 | 1,618 | |||||||||
Deferred income taxes |
(159 | ) | (3,734 | ) | (10,112 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
(857,008 | ) | (448,244 | ) | (176,729 | ) | ||||||
Cash Flows from Investing Activities: |
||||||||||||
Purchases of property and equipment |
(1,441,232 | ) | (3,488,086 | ) | (2,055,020 | ) | ||||||
Capitalized software |
(22,614 | ) | (40,735 | ) | (8,891 | ) | ||||||
Sale of software license |
— | — | 9,000 | |||||||||
Change in security deposits with landlords |
526 | (140,071 | ) | (95,463 | ) | |||||||
Proceeds from asset divestitures and sale of investments, net of cash divested |
1,172,860 | 16,599 | 2,202 | |||||||||
Contributions to investments |
(99,146 | ) | (80,674 | ) | (121,626 | ) | ||||||
Loans to employees and related parties |
— | (5,580 | ) | (1,859 | ) | |||||||
Cash used for acquisitions, net of cash acquired |
— | (1,036,973 | ) | (204,141 | ) | |||||||
Deconsolidation of cash of ChinaCo, net of cash received |
(54,481 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
(444,087 | ) | (4,775,520 | ) | (2,475,798 | ) | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Cash Flows from Financing Activities: |
||||||||||||
Principal payments for property and equipment acquired under finance leases |
$ | (4,021 | ) | $ | (3,590 | ) | $ | (1,869 | ) | |||
Proceeds from issuance of debt |
34,309 | 662,395 | 768,795 | |||||||||
Proceeds from unsecured related party debt |
1,200,000 | — | — | |||||||||
Proceeds from issuance of convertible related party liabilities |
— | 4,000,000 | 1,000,000 | |||||||||
Repayments of debt |
(813,140 | ) | (3,088 | ) | (1,085 | ) | ||||||
Bond repurchase |
— | (32,352 | ) | — | ||||||||
Debt and equity issuance costs |
(12,039 | ) | (71,075 | ) | (23,227 | ) | ||||||
Loans payable to related parties |
— | — | (27,552 | ) | ||||||||
Proceeds from exercise of stock options and warrants |
212 | 38,823 | 3,505 | |||||||||
Proceeds from issuance of noncontrolling interests |
100,628 | 538,934 | 747,907 | |||||||||
Distributions to noncontrolling interests |
(319,860 | ) | (40,000 | ) | — | |||||||
Payments for contingent consideration and holdback of acquisition proceeds |
(39,701 | ) | (38,280 | ) | (14,436 | ) | ||||||
Proceeds relating to contingent consideration and holdbacks of disposition proceeds |
613 | — | — | |||||||||
Additions to members’ service retainers |
382,184 | 703,265 | 359,634 | |||||||||
Refunds of members’ service retainers |
(575,999 | ) | (497,761 | ) | (153,203 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing activities |
(46,814 | ) | 5,257,271 | 2,658,469 | ||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
1,374 | 3,239 | (13,119 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,346,535 | ) | 36,746 | (7,177 | ) | |||||||
Cash, cash equivalents and restricted cash—Beginning of period |
2,200,688 | 2,163,942 | 2,171,119 | |||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash—End of period |
$ | 854,153 | $ | 2,200,688 | $ | 2,163,942 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Cash and cash equivalents |
$ | 800,535 | $ | 1,340,140 | $ | 1,744,209 | ||||||
Restricted cash |
53,618 | 856,255 | 419,733 | |||||||||
Cash and cash equivalents held for sale |
— | 1,138 | — | |||||||||
Restricted cash held for sale |
— | 3,155 | — | |||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash |
$ | 854,153 | $ | 2,200,688 | $ | 2,163,942 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Supplemental Cash Flow Disclosures: |
||||||||||||
Cash paid during the period for interest (net of capitalized interest of $2,981, $13,358 and $0 during 2020, 2019 and 2018, respectively) |
$ | 120,234 | $ | 74,195 | $ | 41,326 | ||||||
Cash paid during the period for income taxes, net of refunds |
29,376 | 27,989 | 4,376 | |||||||||
Cash received for operating lease incentives — tenant improvement allowances |
1,331,660 | 1,134,216 | 673,415 | |||||||||
Cash received for operating lease incentives — broker commissions |
17,583 | 64,246 | 30,627 | |||||||||
Supplemental Disclosure of Non-cash Investing & Financing Activities: |
||||||||||||
Property and equipment included in accounts payable and accrued expenses |
198,040 | 642,161 | 485,037 | |||||||||
Additions to property and equipment from non-cash capitalized interest and amortization of deferred financing costs |
7,436 | 36,699 | — | |||||||||
Issuance of shares for goods received capitalized in property and equipment |
390 | 1,100 | 1,087 | |||||||||
Issuance of stock in connection with acquisitions |
217 | 198,521 | 274,118 | |||||||||
Acquisition consideration holdback included in other liabilities |
1,593 | 45,043 | 43,156 | |||||||||
Transfer of assets to held for sale |
— | 134,958 | — | |||||||||
Transfer of liabilities related to assets held for sale |
— | 25,442 | — | |||||||||
Consideration holdbacks and other receivables relating to dispositions |
20,500 | — | — | |||||||||
Decrease in consolidated total assets resulting from the deconsolidation of ChinaCo (excluding amounts that previously eliminated in consolidation) |
1,764,458 | — | — | |||||||||
Decrease in consolidated total liabilities resulting from the deconsolidation of ChinaCo (excluding amounts that previously eliminated in consolidation) |
1,983,631 | — | — | |||||||||
Conversion of net intercompany receivables into equity method investment in ChinaCo, at fair value |
26,330 | — | — | |||||||||
Conversion of equity method investment to equity in consolidated 424 Fifth Venture |
— | 50,000 | — | |||||||||
Transfer of acquisition deposit to contribution to equity method investment |
— | — | 52,858 | |||||||||
Non-cash settlement of employee loans |
14,736 | 21,666 | — | |||||||||
Non-cash transaction with principal shareholder |
— | 185,000 | — | |||||||||
Warrants issued as debt issuance costs |
— | 853,317 | — | |||||||||
Conversion of related party liabilities to into capital |
21,641 | 2,697,522 | — | |||||||||
Distribution of investment to noncontrolling interest holder |
6,646 | — | — |
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Cash paid for fixed operating lease costs included in the measurement of lease obligations in operating activities |
$ | 2,289,691 | $ | 1,551,573 | ||||
Cash paid for interest relating to finance leases in operating activities |
4,676 | 4,622 | ||||||
Cash paid for principal relating to finance leases in financing activities |
4,021 | 3,590 | ||||||
Right-of-use |
920 | 14,803 | ||||||
Right-of-use |
(106,796 | ) | 9,304,066 |
(Amounts in thousands) |
One-time Employee Benefits |
Consulting Fees |
Other |
Total Restructuring Costs |
||||||||||||
Restructuring liability balance — January 1, 2020 |
$ | 89,872 | $ | — | $ | 1,497 | $ | 91,369 | ||||||||
Restructuring and other related costs expensed during the period |
191,582 | — | 15,121 | 206,703 | ||||||||||||
Cash payments of restructuring liabilities |
(254,456 | ) | — | (124,738 | ) | (379,194 | ) | |||||||||
Non-cash impact — primarily asset and liability write-offs and stock-based compensation |
(10,879 | ) | — | 120,876 | 109,997 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Restructuring liability balance — December 31, 2020 |
$ | 16,119 | $ | — | $ | 12,756 | $ | 28,875 | ||||||||
|
|
|
|
|
|
|
|
(Amounts in thousands) |
One-time Employee Benefits |
Consulting Fees (1) |
Other |
Total Restructuring Costs |
||||||||||||
Restructuring liability balance — January 1, 2019 |
$ | — | $ | — | $ | — | $ | — | ||||||||
Restructuring and other related costs expensed during the period |
139,330 | 185,000 | 4,891 | 329,221 | ||||||||||||
Cash payments of restructuring liabilities |
(29,700 | ) | — | (4,047 | ) | (33,747 | ) | |||||||||
Non-cash impact — primarily asset and liability write-offs and stock-based compensation |
(19,758 | ) | — | 653 | (19,105 | ) | ||||||||||
Liability to be settled directly by SBG included in additional paid-in capital (1) |
— | (185,000 | ) | — | (185,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Restructuring liability balance — December 31, 2019 |
$ | 89,872 | $ | — | $ | 1,497 | $ | 91,369 | ||||||||
|
|
|
|
|
|
|
|
(1) | During the year ended December 31, 2019, SBG entered into a non-compete agreement with Adam Neumann, the Company’s former CEO, for a cash payment of $185.0 million, of which 50% was paid as of December 31, 2019 with the remaining 50% payable in twelve equal monthly installments. Concurrent with the termination of the 2020 Tender Offer, this agreement was terminated and SBG ceased making payments under this agreement. The Company recorded this as an expense of the Company to be paid for by a principal shareholder as the Company also benefitted from the arrangement through restricting Mr. Neumann’s ability to provide similar services to a competing organization. The Company recognized the expense in full during 2019, with a corresponding increase in additional paid-in capital, representing a deemed capital contribution by SBG. In connection with the February 2021 Settlement Agreement (as defined in Note 27), a new non-compete agreement has been entered into by Mr. Newmann with both the Company and SBG. The Company does not have any financial obligation to Mr. Neumann under this agreement. |
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Impairment of assets held for sale (see Note 8) |
$ | 120,273 | $ | 2,559 | ||||
Impairment of goodwill |
— | 214,515 | ||||||
Impairment of intangible assets |
— | 51,789 | ||||||
Impairment and write-off of long-lived assets associated with restructuring |
796,734 | 66,187 | ||||||
Impairment of long-lived assets primarily associated with COVID-19 |
345,034 | — | ||||||
Gain on sale of assets (see Note 8) |
(59,165 | ) | (44 | ) | ||||
Loss on ChinaCo Deconsolidation (See Note 6) |
153,045 | — | ||||||
|
|
|
|
|||||
Total |
$ | 1,355,921 | $ | 335,006 | ||||
|
|
|
|
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Net receivable for value added tax (“VAT”) |
$ | 107,104 | $ | 146,135 | ||||
Deposits on property and equipment |
3,161 | 47,716 | ||||||
Prepaid lease cost |
61,232 | 50,970 | ||||||
Prepaid member referral fees |
31,617 | 57,937 | ||||||
Prepaid software |
19,981 | 30,246 | ||||||
Straight-line revenue receivable |
35,418 | 28,162 | ||||||
Deposits held by landlords |
25,574 | — | ||||||
Disposition proceeds holdback amounts receivable (Note 6 and 8) |
17,500 | — | ||||||
Other prepaid expenses and current assets |
50,585 | 61,772 | ||||||
|
|
|
|
|||||
Total other current assets |
$ | 352,172 | $ | 422,938 | ||||
|
|
|
|
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Leasehold improvements |
$ | 6,671,107 | $ | 6,011,954 | ||||
Finance lease assets |
48,116 | 35,580 | ||||||
Land |
— | 356,473 | ||||||
Equipment |
539,636 | 575,581 | ||||||
Furniture |
869,057 | 726,900 | ||||||
Construction in progress |
458,845 | 1,788,297 | ||||||
|
|
|
|
|||||
Property and equipment |
8,586,761 | 9,494,785 | ||||||
Less: accumulated depreciation |
(1,727,598 | ) | (1,095,244 | ) | ||||
|
|
|
|
|||||
Total property and equipment, net |
$ | 6,859,163 | $ | 8,399,541 | ||||
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Revenue |
$ | 206,261 | $ | 228,537 | $ | 99,529 | ||||||
Location operating expenses |
266,318 | 290,254 | 116,173 | |||||||||
Restructuring and other related costs |
(18,660 | ) | 6,684 | — | ||||||||
Impairments/(gain on sale) of goodwill, intangibles and other assets |
450,312 | — | — | |||||||||
Depreciation and amortization |
39,208 | 42,257 | 20,584 | |||||||||
Total Expenses |
819,527 | 496,113 | 341,237 | |||||||||
Pre-tax loss |
(598,727 | ) | (266,230 | ) | (243,508 | ) | ||||||
Net loss |
(609,820 | ) | (274,019 | ) | (244,613 | ) | ||||||
Net loss attributable to WeWork Inc. |
(62,997 | ) | 39,072 | (48,569 | ) |
December 31, 2020 |
December 31, 2019 |
|||||||||||||||
(Amounts in thousands) |
Asia JVs (1) |
Other VIEs (2) |
Asia JVs (1) |
Other VIEs (2) |
||||||||||||
Consolidated VIE balance sheets information: |
||||||||||||||||
Cash and cash equivalents |
$ | 161,411 | $ | 5,194 | $ | 388,400 | $ | 29,303 | ||||||||
Property and equipment, net |
445,599 | — | 895,015 | 979,655 | ||||||||||||
Restricted cash |
10,000 | — | 93,964 | — | ||||||||||||
Total assets |
2,096,389 | 13,834 | 5,639,177 | 1,073,621 | ||||||||||||
Long-term debt, net |
30,638 | — | 41,945 | 642,184 | ||||||||||||
Total liabilities |
1,693,267 | 573 | 4,686,200 | 665,513 | ||||||||||||
Redeemable stock issued by VIEs |
500,000 | — | 1,799,157 | 6,545 | ||||||||||||
Total net assets (3) |
(96,878 | ) | 13,261 | (846,180 | ) | 401,563 |
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
Year Ended December 31, 2018 |
||||||||||||||||||||||
(Amounts in thousands) |
Asia JVs (1) |
Other VIEs (2) |
Asia JVs (1) |
Other VIEs (2) |
Asia JVs (1) |
Other VIEs (2) |
||||||||||||||||||
Consolidated VIE statements of operations information: |
| |||||||||||||||||||||||
Net income (loss) |
$ | (750,472 | ) | $ | (2,502 | ) | $ | (776,113 | ) | $ | (24,747 | ) | $ | (373,776 | ) | $ | (146 | ) | ||||||
Consolidated VIE statements of cash flows information: |
| |||||||||||||||||||||||
Net cash provided by (used in) operating activities |
$ | (38,259 | ) | $ | 2,549 | $ | (108,246 | ) | $ | 4,247 | $ | (120,831 | ) | $ | (71 | ) | ||||||||
Net cash used in investing activities |
$ | (236,971 | ) | $ | (573 | ) | $ | (592,574 | ) | $ | (826,707 | ) | $ | (516,814 | ) | $ | (23,601 | ) | ||||||
Net cash provided by (used in) financing activities |
$ | 73,447 | $ | (1,908 | ) | $ | 292,775 | $ | 843,312 | $ | 763,229 | $ | 47,905 |
(1) | The “Asia JVs” include ChinaCo, JapanCo and PacificCo as of and for the periods that each represented a consolidated VIE. The ChinaCo deconsolidation occurred on October 2, 2020 and as a result, ChinaCo results and balances are not included above for the period subsequent to deconsolidation. The PacificCo Roll-up occurred on April 17, 2020 and as a result, PacificCo results and balances are not included above for the period subsequent to April 17, 2020. The consent of an affiliate of SoftBank Group Capital Limited is required for any dividends to be distributed by JapanCo. As a result, any net assets of JapanCo would be considered restricted net assets to the Company as of December 31, 2020. The net assets of the Asia JVs include preferred stock issued to affiliates of SBG and other investors with aggregate liquidation preferences totaling $0.5 billion and $1.8 billion, respectively as of December 31, 2020 and 2019, which preferred stock is redeemable upon the occurrence of an event that is not solely within the control of the Company. The initial issuance price of such redeemable preferred stock equals the liquidation preference for each share issued as of December 31, 2020 and 2019, respectively. After reducing the net assets of each Asia JV by the liquidation preference associated with such redeemable preferred stock, the remaining net assets of each Asia JV is negative. |
(2) | “Other VIEs” includes all other consolidated VIEs, other than the Asia JVs discussed separately in (1) and include WeWork Waller Creek, WeCap Manager and WeCap Holdings Partnership, 424 Fifth Venture and the Creator Fund in the periods prior to any disposal or deconsolidation as discussed above. |
(3) | Total net assets represents total assets less total liabilities and redeemable stock issued by VIEs after the total assets and total liabilities have both been reduced to remove amounts that eliminate in consolidation. |
(Amounts in thousands) |
Total 2019 Acquisitions |
|||
Cash and cash equivalents |
$ | 20,379 | ||
Property and equipment |
7,232 | |||
Capitalized software |
32,370 | |||
Goodwill |
289,951 | |||
Finite-lived intangible assets |
21,257 | |||
Lease right-of-use |
9,720 | |||
Lease obligation, net |
(9,720 | ) | ||
Deferred revenue |
(2,574 | ) | ||
Other assets acquired and liabilities assumed, net |
(11,236 | ) | ||
|
|
|||
Total consideration |
$ | 357,379 | ||
|
|
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Assets held for sale: |
||||||||
Cash and cash equivalents |
$ | — | $ | 1,138 | ||||
Accounts receivable and accrued revenue, net |
— | 11,086 | ||||||
Other current assets |
— | 2,786 | ||||||
Property and equipment, net |
— | 846 | ||||||
Lease right-of-use |
— | 879 | ||||||
Restricted cash |
— | 3,155 | ||||||
Goodwill |
— | 52,996 | ||||||
Intangible assets, net of accumulated amortization of none and $21,408 as of December 31, 2020 and 2019, respectively |
— | 61,856 | ||||||
Other assets |
— | 216 | ||||||
Impairment of disposal group |
— | — | ||||||
|
|
|
|
|||||
Total assets held for sale |
$ | — | $ | 134,958 | ||||
|
|
|
|
|||||
Liabilities related to assets held for sale: |
||||||||
Accounts payable and accrued expenses |
$ | — | $ | 8,264 | ||||
Deferred revenue |
— | 16,061 | ||||||
Current lease obligations |
— | 722 | ||||||
Other current liabilities |
— | 216 | ||||||
Long-term lease obligations |
— | 175 | ||||||
Other liabilities |
— | 4 | ||||||
|
|
|
|
|||||
Total liabilities related to assets held for sale |
$ | — | $ | 25,442 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Balance at beginning of period |
$ | 698,416 | $ | 681,017 | ||||
Goodwill acquired |
— | 289,951 | ||||||
Goodwill sold |
(2,652 | ) | — | |||||
Goodwill impairment |
— | (214,515 | ) | |||||
Goodwill held for sale |
— | (52,996 | ) | |||||
Measurement period and other adjustments |
3,577 | (3,093 | ) | |||||
ChinaCo Deconsolidation (Note 6) |
(28,692 | ) | — | |||||
Effect of foreign currency exchange rate changes |
8,702 | (1,948 | ) | |||||
|
|
|
|
|||||
Balance at end of period |
$ | 679,351 | $ | 698,416 | ||||
|
|
|
|
December 31, 2020 |
||||||||||||||||
(Amounts in thousands) |
Weighted- Average Remaining Useful Lives (in years) |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||
Capitalized software |
2.1 | $ | 103,122 | $ | (58,496 | ) | $ | 44,626 | ||||||||
Other finite-lived intangible assets - customer relationships and other |
7.7 | 17,670 | (14,263 | ) | 3,407 | |||||||||||
Indefinite-lived intangible assets - trademarks |
1,863 | — | 1,863 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total intangible assets, net |
$ | 122,655 | $ | (72,759 | ) | $ | 49,896 | |||||||||
|
|
|
|
|
|
|
December 31, 2019 |
|||||||||||||||
(Amounts in thousands) |
Weighted- Average Remaining Useful Lives (in years) |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||
Capitalized software |
2.9 | $ | 87,068 | $ | (41,393 | ) | $ | 45,675 | ||||||||
Other finite-lived intangible assets - customer relationships and other |
6.5 | 53,874 | (24,614 | ) | 29,260 | |||||||||||
Indefinite-lived intangible assets - trademarks |
4,930 | — | 4,930 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total intangible assets, net |
$ | 145,872 | $ | (66,007 | ) | $ | 79,865 | |||||||||
|
|
|
|
|
|
(Amounts in thousands) |
Total |
|||
2021 |
$ | 23,194 | ||
2022 |
17,233 | |||
2023 |
5,427 | |||
2024 |
444 | |||
2025 |
444 | |||
2026 and beyond |
1,291 | |||
|
|
|||
Total |
$ | 48,033 | ||
|
|
December 31, 2020 |
December 31, 2019 |
|||||||||||||||||
(Amounts in thousands, except percentages) |
Carrying |
Cost |
Percentage |
Carrying |
||||||||||||||
Investee |
Investment Type |
Value |
Basis |
Ownership |
Value |
|||||||||||||
Investments held by WeCap Holdings Partnership (1) |
Equity method investment / Note receivable |
61,688 | 63,413 | Various | 66,002 | |||||||||||||
WPI Fund (2) |
Equity method investment |
63,301 | 52,805 | 8% | 54,387 | |||||||||||||
IndiaCo (3) |
Investment in convertible notes |
49,849 | 90,248 | N/A | 5,541 | |||||||||||||
ChinaCo (4) |
Equity method investment |
29,323 | 29,323 | 21.6% | — | |||||||||||||
Creator Fund Investments (5) |
Various |
— | — | N/A | 38,162 | |||||||||||||
Other (6) |
Various |
10,779 | 9,520 | Various | 39,627 | |||||||||||||
|
|
|
|
|
|
|||||||||||||
Total equity method and other investments |
$ | 214,940 | $ | 245,309 | $ | 203,719 | ||||||||||||
|
|
|
|
|
|
(1) | As discussed in Note 6, subsequent to the August 2019 reorganization of the WeCap Investment Group real estate acquisition platform, the following investments are owned through the WeCap Holdings Partnership in which Rhône has a 20% equity interest: |
• | “DSQ” — a venture in which WeCap Holdings Partnership owns a 10% equity interest. DSQ owns a commercial real estate portfolio located in London, United Kingdom. The investment balance also includes a note receivable with an outstanding balance of $28.6 million and $26.0 million as of December 31, 2020 and 2019, respectively, that accrues interest at a rate of 5.81% and matures in April 2028. |
• | “Waller Creek” — a joint venture in which WeCap Holdings Partnership previously owned an 8% equity interest. Waller Creek was established to develop a parcel of land in Texas and then manage, operate, and eventually sell the developed property. During August 2020, the Waller Creek investment was disposed of. See Note 6 for additional details. |
• | “WPI Fund” — a real estate investment fund in which WeCap Holdings Partnership holds the 0.5% general partner interest. The WPI Fund’s focus is acquiring, developing and managing office assets with current or expected vacancy suitable for WeWork occupancy, currently primarily focusing on opportunities in North America and Europe. |
• | “ARK Master Fund” — an investment fund in which WeCap Holdings Partnership holds the general partner and a limited partner interest totaling 2% of the fund’s invested capital. ARK Master Fund invests in real estate and real estate-related investments that it expects could benefit from the Company’s occupancy or involvement or the involvement of the limited partners of the ARK Master Fund. |
(2) | In addition to the general partner interest in the WPI Fund held by WeCap Holdings Partnership described above, a wholly owned subsidiary of the WeCap Investment Group also owns an 8% limited partner interest in the WPI Fund. |
(3) | In June 2020, the Company entered into an agreement with WeWork India Management Private Limited (“IndiaCo”), an affiliate of Embassy Property Developments Private Limited (“Embassy”), to subscribe for new convertible debentures to be issued by IndiaCo in an aggregate principal amount of $100.0 million (the “2020 Debentures”). During June 2020, $85.0 million of the principal had been funded, with the remaining $15.0 million to be funded over time based on milestones achieved by IndiaCo. The 2020 Debentures earn interest at a coupon rate of 12.5% per annum for the 18-month period beginning from June 2020 which then gets reduced to 0.001% per annum and have a maximum term of 10 years. The 2020 Debentures are convertible into equity at the Company’s option after 18 months from June 2020 or upon mutual agreement between the Company, IndiaCo, and Embassy. The Company’s investment balance as of December 31, 2020 and 2019 also includes an aggregate principal amount of approximately $5.5 million in other convertible debentures issued by IndiaCo that earn interest at a coupon rate of 6% per annum and have a maximum term of twenty years. During the years ended December 31, 2020, 2019 and 2018, the Company recorded a credit loss valuation allowance on its investments in IndiaCo totaling $43.9 million, none and none, respectively included in income (loss) from equity method and other investments. As of December 31, 2020 the Company had recorded a liability of $7.9 million, included in other current liabilities, relating to the fair value of the credit loss on the forward contract associated with the obligation on the $15.0 million unfunded commitment associated with the 2020 Debentures (the “IndiaCo Forward Liability”) with such credit loss also included in income (loss) from equity method and other investments during the year ended December 31, 2020. During the years ended December 31, 2020, 2019 and 2018, the Company also recorded $3.3 million, none and none, respectively in losses in unrealized gain (loss) on available-for-sale |
(4) | In October 2020, the Company deconsolidated ChinaCo and its retained 21.6% ordinary share equity method investment was recorded at a fair value of $26.3 million plus capitalized legal cost for a total initial cost basis and carrying value as of December 31, 2020 of $29.3 million. See Note 6 for additional details regarding the ChinaCo Deconsolidation and see Note 25 for details regarding various related party fees payable by ChinaCo to the Company subsequent to the ChinaCo Deconsolidation. |
(5) | During 2018, the Company launched the Creator Fund that previously made investments in recipients of WeWork’s Creator Awards and other investments through use of a venture capital strategy. Prior to September 2020, the Creator Fund was a consolidated subsidiary owned 99.99% by related party noncontrolling interest holders. In September 2020, the Company transferred its variable interest and control over the Creator Fund to an affiliate of SBG and the Creator Fund and its investments were deconsolidated from the Company’s financial statements. See Note 6 for further detail. During the years ended December 31, 2020, 2019 and 2018, the Company recorded impairments on Creator Fund investments totaling $10.4 million, $8.9 million and $1.0 million, respectively, included in income (loss) from equity method and other investments on the accompanying consolidated statements of operations. |
(6) | The Company holds various other investments as of December 31, 2020 and 2019. On March 27, 2020, the Company sold 91% of the equity of Meetup for total consideration of $9.5 million and the remaining 9% was retained by the Company in the amount of $1.1 million. In February 2020, the Company completed the sale of its investment in Refresh Club, Inc. (“The Wing”) for $35.0 million. |
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Deferred financing costs, net — SoftBank Senior Unsecured Notes Warrant (1) |
$ | 488,312 | $ | 568,877 | ||||
Deferred financing costs, net — 2020 LC Facility Warrant issued to SBG (1) |
199,832 | 284,440 | ||||||
Deferred financing costs, net — Other SoftBank Debt Financing Costs paid or payable to SBG (1) |
11,334 | 20,000 | ||||||
Deferred financing costs, net — Other SoftBank Debt Financing Costs paid or payable to third parties (1) |
5,440 | 5,172 | ||||||
Other deferred financing costs, net |
64 | 5,068 | ||||||
Security deposits with landlords |
274,822 | 305,623 | ||||||
Other security deposits |
3,271 | 16,437 | ||||||
Straight-line revenue receivable |
46,313 | 34,274 | ||||||
Deferred income tax assets, net |
1,377 | 1,150 | ||||||
Other long-term prepaid expenses and other assets |
31,493 | 44,698 | ||||||
|
|
|
|
|||||
Total other assets |
$ | 1,062,258 | $ | 1,285,739 | ||||
|
|
|
|
(1) | See Note 14 for details. Amounts are net of accumulated amortization totaling $169.7 million and none as of December 31, 2020 and 2019 respectively. |
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Current portion of acquisition holdbacks |
$ | 1,593 | $ | 43,246 | ||||
Contingent consideration relating to acquisitions payable in stock (See Note 7) |
— | 445 | ||||||
Current portion of long-term debt (See Note 15) |
13,114 | 2,862 | ||||||
2020 Tender Offer (See Note 22) |
— | 123,409 | ||||||
Refunds payable to former members |
35,761 | 20,675 | ||||||
IndiaCo Forward Liability (See Note 11) |
7,907 | — | ||||||
Other current liabilities |
25,380 | 28,183 | ||||||
|
|
|
|
|||||
Total other current liabilities |
$ | 83,755 | $ | 218,820 | ||||
|
|
|
|
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
2019 Warrant Liability: |
||||||||
Cash received on draw in October 2019 |
$ | 1,500,000 | $ | 1,500,000 | ||||
Less: Cost basis of related party financial instrument included in additional paid in capital prior to draw |
(219,708 | ) | (219,708 | ) | ||||
Less: Cumulative issuance of Series H-1 Preferred Stock over life of warrant |
(200,000 | ) | (200,000 | ) | ||||
Plus: Cumulative (gain)/loss from change in fair value of related party financial instruments |
(169,172 | ) | 217,466 | |||||
Less: Conversion to Series H-1 Preferred Stock |
(911,120 | ) | — | |||||
|
|
|
|
|||||
Total 2019 Warrant Liability, at fair value |
— | 1,297,758 | ||||||
|
|
|
|
|||||
SoftBank Debt Financing Warrant Liability: |
||||||||
SoftBank Senior Unsecured Notes Warrant liability capitalized as deferred financing cost at issuance |
568,877 | 568,877 | ||||||
Plus: Cumulative (gain)/loss from change in fair value of related party financial instruments |
(288,674 | ) | — | |||||
Less: Senior Unsecured Notes Warrant liability deferred financing cost adjustment |
(934 | ) | — | |||||
|
|
|
|
|||||
Total SoftBank Senior Unsecured Notes Warrant Liability, at fair value |
279,269 | 568,877 | ||||||
|
|
|
|
|||||
2020 LC Facility Warrant liability capitalized as deferred financing cost at issuance |
284,440 | 284,440 | ||||||
Plus: Cumulative (gain)/loss from change in fair value of related party financial instruments |
(144,335 | ) | — | |||||
Less: 2020 LC Facility Warrant liability deferred financing cost adjustment |
(466 | ) | — | |||||
|
|
|
|
|||||
Total LC Facility Warrant Liability, at Fair Value |
139,639 | 284,440 | ||||||
|
|
|
|
|||||
Total SoftBank Debt Financing Warrant Liability, at fair value |
418,908 | 853,317 | ||||||
|
|
|
|
|||||
Total convertible related party liabilities, net |
$ | 418,908 | $ | 2,151,075 | ||||
|
|
|
|
December 31, |
||||||||||||||
(Amounts in thousands, except percentages) |
Maturity Year |
Interest Rate |
2020 |
2019 |
||||||||||
Senior Notes: |
2025 | 7.875% | ||||||||||||
Outstanding principal balance |
$ | 669,000 | $ | 669,000 | ||||||||||
Less: Unamortized debt issuance costs |
(11,363) | (13,453) | ||||||||||||
|
|
|
|
|||||||||||
Total Senior Notes, net |
657,637 | 655,547 | ||||||||||||
|
|
|
|
|||||||||||
424 Fifth Venture Loans: |
||||||||||||||
Mortgage Loan |
2022 (1) |
LIBOR (2) + 3.45% |
— | 335,750 | ||||||||||
Senior Mezzanine Loan |
2022 (1) |
LIBOR (2) + 5.27% |
— | 100,725 | ||||||||||
Junior Mezzanine Loan |
2022 (1) |
LIBOR (2) + 7.40% |
— | 222,336 | ||||||||||
Less: Unamortized debt issuance costs |
— | (17,538) | ||||||||||||
|
|
|
|
|||||||||||
Total 424 Fifth Venture Loans, net |
— | 641,273 | ||||||||||||
|
|
|
|
|||||||||||
Other Loans: |
||||||||||||||
Outstanding principal balance |
2021 - 2022 |
2.5% - 3.0% | 43,833 | 95,473 | ||||||||||
Less: Current portion of Other Loans |
(13,114) | (2,862) | ||||||||||||
|
|
|
|
|||||||||||
Total non-current portion Other Loans, net |
30,719 | 92,611 | ||||||||||||
|
|
|
|
|||||||||||
Total long-term debt, net |
$ | 688,356 | $ | 1,389,431 | ||||||||||
|
|
|
|
(1) | The original maturity date excluded two one-year extension options subject to extension fees and certain conditions that were available prior to the repayment of these loans in March 2020. |
(2) | The 424 Fifth Venture loan agreements included a LIBOR floor of 2.513% and a LIBOR cap of 4%. The LIBOR interest rate cap was scheduled to expire on February 9, 2021 prior to the termination of these contracts in March 2020 in conjunction with the repayment of the underlying loans. |
(Amounts in thousands) |
Total |
|||
2021 |
$ | 13,114 | ||
2022 |
30,719 | |||
2023 |
— | |||
2024 |
— | |||
2025 |
669,000 | |||
2026 and beyond |
— | |||
|
|
|||
Total minimum payments |
$ | 712,833 | ||
|
|
December 31, 2020 |
||||||||||||||||
(Amounts in thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
Assets: |
||||||||||||||||
Cash equivalents — money market funds and time deposits |
$ | 330,049 | $ | — | $ | — | $ | 330,049 | ||||||||
Other investments — available-for-sale |
— | — | 49,849 | 49,849 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets measured at fair value |
$ | 330,049 | $ | — | $ | 49,849 | $ | 379,898 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Other current liabilities — contingent consideration relating to acquisitions payable in stock |
$ | — | $ | — | $ | — | $ | — | ||||||||
Other current liabilities — IndiaCo Forward Contract Liability |
— | — | 7,907 | 7,907 | ||||||||||||
Convertible related party liabilities — SoftBank Senior Unsecured Notes Warrant |
— | — | 279,269 | 279,269 | ||||||||||||
Convertible related party liabilities — 2020 LC Facility Warrant |
— | — | 139,639 | 139,639 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities measured at fair value |
$ | — | $ | — | $ | 426,815 | $ | 426,815 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2019 |
||||||||||||||||
(Amounts in thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
Assets: |
||||||||||||||||
Cash equivalents — money market funds and time deposits |
$ | 910,093 | $ | — | $ | — | $ | 910,093 | ||||||||
Other investments — available-for-sale |
— | — | 5,541 | 5,541 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets measured at fair value |
$ | 910,093 | $ | — | $ | 5,541 | $ | 915,634 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Other current liabilities — contingent consideration relating to acquisitions payable in stock |
$ | — | $ | — | $ | 445 | $ | 445 | ||||||||
Convertible related party liabilities — 2019 Warrant |
— | — | 1,297,758 | 1,297,758 | ||||||||||||
Convertible related party liabilities — SoftBank Senior Unsecured Notes Warrant |
— | — | 568,877 | 568,877 | ||||||||||||
Convertible related party liabilities — 2020 LC Facility Warrant |
— | — | 284,440 | 284,440 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities measured at fair value |
$ | — | $ | — | $ | 2,151,520 | $ | 2,151,520 | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Assets: |
||||||||
Balance at beginning of period |
$ | 5,541 | $ | 5,319 | ||||
Purchases |
85,000 | — | ||||||
Credit loss valuation allowance included in income (loss) from equity method and other investments |
(43,857 | ) | — | |||||
Unrealized gain on available-for-sale |
4,369 | — | ||||||
Accrued interest income |
5,840 | 320 | ||||||
Accrued interest collected |
(2,678 | ) | — | |||||
Foreign currency translation gains (losses) included in other comprehensive income |
3,810 | — | ||||||
Foreign currency gain (loss) included in net income |
(8,177 | ) | (98 | ) | ||||
|
|
|
|
|||||
Balance at end of period |
$ | 49,848 | $ | 5,541 | ||||
|
|
|
|
Year Ended December 31, 2020 |
||||||||||||||||||||||||
(Amounts in thousands) |
Balance at Beginning of Period |
Additions |
Settlements |
Change in Fair Value (1) |
Foreign Currency Translation Gains (Losses) Included in Other Comprehensive Income |
Balance at End of Period |
||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Contingent consideration payable in stock |
$ | 445 | $ | — | $ | (319 | ) | $ | (122 | ) | $ | (4 | ) | $ | — | |||||||||
IndiaCo Forward Contract Liability |
— | 9,507 | — | (1,600 | ) | — | 7,907 | |||||||||||||||||
2019 Warrant |
1,297,758 | — | (911,120 | ) | (386,638 | ) | — | — | ||||||||||||||||
SoftBank Senior Unsecured Notes Warrant |
568,877 | — | (934 | ) | (288,674 | ) | — | 279,269 | ||||||||||||||||
2020 LC Facility Warrant |
284,440 | — | (466 | ) | (144,335 | ) | — | 139,639 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 2,151,520 | $ | 9,507 | $ | (912,839 | ) | $ | (821,369 | ) | $ | (4 | ) | $ | 426,815 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | During the year ended December 31, 2020 $0.1 million of the change in fair value was included as a reduction of selling, general and administrative expenses, $1.6 million was included as a gain within income (loss) from equity method and other investments on the accompanying consolidated statements of operations and $819.6 million was included as a gain from change in fair value of related party financial instruments on the accompanying consolidated statements of operations. |
Year Ended December 31, 2019 |
||||||||||||||||||||||||
(Amounts in thousands) |
Balance at Beginning of Period |
Additions |
Settlements |
Change in Fair Value (1) |
Foreign Currency Translation Gains (Losses) Included in Other Comprehensive Income |
Balance at End of Period |
||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Contingent consideration payable in stock |
$ | 129,811 | $ | — | $ | (68,090 | ) | $ | (61,650 | ) | $ | 374 | $ | 445 | ||||||||||
Contingent consideration payable in cash |
10,520 | — | (11,496 | ) | 983 | (7 | ) | — | ||||||||||||||||
Embedded redemption derivative |
276,371 | 25,295 | (274,617 | ) | (27,049 | ) | — | — | ||||||||||||||||
2018 Warrant |
— | 1,818,273 | (1,974,545 | ) | 156,272 | — | — | |||||||||||||||||
2019 Warrant |
— | 1,280,292 | (200,000 | ) | 217,466 | — | 1,297,758 | |||||||||||||||||
SoftBank Senior Unsecured Notes Warrant |
— | 568,877 | — | — | — | 568,877 | ||||||||||||||||||
2020 LC Facility Warrant |
— | 284,440 | — | — | — | 284,440 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total | $ | 416,702 | $ | 3,977,177 | $ | (2,528,748 | ) | $ | 286,022 | $ | 367 | $ | 2,151,520 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | During the year ended December 31, 2019, $60.7 million of the change in fair value was included as a reduction of selling, general and administrative expenses, $27.0 million was included as a reduction of interest expense and $373.7 million loss was included as a reduction in the gain from change in fair value of related party financial instruments on the consolidated statements of operations. |
December 31, 2020 |
||||||||||||
Fair Value (in thousands) |
Valuation Technique |
Significant Unobservable Inputs |
Range (Weighted Average) |
|||||||||
Level 3 Assets: |
||||||||||||
Other investments — available-for-sale |
$ | 49,849 | Discounted cash flow/Market approach |
Price per share | $ | 2.97 | ||||||
Level 3 Liabilities: |
||||||||||||
IndiaCo Forward Contract Liability |
$ | 7,907 | Discounted cash flow |
Price per share | $ | 2.97 | ||||||
Convertible related party liabilities |
$ | 418,908 | Discounted cash flow |
Preferred share fair values |
$ | 3.09 |
December 31, 2019 |
||||||||||||||||
Fair Value (in thousands) |
Valuation Technique |
Significant Unobservable Inputs |
Range (Weighted Average) |
|||||||||||||
Level 3 Assets: |
||||||||||||||||
Other investments — available-for-sale |
$ | 5,541 | |
Discounted cash flow |
|
|
Market interest rate |
|
6.0% | |||||||
Level 3 Liabilities: |
||||||||||||||||
Other current liabilities — contingent consideration relating to acquisitions payable in stock |
$ | 445 | |
Discounted cash flow |
|
|
Price per common share |
|
|
$0.02 - $3.97 ($3.72) |
| |||||
Convertible related party liabilities |
$ | 2,151,075 | |
Discounted cash flow |
|
|
Price per preferred share |
|
|
$6.10 - $11.58 ($9.41) |
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
ASC 606 membership and service revenue (1) |
$ | 2,418,259 | $ | 2,700,540 | $ | 1,697,336 | ||||||
ASC 842 rental and service revenue |
715,019 | 358,154 | N/M | |||||||||
|
|
|
|
|
|
|||||||
Total membership and service revenue |
3,133,278 | 3,058,694 | 1,697,336 | |||||||||
Other revenue |
282,587 | 399,899 | 124,415 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
$ | 3,415,865 | $ | 3,458,593 | $ | 1,821,751 | ||||||
|
|
|
|
|
|
(1) | Revenue for the year ended December 31, 2018 was recognized in accordance with ASC 605, Revenue Recognition |
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Contract assets (included in accounts receivable and accrued revenue, net) |
$ | 36,284 | $ | 73,056 | ||||
Contract assets (included in other current assets) |
$ | 13,111 | $ | 16,678 | ||||
Contract assets (included in other assets) |
$ | 22,300 | $ | 14,861 | ||||
Deferred revenue |
$ | (74,645 | ) | $ | (139,820 | ) |
(Amounts in thousands) |
ASC 842 Revenue |
|||
2021 |
$ | 626,292 | ||
2022 |
365,408 | |||
2023 |
210,101 | |||
2024 |
128,612 | |||
2025 |
65,563 | |||
2026 and beyond |
75,371 | |||
|
|
|||
Total |
$ | 1,471,347 | ||
|
|
Year Ended December 31, 2020 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
Selling, |
||||||||||||||||||||
Location |
Pre-opening |
General and |
Restructuring |
|||||||||||||||||
(Amounts in thousands) |
Operating Expenses |
Location Expenses |
Administrative Expenses |
and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period |
$ | 2,638,455 | $ | 128,452 | $ | 61,991 | $ | 1,863 | $ | 2,830,761 | ||||||||||
Non-cash GAAP straight-line lease cost |
380,851 | 171,772 | 19,727 | 576 | 572,926 | |||||||||||||||
Amortization of lease incentives |
(297,828 | ) | (40,550 | ) | (6,138 | ) | (1,084 | ) | (345,600 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 2,721,478 | $ | 259,674 | $ | 75,580 | $ | 1,355 | $ | 3,058,087 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | — | $ | — | $ | — | $ | (37,354 | ) | $ | (37,354 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
Selling, |
||||||||||||||||||||
Location |
Pre-opening |
General and |
Restructuring |
|||||||||||||||||
(Amounts in thousands) |
Operating Expenses |
Location Expenses |
Administrative Expenses |
and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period |
$ | 1,686,431 | $ | 119,220 | $ | 64,949 | $ | 144 | $ | 1,870,744 | ||||||||||
Non-cash GAAP straight-line lease cost |
411,161 | 484,099 | 19,776 | — | 915,036 | |||||||||||||||
Amortization of lease incentives |
(169,676 | ) | (60,447 | ) | (6,109 | ) | — | (236,232 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 1,927,916 | $ | 542,872 | $ | 78,616 | $ | 144 | $ | 2,549,548 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | 553 | $ | — | $ | — | $ | 3,162 | $ | 3,715 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
Selling, |
||||||||||||||||||||
Location |
Pre-opening |
General and |
Restructuring |
|||||||||||||||||
(Amounts in thousands) |
Operating Expenses |
Location Expenses |
Administrative Expenses |
and Other Related Costs |
Total |
|||||||||||||||
Lease cost contractually paid or payable for the period (1) |
$ | 824,650 | $ | 80,736 | $ | 18,730 | $ | — | $ | 924,116 | ||||||||||
Non-cash GAAP straight-line lease cost |
268,125 | 268,593 | 6,124 | — | 542,842 | |||||||||||||||
Amortization of lease incentives |
(88,867 | ) | (3,759 | ) | (1,209 | ) | — | (93,835 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total real estate operating lease cost |
$ | 1,003,908 | $ | 345,570 | $ | 23,645 | $ | — | $ | 1,373,123 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Early termination fees and related (gain)/loss |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Common area maintenance charges and real estate taxes, or “tenancy costs” are a non-lease component as defined in ASC 842. We have elected to not separate non-lease components in the determination of our lease obligation and therefore the costs associated with common area maintenance charges and real estate taxes billed in addition to our base rent, where applicable, have been included as a component of our total operating lease costs in 2019 and 2020. For comparability purposes, we have presented incremental common area maintenance charges and real estate taxes collectively, “tenancy costs”, contractually paid or payable, shown as a component of the total operating lease cost in all periods presented. |
Year Ended December 31, 2020 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
Selling, |
||||||||||||||||||||
Location |
Pre-opening |
General and |
Restructuring |
|||||||||||||||||
(Amounts in thousands) |
Operating Expenses |
Location Expenses |
Administrative Expenses |
and Other Related Costs |
Total |
|||||||||||||||
Fixed real estate lease costs |
$ | 2,283,042 | $ | 243,298 | $ | 67,172 | $ | 613 | $ | 2,594,125 | ||||||||||
Fixed equipment and other lease costs |
2,085 | — | 30 | — | 2,115 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed lease costs |
$ | 2,285,127 | $ | 243,298 | $ | 67,202 | $ | 613 | $ | 2,596,240 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Variable real estate lease costs |
$ | 438,436 | $ | 16,376 | $ | 8,408 | $ | 742 | $ | 463,962 | ||||||||||
Variable equipment and other lease costs |
2,877 | 40 | 151 | — | 3,068 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total variable lease costs |
$ | 441,313 | $ | 16,416 | $ | 8,559 | $ | 742 | $ | 467,030 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019 |
||||||||||||||||||||
Reported in: |
||||||||||||||||||||
Selling, |
||||||||||||||||||||
Location |
Pre-opening |
General and |
Restructuring |
|||||||||||||||||
(Amounts in thousands) |
Operating Expenses |
Location Expenses |
Administrative Expenses |
and Other Related Costs |
Total |
|||||||||||||||
Fixed real estate lease costs |
$ | 1,612,658 | $ | 507,591 | $ | 71,764 | $ | 144 | $ | 2,192,157 | ||||||||||
Fixed equipment and other lease costs |
2,943 | — | 3,263 | — | 6,206 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed lease costs |
$ | 1,615,601 | $ | 507,591 | $ | 75,027 | $ | 144 | $ | 2,198,363 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Variable real estate lease costs |
$ | 315,258 | $ | 35,281 | $ | 6,852 | $ | — | $ | 357,391 | ||||||||||
Variable equipment and other lease costs |
1,902 | — | — | — | 1,902 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total variable lease costs |
$ | 317,160 | $ | 35,281 | $ | 6,852 | $ | — | $ | 359,293 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
|||||||||||||||||||||||
Reported in: |
Reported in: |
|||||||||||||||||||||||
Depreciation |
Depreciation |
|||||||||||||||||||||||
and |
Interest |
and |
Interest |
|||||||||||||||||||||
(Amounts in thousands) |
Amortization |
Expense |
Total |
Amortization |
Expense |
Total |
||||||||||||||||||
Total finance lease cost |
$ | 5,271 | $ | 4,675 | $ | 9,946 | $ | 4,499 | $ | 4,621 | $ | 9,120 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018 |
||||||||||||
Reported in: |
||||||||||||
Depreciation |
||||||||||||
and |
Interest |
|||||||||||
(Amounts in thousands) |
Amortization |
Expense |
Total |
|||||||||
Total capital lease cost |
$ | 2,162 | $ | 3,780 | $ | 5,942 | ||||||
|
|
|
|
|
|
December 31, |
||||||||||
(Amounts in thousands) |
Balance Sheet Captions |
2020 |
2019 |
|||||||
Assets: |
||||||||||
Operating lease right-of-use |
Lease right-of-use |
$ | 15,107,880 | $ | 17,496,004 | |||||
Finance lease right-of-use (1) |
Property and equipment, net | 48,116 | 35,580 | |||||||
|
|
|
|
|||||||
Total leased assets |
$ | 15,155,996 | $ | 17,531,584 | ||||||
|
|
|
|
|||||||
Liabilities: |
||||||||||
Current liabilities |
||||||||||
Operating lease liabilities |
Current lease obligations | $ | 842,680 | $ | 680,911 | |||||
Finance lease liabilities |
Current lease obligations | 4,851 | 4,718 | |||||||
|
|
|
|
|||||||
Total current liabilities |
847,531 | 685,629 | ||||||||
|
|
|
|
|||||||
Non-current liabilities |
||||||||||
Operating lease obligations |
Long-term lease obligations | 20,220,274 | 21,202,804 | |||||||
Finance lease obligations |
Long-term lease obligations | 43,332 | 48,359 | |||||||
|
|
|
|
|||||||
Total non-current liabilities |
20,263,606 | 21,251,163 | ||||||||
|
|
|
|
|||||||
Total lease obligations |
$ | 21,111,137 | $ | 21,936,792 | ||||||
|
|
|
|
(1) | Finance lease right-of-use |
December 31, 2020 |
December 31, 2019 |
|||||||||||||||
Operating |
Finance |
Operating |
Finance |
|||||||||||||
Weighted average remaining lease term (in years) |
13 | 10 | 14 | 10 | ||||||||||||
Weighted average discount rate percentage |
8.7 | % | 7.5 | % | 8.1 | % | 7.4 | % |
(Amounts in thousands) |
Finance Leases |
Operating Leases |
Total |
|||||||||
2021 |
$ | 9,447 | $ | 2,563,634 | $ | 2,573,081 | ||||||
2022 |
9,482 | 2,702,441 | 2,711,923 | |||||||||
2023 |
9,092 | 2,757,020 | 2,766,112 | |||||||||
2024 |
7,464 | 2,804,710 | 2,812,174 | |||||||||
2025 |
6,338 | 2,835,422 | 2,841,760 | |||||||||
2026 and beyond |
32,470 | 23,362,437 | 23,394,907 | |||||||||
|
|
|
|
|
|
|||||||
Total undiscounted fixed minimum lease cost payments |
74,293 | 37,025,664 | 37,099,957 | |||||||||
Less amount representing lease incentive receivables (1) |
— | (698,791 | ) | (698,791 | ) | |||||||
Less amount representing interest |
(26,109 | ) | (15,263,919 | ) | (15,290,028 | ) | ||||||
|
|
|
|
|
|
|||||||
Present value of future lease payments |
48,184 | 21,062,954 | 21,111,138 | |||||||||
Less current portion of lease obligation |
(4,851 | ) | (842,680 | ) | (847,531 | ) | ||||||
|
|
|
|
|
|
|||||||
Total long-term lease obligation |
$ | 43,333 | $ | 20,220,274 | $ | 20,263,607 | ||||||
|
|
|
|
|
|
(1) | Lease incentives receivable primarily represent amounts expected to be received by the Company relating to payments for leasehold improvements that are reimbursable pursuant to lease provisions with relevant landlords and receivables for broker commissions earned for negotiating certain of the Company’s leases. |
(Amounts in thousands) |
Finance Leases |
Operating Leases |
Total |
|||||||||
2020 |
$ | 9,429 | $ | 2,416,519 | $ | 2,425,948 | ||||||
2021 |
9,511 | 2,824,330 | 2,833,841 | |||||||||
2022 |
9,465 | 2,911,370 | 2,920,835 | |||||||||
2023 |
8,931 | 2,960,557 | 2,969,488 | |||||||||
2024 |
7,258 | 2,996,646 | 3,003,904 | |||||||||
2025 and beyond |
38,755 | 26,013,434 | 26,052,189 | |||||||||
|
|
|
|
|
|
|||||||
Total undiscounted fixed minimum lease cost payments |
83,349 | 40,122,856 | 40,206,205 | |||||||||
Less amount representing lease incentive receivables (1) |
— | (1,794,191 | ) | (1,794,191 | ) | |||||||
Less amount representing interest |
(30,272 | ) | (16,444,053 | ) | (16,474,325 | ) | ||||||
|
|
|
|
|
|
|||||||
Present value of future lease payments |
53,077 | 21,884,612 | 21,937,689 | |||||||||
Less obligations classified as held for sale |
— | (897 | ) | (897 | ) | |||||||
Less current portion of lease obligation |
(4,718 | ) | (680,911 | ) | (685,629 | ) | ||||||
|
|
|
|
|
|
|||||||
Total long-term lease obligation |
$ | 48,359 | $ | 21,202,804 | $ | 21,251,163 | ||||||
|
|
|
|
|
|
(1) | Lease incentives receivable primarily represent amounts expected to be received by the Company relating to payments for leasehold improvements that are reimbursable pursuant to lease provisions with relevant landlords and receivables for broker commissions earned for negotiating certain of the Company’s leases. |
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
U.S. |
$ | (1,540,919 | ) | $ | (2,497,989 | ) | $ | (1,162,229 | ) | |||
Non-U.S. |
(2,273,432 | ) | (1,231,261 | ) | (766,040 | ) | ||||||
|
|
|
|
|
|
|||||||
Total pre-tax loss |
$ | (3,814,351 | ) | $ | (3,729,250 | ) | $ | (1,928,269 | ) | |||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Current tax provision (benefit): |
||||||||||||
Federal |
$ | — | $ | — | $ | — | ||||||
State and local |
— | — | — | |||||||||
Non-U.S. |
20,456 | 49,371 | 9,263 | |||||||||
|
|
|
|
|
|
|||||||
Total current tax provision |
20,456 | 49,371 | 9,263 | |||||||||
|
|
|
|
|
|
|||||||
Deferred tax provision (benefit): |
||||||||||||
Federal |
(118 | ) | (148 | ) | (1,741 | ) | ||||||
State and local |
(324 | ) | (510 | ) | (6,777 | ) | ||||||
Non-U.S. |
(508 | ) | (3,076 | ) | (1,595 | ) | ||||||
|
|
|
|
|
|
|||||||
Total deferred tax provision (benefit) |
(950 | ) | (3,734 | ) | (10,113 | ) | ||||||
|
|
|
|
|
|
|||||||
Income tax provision (benefit) |
$ | 19,506 | $ | 45,637 | $ | (850 | ) | |||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 (1) |
2018 (1) |
|||||||||
Income tax provision (benefit) at the U.S. Federal tax rate |
$ | (801,014 | ) | $ | (783,143 | ) | $ | (404,937 | ) | |||
State income taxes, inclusive of valuation allowance |
(256 | ) | (403 | ) | (5,354 | ) | ||||||
Withholding tax |
8,350 | 13,712 | — | |||||||||
Foreign rate differential |
(39,240 | ) | (23,087 | ) | (14,355 | ) | ||||||
Stock-based compensation |
30,567 | 13,772 | 4,251 | |||||||||
Non-deductible expenses |
15,056 | 13,333 | 16,196 | |||||||||
Non-deductible financial instrument expense |
(136,753 | ) | (15,402 | ) | 27,768 | |||||||
Goodwill Impairment |
1,492 | 39,482 | — | |||||||||
Rate Change |
(143,058 | ) | 10,259 | 5,238 | ||||||||
ChinaCo Deconsolidation |
286,637 | — | — | |||||||||
Other, net |
54,609 | (3,298 | ) | (1,775 | ) | |||||||
Valuation allowance |
743,116 | 780,412 | 372,118 | |||||||||
|
|
|
|
|
|
|||||||
Income tax provision (benefit) |
$ | 19,506 | $ | 45,637 | $ | (850 | ) | |||||
|
|
|
|
|
|
(1) | Certain lines from the prior years have been reclassified to align with the 2020 presentation with no impact to the Income tax provision (benefit) amount. |
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 (2) |
||||||
Deferred tax assets: |
||||||||
Investment in partnership |
$ | 488,786 | $ | 477,612 | ||||
Deferred rent |
136,502 | 125,635 | ||||||
Property and Equipment |
71,353 | 40,645 | ||||||
Accrued expenses |
11,527 | 20,231 | ||||||
Stock-based compensation |
8,107 | 4,487 | ||||||
Deferred financing obligation |
2,546 | 989 | ||||||
Unrealized (gain) loss on foreign exchange |
3,634 | 5,222 | ||||||
Net operating loss |
2,033,703 | 1,205,139 | ||||||
Capital Loss |
40,677 | — | ||||||
Finite-lived intangibles |
1,259,586 | 1,144,862 | ||||||
Interest |
6,989 | 1,863 | ||||||
Lease Liability |
2,636,664 | 2,762,142 | ||||||
Other |
14,515 | 7,996 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
6,714,589 | 5,796,823 | ||||||
Valuation allowance |
(4,057,892 | ) | (3,011,064 | ) | ||||
|
|
|
|
|||||
Total net deferred tax assets |
2,656,697 | 2,785,759 | ||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Deferred Rent |
(755 | ) | — | |||||
Accrued Expenses |
(2,206 | ) | (343 | ) | ||||
Unrealized (Gain)/Loss |
(7,655 | ) | (181 | ) | ||||
Property and equipment |
(10,969 | ) | (14,584 | ) | ||||
Finite-lived intangibles |
(264 | ) | (5,284 | ) | ||||
Right of Use Asset |
(2,630,343 | ) | (2,763,802 | ) | ||||
Other |
(3,128 | ) | (404 | ) | ||||
Indefinite-lived intangibles |
— | (11 | ) | |||||
|
|
|
|
|||||
Total deferred tax liabilities |
(2,655,320 | ) | (2,784,609 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets (1) |
$ | 1,377 | $ | 1,150 | ||||
|
|
|
|
(1) | As of December 31, 2020 and 2019, $1.4 million and $1.2 million net deferred tax asset is included as a component of other assets on the accompanying consolidated balance sheet, respectively. |
(2) | Certain 2019 lines have been reclassified to align with the 2020 presentation with no impact to the Net deferred tax assets (liabilities). |
December 31, 2020 |
||||||||||||||||||||
(Amounts in thousands, except per share amounts) |
Conversion Price per Share |
Liquidation Preference |
Shares Authorized |
Shares Issued and Outstanding |
Carrying Amount |
|||||||||||||||
Series A |
$ | 0.46 | $ | 17,500 | 38,393 | 38,393 | $ | 17,350 | ||||||||||||
Series B |
1.85 | 41,039 | 22,165 | 22,165 | 40,995 | |||||||||||||||
Series C |
5.36 | 152,227 | 29,189 | 28,404 | 154,699 | |||||||||||||||
Series D-1 |
16.65 | 198,800 | 11,939 | 11,939 | 198,541 | |||||||||||||||
Series D-2 |
16.65 | 156,200 | 9,381 | 9,380 | 155,996 | |||||||||||||||
Series E |
32.89 | 433,934 | 13,194 | 13,194 | 433,507 | |||||||||||||||
Series F |
50.19 | 690,612 | 14,942 | 13,759 | 675,913 | |||||||||||||||
Series G |
57.90 | 2,017,338 | 34,742 | 33,114 | 1,729,997 | |||||||||||||||
Series G-1 |
110.00 | 3,500,000 | 45,455 | 31,818 | 2,681,069 | |||||||||||||||
Series H-1 |
11.60 | 1,900,000 | 227,025 | 163,793 | 1,352,819 | |||||||||||||||
Series H-2 |
11.60 | — | 227,025 | — | — | |||||||||||||||
Series H-3 |
0.01 | — | 129,888 | — | — | |||||||||||||||
Series H-4 |
0.01 | — | 129,888 | — | — | |||||||||||||||
Acquisition |
91.37 | 269,678 | 13,900 | 2,951 | 223,912 | |||||||||||||||
Junior |
866.67 | 1,300 | 2 | 2 | 1,300 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 9,378,628 | 947,128 | 368,912 | $ | 7,666,098 | ||||||||||||||
|
|
|
|
|
|
|
|
December 31, 2019 |
December 31, 2018 |
|||||||||||||||
(Amounts in thousands) |
Shares Issued and Outstanding |
Carrying Amount |
Shares Issued and Outstanding |
Carrying Amount |
||||||||||||
Series A |
$ | 38,393 | $ | 17,350 | $ | 38,393 | $ | 17,350 | ||||||||
Series B |
22,165 | 40,995 | 22,165 | 40,995 | ||||||||||||
Series C |
28,404 | 154,699 | 28,404 | 154,699 | ||||||||||||
Series D-1 |
11,939 | 198,541 | 11,939 | 198,541 | ||||||||||||
Series D-2 |
9,380 | 155,996 | 9,380 | 155,996 | ||||||||||||
Series E |
13,194 | 433,507 | 13,194 | 433,507 | ||||||||||||
Series F |
13,759 | 675,913 | 13,759 | 675,913 | ||||||||||||
Series G |
33,114 | 1,729,997 | 33,114 | 1,729,997 | ||||||||||||
Series G-1 |
31,818 | 2,681,069 | — | — | ||||||||||||
Series H-1 |
17,241 | 161,353 | — | — | ||||||||||||
Acquisition |
2,920 | 222,884 | 1,408 | 90,398 | ||||||||||||
Junior |
2 | 1,300 | 2 | 1,300 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 222,329 | $ | 6,473,604 | $ | 171,758 | $ | 3,498,696 | ||||||||
|
|
|
|
|
|
|
|
• | First, the holders of shares of each series of Senior Preferred Stock then outstanding are entitled to be paid out of the assets of the Company, on a pari passu |
• | Second, after the payment of all preferential amounts required to be paid to the holders of shares of Senior Preferred Stock, the holders of shares of Acquisition Preferred Stock and Junior Preferred Stock then outstanding are entitled to be paid out of the assets of the Company, before any payment is made to the holders of Class A Common Stock, Class B Common Stock or Class D Common Stock, an amount per share equal to the original issue price for the Junior Preferred Stock and in the case of Acquisition Preferred Stock, an amount per share equal to the greater of (i) the applicable original issue price for such series of Acquisition Preferred Stock or (ii) such amount per share as would have been payable had all shares of such series of Acquisition Preferred Stock been converted into Class A Common Stock in accordance with the Company’s Amended and Restated Certificate of Incorporation immediately prior to such transaction; and |
• | Third, after the payment of all preferential amounts required to be paid to the holders of shares of Senior Preferred Stock, Junior Preferred Stock, and Acquisition Preferred Stock, the remaining assets of the Company will be distributed among the holders of shares of Class A Common stock, Class B Common Stock and Class D Common Stock, pro rata based on the number of shares held by each such holder. The holders of shares of Class C Common Stock shall not participate in any such distribution in respect of such shares. |
Convertible Into |
Number of Shares |
Exercise Price |
Expiration Date | |||||||
Class A Common Stock |
5,941 | $ | 13.12 | July 31, 2025 | ||||||
Class A Common Stock |
250,000 | $ | 0.001 | February 8, 2026 | ||||||
|
|
|||||||||
255,941 | ||||||||||
|
|
Number of WeWork Partnerships Profits Interest Units |
Weighted- Average Distribution Threshold |
Weighted- Average Preference Amount |
Aggregate Intrinsic Value (In thousands) |
|||||||||||||
Outstanding, December 31, 2019 |
27,752,323 | $ | 24.22 | $ | 1.44 | $ | — | |||||||||
Granted |
— | $ | — | $ | — | |||||||||||
Exchanged/redeemed |
— | $ | — | $ | — | |||||||||||
Forfeited/canceled |
(2,583,385 | ) | $ | 49.28 | $ | 10.92 | ||||||||||
|
|
|
|
|||||||||||||
Outstanding, December 31, 2020 |
25,168,938 | $ | 21.64 | $ | 0.47 | $ | — | |||||||||
|
|
|
|
|||||||||||||
Exercisable, December 31, 2020 |
8,574,428 | $ | 19.55 | $ | 0.13 | $ | — | |||||||||
|
|
|
|
|||||||||||||
Vested and expected to vest, December 31, 2020 |
9,558,975 | $ | 22.61 | $ | 1.24 | $ | — | |||||||||
|
|
|
|
|||||||||||||
Vested and exercisable, December 31, 2020 |
8,574,428 | $ | 19.55 | $ | 0.13 | $ | — | |||||||||
|
|
|
|
December 31, 2019 | ||
Fair value of Class B common stock |
$ 4.12 - 56.85 | |
Weighted average expected term (years) |
5.83 | |
Weighted average expected volatility |
40.0% | |
Risk-free interest rate |
1.53% - 1.94% | |
Dividend yield |
— |
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life in Years |
Aggregate Intrinsic Value (In thousands) |
|||||||||||||
Outstanding, December 31, 2019 |
24,505,020 | $ | 8.42 | 5.9 | $ | 32,648 | ||||||||||
Granted |
28,690,953 | $ | 3.89 | |||||||||||||
Granted under Option Repricing (1) |
18,699,611 | $ | 2.10 | |||||||||||||
Exercised |
(133,565 | ) | $ | 2.06 | ||||||||||||
Forfeited/canceled |
(18,780,864 | ) | $ | 6.16 | ||||||||||||
Canceled under Option Repricing (1) |
(18,903,257 | ) | $ | 4.00 | ||||||||||||
|
|
|
|
|||||||||||||
Outstanding, December 31, 2020 |
34,077,898 | $ | 4.74 | 6.4 | $ | 12,534 | ||||||||||
|
|
|
|
|||||||||||||
Exercisable December 31, 2020 |
18,071,812 | $ | 6.09 | 4.1 | $ | 12,884 | ||||||||||
|
|
|
|
|||||||||||||
Vested and expected to vest, December 31, 2020 |
20,711,145 | $ | 7.29 | 4.6 | $ | 12,568 | ||||||||||
|
|
|
|
|||||||||||||
Vested and exercisable, December 31, 2020 |
18,071,812 | $ | 6.09 | 4.1 | $ | 12,522 | ||||||||||
|
|
|
|
(1) | In June 2020, the Board of Directors of the Company approved a one-time repricing (the “Option Repricing”) of stock options granted during March and May 2020 from an exercise price of $4.00 per share to an exercise price of $2.10 per share. See “Option Repricing” below. |
December 31, | ||||||
2020 |
2019 |
2018 | ||||
Fair value of common stock |
$ 2.07 - 2.10 |
$ 37.44 - 42.88 |
$ 26.45 - 26.75 | |||
Weighted average expected term (years) |
6.22 | 6.41 | 6.19 | |||
Weighted average expected volatility |
51.0% | 40.0% | 40.0% | |||
Risk-free interest rate |
0.30% - 1.02% |
1.98% - 2.70% |
2.41% - 2.99% | |||
Dividend yield |
— | — | — |
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life in Years |
Aggregate Intrinsic Value (In thousands) |
|||||||||||||
Outstanding, December 31, 2019 |
— | $ | — | — | $ | — | ||||||||||
Granted |
27,262,500 | $ | 3.55 | |||||||||||||
Granted under Option Repricing (1) |
18,225,000 | $ | 2.10 | |||||||||||||
Exercised |
— | $ | — | |||||||||||||
Forfeited/canceled |
(11,700,000 | ) | $ | 2.53 | ||||||||||||
Canceled under 2020 Option Repricing (1) |
(18,225,000 | ) | $ | 4.00 | ||||||||||||
|
|
|
|
|||||||||||||
Outstanding, December 31, 2020 |
15,562,500 | $ | 2.09 | 9.4 | $ | — | ||||||||||
|
|
|
|
|||||||||||||
Exercisable December 31, 2020 |
— | $ | — | — | $ | — | ||||||||||
|
|
|
|
|||||||||||||
Vested and expected to vest, December 31, 2020 |
5,187,500 | $ | 2.09 | 9.4 | $ | — | ||||||||||
|
|
|
|
|||||||||||||
Vested and exercisable, December 31, 2020 |
— | $ | — | — | $ | — | ||||||||||
|
|
|
|
(1) | In June 2020, the Board of Directors of the Company approved a one-time repricing of stock options granted during March and May 2020 from an exercise price of $4.00 per share to an exercise price of $2.10 per share. See “2020 Option Repricing” below. |
December 31, 2020 | ||
Fair value of common stock |
$2.07 -$2.10 | |
Weighted average expected term (years) |
5.56 | |
Weighted average expected volatility |
50.0% | |
Risk-free interest rate |
0.20% - 0.80% | |
Dividend yield |
—% |
Shares |
Weighted Average Grant Date Value |
|||||||
Unvested, December 31, 2019 |
6,683,555 | $ | 18.55 | |||||
Granted |
47,158 | 3.72 | ||||||
Vested (1) |
(503,898 | ) | 23.48 | |||||
Forfeited/canceled |
(3,407,669 | ) | 19.03 | |||||
|
|
|
|
|||||
Unvested, December 31, 2020 (2) |
2,819,146 | $ | 16.85 | |||||
|
|
|
|
(1) | Includes 160,200 restricted stock units which vested in the year ended December 31, 2020, however the underlying common shares have not been issued to the individual. As of December 31, 2020, a total of 670,244 shares representing $14.5 million was included as a component of additional paid-in capital on the accompanying balance sheet relating to previously vested restricted stock units that have not been settled. |
(2) | The unvested balance includes (a) 158,048 restricted stock and restricted stock units that will vest over their remaining service period, and (b) 2,661,098 restricted stock units granted, which will vest annually over a three to seven year employment service period or upon the satisfaction of specified performance-based vesting conditions, only if and when an initial public offering or Acquisition (as defined in the 2015 Plan) occurs within seven to ten years of the date of grant. |
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Stock-based compensation included in: |
||||||||||||
Location operating expenses |
$ | 8,975 | $ | 46,135 | $ | 22,368 | ||||||
Selling, general and administrative expenses |
41,783 | 300,612 | 47,032 | |||||||||
Restructuring and other related costs |
12,018 | 12,222 | — | |||||||||
|
|
|
|
|
|
|||||||
Total stock-based compensation expense |
$ | 62,776 | $ | 358,969 | $ | 69,400 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands, except share and per share data) |
2020 |
2019 |
2018 |
|||||||||
Numerator: |
||||||||||||
Net loss attributed to WeWork Inc. |
$ | (3,129,358 | ) | $ | (3,264,738 | ) | $ | (1,610,792 | ) | |||
|
|
|
|
|
|
|||||||
Net loss attributable to Class A and Class B Common Stockholders |
$ | (3,129,358 | ) | $ | (3,264,738 | ) | $ | (1,610,792 | ) | |||
|
|
|
|
|
|
|||||||
Denominator: |
||||||||||||
Basic shares: |
||||||||||||
Weighted-average shares - Basic |
170,275,761 | 168,436,109 | 163,148,918 | |||||||||
|
|
|
|
|
|
|||||||
Diluted shares: |
||||||||||||
Weighted-average shares - Diluted |
170,275,761 | 168,436,109 | 163,148,918 | |||||||||
|
|
|
|
|
|
|||||||
Net loss per share attributable to Class A and Class B Common Stockholders: |
||||||||||||
Basic |
$ | (18.38 | ) | $ | (19.38 | ) | $ | (9.87 | ) | |||
|
|
|
|
|
|
|||||||
Diluted |
$ | (18.38 | ) | $ | (19.38 | ) | $ | (9.87 | ) | |||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Convertible Preferred Stock Series A, B, C, D-1, D-2, E, F, G, G-1, H-1 and Acquisition |
310,157,467 | 190,353,521 | 171,369,355 | |||||||||
Convertible Preferred Stock Series Junior |
1,500 | 1,500 | 1,500 | |||||||||
Convertible notes |
785,302 | 5,666,996 | 3,848,814 | |||||||||
Stock options not subject to performance conditions |
6,798,047 | 15,339,168 | 16,023,662 | |||||||||
Unvested restricted stock/RSUs not subject to performance conditions |
— | 489,220 | 955,301 | |||||||||
Vested RSUs with non-forfeitable dividend rights |
594,412 | 432,472 | 272,185 | |||||||||
Warrants |
135,722,164 | 14,695,807 | 1,178,715 | |||||||||
WeWork Partnerships Profits Interest Units not subject to performance conditions |
— | 550,387 | — |
Year Ended December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Balance at beginning of period |
$ | 131,989 | $ | 90,470 | ||||
Liabilities incurred in the current period |
8,842 | 35,968 | ||||||
Liabilities settled in the current period |
(5,475 | ) | (762 | ) | ||||
Accretion of liability |
9,888 | 5,639 | ||||||
Revisions in estimated cash flows |
64,630 | — | ||||||
ChinaCo Deconsolidation (Note 6) |
(8,883 | ) | — | |||||
Effect of foreign currency exchange rate changes |
4,974 | 674 | ||||||
|
|
|
|
|||||
Balance at end of period |
205,965 | 131,989 | ||||||
Less: Current portion of asset retirement obligations |
(113 | ) | (201 | ) | ||||
|
|
|
|
|||||
Total non-current portion of asset retirement obligations |
$ | 205,852 | $ | 131,788 | ||||
|
|
|
|
Year Ended December 31, |
||||||||||||
(Amounts in thousands) |
2020 |
2019 |
2018 |
|||||||||
Revenue: |
||||||||||||
United States |
$ | 1,685,274 | $ | 1,874,589 | $ | 1,073,680 | ||||||
United Kingdom |
421,252 | 466,202 | 275,615 | |||||||||
Greater China (1) |
206,261 | 228,537 | 99,529 | |||||||||
Japan |
250,733 | 174,120 | 44,282 | |||||||||
Other foreign countries |
852,345 | 715,144 | 328,645 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
$ | 3,415,865 | $ | 3,458,592 | $ | 1,821,751 | ||||||
|
|
|
|
|
|
December 31, |
||||||||
(Amounts in thousands) |
2020 |
2019 |
||||||
Property and equipment: |
||||||||
United States |
$ | 4,752,834 | $ | 5,825,644 | ||||
United Kingdom |
1,020,575 | 905,966 | ||||||
Greater China (1) |
— | 395,290 | ||||||
Japan |
525,046 | 350,623 | ||||||
Other foreign countries |
2,288,306 | 2,017,262 | ||||||
|
|
|
|
|||||
Total property and equipment |
$ | 8,586,761 | $ | 9,494,785 | ||||
|
|
|
|
(1) | The amounts for Greater China relate solely to the consolidated amounts of ChinaCo which was deconsolidated on October 2, 2020. |
• | The launch of a new tender offer |
• | Certain governance changes |
transactions contemplated by the Settlement Agreement, on February 26, 2021, all of the outstanding shares of Class B common stock of the Company automatically converted into shares of Class A common stock and the shares of Class C Common stock of the Company now have one vote per share, instead of three (the “Class B Conversion”). The Amended and Restated Certificate of Incorporation provides that if, following the Class B Conversion, new shares of Class B common stock are issued pursuant to (i) the exercise of options to purchase shares of Class B common stock outstanding as of the date of the Class B Conversion, (ii) securities convertible into shares of Class B common stock outstanding as of the date of the Class B Conversion, and (iii) other circumstances which are specified in the Amended and Restated Certificate of Incorporation, such new shares will be automatically converted into shares of Class A common stock immediately following the time such new shares of Class B common stock are issued. |
• | Adam Neumann settlement payment. |
• | Adam Neumann sale of stock to SBG paid-in capital, representing a deemed capital contribution by SBG in its consolidated balance sheet. |
• | Adam Neumann proxy changes |
• | SBG proxy agreement. |
• | WeWork Partnerships Profits Interest Units amendments. |
WeWork Partnership became fully vested and were amended to have a catch-up base amount of $0. The per unit distribution thresholds for the WeWork Partnerships Profits Interest Units interests were also amended to initially be $10.00 and may be subject to downward adjustment based on closing date pricing if a de-SPAC or initial public offering were to occur. As a result of this modification, the Company recorded $102.0 million of restructuring and other related costs in its consolidated statement of operations for the three-months ended March 31, 2021. |
• | at the closing of the transactions contemplated by the Merger Agreement (the Closing), upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Delaware General Corporation Law, as amended (the “DGCL”), Merger Sub will merge with and into the Company, the separate corporate existence of Merger Sub will cease and the Company will be the surviving corporation and a wholly owned subsidiary of BowX (the “Merger”); |
• | as promptly as practicable following the Closing, the Company will merge with and into BowX Merger Subsidiary II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of BowX (Merger Sub II and such transaction, the Second Merger), with Merger Sub II being the surviving entity of the Second Merger; |
• | as a result of the Merger, among other things, all outstanding shares of capital stock of the Company (other than shares of Class C common stock of the Company, treasury shares, shares held by |
stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to the DGCL and shares of Company stock subject to options, warrants and RSUs) will be cancelled in exchange for the right to receive a number of newly issued shares of Class A common stock, par value $0.0001 per share, of BowX (“BowX Common Stock”) determined using an exchange ratio (the “Exchange Ratio”) which is determined based on a pre-money enterprise valuation of the Company of approximately $9 billion, a $10.00 price per share of BowX Common Stock and the fully diluted equity capitalization of the Company immediately prior to the Closing (which is subject to change between signing and Closing), as described below; |
• | shares of Class C common stock of the Company will be cancelled in exchange for the right to receive a number of newly issued shares of Class C common stock, par value $0.0001 per share, of BowX (“Bow X Class C Common Stock”) determined using the Exchange Ratio; |
• | outstanding options and warrants to purchase Company stock and RSUs will be converted into the right to receive options or warrants to purchase shares of BowX Common Stock or restricted stock units representing the right to receive shares of BowX Common Stock, as applicable, on the same terms and conditions that are in effect with respect to such options, warrants or RSUs on the day of Closing, subject to adjustments using the Exchange Ratio, as described below; and |
• | BowX will immediately be renamed “WeWork Inc.” or such other name as agreed to by the Company and BowX prior to Closing. |
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 800,531 | $ | 4 | $ | — | $ | — | $ | 800,535 | ||||||||||
Accounts receivable and accrued revenue, net |
176,521 | — | — | — | 176,521 | |||||||||||||||
Other current assets |
349,672 | — | 2,500 | — | 352,172 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
1,326,724 | 4 | 2,500 | — | 1,329,228 | |||||||||||||||
Investments in and advances to/(from) consolidated subsidiaries |
(28,632 | ) | 436,385 | 405,255 | (813,008 | ) | — | |||||||||||||
Property and equipment, net |
6,859,163 | — | — | — | 6,859,163 | |||||||||||||||
Lease right-of-use |
15,107,880 | — | — | — | 15,107,880 | |||||||||||||||
Restricted cash |
53,618 | — | — | — | 53,618 | |||||||||||||||
Equity method and other investments |
214,940 | — | — | — | 214,940 | |||||||||||||||
Goodwill |
679,351 | — | — | — | 679,351 | |||||||||||||||
Intangible assets, net |
49,896 | — | — | — | 49,896 | |||||||||||||||
Other assets |
1,062,258 | — | — | — | 1,062,258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 25,325,198 | $ | 436,389 | $ | 407,755 | $ | (813,008 | ) | $ | 25,356,334 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued expenses |
$ | 698,241 | $ | 25,168 | $ | 2 | $ | — | $ | 723,411 | ||||||||||
Members’ service retainers |
358,566 | — | — | — | 358,566 | |||||||||||||||
Deferred revenue |
176,004 | — | — | — | 176,004 | |||||||||||||||
Current lease obligations |
847,531 | — | — | — | 847,531 | |||||||||||||||
Other current liabilities |
83,755 | — | — | — | 83,755 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
2,164,097 | 25,168 | 2 | — | 2,189,267 | |||||||||||||||
Long-term lease obligations |
20,263,606 | — | — | — | 20,263,606 | |||||||||||||||
Unsecured related party debt |
1,200,000 | — | — | — | 1,200,000 | |||||||||||||||
Convertible related party liabilities, net |
— | 418,908 | — | — | 418,908 | |||||||||||||||
Long-term debt, net |
688,356 | — | — | — | 688,356 | |||||||||||||||
Other liabilities |
221,780 | — | — | — | 221,780 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
24,537,839 | 444,076 | 2 | — | 24,981,917 | |||||||||||||||
Convertible preferred stock |
— | 7,666,098 | — | — | 7,666,098 | |||||||||||||||
Redeemable noncontrolling interests |
380,242 | — | — | — | 380,242 | |||||||||||||||
Equity |
||||||||||||||||||||
Total WeWork Inc. shareholders’ equity (deficit) |
405,255 | (7,673,785 | ) | 407,753 | (813,008 | ) | (7,673,785 | ) | ||||||||||||
Noncontrolling interests |
1,862 | — | — | — | 1,862 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total equity (deficit) |
407,117 | (7,673,785 | ) | 407,753 | (813,008 | ) | (7,671,923 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 25,325,198 | $ | 436,389 | $ | 407,755 | $ | (813,008 | ) | $ | 25,356,334 | |||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 1,340,139 | $ | 1 | $ | — | $ | — | $ | 1,340,140 | ||||||||||
Accounts receivable and accrued revenue |
230,239 | — | — | — | 230,239 | |||||||||||||||
Lease incentives receivable |
— | — | — | — | — | |||||||||||||||
Due from related parties |
— | — | — | — | — | |||||||||||||||
Assets held for sale |
134,958 | — | — | — | 134,958 | |||||||||||||||
Other current assets |
422,938 | — | — | — | 422,938 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
2,128,274 | 1 | — | — | 2,128,275 | |||||||||||||||
Investments in and advances to/(from) consolidated subsidiaries |
(89,515 | ) | 4,141,631 | 4,052,116 | (8,104,232 | ) | — | |||||||||||||
Property and equipment, net |
8,399,541 | — | — | — | 8,399,541 | |||||||||||||||
Lease right-of-use |
17,496,004 | — | — | — | 17,496,004 | |||||||||||||||
Restricted cash |
856,255 | — | — | — | 856,255 | |||||||||||||||
Deferred lease acquisition costs, net |
— | — | — | — | — | |||||||||||||||
Equity method and other investments |
203,719 | — | — | — | 203,719 | |||||||||||||||
Goodwill |
698,416 | — | — | — | 698,416 | |||||||||||||||
Intangible assets, net |
79,865 | — | — | — | 79,865 | |||||||||||||||
Other assets |
1,286,180 | (441 | ) | — | — | 1,285,739 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 31,058,739 | $ | 4,141,191 | $ | 4,052,116 | $ | (8,104,232 | ) | $ | 31,147,814 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued expenses |
$ | 1,281,677 | $ | 90,000 | $ | — | $ | — | $ | 1,371,677 | ||||||||||
Members’ service retainers |
605,574 | — | — | — | 605,574 | |||||||||||||||
Deferred revenue |
180,390 | — | — | — | 180,390 | |||||||||||||||
Current lease obligations |
685,629 | — | — | — | 685,629 | |||||||||||||||
Liabilities held for sale |
25,442 | — | — | — | 25,442 | |||||||||||||||
Other current liabilities |
95,411 | 123,409 | — | — | 218,820 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
2,874,123 | 213,409 | — | — | 3,087,532 | |||||||||||||||
Long-term lease obligations |
21,251,163 | — | — | — | 21,251,163 | |||||||||||||||
Convertible related party liabilities, net |
— | 2,151,075 | — | — | 2,151,075 | |||||||||||||||
Long-term debt, net |
1,389,431 | — | — | — | 1,389,431 | |||||||||||||||
Other liabilities |
137,641 | — | — | — | 137,641 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
25,652,358 | 2,364,484 | — | — | 28,016,842 | |||||||||||||||
Convertible preferred stock |
— | 6,473,604 | — | — | 6,473,604 | |||||||||||||||
Redeemable noncontrolling interests |
1,032,080 | — | — | — | 1,032,080 | |||||||||||||||
Equity |
||||||||||||||||||||
Total WeWork Inc. shareholders’ equity (deficit) |
4,052,116 | (4,696,897 | ) | 4,052,116 | (8,104,232 | ) | (4,696,897 | ) | ||||||||||||
Noncontrolling interests |
322,185 | — | — | — | 322,185 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total equity (deficit) |
4,374,301 | (4,696,897 | ) | 4,052,116 | (8,104,232 | ) | (4,374,712 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity |
$ | 31,058,739 | $ | 4,141,191 | $ | 4,052,116 | $ | (8,104,232 | ) | $ | 31,147,814 | |||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Revenue |
$ | 3,415,865 | $ | — | $ | — | $ | — | $ | 3,415,865 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses |
3,542,918 | — | — | — | 3,542,918 | |||||||||||||||
Pre-opening location expenses |
273,049 | — | — | — | 273,049 | |||||||||||||||
Selling, general and administrative expenses |
1,604,311 | 330 | 28 | — | 1,604,669 | |||||||||||||||
Restructuring and other related costs |
206,703 | — | — | — | 206,703 | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
1,409,234 | — | (53,313 | ) | — | 1,355,921 | ||||||||||||||
Depreciation and amortization |
779,368 | — | — | — | 779,368 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
7,815,583 | 330 | (53,285 | ) | — | 7,762,628 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(4,399,718 | ) | (330 | ) | 53,285 | — | (4,346,763 | ) | ||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | (3,949,108 | ) | (4,002,393 | ) | 7,951,501 | — | |||||||||||||
Income (loss) from equity method and other investments |
(44,788 | ) | — | — | — | (44,788 | ) | |||||||||||||
Interest expense |
(331,217 | ) | — | — | — | (331,217 | ) | |||||||||||||
Interest income |
16,910 | — | — | — | 16,910 | |||||||||||||||
Foreign currency gain (loss) |
149,204 | (8 | ) | — | — | 149,196 | ||||||||||||||
Gain from change in fair value of related party financial instruments |
— | 819,647 | — | — | 819,647 | |||||||||||||||
Loss on extinguishment of debt |
(77,336 | ) | — | — | — | (77,336 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest and other income (expense), net |
(287,227 | ) | (3,129,469 | ) | (4,002,393 | ) | 7,951,501 | 532,412 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(4,686,945 | ) | (3,129,799 | ) | (3,949,108 | ) | 7,951,501 | (3,814,351 | ) | |||||||||||
Income tax benefit (provision) |
(19,947 | ) | 441 | — | — | (19,506 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(4,706,892 | ) | (3,129,358 | ) | (3,949,108 | ) | 7,951,501 | (3,833,857 | ) | |||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
675,631 | — | — | — | 675,631 | |||||||||||||||
Noncontrolling interest — equity |
28,868 | — | — | — | 28,868 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (4,002,393 | ) | $ | (3,129,358 | ) | $ | (3,949,108 | ) | $ | 7,951,501 | $ | (3,129,358 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Revenue |
$ | 3,458,592 | $ | — | $ | — | $ | — | $ | 3,458,592 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
||||||||||||||||||||
Location operating expenses |
2,758,318 | — | — | — | 2,758,318 | |||||||||||||||
Pre-opening location expenses |
571,968 | — | — | — | 571,968 | |||||||||||||||
Selling, general and administrative expense |
2,793,178 | 485 | 2,793,663 | |||||||||||||||||
Restructuring and other related costs |
329,221 | — | — | 329,221 | ||||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
335,006 | — | — | — | 335,006 | |||||||||||||||
Depreciation and amortization |
589,914 | — | — | — | 589,914 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total expenses |
7,377,605 | 485 | — | — | 7,378,090 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(3,919,013 | ) | (485 | ) | — | — | (3,919,498 | ) | ||||||||||||
Interest and other income (expense), net: |
||||||||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | (3,046,346 | ) | (3,046,346 | ) | 6,092,692 | — | |||||||||||||
Income (loss) from equity method and other investments |
(32,206 | ) | — | — | — | (32,206 | ) | |||||||||||||
Interest expense |
(99,587 | ) | — | — | — | (99,587 | ) | |||||||||||||
Interest income |
53,244 | — | — | — | 53,244 | |||||||||||||||
Foreign currency gain (loss) |
29,652 | — | — | — | 29,652 | |||||||||||||||
Gain (loss) from change in fair value of related party financial instruments |
456,611 | (217,466 | ) | — | — | 239,145 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest and other income (expense), net |
407,714 | (3,263,812 | ) | (3,046,346 | ) | 6,092,692 | 190,248 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax loss |
(3,511,299 | ) | (3,264,297 | ) | (3,046,346 | ) | 6,092,692 | (3,729,250 | ) | |||||||||||
Income tax benefit (provision) |
(45,196 | ) | (441 | ) | — | — | (45,637 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
(3,556,495 | ) | (3,264,738 | ) | (3,046,346 | ) | 6,092,692 | (3,774,887 | ) | |||||||||||
Net loss attributable to noncontrolling interests: |
||||||||||||||||||||
Redeemable noncontrolling interests — mezzanine |
493,047 | — | — | — | 493,047 | |||||||||||||||
Noncontrolling interest — equity |
17,102 | — | — | — | 17,102 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to WeWork Inc. |
$ | (3,046,346 | ) | $ | (3,264,738 | ) | $ | (3,046,346 | ) | $ | 6,092,692 | $ | (3,264,738 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Operating Activities: |
||||||||||||||||||||
Net loss |
(4,706,892 | ) | $ | (3,129,358 | ) | $ | (3,949,108 | ) | $ | 7,951,501 | $ | (3,833,857 | ) | |||||||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||||||||||||||
Depreciation and amortization |
779,368 | — | — | — | 779,368 | |||||||||||||||
Impairment of property and equipment |
3,066 | — | — | — | 3,066 | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
1,409,234 | — | (53,313 | ) | — | 1,355,921 | ||||||||||||||
Loss on extinguishment of debt |
77,336 | — | — | 77,336 | ||||||||||||||||
Stock-based compensation expense |
62,776 | — | — | — | 62,776 | |||||||||||||||
Cash paid to settle employee stock awards |
(3,141 | ) | — | — | — | (3,141 | ) | |||||||||||||
Issuance of stock for services rendered |
7,893 | — | — | — | 7,893 | |||||||||||||||
Non-cash interest expense |
172,112 | — | — | — | 172,112 | |||||||||||||||
Provision for allowance for doubtful accounts |
67,482 | — | — | — | 67,482 | |||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | 3,949,108 | 4,002,393 | (7,951,501 | ) | — | ||||||||||||||
(Income) loss from equity method and other investments |
44,788 | — | — | — | 44,788 | |||||||||||||||
Distribution of income from equity method and other investments |
4,191 | 4,191 | ||||||||||||||||||
Foreign currency (gain) loss |
(149,204 | ) | 8 | — | — | (149,196 | ) | |||||||||||||
Change in fair value of financial instruments |
— | (819,647 | ) | — | (819,647 | ) | ||||||||||||||
Contingent consideration fair market value adjustment |
(122 | ) | — | — | — | (122 | ) | |||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||
Operating lease right-of-use |
1,024,709 | — | — | — | 1,024,709 | |||||||||||||||
Current and long-term lease obligations |
502,025 | — | — | — | 502,025 | |||||||||||||||
Accounts receivable and accrued revenue |
(32,749 | ) | — | — | — | (32,749 | ) | |||||||||||||
Other assets |
(28,148 | ) | — | — | — | (28,148 | ) | |||||||||||||
Accounts payable and accrued expenses |
(99,360 | ) | (64,832 | ) | 2 | — | (164,190 | ) | ||||||||||||
Deferred revenue |
32,803 | — | — | — | 32,803 | |||||||||||||||
Other liabilities |
39,731 | — | — | — | 39,731 | |||||||||||||||
Deferred income taxes |
282 | (441 | ) | — | — | (159 | ) | |||||||||||||
Advances to/from consolidated subsidiaries |
(65,191 | ) | 65,165 | 26 | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) operating activities |
(857,011 | ) | 3 | — | — | (857,008 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Investing Activities: |
||||||||||||||||||||
Purchases of property and equipment |
(1,441,232 | ) | — | — | — | (1,441,232 | ) | |||||||||||||
Capitalized software |
(22,614 | ) | — | — | — | (22,614 | ) | |||||||||||||
Sale of software license |
— | — | — | — | — | |||||||||||||||
Change in security deposits with landlords |
526 | — | — | — | 526 | |||||||||||||||
Proceeds from asset divestitures and sale of investments, net of cash divested |
1,047,321 | — | 125,539 | — | 1,172,860 | |||||||||||||||
Sale/distribution of acquisitions among consolidated subsidiaries |
125,539 | — | (125,539 | ) | — | — | ||||||||||||||
Contributions to investments |
(99,146 | ) | — | — | — | (99,146 | ) | |||||||||||||
Deconsolidation of cash of ChinaCo, net of cash received |
(54,481 | ) | (54,481 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) investing activities |
(444,087 | ) | — | — | — | (444,087 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Flows from Financing Activities: |
||||||||||||||||||||
Principal payments for property and equipment acquired under finance leases |
(4,021 | ) | — | — | — | (4,021 | ) | |||||||||||||
Proceeds from issuance of debt |
34,309 | — | — | — | 34,309 | |||||||||||||||
Proceeds from unsecured related party debt |
1,200,000 | — | — | — | 1,200,000 | |||||||||||||||
Repayments of debt |
(813,140 | ) | — | — | — | (813,140 | ) | |||||||||||||
Debt and equity issuance costs |
(12,039 | ) | — | — | — | (12,039 | ) | |||||||||||||
Proceeds from exercise of stock options and warrants |
212 | — | — | — | 212 | |||||||||||||||
Proceeds from issuance of noncontrolling interests |
100,628 | — | — | — | 100,628 | |||||||||||||||
Distributions to noncontrolling interests |
(319,860 | ) | — | — | — | (319,860 | ) | |||||||||||||
Payments for contingent consideration and holdback of acquisition proceeds |
(39,701 | ) | — | — | — | (39,701 | ) | |||||||||||||
Proceeds relating to contingent consideration and holdbacks of disposition proceeds |
613 | 613 | ||||||||||||||||||
Additions to members’ service retainers |
382,184 | — | — | — | 382,184 | |||||||||||||||
Refunds of members’ service retainers |
(575,999 | ) | — | — | — | (575,999 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by (used in) financing activities |
(46,814 | ) | — | — | — | (46,814 | ) | |||||||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
1,374 | — | — | — | 1,374 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(1,346,538 | ) | 3 | — | — | (1,346,535 | ) | |||||||||||||
Cash, cash equivalents and restricted cash — Beginning of period |
2,200,687 | 1 | — | — | 2,200,688 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash, cash equivalents and restricted cash — End of period |
$ | 854,149 | $ | 4 | $ | — | $ | — | $ | 854,153 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Operating Activities: |
||||||||||||||||||||
Net loss |
$ | (3,556,495 | ) | $ | (3,264,738 | ) | $ | (3,046,346 | ) | $ | 6,092,692 | $ | (3,774,887 | ) | ||||||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||||||||||||||
Depreciation and amortization |
589,914 | — | — | — | 589,914 | |||||||||||||||
Impairment of property and equipment |
63,128 | — | — | — | 63,128 | |||||||||||||||
Impairment/(gain on sale) of goodwill, intangibles and other assets |
335,006 | — | — | — | 335,006 | |||||||||||||||
Non-cash transaction with principal shareholder |
185,000 | — | — | — | 185,000 | |||||||||||||||
Stock-based compensation expense |
358,969 | — | — | — | 358,969 | |||||||||||||||
Issuance of common stock for services rendered |
20,367 | — | — | — | 20,367 | |||||||||||||||
Noncash interest expense |
14,917 | — | — | — | 14,917 | |||||||||||||||
Provision for allowance for doubtful accounts |
22,221 | — | — | — | 22,221 | |||||||||||||||
Equity income (loss) from consolidated subsidiaries |
— | 3,046,346 | 3,046,346 | (6,092,692 | ) | — | ||||||||||||||
(Income) loss from equity method and other investments |
32,206 | — | — | — | 32,206 | |||||||||||||||
Foreign currency (gain) loss |
(30,915 | ) | — | — | — | (30,915 | ) | |||||||||||||
Change in fair value of financial instruments |
(456,611 | ) | 217,466 | — | (239,145 | ) | ||||||||||||||
Contingent consideration fair market value adjustment |
(60,667 | ) | — | — | — | (60,667 | ) | |||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||
Operating lease right-of-use |
(5,850,744 | ) | — | — | — | (5,850,744 | ) | |||||||||||||
Current and long-term lease obligations |
7,672,358 | — | — | — | 7,672,358 | |||||||||||||||
Accounts receivable and accrued revenue |
(175,262 | ) | — | — | — | (175,262 | ) | |||||||||||||
Other assets |
(126,870 | ) | — | — | (126,870 | ) | ||||||||||||||
Accounts payable and accrued expenses |
300,609 | 90,000 | — | — | 390,609 | |||||||||||||||
Deferred revenue |
90,445 | — | — | — | 90,445 | |||||||||||||||
Other liabilities |
(84,569 | ) | 123,409 | — | — | 38,840 | ||||||||||||||
Deferred income taxes |
(4,175 | ) | 441 | — | — | (3,734 | ) | |||||||||||||
Advances to/from consolidated subsidiaries |
212,923 | (212,923 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash used in operating activities |
(448,245 | ) | 1 | — | — | (448,244 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash Flows from Investing Activities: |
||||||||||||||||||||
Purchases of property and equipment |
(3,488,086 | ) | — | — | — | (3,488,086 | ) | |||||||||||||
Capitalized software |
(40,735 | ) | — | — | — | (40,735 | ) | |||||||||||||
Change in security deposits with landlords |
(140,071 | ) | — | — | — | (140,071 | ) | |||||||||||||
Proceeds from asset divestitures and sale of investments |
16,599 | — | — | — | 16,599 | |||||||||||||||
Contributions to investments |
(80,674 | ) | — | — | — | (80,674 | ) | |||||||||||||
Loans to employees and related parties |
(5,580 | ) | — | — | — | (5,580 | ) | |||||||||||||
Cash used for acquisitions, net of cash acquired |
(992,980 | ) | (43,993 | ) | — | — | (1,036,973 | ) | ||||||||||||
Sale of acquisitions to consolidated subsidiaries |
(43,993 | ) | 43,993 | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash used in investing activities |
(4,775,520 | ) | — | — | — | (4,775,520 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
WeWork Companies LLC & Subsidiaries (Consolidated) |
WeWork Inc. (Standalone) |
Other Subsidiaries (Combined) |
Eliminations |
WeWork Inc. Consolidated |
|||||||||||||||
Cash Flows from Financing Activities: |
||||||||||||||||||||
Principal payments for property and equipment acquired under finance leases |
(3,590 | ) | — | — | — | (3,590 | ) | |||||||||||||
Proceeds from issuance of debt |
662,395 | — | — | — | 662,395 | |||||||||||||||
Proceeds from issuance of convertible related party liabilities |
2,500,000 | 1,500,000 | — | — | 4,000,000 | |||||||||||||||
Advances to/from consolidated subsidiaries |
1,500,000 | (1,500,000 | ) | — | — | — | ||||||||||||||
Repayments of debt |
(3,088 | ) | — | — | — | (3,088 | ) | |||||||||||||
Bond repurchase |
(32,352 | ) | — | — | — | (32,352 | ) | |||||||||||||
Debt and equity issuance costs |
(71,075 | ) | — | — | — | (71,075 | ) | |||||||||||||
Proceeds from exercise of stock options and warrants |
38,823 | — | — | — | 38,823 | |||||||||||||||
Proceeds from issuance of noncontrolling interests |
538,934 | — | — | — | 538,934 | |||||||||||||||
Distributions to noncontrolling interests |
(40,000 | ) | — | — | — | (40,000 | ) | |||||||||||||
Payments for contingent consideration and holdback of acquisition proceeds |
(38,280 | ) | — | — | — | (38,280 | ) | |||||||||||||
Additions to members’ service retainers |
703,265 | — | — | — | 703,265 | |||||||||||||||
Refunds of members’ service retainers |
(497,761 | ) | — | — | — | (497,761 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cash provided by financing activities |
5,257,271 | — | — | — | 5,257,271 | |||||||||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
3,239 | — | — | — | 3,239 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
36,745 | 1 | — | — | 36,746 | |||||||||||||||
Cash, cash equivalents and restricted cash — Beginning of period |
2,163,942 | — | — | — | 2,163,942 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash, cash equivalents and restricted cash — End of period |
$ | 2,200,687 | $ | 1 | $ | — | $ | — | $ | 2,200,688 | ||||||||||
|
|
|
|
|
|
|
|
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
(Unaudited) |
||||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash |
$ | $ | ||||||
Prepaid expenses |
||||||||
Total current assets |
||||||||
Investments held in Trust Account |
||||||||
Total assets |
$ |
$ |
||||||
Liabilities and Stockholders’ Equity: |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses |
||||||||
Accrued income tax |
||||||||
Franchise tax payable |
||||||||
Total current liabilities |
||||||||
Deferred underwriting commissions in connection with the initial public offering |
||||||||
Warrant liabilities |
||||||||
Total liabilities |
||||||||
Commitments and Contingencies (Note 5) |
||||||||
Class A common stock, $ |
||||||||
Stockholders’ Equity: |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total stockholders’ equity |
||||||||
Total Liabilities and Stockholders’ Equity |
$ |
$ |
||||||
For the Three Months Ended June 30, 2021 |
For the Six Months Ended June 30, 2021 |
For the Period from May 19, 2020 (inception) through June 30, 2020 |
||||||||||
Operating expenses |
||||||||||||
General and administrative expenses |
$ | $ | $ | |||||||||
Franchise tax expense |
||||||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ||||||
Change in fair value of warrant liabilities |
( |
) | ( |
) | ||||||||
Net gain from investments held in Trust Account |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted average shares outstanding of Class A common stock, basic and diluted |
||||||||||||
Basic and diluted net income per share, Class A common stock |
$ | $ | $ | |||||||||
Weighted average shares outstanding of Class B common stock, basic and diluted |
||||||||||||
Basic and diluted net loss per share, Class B common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Common Stock |
Total Stockholders’ Equity |
|||||||||||||||||||||||||||
Class A |
Class B |
Additional Paid-In Capital |
Accumulated Deficit |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance - December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
Common stock subject to possible redemption |
||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - March 31, 2021 (Unaudited) |
( |
) |
||||||||||||||||||||||||||
Common stock subject to possible redemption |
||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - June 30, 2021 (Unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||
Shares (1) |
Amount |
|||||||||||||||||||
Balance - May 19, 2020 (inception) |
$ | $ | $ | $ | ||||||||||||||||
Issuance of Class B common stock to initial stockholders |
||||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance - June 30, 2020 (unaudited) |
$ |
$ |
$ |
( |
) |
$ |
(1) |
This number included up to |
For the Six Months Ended June 30, 2021 |
For the Period from May 19, 2020 (Inception) through June 30, 2020 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
General and administrative expenses paid by related party |
— | |||||||
Change in fair value of warrant liabilities |
— | |||||||
Net gain from investments held in Trust Account |
( |
) | — | |||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
— | |||||||
Accounts payable |
||||||||
Accrued expenses |
— | |||||||
Accrued income tax |
( |
) | — | |||||
Franchise tax payable |
( |
) | ||||||
Net cash used in operating activities |
( |
) | — | |||||
Cash Flows from Investing Activities |
||||||||
Interest released from Trust Account |
— | |||||||
Net cash provided by investing activities |
— | |||||||
Net decrease in cash |
( |
) | — | |||||
Cash - beginning of the period |
— | |||||||
Cash - end of the period |
$ | $ | — | |||||
Supplemental Cash Flow Information |
||||||||
Cash paid for income taxes |
$ | $ | — | |||||
Supplemental disclosure of noncash activities: |
||||||||
Offering costs paid by related party in exchange for issuance of Class B common stock |
$ | — | $ | |||||
Offering costs included in accrued expenses |
$ | — | $ | |||||
Offering costs included in note payable |
$ | — | $ | |||||
Change in value of Class A common stock subject to possible redemption |
$ | ( |
) | $ | — | |||
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the Three Months Ended June 30, 2021 |
For the Six Months Ended June 30, 2021 |
For the Period from May 19, 2020 (Inception) through June 30, 2020 |
||||||||||
Class A common stock |
||||||||||||
Numerator: |
||||||||||||
Net gain from investments held in Trust Account |
$ | $ | $ | |||||||||
Less: Company’s portion available to be withdrawn to pay taxes |
( |
) | ( |
) | ||||||||
Net income attributable to Class A common stock |
$ | $ | $ | |||||||||
Denominator: |
||||||||||||
Weighted average shares outstanding of Class A common stock , basic and diluted |
||||||||||||
Basic and diluted net income per share, Class A common stock |
$ | $ | $ | |||||||||
Class B common stock |
||||||||||||
Numerator: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Less: Net income attributable to Class A common stock |
||||||||||||
Net loss attributable to Class B common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Denominator: |
||||||||||||
Weighted average shares outstanding of Class B common stock, basic and diluted |
||||||||||||
Basic and diluted net loss per share, Class B common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the last reported sale price of the Class A common stock equals or exceeds $ |
• | in whole and not in part; |
• | at $ |
• | if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $ |
on the trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders; |
• | if, and only if, the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above; and |
• | if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock (or a security other than the Class A common stock into which the Class A common stock has been converted or exchanged for in the event the Company is not the surviving company in the initial Business Combination) issuable upon exercise of the Warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given. |
Fair Value Measured as of June 30, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Investments held in Trust Account—U.S. Treasury Securities |
$ | $ | — | $ | — | $ | ||||||||||
Liabilities: |
||||||||||||||||
Warrant liabilities |
$ | — | $ | $ | — | $ |
Fair Value Measured as of December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Investments held in Trust Account—U.S. Treasury Securities |
$ | $ | — | $ | — | $ | ||||||||||
Liabilities: |
||||||||||||||||
Warrant liabilities |
$ | — | $ | $ | — | $ |
Warrant liabilities at December 31, 2020 |
$ | |||
Change in fair value of warrant liabilities |
||||
Warrant liabilities at March 31, 2021 |
||||
Change in fair value of warrant liabilities |
||||
Warrant liabilities at June 30, 2021 |
$ | |||
Assets: |
||||
Current assets: |
||||
Cash |
$ | |||
Prepaid expenses |
||||
Due from related party |
||||
Total current assets |
||||
Investments held in Trust Account |
||||
Total assets |
$ |
|||
Liabilities and Stockholders’ Equity: |
||||
Current liabilities: |
||||
Accounts payable |
$ | |||
Accrued expenses |
||||
Accrued income tax |
||||
Franchise tax payable |
||||
Total current liabilities |
||||
Deferred underwriting commissions in connection with the initial public offering |
||||
Warrant liabilities |
||||
Total liabilities |
||||
Commitments and Contingencies (Note 6) |
||||
Class A common stock, $ |
||||
Stockholders’ Equity: |
||||
Preferred stock, $ |
||||
Class A common stock, $ |
||||
Class B common stock, $ |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
Total stockholders’ equity |
||||
Total Liabilities and Stockholders’ Equity |
$ |
|||
Operating expenses |
||||
General and administrative expenses |
$ | |||
Franchise tax expense |
||||
Total operating expenses |
( |
) | ||
Change in fair value of warrant liabilities |
( |
) | ||
Offering costs associated with private placement warrants |
( |
) | ||
Net gain from investments held in Trust Account |
||||
Loss before income tax expense |
( |
) | ||
Income tax expense |
||||
Net loss |
( |
) | ||
Weighted average shares outstanding of Class A common stock, basic and diluted |
||||
Basic and diluted net income per share, Class A |
$ | |||
Weighted average shares outstanding of Class B common stock, basic and diluted |
||||
Basic and diluted net loss per share, Class B |
$ | ( |
) | |
Common Stock |
Total Stockholders’ Equity |
|||||||||||||||||||||||||||
Class A |
Class B |
Additional Paid-In Capital |
Accumulated Deficit |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance — May 19, 2020 (inception) |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||
Issuance of Class B common stock to initial stockholders |
— | — | — | |||||||||||||||||||||||||
Sale of units in initial public offering, gross |
— | — | — | |||||||||||||||||||||||||
Offering costs |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
Excess cash received over the fair value of the private warrants |
— | — | — | — | — | |||||||||||||||||||||||
Common stock subject to possible redemption |
( |
) | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance — December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
||||
General and administrative expenses paid by related party |
||||
Change in fair value of warrant liabilities |
||||
Offering costs associated with private placement warrants |
||||
Net gain from investments held in Trust Account |
( |
) | ||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accounts payable |
||||
Accrued expenses |
||||
Due to related party |
( |
) | ||
Accrued income tax |
||||
Franchise tax payable |
||||
Net cash used in operating activities |
( |
) | ||
Cash Flows from Investing Activities |
||||
Cash deposited in Trust Account |
( |
) | ||
Net cash used in investing activities |
( |
) | ||
Cash Flows from Financing Activities: |
||||
Repayment of note payable to related party |
( |
) | ||
Proceeds received from initial public offering, gross |
||||
Proceeds received from private placement |
||||
Offering costs paid |
( |
) | ||
Net cash provided by financing activities |
||||
Net increase in cash |
||||
Cash - beginning of the period |
||||
Cash - end of the period |
$ | |||
Supplemental disclosure of noncash activities: |
||||
Offering costs paid by related party in exchange for issuance of Class B common stock |
$ | |||
Offering costs included in accrued expenses |
$ | |||
Offering costs included in note payable |
$ | |||
Deferred underwriting commissions in connection with the initial public offering |
$ | |||
Warrant liabilities |
$ | |||
Initial Value of Class A common stock subject to possible redemption |
$ | |||
Change in Value of Class A common stock subject to possible redemption |
$ | |||
As of December 31, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Balance Sheet |
||||||||||||
Total assets |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
|||||||
Liabilities and stockholders’ equity |
||||||||||||
Total current liabilities |
$ | $ | — | $ | ||||||||
Deferred underwriting commissions |
— | |||||||||||
Warrant liabilities |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
Class A common stock, $ |
( |
) | ||||||||||
Stockholders’ equity |
||||||||||||
Preferred stock - $ |
— | — | — | |||||||||
Class A common stock - $ |
||||||||||||
Class B common stock - $ |
— | |||||||||||
Additional paid-in-capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total liabilities and stockholders’ equity |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
For the Period from May 19, 2020 (inception) to December 31, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Statement of Operations |
||||||||||||
Loss from operations |
$ | ( |
) | $ | — | $ | ( |
) | ||||
Change in fair value of warrant liabilities |
— | ( |
) | ( |
) | |||||||
Offering costs associated with private placement warrants |
— | ( |
) | ( |
) | |||||||
Net gain from investments held in Trust Account |
— | |||||||||||
|
|
|
|
|
|
|||||||
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense |
— | |||||||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Weighted average Class A common stock outstanding, basic and diluted |
— | |||||||||||
Basic and diluted net income per Class A common stock |
$ | — | $ | — | $ | |||||||
Weighted average Class B common stock outstanding, basic and diluted |
— | |||||||||||
Basic and diluted net loss per Class B common stock |
$ | ( |
) | $ | — | $ | ( |
) |
For the Period from May 19, 2020 (inception) to December 31, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Statement of Cash Flows |
||||||||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||||||
Net cash provided by financing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Net change in cash |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
As of August 7, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Balance Sheet |
||||||||||||
Total assets |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
|||||||
Liabilities and stockholders’ equity |
||||||||||||
Total current liabilities |
$ | $ | — | $ | ||||||||
Deferred underwriting commissions |
— | |||||||||||
W’arrant liabilities |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
Class A common stock, $ |
( |
) | ||||||||||
Stockholders’ equity |
||||||||||||
Preferred stock- $ |
— | — | — | |||||||||
Class A common stock - $ |
||||||||||||
Class B common stock - $ |
— | |||||||||||
Additional paid-in-capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total liabilities and stockholders’ equity |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the last reported sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that |
number of shares of Class A common stock to be determined by reference to an agreed table based on the redemption date and the “fair market value” of the Company’s Class A common stock; |
• | if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $ |
• | if, and only if, the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above; and |
• | if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock (or a security other than the Class A common stock into which the Class A common stock has been converted or exchanged for in the event the Company is not the surviving company in the initial Business Combination) issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given. |
Fair Value Measured as of December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Investments held in Trust Account — U.S. Treasury Securities |
$ | $ | — | $ | — | $ | ||||||||||
Liabilities: |
||||||||||||||||
Warrant liabilities (restated) |
— | — | ||||||||||||||
Total fair value |
$ | $ | $ | — | $ | |||||||||||
Warrant liabilities at May 19, 2020 (incpetion) |
$ | |||
Issuance of Private Warrants |
||||
Change in fair value of warrant liabilibites |
||||
Warrant liabilities at September 30, 2020 |
$ | |||
Change in fair value of warrant liabilibites |
||||
Warrant liabilities at December 31, 2020 |
$ | |||
September 30, 2020 |
August 7, 2020 |
|||||||
Exercise price |
$ | $ | ||||||
Stock Price |
$ | $ | ||||||
Term (in years) |
||||||||
Volatility |
% | % | ||||||
Risk-free interest rate |
% | % | ||||||
Dividend yield |
For the Period from May 19, 2020 (inception) through December 31, 2020 |
||||
Current |
||||
Federal |
$ | |||
State |
||||
Deferred |
||||
Federal |
( |
) | ||
State |
||||
Valuation allowance |
||||
|
|
|||
Income tax provision |
$ | |||
|
|
|
|
|
December 31, 2020 |
||||
Deferred tax assets: |
||||
Start-up/Organization costs |
$ | |||
|
|
|||
Total deferred tax assets |
||||
Valuation allowance |
( |
) | ||
|
|
|||
Deferred tax asset, net of allowance |
$ | |||
|
|
For the Period from May 19, 2020 (inception) through December 31, 2020 |
||||
Statutory federal income tax rate |
% | |||
State taxes, net of federal tax benefit |
% | |||
Change in fair value of warrant liabilities |
( |
)% | ||
Change in valuation allowance |
( |
)% | ||
|
|
|||
Effective Tax Rate |
- |
% | ||
|
|
As of September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Balance Sheet |
||||||||||||
Total assets |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
|||||||
Liabilities and stockholders’ equity |
||||||||||||
Total current liabilities |
$ | $ | — | $ | ||||||||
Deferred underwriting commissions |
— | |||||||||||
Warrant liabilities |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
Class A common stock, $0.0001 par value; shares subject to possible redemption |
( |
) | ||||||||||
Stockholders’ equity |
||||||||||||
Preferred stock - $0.0001 par value |
— | — | — | |||||||||
Class A common stock - $0.0001 par value |
||||||||||||
Class B common stock - $0.0001 par value |
— | |||||||||||
Additional paid-in-capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total liabilities and stockholders’ equity |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
For the Period from May 19, 2020 (inception) to September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Statement of Operations |
||||||||||||
Loss from operations |
$ | ( |
) | $ | — | $ | ( |
) | ||||
Change in fair value of warrant liabilities |
— | ( |
) | ( |
) | |||||||
Offering costs associated with private placement warrants |
— | ( |
) | ( |
) | |||||||
Net gain from investments held in Trust Account |
— | |||||||||||
|
|
|
|
|
|
|||||||
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense |
— | |||||||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Weighted average Class A common stock outstanding, basic and diluted |
— | |||||||||||
Basic and diluted net income per Class A common stock |
$ | — | $ | — | $ | — | ||||||
Weighted average Class B common stock outstanding, basic and diluted |
— | |||||||||||
Basic and diluted net loss per Class B common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) |
For the Three Months Ended September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Statement of Operations |
||||||||||||
Loss from operations |
$ | ( |
) | $ | — | $ | ( |
) | ||||
Change in fair value of warrant liabilities |
— | ( |
) | ( |
) | |||||||
Offering costs associated with private placement warrants |
— | ( |
) | ( |
) | |||||||
Net gain from investments held in Trust Account |
— | |||||||||||
|
|
|
|
|
|
|||||||
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense |
— | |||||||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Weighted average Class A common stock outstanding, basic and diluted |
— | |||||||||||
Basic and diluted net income per Class A common stock |
$ | — | $ | — | $ | — | ||||||
Weighted average Class B common stock outstanding, basic and diluted |
— | |||||||||||
Basic and diluted net loss per Class B common stock |
$ | ( |
) | $ | ( |
) | $ | ( |
) |
For the Period from May 19, 2020 (inception) to September 30, 2020 |
||||||||||||
As Previously Reported |
Restatement Adjustment |
As Restated |
||||||||||
Unaudited Condensed Statement of Cash Flows |
||||||||||||
Net cash used in operating activities |
( |
) | — | ( |
) | |||||||
Net cash used in investing activities |
( |
) | — | ( |
) | |||||||
Net cash provided by financing activities |
— | |||||||||||
|
|
|
|
|
|
|||||||
Net change in cash |
$ | $ | — | $ | ||||||||
|
|
|
|
|
|
Page | ||||||
Section 7.8 |
Acquiror Public Filings | 69 | ||||
Section 7.9 |
PIPE Subscriptions | 69 | ||||
Section 7.10 |
Stockholder Litigation | 69 | ||||
Section 7.11 |
Second Merger | 69 | ||||
Article VIII | ||||||
JOINT COVENANTS | ||||||
Section 8.1 |
HSR Act; Other Filings | 70 | ||||
Section 8.2 |
Preparation of Proxy Statement/Registration Statement; Stockholders’ Meeting and Approvals | 71 | ||||
Section 8.3 |
Support of Transaction | 74 | ||||
Section 8.4 |
Tax Matters | 74 | ||||
Section 8.5 |
Section 16 Matters | 74 | ||||
Section 8.6 |
Cooperation; Consultation | 74 | ||||
Article IX | ||||||
CONDITIONS TO OBLIGATIONS | ||||||
Section 9.1 |
74 | |||||
Section 9.2 |
75 | |||||
Section 9.3 |
76 | |||||
Article X | ||||||
TERMINATION/EFFECTIVENESS | ||||||
Section 10.1 |
Termination | 76 | ||||
Section 10.2 |
Effect of Termination | 77 | ||||
Article XI | ||||||
MISCELLANEOUS | ||||||
Section 11.1 |
Trust Account Waiver | 77 | ||||
Section 11.2 |
Waiver | 78 | ||||
Section 11.3 |
Notices | 78 | ||||
Section 11.4 |
Assignment | 79 | ||||
Section 11.5 |
Rights of Third Parties | 79 | ||||
Section 11.6 |
Expenses | 79 | ||||
Section 11.7 |
Governing Law | 79 | ||||
Section 11.8 |
Headings; Counterparts; Electronic Delivery | 79 | ||||
Section 11.9 |
Company and Acquiror Disclosure Letters | 80 | ||||
Section 11.10 |
Entire Agreement | 80 | ||||
Section 11.11 |
Amendments | 80 | ||||
Section 11.12 |
Publicity | 80 | ||||
Section 11.13 |
Severability | 80 | ||||
Section 11.14 |
Jurisdiction; Waiver of Jury Trial | 81 | ||||
Section 11.15 |
Enforcement | 81 | ||||
Section 11.16 |
Non-Recourse | 81 | ||||
Section 11.17 |
Non-Survival of Representations, Warranties and Covenants | 82 | ||||
Section 11.18 |
Conflicts and Privilege | 82 |
Exhibit A | Form of Amended and Restated Certificate of Incorporation of Acquiror | |
Exhibit B | Form of Amended and Restated Bylaws of Acquiror | |
Exhibit C | Form of Registration Rights Agreement | |
Exhibit D | Terms of Incentive Equity Plan | |
Exhibit E | Terms of Employee Stock Purchase Plan | |
Exhibit F | Form of Stockholders Agreement |
BOWX ACQUISITION CORP. | ||
By: | /s/ Vivek Ranadivé | |
Name: | Vivek Ranadivé | |
Title: | Chairman and Co-Chief Executive | |
Officer | ||
BOWX MERGER SUBSIDIARY CORP. | ||
By: | /s/ Vivek Ranadivé | |
Name: | Vivek Ranadivé | |
Title: | President |
WEWORK INC. | ||
By: | /s/ Jared DeMatteis | |
Name: | Jared DeMatteis | |
Title: | Chief Legal Officer and Secretary |
BOWX ACQUISITION CORP. | ||
By: | ||
Name: | ||
Title: |
Page |
||||||
Article I - Corporate Offices |
4 | |||||
1.1 |
Registered Office | 4 | ||||
1.2 |
Other Offices | 4 | ||||
Article II - Meetings of Stockholders |
4 | |||||
2.1 |
Place of Meetings | 4 | ||||
2.2 |
Annual Meeting | 4 | ||||
2.3 |
Special Meeting | 4 | ||||
2.4 |
Notice of Business to be Brought before a Meeting | 4 | ||||
2.5 |
Notice of Nominations for Election to the Board of Directors | 7 | ||||
2.6 |
Additional Requirements for Valid Nomination of Candidates to Serve as Director and, if Elected, to be Seated as Directors | 9 | ||||
2.7 |
Notice of Stockholders’ Meetings | 11 | ||||
2.8 |
Quorum | 11 | ||||
2.9 |
Adjourned Meeting; Notice | 11 | ||||
2.10 |
Conduct of Business | 11 | ||||
2.11 |
Voting | 12 | ||||
2.12 |
Record Date for Stockholder Meetings and Other Purposes | 12 | ||||
2.13 |
Proxies | 13 | ||||
2.14 |
List of Stockholders Entitled to Vote | 13 | ||||
2.15 |
Inspectors of Election | 13 | ||||
2.16 |
Delivery to the Corporation | 14 | ||||
Article III - Directors |
14 | |||||
3.1 |
Powers | 14 | ||||
3.2 |
Number of Directors | 14 | ||||
3.3 |
Chairperson of the Board; Vice Chairperson of the Board; Executive Chairman | 14 | ||||
3.4 |
Election, Qualification and Term of Office of Directors | 15 | ||||
3.5 |
Resignation and Vacancies | 15 | ||||
3.6 |
Place of Meetings; Meetings by Telephone | 15 | ||||
3.7 |
Regular Meetings | 15 | ||||
3.8 |
Special Meetings; Notice | 16 | ||||
3.9 |
Quorum | 16 | ||||
3.10 |
Board Action without a Meeting | 16 | ||||
3.11 |
Fees and Compensation of Directors | 17 | ||||
Article IV - Committees |
17 | |||||
4.1 |
Committees of Directors | 17 | ||||
4.2 |
Meetings and Actions of Committees | 17 | ||||
4.3 |
Subcommittees | 17 | ||||
Article V - Officers |
18 | |||||
5.1 |
Officers | 18 | ||||
5.2 |
Appointment of Officers | 18 | ||||
5.3 |
Subordinate Officers | 18 | ||||
5.4 |
Removal and Resignation of Officers | 18 | ||||
5.5 |
Vacancies in Offices | 18 | ||||
5.6 |
Representation of Shares of Other Corporations | 18 | ||||
5.7 |
Authority and Duties of Officers | 19 | ||||
5.8 |
Compensation | 19 |
Page |
||||||
Article VI - Records |
19 | |||||
Article VII - General Matters |
19 | |||||
7.1 |
Execution of Corporate Contracts and Instruments | 19 | ||||
7.2 |
Stock Certificates | 19 | ||||
7.3 |
Special Designation of Certificates | 20 | ||||
7.4 |
Lost Certificates | 20 | ||||
7.5 |
Shares Without Certificates | 20 | ||||
7.6 |
Construction; Definitions | 20 | ||||
7.7 |
Dividends | 20 | ||||
7.8 |
Fiscal Year | 21 | ||||
7.9 |
Seal | 21 | ||||
7.10 |
Transfer of Stock | 21 | ||||
7.11 |
Stock Transfer Agreements | 21 | ||||
7.12 |
Registered Stockholders | 21 | ||||
7.13 |
Waiver of Notice | 21 | ||||
Article VIII - Notice |
22 | |||||
8.1 |
Delivery of Notice; Notice by Electronic Transmission | 22 | ||||
Article IX - Indemnification |
22 | |||||
9.1 |
Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation | 22 | ||||
9.2 |
Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation | 23 | ||||
9.3 |
Authorization of Indemnification | 23 | ||||
9.4 |
Good Faith Defined | 23 | ||||
9.5 |
Indemnification by a Court | 24 | ||||
9.6 |
Expenses Payable in Advance | 24 | ||||
9.7 |
Nonexclusivity of Indemnification and Advancement of Expenses | 24 | ||||
9.8 |
Insurance | 24 | ||||
9.9 |
Certain Definitions | 25 | ||||
9.10 |
Survival of Indemnification and Advancement of Expenses | 25 | ||||
9.11 |
Limitation on Indemnification | 25 | ||||
9.12 |
Indemnification of Employees and Agents | 25 | ||||
9.13 |
Primacy of Indemnification | 25 | ||||
Article X - Amendments |
26 | |||||
Article XI - Definitions |
26 |
(i) | if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; |
(ii) | if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and |
(iii) | if by any other form of electronic transmission, when directed to the stockholder. |
1 |
Note to Draft |
1. | Entry into Amended and Restated Note Purchase Agreement . |
2. | Conditions . |
3. | Miscellaneous . |
Very truly yours, STARBRIGHT WW LP, Acting by: STARBRIGHT LIMITED, its general partner | ||
By: | /s/ Stephen Lam | |
Name: | Stephen Lam | |
Title: | Director |
WEWORK COMPANIES LLC | ||
By: | /s/ Jared DeMatteis | |
Name: | Jared DeMatteis | |
Title: | Chief Legal Officer & Secretary |
Section 1. |
DEFINITIONS | 2 | ||||
1.1 |
2 | |||||
1.2 |
7 | |||||
1.3 |
7 | |||||
1.4 |
8 | |||||
Section 2. |
8 | |||||
2.1 |
8 | |||||
2.2 |
8 | |||||
2.3 |
8 | |||||
2.4 |
8 | |||||
2.5 |
9 | |||||
2.6 |
9 | |||||
2.7 |
9 | |||||
Section 3. |
CONDITIONS TO CLOSING | 10 | ||||
3.1 |
10 | |||||
3.2 |
10 | |||||
3.3 |
10 | |||||
3.4 |
10 | |||||
3.5 |
10 | |||||
3.6 |
10 | |||||
3.7 |
10 | |||||
3.8 |
11 | |||||
3.9 |
11 | |||||
3.10 |
11 | |||||
3.11 |
11 | |||||
3.12 |
11 | |||||
3.13 |
11 | |||||
3.14 |
11 | |||||
3.15 |
11 | |||||
3.16 |
11 | |||||
3.17 |
12 | |||||
3.18 |
12 | |||||
3.19 |
12 |
3.20 |
12 | |||||
3.21 |
12 | |||||
Section 4. |
REPRESENTATIONS AND WARRANTIES | 13 | ||||
4.1 |
13 | |||||
4.2 |
13 | |||||
4.3 |
13 | |||||
4.4 |
13 | |||||
4.5 |
13 | |||||
4.6 |
13 | |||||
4.7 |
14 | |||||
4.8 |
14 | |||||
4.9 |
14 | |||||
4.10 |
14 | |||||
4.11 |
14 | |||||
4.12 |
15 | |||||
4.13 |
15 | |||||
4.14 |
15 | |||||
4.15 |
15 | |||||
4.16 |
15 | |||||
4.17 |
16 | |||||
4.18 |
16 | |||||
4.19 |
16 | |||||
4.20 |
16 | |||||
4.21 |
16 | |||||
4.22 |
17 | |||||
4.23 |
17 | |||||
4.24 |
18 | |||||
4.25 |
18 | |||||
4.26 |
18 | |||||
4.27 |
18 | |||||
4.28 |
19 | |||||
4.29 |
19 | |||||
4.30 |
19 | |||||
4.31 |
19 | |||||
4.32 |
19 |
4.33 |
19 | |||||
4.34 |
19 | |||||
4.35 |
19 | |||||
Section 5. |
20 | |||||
5.1 |
20 | |||||
5.2 |
20 | |||||
5.3 |
20 | |||||
5.4 |
20 | |||||
5.5 |
20 | |||||
Section 6. |
21 | |||||
6.1 |
21 | |||||
6.2 |
22 | |||||
Section 7. |
23 | |||||
7.1 |
23 | |||||
7.2 |
24 | |||||
7.3 |
24 | |||||
7.4 |
25 | |||||
7.5 |
25 | |||||
Section 8. |
MISCELLANEOUS | 25 | ||||
8.1 |
25 | |||||
8.2 |
26 | |||||
8.3 |
26 | |||||
8.4 |
27 | |||||
8.5 |
27 | |||||
8.6 |
27 | |||||
8.7 |
27 | |||||
8.8 |
27 | |||||
8.9 |
27 | |||||
8.10 |
28 | |||||
8.11 |
28 | |||||
8.12 |
28 | |||||
8.13 |
28 | |||||
8.14 |
28 | |||||
8.15 |
28 | |||||
8.16 |
28 |
EXHIBITS: |
||||
Exhibit A |
– |
Form of Indenture | ||
Exhibit B |
– |
Form of Intercreditor Agreement | ||
Exhibit C |
– |
Form of Pledge and Security Agreement | ||
SCHEDULES: |
||||
Schedule 4.4 |
– |
Capitalization | ||
Schedule 4.13 |
– |
Legal Proceedings |
2 |
NTD: Maturity date shall be no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
3 |
NTD: Draw Period shall end no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
4 |
To be dated two months prior to the maturity date. |
WEWORK COMPANIES LLC | ||
By: | ||
Name: | ||
Title: |
WW CO-OBLIGOR INC. | ||
By: | ||
Name: | ||
Title: |
STARBRIGHT WW LP, | ||
Acting by: STARBRIGHT LIMITED, its general partner | ||
By: | ||
Name: | ||
Title: |
1 |
Trustee and Collateral Agent to be determined. |
2 |
NTD: Maturity date shall be no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
Page | ||||||
1 | ||||||
Section 1.01 | 1 | |||||
Section 1.02 | 30 | |||||
Section 1.03 | 31 | |||||
Section 1.04 | 32 | |||||
Section 1.05 | 33 | |||||
34 | ||||||
Section 2.01 | 34 | |||||
Section 2.02 | 34 | |||||
Section 2.03 | 35 | |||||
Section 2.04 | 35 | |||||
Section 2.05 | 35 | |||||
Section 2.06 | 36 | |||||
Section 2.07 | 37 | |||||
Section 2.08 | 37 | |||||
Section 2.09 | 37 | |||||
Section 2.10 | 37 | |||||
Section 2.11 | 38 | |||||
Section 2.12 | 38 | |||||
Section 2.13 | 38 | |||||
39 | ||||||
Section 3.01 | 39 | |||||
Section 3.02 | 39 | |||||
Section 3.03 | 39 | |||||
Section 3.04 | 40 | |||||
Section 3.05 | 40 | |||||
Section 3.06 | 41 | |||||
Section 3.07 | 41 | |||||
Section 3.08 | 41 | |||||
Section 3.09 | 41 | |||||
43 | ||||||
Section 4.01 | 43 | |||||
Section 4.02 | 43 | |||||
Section 4.03 | 43 | |||||
Section 4.04 | 43 | |||||
Section 4.05 | 44 | |||||
Section 4.06 | 44 | |||||
Section 4.07 | 46 | |||||
Section 4.08 | 47 | |||||
Section 4.09 | 51 | |||||
Section 4.10 | 56 | |||||
Section 4.11 | 56 | |||||
Section 4.12 | 57 | |||||
Section 4.13 | 58 | |||||
Section 4.14 | 59 | |||||
Section 4.15 | 60 | |||||
Section 4.16 | 62 |
Page | ||||||
Section 4.17 | 64 | |||||
Section 4.18 | 64 | |||||
Section 4.19 | 64 | |||||
Section 4.20 | 65 | |||||
66 | ||||||
Section 5.01 | 66 | |||||
Section 5.02 | 67 | |||||
68 | ||||||
Section 6.01 | 68 | |||||
Section 6.02 | 70 | |||||
Section 6.03 | 70 | |||||
Section 6.04 | 71 | |||||
Section 6.05 | 71 | |||||
Section 6.06 | 71 | |||||
Section 6.07 | 71 | |||||
Section 6.08 | 72 | |||||
Section 6.09 | 72 | |||||
Section 6.10 | 72 | |||||
Section 6.11 | 72 | |||||
Section 6.12 | 72 | |||||
Section 6.13 | 73 | |||||
Section 6.14 | 73 | |||||
73 | ||||||
Section 7.01 | 73 | |||||
Section 7.02 | 74 | |||||
Section 7.03 | 75 | |||||
Section 7.04 | 75 | |||||
Section 7.05 | 76 | |||||
Section 7.06 | 76 | |||||
Section 7.07 | 76 | |||||
Section 7.08 | 77 | |||||
Section 7.09 | 77 | |||||
Section 7.10 | 78 | |||||
Section 7.11 | 78 | |||||
78 | ||||||
Section 8.01 | 78 | |||||
Section 8.02 | 78 | |||||
Section 8.03 | 79 | |||||
Section 8.04 | 80 | |||||
Section 8.05 | 80 | |||||
Section 8.06 | 81 | |||||
Section 8.07 | 81 |
Page | ||||||
81 | ||||||
Section 9.01 | 81 | |||||
Section 9.02 | 82 | |||||
Section 9.03 | 84 | |||||
Section 9.04 | 84 | |||||
Section 9.05 | 84 | |||||
84 | ||||||
Section 10.01 | 84 | |||||
Section 10.02 | 86 | |||||
Section 10.03 | 86 | |||||
Section 10.04 | 86 | |||||
Section 10.05 | 86 | |||||
Section 10.06 | 87 | |||||
Section 10.07 | 87 | |||||
88 | ||||||
Section 11.01 | 88 | |||||
Section 11.02 | 88 | |||||
89 | ||||||
Section 12.01 | 89 | |||||
Section 12.02 | 89 | |||||
Section 12.03 | 89 | |||||
Section 12.04 | 95 | |||||
Section 12.05 | 96 | |||||
Section 12.06 | 97 | |||||
Section 12.07 | 97 | |||||
97 | ||||||
Section 13.01 | 97 | |||||
Section 13.02 | 99 | |||||
Section 13.03 | 99 | |||||
Section 13.04 | 99 | |||||
Section 13.05 | 99 | |||||
Section 13.06 | 99 | |||||
Section 13.07 | 100 | |||||
Section 13.08 | 100 | |||||
Section 13.09 | 100 | |||||
Section 13.10 | 100 | |||||
Section 13.11 | 100 | |||||
Section 13.12 | 100 | |||||
Section 13.13 | 101 | |||||
Section 13.14 | 101 | |||||
Section 13.15 | 101 | |||||
Section 13.16 | 101 | |||||
Section 13.17 | 101 |
Appendix A Provisions Relating to the Notes |
||||||
Exhibit A Form of Note |
||||||
Exhibit B Form of Institutional Accredited Investor Transferee Letter of Representation |
||||||
Exhibit C Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors |
3 |
NTD: Maturity date shall be no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
4 |
This proviso only acceptable where a draw has occurred prior to August 1, 2021. |
5 |
First date on which Notes will be issued pursuant to this Indenture. |
4(a)(2) Global Note |
2.1(b) of Appendix A | |||
4(a)(2) Notes |
2.1(a) of Appendix A | |||
Action |
12.03(aa) | |||
Affiliate Transaction |
4.14(a) | |||
Agent Members |
2.1(c) of Appendix A | |||
Applicable Procedures |
1.1(a) of Appendix A | |||
Asset Disposition Offer |
4.16(c) | |||
Asset Disposition Offer Amount |
3.09(b) | |||
Asset Disposition Offer Period |
3.09(b) | |||
Asset Disposition Purchase Date |
3.09(b) | |||
Authentication Order |
2.02(c) | |||
Automatic Exchange |
2.2(i) of Appendix A | |||
Automatic Exchange Date |
2.2(i) of Appendix A | |||
Automatic Exchange Notice |
2.2(i) of Appendix A | |||
Automatic Exchange Notice Date |
2.2(i) of Appendix A | |||
balance sheet date |
4.06(e) | |||
Change of Control Offer |
4.15(a) | |||
Change of Control Payment |
4.15(a) | |||
Change of Control Payment Date |
4.15(b)(2) | |||
Clearstream |
1.1(a) of Appendix A | |||
Collateral Agent |
12.03(i) | |||
Covenant Defeasance |
8.03(a) | |||
Definitive Notes Legend |
2.2(e)(i) of Appendix A | |||
Designation |
4.13(a) | |||
Distribution Compliance Period |
1.1(a) of Appendix A | |||
ERISA Legend |
2.2(e)(i) of Appendix A | |||
Euroclear |
1.1(a) of Appendix A | |||
Event of Default |
6.01(a) | |||
Excess Proceeds |
4.16(c) | |||
Expiration Date |
1.04(j) | |||
Global Note |
2.1(b) of Appendix A | |||
Global Notes |
2.1(b) of Appendix A | |||
Global Notes Legend |
2.2(e)(i) of Appendix A | |||
Guaranteed Obligations |
10.01(a)(2) | |||
IAI |
1.1(a) of Appendix A | |||
IAI Global Note |
2.1(b) of Appendix A | |||
Legal Defeasance |
8.02(a) | |||
Note Register |
2.03(a) | |||
OID Notes Legend |
2.2(e)(i) of Appendix A | |||
Paying Agent |
2.03(a) | |||
PDF |
13.14 | |||
QIB |
1.1(a) of Appendix A | |||
Registrar |
2.03(a) | |||
Regulation S |
1.1(a) of Appendix A |
Regulation S Global Note |
2.1(b) of Appendix A | |||
Regulation S Notes |
2.1(a) of Appendix A | |||
Reinstatement Date |
4.19(a)(2) | |||
Restricted Notes Legend |
2.2(e)(i) of Appendix A | |||
Restricted Payment |
4.08(a)(4) | |||
Revocation |
4.13(a)(5) | |||
Rule 144 |
1.1(a) of Appendix A | |||
Rule 144A |
1.1(a) of Appendix A | |||
Rule 144A Global Note |
2.1(b) of Appendix A | |||
Rule 144A Notes |
2.1(a) of Appendix A | |||
Security Document Order |
12.03(w) | |||
Specified Courts |
13.07 | |||
Successor Company |
5.01(a)(1) | |||
Successor Guarantor |
5.01(c)(1)(a) | |||
Suspended Covenants |
4.19(a)(2) | |||
Suspension Date |
4.19(a) | |||
Suspension Period |
4.19(a)(2) | |||
Trustee |
7.07(f) | |||
U.S. person |
1.1(a) of Appendix A | |||
Unrestricted Global Note |
1.1(a) of Appendix A | |||
Unrestricted Subsidiary |
4.13(a) |
6 |
NTD: Contact information for trustee/collateral agent TBD. |
WEWORK COMPANIES LLC | ||
By: |
||
Name: | ||
Title: | ||
WW CO-OBLIGOR INC. | ||
By: |
||
Name: | ||
Title: | ||
[GUARANTORS] | ||
By: |
||
Name: | ||
Title: |
[●], as Trustee | ||
By: |
||
Name: | ||
Title: | ||
[●], as Collateral Agent | ||
By: |
||
Name: | ||
Title: |
Term: |
Defined in Section: |
|||
“ 4(a)(2) Global Notes |
2.1 | (b) | ||
“ 4(a)(2) Notes |
2.1 | (a) | ||
“ Agent Members |
2.1 | (c) | ||
“ Automatic Exchange |
2.2 | (i) | ||
“ Automatic Exchange Date |
2.2 | (i) | ||
“ Automatic Exchange Notice |
2.2 | (i) |
Term: |
Defined in Section: |
|||
“ Automatic Exchange Notice Date |
2.2 | (i) | ||
“ Definitive Notes Legend |
2.2 | (e) | ||
“ ERISA Legend |
2.2 | (e) | ||
“ Global Note |
2.1 | (b) | ||
“ Global Notes Legend |
2.2 | (e) | ||
“ IAI Global Note |
2.1 | (b) | ||
“ OID Notes Legend |
2.2 | (e) | ||
“ Regulation S Global Note |
2.1 | (b) | ||
“ Regulation S Notes |
2.1 | (a) | ||
“ Restricted Notes Legend |
2.2 | (e) | ||
“ Rule 144A Global Note |
2.1 | (b) | ||
“ Rule 144A Notes |
2.1 | (a) |
No. [RA-__] [RS-__] [RIAI-__] [U-__] |
$ | [______________ | ] |
7 |
NTD: Maturity date shall be no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
8 |
NTD: Maturity date shall be no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
WEWORK COMPANIES LLC | ||
By: | ||
Name: | ||
Title: | ||
WW CO-OBLIGOR INC. | ||
By: | ||
Name: | ||
Title: |
[●], as Trustee | ||
By: | ||
Authorized Signatory |
(I) or (we) assign and transfer this Note to: | ||
(Insert assignee’s legal name) | ||
(Insert assignee’s soc. sec. or tax I.D. no.) | ||
(Print or type assignee’s name, address and zip code) |
and irrevocably appoint | ||
to transfer this Note on the books of the Company. The agent may substitute another to act for him. |
Your Signature: | ||
(Sign exactly as your name appears on the face of this Note) |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
☐ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
☐ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
(1) ☐ | to the Company or subsidiary thereof; or |
(2) ☐ | to the Registrar for registration in the name of the Holder, without transfer; or |
(3) ☐ | pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Securities Act |
(4) ☐ | to a Person that the undersigned reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (“ Rule 144A |
(5) ☐ | pursuant to offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act (and if the transfer is being made prior to the expiration of the Distribution Compliance Period, the Notes shall be held immediately thereafter through Euroclear or Clearstream); or |
(6) ☐ | to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements; or |
(7) ☐ | pursuant to Rule 144 under the Securities Act; or |
(8) ☐ | pursuant to another available exemption from registration under the Securities Act. |
Your Signature | ||||||||
Date: | ||||||||
Signature of Signature Guarantor |
Dated: | ||||||||
NOTICE: | To be executed by an executive officer | |||||||
Name: | ||||||||
Title: |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
☐ | the undersigned is not a dealer (as defined in the Securities Act) and is a non-U.S. person (within the meaning of Regulation S under the Securities Act); or |
☐ | the undersigned is not a dealer (as defined in the Securities Act) and is a U.S. person (within the meaning of Regulation S under the Securities Act) who purchased interests in the Notes pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act; or |
☐ | the undersigned is a dealer (as defined in the Securities Act) and the interest of the undersigned in this Note does not constitute the whole or a part of an unsold allotment to or subscription by such dealer for the Notes. |
Dated: | ||||||||
Your Signature |
9 |
Include only for Regulation S Global Notes. |
$_______________ | (integral multiples of $1,000, provided |
Your Signature: | ||
(Sign exactly as your name appears on the face of this Note) |
Tax Identification No.: |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal Amount of this Global Note following such decrease or increase |
Signature of authorized signatory of Trustee, Depositary or Custodian |
* | This schedule should be included only if the Note is issued in global form. |
TRANSFEREE: | | |
by: |
[NAME OF GUARANTEEING SUBSIDIARY] | ||
By: | ||
Name: | ||
Title: |
[●], as Trustee | ||
By: | ||
Name: | ||
Title: |
Page |
||||||
1 | ||||||
1 | ||||||
5 | ||||||
6 | ||||||
6 | ||||||
6 | ||||||
7 | ||||||
8 | ||||||
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9 | ||||||
10 | ||||||
11 | ||||||
11 | ||||||
11 | ||||||
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12 | ||||||
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17 |
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17 | ||||||
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18 | ||||||
18 | ||||||
18 | ||||||
18 | ||||||
19 |
1 |
NTD: Maturity date shall be no later than February 12, 2023 (or, if earlier, 18 months from the date of the SPAC closing). |
GOLDMAN SACHS BANK INTERNATIONAL, | ||
as Authorized Representative for the Credit | ||
Agreement Secured Parties | ||
By: |
||
Name: | ||
Title: |
[ ] as Authorized Representative for the Senior Secured | ||
Notes Creditors | ||
By: |
||
Name: |
||
Title: |
WEWORK COMPANIES LLC as a Grantor | ||
By: |
||
Name: | ||
Title: | ||
[ ] 2 as a Grantor | ||
By: |
||
Name: | ||
Title: |
2 |
To be updated with signature blocks for each Grantor at the time of signing. |
1. | [•] |
3 |
To be updated with list of applicable Grantors at the time of signing. |
[NEW GRANTOR] | ||
By: | ||
Name: | ||
Title: |
Page | ||||||
DEFINITIONS |
||||||
Section 1.1 |
1 | |||||
Section 1.2 |
1 | |||||
Section 1.3 |
2 | |||||
Section 1.4 |
2 | |||||
GRANT OF SECURITY INTEREST |
||||||
REPRESENTATIONS AND WARRANTIES |
||||||
Section 3.1 |
8 | |||||
Section 3.2 |
9 | |||||
Section 3.3 |
9 | |||||
Section 3.4 |
9 | |||||
COVENANTS |
||||||
Section 4.1 |
9 | |||||
Section 4.2 |
10 | |||||
Section 4.3 |
10 | |||||
Section 4.4 |
11 | |||||
Section 4.5 |
12 | |||||
Section 4.6 |
13 | |||||
REMEDIES |
||||||
Section 5.1 |
13 | |||||
Section 5.2 |
15 | |||||
Section 5.3 |
15 | |||||
Section 5.4 |
15 | |||||
Section 5.5 |
16 | |||||
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY |
||||||
Section 6.1 |
16 | |||||
Section 6.2 |
16 | |||||
GENERAL PROVISIONS |
||||||
Section 7.1 |
17 | |||||
Section 7.2 |
17 | |||||
Section 7.3 |
18 | |||||
Section 7.4 |
18 | |||||
Section 7.5 |
18 |
Page | ||||||
Section 7.6 |
19 | |||||
Section 7.7 |
19 | |||||
Section 7.8 |
19 | |||||
Section 7.9 |
19 | |||||
Section 7.10 |
19 | |||||
Section 7.11 |
19 | |||||
Section 7.12 |
20 | |||||
Section 7.13 |
20 | |||||
Section 7.14 |
20 | |||||
Section 7.15 |
21 | |||||
Section 7.16 |
21 | |||||
Section 7.17 |
21 | |||||
Section 7.18 |
21 | |||||
NOTICES |
||||||
Section 8.1 |
22 | |||||
Section 8.2 |
22 | |||||
SCHEDULE: |
||||||
Schedule I |
Pledged Collateral |
Page | ||||
EXHIBITS: |
||||
Exhibit A | Form of Joinder | |||
Exhibit B | Form of Intellectual Property Security Agreement |
GRANTORS: | ||
[______________] | ||
By: | ||
Name: | ||
Title: |
COLLATERAL AGENT: | ||
[__] as Collateral Agent | ||
By: | ||
Name: | ||
Title: |
Issuer |
Record Owner/Grantor |
Certificate No. (if applicable) |
Percentage of Issued and Outstanding Equity Interests Pledged | |||
[NEW GRANTOR] | ||
By: | ||
Name: | ||
Title: |
Acknowledged and accepted : | ||
[__], | ||
as Collateral Agent | ||
By: | ||
Name: | ||
Title: |
Issuer |
Record Owner/Grantor |
Certificate No. (if applicable) |
Number of Shares/Interest Owned |
Percentage of Ownership Pledged | ||||
Grantor |
Issuer |
Initial Principal Amount |
Date of Issuance |
Maturity Date | ||||
1 |
Applicable to Patent Security Agreement |
2 |
Applicable to Trademark Security Agreement |
3 |
Applicable to Copyright Security Agreement |
4 |
Applicable to Trademark Security Agreement |
[GRANTOR] | ||
By: |
||
Name: | ||
Title: |
[__], | ||
as Collateral Agent | ||
By: |
||
Name: | ||
Title: |
Percentage of Outstanding Class A and Class C Common Stock |
Number of SB Investor Directors |
|||
25% or greater |
3 | |||
Less than 25% but greater than or equal to 15% |
2 | |||
Less than 15% but greater than or equal to 1% |
1 | |||
Less than 1% |
0 |
THE COMPANY | ||
WeWork Inc. | ||
By: | | |
Name: [●] | ||
Title: [●] | ||
BOWX INVESTOR | ||
BowX Sponsor, LLC | ||
By: | | |
Name: [●] | ||
Title: [●] | ||
SB INVESTOR | ||
SB WW HOLDINGS (CAYMAN) LIMITED | ||
By: | | |
Name: [●] | ||
Title: [●] |
VISION FUND INVESTOR | ||
SVF ENDURANCE (CAYMAN) LIMITED | ||
By: | | |
Name: [●] | ||
Title: [●] | ||
BENCHMARK INVESTOR | ||
[BENCHMARK ENTITY] | ||
By: | | |
Name: [●] | ||
Title: [●] |
Email: | vivek@bowcapital.com |
COMPANY STOCKHOLDERS: | ||
By: | [●] | |
Name: [●] | ||
Title: [●] |
ACQUIROR: | ||
BOWX ACQUISITION CORP. | ||
By: | | |
Name: Vivek Ranadivé | ||
Title: Chairman and Co-Chief Executive Officer |
COMPANY: | ||
WEWORK INC | ||
By: | | |
Name: Jared DeMatteis | ||
Title: Chief Legal Officer and Secretary |
| ||
By: | | |
Name: | ||
Title: | ||
Dated: | |
1. | Amendment and extension to the $1.75 billion letter of credit facility under which SoftBank Group Corp. or an affiliate (“ SBG ”) provides credit support and entry into a renewed letter of credit facility |
2. | Penny warrants for the equivalent of 14,431,991 shares of common stock to be issued by the Acquiror to SBG in the event the Company determines to renew the letter of credit facility with SBG (exercise price and number of shares of common stock to be adjusted based on the exchange ratio in the Merger Agreement) |
3. | Amendment to $1.1 billion senior secured debt facility with SBG reducing the maximum amount to $550 million, changing the draw period to 18 months commencing on the earlier of August 12, 2021 and the closing of the Merger, and changing the interest rate to 7.5% (facility to be terminated once the Company obtains a $550 million or more revolving debt facility with a third party lender on similar or better terms) |
4. | Penny warrants for the equivalent of 47,366,404 shares of common stock to be issued by the Acquiror to SBG upon the closing of the Merger (exercise price and number of shares of common stock to be adjusted based on the exchange ratio in the Merger Agreement) |
5. | Assumption of “FIRPTA Status” letter, dated June 3, 2019, by the Acquiror, or the entry into of a new “FIRPTA Status” letter by the Acquiror, in each case, effective as of the closing of the Merger |
6. | Assumption by the Acquiror of the obligations set forth in Section 9.6 of the Share Purchase Agreement, dated March 31, 2020, by and among WeWork APAC Partner Holdings B.V., WeWork Companies (International) B.V., WeWork Asia Holding Company B.V., WeWork Inc., WeWork Companies Partner LLC, WeWork Companies LLC, SVF WW PacificCo (Singapore) Pte. Ltd. and SVF Endurance (Cayman) Limited, or the entry into of a new “FIRPTA Status” letter by the Acquiror, in each case, effective as of the closing of the Merger |
7. | Any other transaction with SBG or with SoftBank Vision Fund (AIV M1) L.P. or any of their respective affiliates that is (a) necessary or advisable in order to implement or facilitate the Transactions or is otherwise contemplated by or described in the Merger Agreement and (b) within the scope of a recommendation made by the Special Committee of the Board of Directors of the Company, to the Board of Directors of the Company, which recommendation is approved by the Board of Directors of the Company |
(a) | all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Class A Common Stock is then listed; |
(b) | fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities); |
(c) | printing, messenger, telephone, delivery and road show or other marketing expenses; |
(d) | reasonable fees and disbursements of counsel for the Company; |
(e) | reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and |
(f) | in an Underwritten Offering, reasonable fees and expenses of one (1) legal counsel (not to exceed $100,000 in the aggregate for each Registration without prior approval of the Company) selected by the majority-in-interest |
COMPANY: | ||
WEWORK INC. | ||
By: | | |
Name: | ||
Title: |
BOWX INVESTORS : | ||
BOWX SPONSOR, LLC | ||
By: | | |
Name: | ||
Title: |
|
|
|
|
|
|
|
|
|
|
|
BLACKROCK CREDIT ALPHA MASTER FUND L.P. | ||
By: BlackRock Financial Management, Inc., in its capacity as investment advisor | ||
By: | | |
Name: | ||
Title: | ||
HC NCBR FUND | ||
By: BlackRock Financial Management, Inc., in its capacity as investment advisor | ||
By: | | |
Name: | ||
Title: |
ANCHOR INVESTORS | ||
SOF-X WW HOLDINGS, L.P. | ||
By: SOF-X WW Holdings GP, L.L.C. | ||
By: | | |
Name: | ||
Title: | ||
SOF-XI WW HOLDINGS, L.P. | ||
By: SOF-XI WW Holdings GP, L.L.C. | ||
By: | | |
Name: | ||
Title: | ||
[INSIGHT ENTITY] | ||
By: | ||
By: | | |
Name: | ||
Title: |
1 |
For the Key Anchor Investors |
2 |
For the Key Anchor Investors |
3 |
For the Key Anchor Investors |
4 |
For the Key Anchor Investors |
( i ) |
if to Subscriber, to such address or addresses set forth on the signature page hereto; |
(ii) |
if to the Issuer, to: |
(iii) |
if to the Placement Agents, to: |
BOWX ACQUISITION CORP. | ||
By: | | |
Name: | ||
Title: |
SUBSCRIBER: Signature of Subscriber: | ||
By: | | |
Name: | ||
Title: | ||
Date: | ||
Name of Subscriber: (Please print. Please indicate name and capacity of person signing above) | ||
Name in which securities are to be registered (if different): | ||
Email Address: __________________________ | ||
Subscriber’s EIN: _________________________ | ||
Address: | ||
| ||
Attn:_________________________________ | ||
Telephone No.: __________________________ | ||
Facsimile No.: __________________________ | ||
Aggregate Number of Acquired Shares subscribed for: __________________ | ||
Aggregate Purchase Price: $_________________ |
[WEWORK COMPANIES LLC (solely for Section 10(q)) | ||
By: | | |
Name: | ||
Title:] |
A. | QUALIFIED INSTITUTIONAL BUYER STATUS |
☐ | Subscriber is a “ qualified institutional buyer QIB |
☐ | Subscriber is subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, and each owner of such accounts is a QIB. |
B. | ACCREDITED INVESTOR STATUS |
C. | AFFILIATE STATUS |
☐ | is: |
☐ | is not: |
Date of Transfer or Reduction |
Transferee |
Number of Transferee Acquired Shares Transferred or Reduced |
Subscriber Revised Subscription Amount |
BOWX ACQUISITION CORP. | ||
By: | | |
Name: | ||
Title: | ||
Signature of Subscriber: [SUBSCRIBER] | ||
By: | | |
Name: | ||
Title: |
SPONSORS: | ||
B OW X SPONSOR , LLC | ||
By: | | |
Name: Vivek Ranadivé | ||
Title: Chairman and Co-Chief Executive | ||
Officer | ||
| ||
Name: Murray Rode | ||
| ||
Name: Eric C.W. Dunn | ||
| ||
Name: Lori Wright | ||
| ||
Name: Vijay Advani |
ACQUIROR: | ||
B OW X ACQUISITION CORP . | ||
By: | | |
Name: Vivek Ranadivé | ||
Title: Chairman and Co-Chief Executive | ||
Officer |
COMPANY: | ||||
W E WORK , INC . | ||||
By: | | |||
Name: | Jared DeMatteis | |||
Title: | Chief Legal Officer and Secretary |
Sponsor |
Acquiror Sponsor Shares |
Acquiror Warrants |
||||||
BowX Sponsor, LLC c/o BowX Acquisition Corp. 2400 Sand Hill Rd., Suite 200, Menlo Park, CA 94025 |
7,920,934 | 4,938,581 | ||||||
Murray Rode c/o BowX Acquisition Corp. 2400 Sand Hill Rd., Suite 200, Menlo Park, CA 94025 |
1,425,600 | (1) |
38,673 | (1) | ||||
Eric C.W. Dunn c/o BowX Acquisition Corp. 2400 Sand Hill Rd., Suite 200, Menlo Park, CA 94025 |
36,000 | — | ||||||
Lori Wright c/o BowX Acquisition Corp. 2400 Sand Hill Rd., Suite 200, Menlo Park, CA 94025 |
36,000 | — | ||||||
Vijay Advani c/o BowX Acquisition Corp. 2400 Sand Hill Rd., Suite 200, Menlo Park, CA 94025 |
36,000 | — |
(1) | Messrs. Ranadive and Rode may be deemed to beneficially own securities held by BowX Sponsor, LLC by virtue of their shared control over BowX Sponsor, LLC. Each of Messrs. Ranadive and Rode disclaims beneficial ownership of securities held by BowX Sponsor, LLC |
1 |
Only included for SB WW Holdings (Cayman) Limited. |
2 |
Only included for SB WW Holdings (Cayman) Limited. |
3 |
Only included for SVF Endurance (Cayman) Limited. |
4 |
Only included for SB WW Holdings (Cayman) Limited. |
5 |
Only included for SB WW Holdings (Cayman) Limited. |
6 |
Only included for SB WW Holdings (Cayman) Limited. |
7 |
Only included for SB WW Holdings (Cayman) Limited. |
8 |
Only included for SB WW Holdings (Cayman) Limited. |
If to Acquiror : | ||
BowX Acquisition Corp. | ||
2400 Sand Hill Road, Suite 200 | ||
Menlo Park, California 94025 | ||
Attention: | Vivek Ranadive Murray Rode | |
Email: | vivek@bowcapital.com murray@bowcapital.com | |
with a copy to (which will not constitute notice): | ||
Cooley LLP 101 California Street, 5 th Floor | ||
San Francisco, California 94111 |
Attention: | Jamie Leigh Garth Osterman Kevin Cooper | |
Email: | jleigh@cooley.com gosterman@cooley.com kcooper@cooley.com | |
If to the Company : | ||
WeWork Inc. | ||
45 W. 18th Street, Floor 6 | ||
New York, NY 10011 | ||
Attention: | Chief Legal Officer | |
Email: | legal@wework.com | |
with a copy to (which shall not constitute notice): | ||
Skadden, Arps, Slate, Meagher & Flom LLP | ||
One Manhattan West | ||
New York, New York 10001 | ||
Attention: | Howard L. Ellin C. Michael Chitwood Graham Robinson Laura P. Knoll | |
Email: | Howard.Ellin@skadden.com Michael.Chitwood@skadden.com Graham.Robinson@skadden.com Laura.Knoll@skadden.com | |
If to the Company Stockholder : | ||
[SB WW Holdings (Cayman) Limited.][SVF Endurance (Cayman) Limited] | ||
[with a copy to (which will not constitute notice): | ||
Morrison & Foerster LLP | ||
2100 L Street, NW, Suite 900 | ||
Washington, DC 20037 | ||
Attention: | David Slotkin Omar Pringle | |
Email: | DSlotkin@mofo.com OPringle@mofo.com] 9 |
9 |
Only included for SB WW Holdings (Cayman) Limited. |
COMPANY STOCKHOLDER: | ||
[SB WW HOLDINGS (CAYMAN) LIMITED.] | ||
[SVF ENDURANCE (CAYMAN) LIMITED] | ||
By: | | |
Name: | ||
Title: |
ACQUIROR: | ||
BOWX ACQUISITION CORP. | ||
By: | | |
Name: Vivek Ranadivé | ||
Title: Chairman and Co-Chief Executive Officer |
COMPANY: | ||
WEWORK INC. | ||
By: | | |
Name: Jared DeMatteis | ||
Title: Chief Legal Officer and Secretary |
| ||
By: | | |
Name: | ||
Title: | ||
Dated: | |
1 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé and Murray Rode. |
2 |
To be included for Adam Neumann, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
3 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé and Murray Rode. |
4 |
To be included for Adam Neumann, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
5 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé and Murray Rode. |
6 |
To be included for Adam Neumann, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
7 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé and Murray Rode. |
8 |
To be included for Adam Neumann, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
9 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé and Murray Rode. |
10 |
To be included for Adam Neumann, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
11 |
To be included for Adam Neumann. |
12 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé and Murray Rode. |
13 |
To be included for Adam Neumann, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
14 |
To be included for Adam Neumann. |
15 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
16 |
To be included for Adam Neumann. |
17 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
18 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
19 |
To be included for Adam Neumann. |
20 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
21 |
To be included for Adam Neumann. |
22 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
23 |
To be included for Adam Neumann. |
(i) | in the case of an entity, Transfers to a [or distributions to any direct or indirect] 34 stockholder, partner, member or affiliate of such entity [(or to any executive officer or director of such entity or of such entity’s affiliates)]35 [or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control or management with such entity or affiliates of such entity (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by or under common management as such partnership)]36 ; |
(ii) | in the case of an individual, Transfers by gift to members of the individual’s immediate family (as defined below) or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization; |
(iii) | in the case of an individual, Transfers by virtue of laws of descent and distribution upon death of the individual; |
(iv) | in the case of an individual, Transfers pursuant to a qualified domestic relations order or divorce settlement; |
(v) | in the case of an entity, Transfers by virtue of the laws of the state [or jurisdiction] 37 of the entity’s organization and the entity’s organizational documents upon dissolution of the entity; |
(vi) | transactions relating to Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock acquired in open market transactions after the Closing, |
24 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
25 |
To be excluded for SB WW Holdings (Cayman) Limited. |
26 |
To be excluded for SVF Endurance (Cayman) Limited |
27 |
To be excluded for BowX Sponsor, LLC. |
28 |
To be excluded for Benchmark Capital Partners VII (AIV) L.P. |
29 |
To be excluded for Sandeep Mathrani. |
30 |
To be excluded for Benjamin Dunham. |
31 |
To be excluded for Vivek Ranadivé. |
32 |
To be excluded for Murray Rode. |
33 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
34 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
35 |
To be included for SB WW Holdings (Cayman) Limited and SVF Endurance (Cayman) Limited. |
36 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
37 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
provided Lock-Up Period; |
(vii) | the exercise of any options or warrants to purchase Common Stock (which exercises may be effected on a cashless basis to the extent the instruments representing such options or warrants permit exercises on a cashless basis)[, the conversion of Profits Units (as defined in the Second Amended and Restated Agreement of Exempted Limited Partnership of The We Company Management holdings, L.P., dated as of October 30, 2019 (the “ Partnership Agreement 38 ; |
(viii) | Transfers (including forfeitures) [(x)] 39 to [BowX (or any of its subsidiaries, as applicable)]40 [the Company]41 to satisfy tax withholding obligations pursuant to equity incentive plans or arrangements of [BowX (or any of its subsidiaries, as applicable)]42 [the Company]43 [or (y) pursuant to an escrow arrangement with the Company with respect to tax withholding obligations pursuant to the Code]44 ; |
(ix) | Transfers to [BowX (or any of its subsidiaries, as applicable)] 45 [the Company]46 pursuant to any contractual arrangement in effect at the Closing that provides for the repurchase by [BowX (or any of its subsidiaries, as applicable)]47 [the Company]48 or forfeiture of the Securityholder’s Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock in connection with the termination of the Securityholder’s service to [BowX (or any of its subsidiaries, as applicable)]49 [the Company]50 ; |
(x) | the establishment of a trading plan that meets the requirements of Rule 10b5-1(c) under the Exchange Act (a “Trading Plan provided however Lock-Up Period, and (b)(x) no public announcement or filing shall be made voluntarily regarding such plan during the Lock-Up Period or (y) if any public announcement is required of or voluntarily made by or on |
38 |
To be included for Adam Neumann. |
39 |
To be included for SB WW Holdings (Cayman) Limited and SVF Endurance (Cayman) Limited. |
40 |
To be included for Adam Neumann. |
41 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
42 |
To be included for Adam Neumann. |
43 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
44 |
To be included for SB WW Holdings (Cayman) Limited and SVF Endurance (Cayman) Limited. |
45 |
To be included for Adam Neumann. |
46 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
47 |
To be included for Adam Neumann. |
48 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
49 |
To be included for Adam Neumann. |
50 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
behalf of the Securityholder or [BowX (or any of its subsidiaries, as applicable)] 51 [the Company]52 regarding such plan, then such announcement or filing shall include a statement to the effect that no Transfer may be made under such plan during the Lock-Up Period; |
(xi) | transactions in the event of completion of a liquidation, merger, [consolidation,] 53 stock exchange, [reorganization,]54 tender offer or other similar transaction which results in all of [BowX’s]55 [the Company’s]56 securityholders having the right to exchange their shares of Common Stock for cash, securities or other property; |
(xii) | transactions to satisfy any U.S. federal, state, or local income tax obligations of the Securityholder (or its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of 1986, as amended (the “ Code Regulations tax-free treatment pursuant to any successor or other provision of the Code or Regulations taking into account such changes), in each case, solely to the extent necessary to cover any tax liability as a result of the transaction; and |
(xiii) | [Transfers (including, for the avoidance of doubt, release of Collateral (as defined in the A&R Pledge Agreement)) permitted pursuant to the (a) Amended and Restated Stock Pledge Agreement, dated as of February 25, 2021 (the “ A&R Pledge Agreement Starbright Non-Recourse Promissory Note, dated as of February 25, 2021, by and between Neumann and Starbright.]57 [in connection with the creation of any charge, lien, mortgage, pledge or other security interest or posting as collateral of any of the Securityholder’s Securities in connection with a bona fide loan transaction; provided that prior to entering into the collateral agreement or similar agreement in connection with the loan transaction, each pledgee shall execute and deliver to the Company a lock-up agreement in substantially the form of this Letter Agreement to take effect in the event that the pledgee takes possession of the Securityholder’s Securities as a result of a foreclosure, margin call or similar disposition.]58 |
51 |
To be included for Adam Neumann. |
52 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
53 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
54 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
55 |
To be included for Adam Neumann. |
56 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
57 |
To be included for Adam Neumann. |
58 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
59 |
To be included for BowX Sponsor, LLC, Vivek Ranadivé, Murray Rode, Benchmark Capital Partners VII (AIV) L.P., SB WW Holdings (Cayman) Limited, SVF Endurance (Cayman) Limited, Sandeep Mathrani and Benjamin Dunham. |
Very truly yours, |
(Name of Securityholder – Please Print) |
(Signature) |
(Name of Signatory if Securityholder is an entity – Please Print) |
(Title of Signatory if Securityholder is an entity – Please Print) |
Address: | ||
(a) | A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful. |
(b) | A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. |
(c) | To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. |
(d) | Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections |
(a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. |
(e) | Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. |
(f) | The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred. |
(g) | A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. |
(h) | For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. |
(i) | For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section. |
(j) | The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. |
(k) | The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).” |
(a) |
|
Exhibit Number |
Description | |
99.2** | Consent of Sandeep Mathrani to be named as director. | |
99.3** | Consent of Marcelo Claure to be named as director. | |
99.4** | Consent of Michel Combes to be named as director. | |
99.5** | Consent of Bruce Dunlevie to be named as director. | |
99.6** | Consent of Deven Parekh to be named as director. | |
99.7** | Consent of Vivek Ranadivé to be named as director. | |
99.8** | Consent of Kirthiga Reddy to be named as director. | |
99.9** | Consent of Jeffrey Sine to be named as director. | |
99.10** | Consent of Véronique Laury to be named as director. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104. | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | Filed herewith. |
** | Previously filed. |
¥ | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
1. | The undersigned Registrant hereby undertakes: |
2. | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
3. | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145 (c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
4. | The registrant undertakes that every prospectus: (1) that is filed pursuant to the immediately preceding paragraph, or (2) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
5. | The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. |
6. | The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. |
BOWX ACQUISITION CORP. | ||
By: | /s/ Vivek Ranadivé | |
Name: Vivek Ranadivé | ||
Title: Chairman and Co-Chief Executive | ||
Officer |
Signature |
Title |
Date | ||
/s/ Vivek Ranadivé | Chairman and Co-Chief Executive Officer |
September 1, 2021 | ||
Vivek Ranadivé | (Principal Executive Officer) | |||
/s/ Murray Rode | Co-Chief Executive Officer, Chief Financial Officer |
September 1, 2021 | ||
Murray Rode | (Principal Financial and Accounting Officer), Secretary, Treasurer and Director |
|||
* | Director | September 1, 2021 | ||
Eric C.W. Dunn | ||||
* | Director | September 1, 2021 | ||
Lori Wright | ||||
* | Director | September 1, 2021 | ||
Vijay Advani |
*By: | /s/ Vivek Ranadivé | |
Vivek Ranadivé | ||
Attorney-in-Fact |