DEFM14A 1 defm14a1022_proptechinvest2.htm PROXY STATEMENT

  

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________________

SCHEDULE 14A

_______________________________

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant

 

Filed by a Party other than the Registrant

 

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

PROPTECH INVESTMENT CORPORATION II
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-16(i)(1) and 0-11.

  

 

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PROXY STATEMENT FOR SPECIAL MEETING OF

PROPTECH INVESTMENT CORPORATION II
3415 N. Pines Way, Suite 204
Wilson, WY 83014

To the Stockholders of PropTech Investment Corporation II:

You are cordially invited to attend the Special Meeting of Stockholders (the “Special Meeting”) of PropTech Investment Corporation II, a Delaware corporation (the “Company,” “PTIC II,” “we,” “us” or “our”). The Special Meeting will be held on November 18, 2022, at 11:00 a.m., Eastern Time, via a virtual meeting. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. PTIC II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to attend the Special Meeting in person.

As previously announced, on May 17, 2022, the board of directors of PTIC II (the “PTIC II Board”) unanimously approved that certain business combination agreement, dated as of May 17, 2022 (as the same has been or may be amended, modified, supplemented or waived from time to time, the “Business Combination Agreement”), by and among PTIC II, RW National Holdings, LLC, a Delaware limited liability company (“Renters Warehouse”), and Lake Street Landlords, LLC, a Delaware limited liability company, in its capacity as the representative (the “Sellers’ Representative”) of applicable Renters Warehouse unitholders. Northland Securities, Inc. provided an opinion to the PTIC II Board as to (i) the fairness, from a financial point of view, to PTIC II and its unaffiliated holders (“PTIC II Class A Stockholders”) of PTIC II’s Class A common stock, par value $0.0001 per share (“PTIC II Class A Common Stock”), of the consideration to be paid by PTIC II to Renters Warehouse pursuant to the Business Combination Agreement, and (ii) whether Renters Warehouse has a fair market value equal to at least eighty percent (80%) of the balance of funds in the Trust Account (as defined below) (excluding deferred underwriting commissions and taxes payable). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Business Combination Agreement.

At the Special Meeting, holders of PTIC II Common Stock (“PTIC II Stockholders”) are being asked to consider and vote upon the following proposals (the “Stockholder Proposals”):

        Proposal 1.    The PTIC II Charter Amendment Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Business Combination Proposal is approved and adopted, the following amendments to the Existing Charter:

(i)      Section 9.2(a) be deleted in its entirety and be replaced with the following new Section 9.2(a):

“Prior to the consummation of the initial Business Combination, the Corporation shall provide Public Stockholders with the opportunity to have their Offering Shares redeemed by means of a tender offer pursuant to, and subject to the limitations of, Sections 9.2(b) and 9.2(c) (such rights of such holders to have their Offering Shares redeemed pursuant to such Sections, the “Redemption Rights”) hereof for cash equal to the applicable redemption price per share determined in accordance with Section 9.2(b) hereof (the “Redemption Price”). Such obligation to repurchase Offering Shares is subject to the completion of the proposed Business Combination to which it relates. Notwithstanding anything to the contrary contained in this Amended and Restated Certificate, there shall be no Redemption Rights or liquidating distributions with respect to any warrant issued pursuant to the Offering.”

(ii)    the phrase “Exchange Act” in Section 9.2(b) be deleted in its entirety and replaced with the following:

“Securities Exchange Act of 1934, as amended (the “Exchange Act”)”

 

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(iii)   Section 9.2(e) be deleted in its entirety and be replaced with the following new Section 9.2(e):

“If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination, the Corporation shall consummate the proposed initial Business Combination only if such initial Business Combination is approved by the affirmative vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder meeting held to consider such initial Business Combination.”

(iv)   Section 9.2(f) be deleted in its entirety.

(v)    Section 9.7 be deleted in its entirety and be replaced with the following new Section 9.7:

“If, in accordance with Section 9.1(a), any amendment is made to Section 9.2(d) to modify (i) the substance or timing of the ability of Public Stockholders to seek redemption in connection with an initial Business Combination or the Corporation’s obligation to redeem 100% of the Offering Shares if the Corporation has not consummated an initial Business Combination within twenty-four (24) months from the date of the closing of the Offering or (ii) any other provisions relating to stockholders’ rights or pre-initial Business Combination activity, the Public Stockholders shall be provided with the opportunity to redeem their Offering Shares upon the approval of any such amendment, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Corporation to pay its taxes, divided by the number of then outstanding Offering Shares.”

        Proposal 2.    The Business Combination Proposal — to consider and vote on a proposal to adopt and approve by stockholder approval (a) the Business Combination Agreement, pursuant to which, among other things, (i) immediately prior to the Closing, (A) PTIC II shall form Appreciate Intermediate Holdings, LLC (“NewCo LLC”) for purposes of consummating the transactions contemplated by the Business Combination Agreement and the Ancillary Documents, on the terms and subject to the conditions set forth in the Business Combination Agreement, (B) each share of PTIC II Class B Common Stock that is issued and outstanding immediately prior to the Closing shall be converted into one (1) share of PTIC II Class A Common Stock, (C) the Proposed Appreciate Charter (as defined below) and the Proposed Appreciate Bylaws (as defined below) shall become the Governing Documents (as defined in the Business Combination Agreement) of PTIC II, and (D) PTIC II will change its name to “Appreciate Holdings, Inc.” in accordance with the Business Combination Agreement, and (ii) on the Closing Date, (A) Rolling Renters Warehouse Unitholders will contribute all of their Existing Renters Warehouse LLC Interests to NewCo LLC in exchange for non-voting NewCo LLC Class B Units, (B) NewCo LLC Agreement will be amended and restated in the required form, (C) PTIC II will contribute the Closing Date Contribution Amount to NewCo LLC, in exchange for NewCo LLC Class A Units and (D) the unitholders of NewCo LLC (other than PTIC II) will receive a number of shares of Appreciate Class B Common Stock (as defined below) equal to the Transaction Equity Security Amount, on the terms and subject to the conditions set forth in the Business Combination Agreement; and (b) the transactions contemplated by the Business Combination Agreement (the “Business Combination” and such proposal, the “Business Combination Proposal”). A copy of the Business Combination Agreement is attached to this proxy statement as Annex A.

        Proposal 3.    The Appreciate Charter Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Business Combination Proposal is approved and adopted, the proposed new certificate of incorporation (the “Proposed Appreciate Charter”) of Appreciate Holdings, Inc., the post-Business Combination company (“Appreciate” or the “Combined Company”), which, if approved, would take effect at the time of the Closing (we refer to this proposal as the “Appreciate Charter Proposal”). A copy of the Proposed Appreciate Charter is attached to this proxy statement as Annex B.

        Proposal 4.    The Advisory Governing Documents Proposals — to consider and vote upon proposals to approve, by stockholder approval, on a non-binding advisory basis, certain governance provisions in the Proposed Appreciate Charter and the proposed new bylaws (the “Proposed Appreciate Bylaws”) of Appreciate in connection with the Business Combination (the “Proposed Governing Documents”), which are being presented separately in accordance with guidance from the U.S. Securities and

 

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Exchange Commission (the “SEC”) to give stockholders the opportunity to present their separate views on the following important corporate governance provisions, as nine (9) sub-proposals (which proposals we refer to, collectively, as the “Advisory Governing Documents Proposals”):

        Proposal 4A — to change PTIC II’s name to “Appreciate Holdings, Inc.”;

        Proposal 4B — to remove certain provisions related to PTIC II’s status as a special purpose acquisition company;

        Proposal 4C — to increase the amount of authorized shares of capital stock from 111,000,000 shares of capital stock, par value $0.0001 per share, of consisting of (a) 110,000,000 shares of PTIC II common stock, including (i) 100,000,000 shares of PTIC II Class A Common Stock, and (ii) 10,000,000 shares of PTIC II’s Class B common stock, par value $0.0001 per share (“PTIC II Class B Common Stock” and together with PTIC II Class A Common Stock “PTIC II Common Stock”), and (b) 1,000,000 shares of preferred stock, par value $0.001, of PTIC II (“PTIC II Preferred Stock”), to 201,000,000 shares of capital stock, par value $0.0001 per share, consisting of (a) 200,000,000 shares of Appreciate Common Stock, including (i) 100,000,000 shares of Class A common stock, par value $0.0001 per share, of Appreciate (“Appreciate Class A Common Stock”), and (ii) 100,000,000 shares of Class B common stock, par value $0.0001 per share, of Appreciate (“Appreciate Class B Common Stock” and together with Appreciate Class A Common Stock “Appreciate Common Stock”), and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share, of Appreciate (“Appreciate Preferred Stock”);

        Proposal 4D — to provide that, unless Appreciate consents in writing to the selection of an alternative forum, (i) any derivative action or proceeding brought on behalf of Appreciate, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of Appreciate to Appreciate or its stockholders, or any claim for aiding and abetting such alleged breach, (iii) any action asserting a claim against Appreciate or any current or former director, officer, other employee, agent or stockholder of Appreciate (a) arising pursuant to any provision of the General Corporation Law of the State of Delaware (“DGCL”) or the Proposed Governing Documents or (b) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery, (iv) any action to interpret, apply, enforce or determine the validity of the Proposed Governing Documents, or (v) any action asserting a claim against Appreciate or any current or former director, officer, other employee, agent or stockholder of Appreciate governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (i) through (v), to the fullest extent permitted by applicable law, be solely and exclusively brought in the Delaware Court of Chancery; provided, however, that the foregoing shall not apply to any claim (a) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten (10) days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery, or (c) arising under federal securities laws, including the Securities Act of 1933, as amended, as to which the federal district courts of the United States of America shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum. Notwithstanding the foregoing, this will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”); and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder. Failure to enforce the foregoing provisions would cause Appreciate irreparable harm and Appreciate shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. To the

 

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fullest extent permitted by applicable law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of Appreciate shall be deemed to have notice of and to have consented to the exclusive forum provisions;

        Proposal 4E — to absolve certain Appreciate stockholders from certain competition and corporate opportunities obligations;

        Proposal 4F — to opt out of Section 203 of the DGCL;

        Proposal 4G — to change how the Proposed Governing Documents may be amended, altered, replaced or rescinded;

        Proposal 4H — to provide that (1) no Appreciate stockholders will have cumulative voting rights, (2) any newly-created directorship and any vacancy occurring in the Appreciate board of directors (the “Appreciate Board”) shall be filled by the affirmative vote of a majority vote of the directors then in office, even if less than a quorum, or by a sole remaining director (and not by the stockholders), (3) any or all of the directors (other than the directors elected by the holders of any series of preferred stock, voting separately as a series or together with one or more other such series, as the case may be) may be removed only for cause and only upon the affirmative vote of the holders of at least 66⅔% in voting power of all the then outstanding shares of Appreciate Common Stock entitled to vote generally in the election of directors, voting together as a single class and (4) the total number of directors constituting the whole Appreciate Board shall, (a) as of the date of the Proposed Appreciate Charter, initially be eight (8) and (b) thereafter, shall be fixed exclusively by one or more resolutions adopted from time to time by a majority of the Appreciate Board; and that the directors elected by any holders of Appreciate Preferred Stock shall be in addition to the number fixed pursuant to the Proposed Appreciate Charter; and

        Proposal 4I — to allow Appreciate stockholders to call special meetings and act by written consent.

        Proposal 5.    The Nasdaq Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Business Combination Proposal and the Appreciate Charter Proposal are approved and adopted, for the purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of more than 20% of the issued and outstanding shares of common stock and the resulting change in control in connection with the transactions contemplated by the Business Combination Agreement and the CEF Purchase Agreement (as defined below), subject to certain customary conditions and limitations set forth therein (we refer to this proposal as the “Nasdaq Proposal” and, collectively with the Business Combination Proposal and the Appreciate Charter Proposal, the “Condition Precedent Proposals”).

        Proposal 6.    The Equity Incentive Plan Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Condition Precedent Proposals are approved and adopted, the 2022 Equity Incentive Plan for Appreciate Holdings, Inc. (the “Equity Incentive Plan”), which, if approved, would take effect on the date it is approved by the PTIC II Stockholders (we refer to this proposal as the “Equity Incentive Plan Proposal”). A copy of the Equity Incentive Plan is attached to this proxy statement as Annex F.

        Proposal 7.    The Adjournment Proposal — to consider and vote upon a proposal to approve by stockholder approval the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, any of the PTIC II Charter Amendment Proposal and the Condition Precedent Proposals would not be duly approved and adopted by our stockholders or we determine that one or more of the closing conditions under the Business Combination Agreement is not satisfied or waived (we refer to this proposal as the “Adjournment Proposal”).

Each of these proposals is more fully described in the accompanying proxy statement. Each of the Business Combination Proposal, the Appreciate Charter Proposal and the Nasdaq Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Business Combination is not conditioned on the PTIC II Charter Amendment Proposal, the Advisory Governing Documents Proposals, the Equity Incentive Plan

 

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Proposal or the Adjournment Proposal. The PTIC II Charter Amendment Proposal and the Adjournment Proposal are not conditioned upon the approval of any other proposal, though the amendments contemplated by the PTIC II Charter Amendment Proposal will be adopted substantially concurrently with the Business Combination only if the Business Combination Proposal is approved, all other conditions to the consummation of the Business Combination are satisfied or waived and the Business Combination is consummated. Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

The Business Combination Agreement provides for, among other things, the following:

        Immediately prior to the Closing, (a) PTIC II shall form NewCo LLC, for purposes of consummating the transactions contemplated by the Business Combination Agreement and the Ancillary Documents, on the terms and subject to the conditions set forth in the Business Combination Agreement, (b) each share of PTIC II Class B Common Stock that is issued and outstanding immediately prior to the Closing shall be converted into one (1) share of PTIC II Class A Common Stock, (c) the Proposed Appreciate Charter and the Proposed Appreciate Bylaws shall become the Governing Documents (as defined in the Business Combination Agreement) of PTIC II, and (d) PTIC II will change its name to “Appreciate Holdings, Inc.” in accordance with the Business Combination Agreement;

        On the Closing Date, (a) Rolling Renters Warehouse Unitholders will contribute all of their Existing Renters Warehouse LLC Interests to NewCo LLC in exchange for non-voting NewCo LLC Class B Units equal to the Transaction Equity Security Amount, (b) the NewCo LLC Agreement will be amended and restated in the required form, (c) PTIC II will contribute the Closing Date Contribution Amount to NewCo LLC in exchange for NewCo LLC Class A Units and (d) the NewCo LLC unitholders (other than PTIC II) will receive a number of shares of Appreciate Class B Common Stock equal to the Transaction Equity Security Amount, on the terms and subject to the conditions set forth in the Business Combination Agreement;

        Following the completion of the Business Combination, as described above, our organizational structure will be what is commonly referred to as an umbrella partnership corporation (or “Up-C”) structure. This organizational structure will allow the Rolling Renters Warehouse Unitholders, as Continuing Members (as defined in the Amended and Restated NewCo LLC Agreement), to retain their equity ownership in NewCo LLC, an entity that is classified as a partnership for U.S. federal income tax purposes, in the form of NewCo LLC Class B Units issued pursuant to the Business Combination.

PTIC II will hold limited liability company interests in NewCo LLC and will be the managing member of NewCo LLC; and the Rolling Renters Warehouse Unitholders will hold non-voting NewCo LLC Class B Units.

In connection with the Business Combination, PTIC II will be renamed “Appreciate Holdings, Inc.” Upon consummation of the Business Combination, the Combined Company will be organized in an Up-C structure. The parties agreed to structure the Business Combination in this manner for business purposes, and we do not believe that our Up-C organizational structure will give rise to any significant business or strategic benefit or detriment. See the section entitled “Risk Factors — Risks Related to PTIC II and the Business Combination” for additional information on our organizational structure, including the Tax Receivable Agreement.

The PTIC II Units (as defined below), PTIC II Class A Common Stock and Public Warrants (as defined in the proxy statement) are currently listed on the Nasdaq Stock Market (“Nasdaq”) under the symbols “PTICU,” “PTIC” and “PTICW,” respectively. PTIC II will apply for listing, to be effective upon consummation of the Business Combination, of Appreciate Class A Common Stock and warrants on the Nasdaq under the proposed symbols “SFR” and “SFRW,” respectively.

In connection with the Business Combination, PTIC II entered into a common stock purchase agreement (the “CEF Purchase Agreement”), dated as of May 17, 2022, with CF Principal Investments LLC, a Delaware limited liability company, relating to a committed equity facility (the “Committed Equity Facility”) that will be available to support Appreciate following the Closing of the Business Combination, subject to certain customary conditions and limitations set forth in the CEF Purchase Agreement.

If approximately 39.7% or more of the shares of PTIC II Class A Common Stock are redeemed prior to the Business Combination, we expect that Appreciate, following the Business Combination, will be considered a “controlled company” within the meaning of the Nasdaq rules and may elect to take advantage of certain “controlled company” exemptions. See the section entitled “Management Following the Business Combination — Independence of the Appreciate Board.”

 

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Pursuant to PTIC II’s amended and restated Certificate of Incorporation, dated as of December 3, 2020, PTIC II is providing PTIC II Class A Stockholders with the opportunity to redeem, upon the Closing, shares of PTIC II Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two (2) business days prior to the closing of the Business Combination) in the trust account (the “Trust Account”) that holds the proceeds (including interest but less franchise and income taxes payable) of PTIC II’s initial public offering (the “IPO”). For illustrative purposes, based on funds in the Trust Account of approximately $230.0 million on June 30, 2022, the estimated per-share redemption price would have been approximately $10.00. PTIC II Class A Stockholders may elect to redeem their PTIC II Class A Common Stock in connection with (i) the PTIC II Charter Amendment Proposal, but only if the PTIC II Charter Amendment Proposal is approved and adopted by the PTIC II Board and the amendment to the Existing Charter is effected, which would only occur if the Business Combination is consummated substantially concurrently with such amendment or (ii) the Business Combination Proposal, even if they vote for the PTIC II Charter Amendment Proposal or the Business Combination Proposal. A PTIC II Class A Stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, 15% or more of the shares of PTIC II Class A Common Stock included in the PTIC II units sold in the IPO, which consist of one share of PTIC II Class A Common Stock and one-third of one Public Warrant (the “PTIC II Units”). Holders of the outstanding Public Warrants and PTIC II Units do not have redemption rights with respect to such securities in connection with the Business Combination.

Holders of outstanding PTIC II Units must separate the underlying shares of PTIC II Class A Common Stock and Public Warrants prior to exercising redemption rights with respect to the PTIC II Class A Common Stock. The Sponsor and the Other PTIC II Class B Stockholders (as defined in the proxy statement) have agreed to waive their redemption rights with respect to any Founder Shares and any shares of PTIC II Common Stock they may hold in connection with the consummation of the Business Combination, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the Sponsor and the Other PTIC II Class B Stockholders own an aggregate amount of approximately 20% of the issued and outstanding shares of PTIC II Common Stock, including PTIC II Class A Common Stock underlying PTIC II Units. The Sponsor and the Other PTIC II Class B Stockholders, pursuant to the Sponsor Letter Agreement have agreed to vote any shares of PTIC II Common Stock owned by them in favor of the Business Combination Proposal and the other Stockholder Proposals.

PTIC II is providing this proxy statement and accompanying proxy card to PTIC II Stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Whether or not you plan to attend the Special Meeting, PTIC II urges you to read this proxy statement (and any documents incorporated into this proxy statement by reference) carefully. Please pay particular attention to the section titled “Risk Factors.

After careful consideration, the PTIC II Board has unanimously approved the Business Combination Agreement and the transactions contemplated therein and, after taking into account certain updated projected financial information of Renters Warehouse as described in “The Business Combination Proposal — September 2022 Update to Renters Warehouse Projected Financial Information,” unanimously recommends that stockholders vote “FOR” adoption and approval of the PTIC II Charter Amendment Proposal, “FOR” adoption and approval of the Business Combination Proposal, “FOR” the Appreciate Charter Proposal, “FOR” the Advisory Governing Documents Proposals, “FOR” the Nasdaq Proposal and “FOR” the Equity Incentive Plan Proposal to be presented at the Special Meeting, and “FOR” the Adjournment Proposal, if presented. When you consider the PTIC II Board’s recommendation of the Stockholder Proposals, you should keep in mind that the directors and officers of PTIC II have interests in the Business Combination that may conflict with your interests as a stockholder. The PTIC II Charter Amendment Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in the accompanying proxy statement. The PTIC II Charter Amendment Proposal will be adopted by the PTIC II Board substantially concurrently with the Business Combination only if the Business Combination Proposal is approved, all other conditions to the consummation of the Business Combination are satisfied or waived and the Business Combination is consummated. See the section titled “Proposal No. 2 — The Business Combination Proposal — Interests of PTIC II Directors and Officers and Others in the Business Combination.”

Each redemption of shares of PTIC II Class A Common Stock by PTIC II Class A Stockholders will decrease the amount in the Trust Account, which held total assets of approximately $230.0 million as of June 30, 2022.

 

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Your vote is very important. If you are a registered stockholder, please vote your shares as soon as possible to ensure that your vote is counted, regardless of whether you expect to attend the Special Meeting virtually, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Business Combination Proposal, the Appreciate Charter Proposal and the Nasdaq Proposal are approved at the Special Meeting. The Appreciate Charter Proposal, the Advisory Governing Documents Proposals, the Nasdaq Proposal and the Equity Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and satisfaction of other closing conditions.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” for the PTIC II Charter Amendment Proposal, “FOR” for the Business Combination Proposal, “FOR” for the Appreciate Charter Proposal, “FOR” for the Advisory Governing Documents Proposals, “FOR” for the Nasdaq Proposal and “FOR” for the Equity Incentive Plan Proposal to be presented at the Special Meeting and “FOR” the Adjournment Proposal, if presented. If you fail to return your proxy card or fail to submit your proxy by telephone or over the internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting in person by virtual attendance, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting, and, if a quorum is present, will have no effect on the Stockholder Proposals. If you are a stockholder of record and you attend the Special Meeting and wish to vote during the Special Meeting, you may withdraw your proxy and vote during the Special Meeting.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT PTIC II REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO PTIC II’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of the PTIC II Board, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,

   

/s/ Thomas D. Hennessy 

   

Thomas D. Hennessy

   

Chairman of the Board, Co-Chief Executive Officer and President

PropTech Investment Corporation II

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This proxy statement provides you with detailed information about the Business Combination and other matters to be considered at the Special Meeting.    We urge you to carefully read this entire document and the documents incorporated herein by reference. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 30 of this proxy statement.

Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in this proxy statement, passed upon the fairness of the Business Combination Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of this proxy statement. Any representation to the contrary is a criminal offense.

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This proxy statement is dated October 28, 2022, and is first being mailed to PTIC II Stockholders on or about October 28, 2022.

 

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PROPTECH INVESTMENT CORPORATION II
3415 N. Pines Way, Suite 204
Wilson, WY 83014

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF PROPTECH INVESTMENT CORPORATION II

TO BE HELD ON NOVEMBER 18, 2022

TO THE STOCKHOLDERS OF PROPTECH INVESTMENT CORPORATION II:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “Special Meeting”) of PropTech Investment Corporation II., a Delaware corporation (“PTIC II,” “we,” “our” or “us”), will be held on November 18, 2022, at 11:00 a.m., Eastern Time, via live webcast at the following address: www.cstproxy.com/proptechinvestmentcorpii/2022. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. PTIC II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. You are cordially invited to attend the Special Meeting for the following purposes:

        Proposal 1.    The PTIC II Charter Amendment Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Business Combination Proposal is approved and adopted, the following amendments to the Existing Charter:

(i)     Section 9.2(a) be deleted in its entirety and be replaced with the following new Section 9.2(a):

“Prior to the consummation of the initial Business Combination, the Corporation shall provide Public Stockholders with the opportunity to have their Offering Shares redeemed by means of a tender offer pursuant to, and subject to the limitations of, Sections 9.2(b) and 9.2(c) (such rights of such holders to have their Offering Shares redeemed pursuant to such Sections, the “Redemption Rights”) hereof for cash equal to the applicable redemption price per share determined in accordance with Section 9.2(b) hereof (the “Redemption Price”). Such obligation to repurchase Offering Shares is subject to the completion of the proposed Business Combination to which it relates. Notwithstanding anything to the contrary contained in this Amended and Restated Certificate, there shall be no Redemption Rights or liquidating distributions with respect to any warrant issued pursuant to the Offering.”

(ii)    the phrase “Exchange Act” in Section 9.2(b) be deleted in its entirety and replaced with the following:

“Securities Exchange Act of 1934, as amended (the “Exchange Act”)”

(iii)   Section 9.2(e) be deleted in its entirety and be replaced with the following new Section 9.2(e):

“If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination, the Corporation shall consummate the proposed initial Business Combination only if such initial Business Combination is approved by the affirmative vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder meeting held to consider such initial Business Combination.”

(iv)   Section 9.2(f) be deleted in its entirety.

(v)    Section 9.7 be deleted in its entirety and be replaced with the following new Section 9.7:

“If, in accordance with Section 9.1(a), any amendment is made to Section 9.2(d) to modify (i) the substance or timing of the ability of Public Stockholders to seek redemption in connection with an initial Business Combination or the Corporation’s obligation to redeem 100% of the Offering Shares if the Corporation has not consummated an initial Business Combination within twenty-four (24) months from the date of the closing of the Offering or (ii) any other provisions relating to stockholders’ rights or pre-initial Business Combination activity, the Public Stockholders shall be provided with the opportunity to redeem their Offering Shares upon the approval of any such amendment, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Corporation to pay its taxes, divided by the number of then outstanding Offering Shares.”

 

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        Proposal 2.    The Business Combination Proposal — to consider and vote on a proposal to adopt and approve by stockholder approval (a) the Business Combination Agreement, dated as of May 17, 2022 (as the same has been or may be amended, modified, supplemented or waived from time to time, the “Business Combination Agreement”), by and among PTIC II, RW National Holdings, LLC, a Delaware limited liability company (“Renters Warehouse”), and Lake Street Landlords, LLC, a Delaware limited liability company, in its capacity as the representative (the “Sellers’ Representative”) of applicable Renters Warehouse unitholders, pursuant to which, among other things, (i) immediately prior to the Closing, (A) PTIC II shall form Appreciate Intermediate Holdings, LLC (“NewCo LLC”) for purposes of consummating the transactions contemplated by the Business Combination Agreement and the Ancillary Documents, on the terms and subject to the conditions set forth in the Business Combination Agreement, (B) each share of PTIC II Class B Common Stock that is issued and outstanding immediately prior to the Closing shall be converted into one (1) share of PTIC II Class A Common Stock, (C) the Proposed Appreciate Charter (as defined below) and the Proposed Appreciate Bylaws (as defined below) shall become the Governing Documents (as defined in the Business Combination Agreement) of PTIC II, and (D) PTIC II will change its name to “Appreciate Holdings, Inc.” in accordance with the Business Combination Agreement, and (ii) on the Closing Date, (A) Rolling Renters Warehouse Unitholders will contribute all of their Existing Renters Warehouse LLC Interests to NewCo LLC in exchange for non-voting NewCo LLC Class B Units equal to the Transaction Equity Security Amount, (B) NewCo LLC Agreement will be amended and restated in the required form, (C) PTIC II will contribute the Closing Date Contribution Amount to NewCo LLC, in exchange for NewCo LLC Class A Units and (D) the unitholders of NewCo LLC (other than PTIC II) will receive a number of shares of Appreciate Class B Common Stock equal to the Transaction Equity Security Amount, on the terms and subject to the conditions set forth in the Business Combination Agreement; and (b) the transactions contemplated by the Business Combination Agreement (the “Business Combination” and such proposal, the “Business Combination Proposal”). A copy of the Business Combination Agreement is attached to this proxy statement as Annex A. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Business Combination Agreement.

        Proposal 3.    The Appreciate Charter Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Business Combination Proposal is approved and adopted, the proposed new certificate of incorporation (the “Proposed Appreciate Charter”) of Appreciate Holdings, Inc., the post-Business Combination company (“Appreciate” or the “Combined Company”), which, if approved, would take effect at the time of the Closing (we refer to this proposal as the “Appreciate Charter Proposal”). A copy of the Proposed Appreciate Charter is attached to this proxy statement as Annex B.

        Proposal 4.    The Advisory Governing Documents Proposals — to consider and vote upon proposals to approve, by stockholder approval, on a non-binding advisory basis, certain governance provisions in the Proposed Appreciate Charter and the proposed new bylaws (the “Proposed Appreciate Bylaws”) of Appreciate in connection with the Business Combination (the “Proposed Governing Documents”), which are being presented separately in accordance with guidance from the U.S. Securities and Exchange Commission (the “SEC”) to give stockholders the opportunity to present their separate views on the following important corporate governance provisions, as nine (9) sub-proposals (which proposals we refer to, collectively, as the “Advisory Governing Documents Proposals”):

        Proposal 4A — to change PTIC II’s name to “Appreciate Holdings, Inc.”;

        Proposal 4B — to remove certain provisions related to PTIC II’s status as a special purpose acquisition company;

        Proposal 4C — to increase the amount of authorized shares of capital stock from 111,000,000 shares of capital stock, par value $0.0001 per share, of consisting of (a) 110,000,000 shares of PTIC II common stock, including (i) 100,000,000 shares of PTIC II Class A Common Stock, and (ii) 10,000,000 shares of PTIC II’s Class B common stock, par value $0.0001 per share (“PTIC II Class B Common Stock” and together with PTIC II Class A Common Stock “PTIC II Common Stock”), and (b) 1,000,000 shares of preferred stock, par value $0.001, of PTIC II (“PTIC II Preferred Stock”), to 201,000,000 shares of capital stock, par value

 

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$0.0001 per share, consisting of (a) 200,000,000 shares of Appreciate Common Stock, including (i) 100,000,000 shares of Class A common stock, par value $0.0001 per share, of Appreciate (“Appreciate Class A Common Stock”), and (ii) 100,000,000 shares of Class B common stock, par value $0.0001 per share, of Appreciate (“Appreciate Class B Common Stock” and together with Appreciate Class A Common Stock “Appreciate Common Stock”), and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share, of Appreciate (“Appreciate Preferred Stock”);

        Proposal 4D — to provide that, unless Appreciate consents in writing to the selection of an alternative forum, (i) any derivative action or proceeding brought on behalf of Appreciate, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of Appreciate to Appreciate or its stockholders, or any claim for aiding and abetting such alleged breach, (iii) any action asserting a claim against Appreciate or any current or former director, officer, other employee, agent or stockholder of Appreciate (a) arising pursuant to any provision of the General Corporation Law of the State of Delaware (“DGCL”) or the Proposed Governing Documents or (b) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery, (iv) any action to interpret, apply, enforce or determine the validity of the Proposed Governing Documents, or (v) any action asserting a claim against Appreciate or any current or former director, officer, other employee, agent or stockholder of Appreciate governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (i) through (v), to the fullest extent permitted by applicable law, be solely and exclusively brought in the Delaware Court of Chancery; provided, however, that the foregoing shall not apply to any claim (a) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten (10) days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery, or (c) arising under federal securities laws, including the Securities Act of 1933, as amended, as to which the federal district courts of the United States of America shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum. Notwithstanding the foregoing, this will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”); and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder. Failure to enforce the foregoing provisions would cause Appreciate irreparable harm and Appreciate shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. To the fullest extent permitted by applicable law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of Appreciate shall be deemed to have notice of and to have consented to the exclusive forum provisions;

        Proposal 4E — to absolve certain Appreciate stockholders from certain competition and corporate opportunities obligations;

        Proposal 4F — to opt out of Section 203 of the DGCL;

        Proposal 4G — to change how the Proposed Governing Documents may be amended, altered, replaced or rescinded;

 

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        Proposal 4H — to provide that (1) no Appreciate stockholders will have cumulative voting rights, (2) any newly-created directorship and any vacancy occurring in the Appreciate board of directors (the “Appreciate Board”) shall be filled by the affirmative vote of a majority vote of the directors then in office, even if less than a quorum, or by a sole remaining director (and not by the stockholders), (3) any or all of the directors (other than the directors elected by the holders of any series of preferred stock, voting separately as a series or together with one or more other such series, as the case may be) may be removed only for cause and only upon the affirmative vote of the holders of at least 66⅔% in voting power of all the then outstanding shares of Appreciate Common Stock entitled to vote generally in the election of directors, voting together as a single class and (4) the total number of directors constituting the whole Appreciate Board shall, (a) as of the date of the Proposed Appreciate Charter, initially be eight (8) and (b) thereafter, shall be fixed exclusively by one or more resolutions adopted from time to time by a majority of the Appreciate Board; and that the directors elected by any holders of Appreciate Preferred Stock shall be in addition to the number fixed pursuant to the Proposed Appreciate Charter; and

        Proposal 4I — to allow Appreciate stockholders to call special meetings and act by written consent.

        Proposal 5.    The Nasdaq Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Business Combination Proposal and the Appreciate Charter Proposal are approved and adopted, for the purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of more than 20% of the issued and outstanding shares of common stock and the resulting change in control in connection with the transactions contemplated by the Business Combination Agreement and the CEF Purchase Agreement (as defined below), subject to certain customary conditions and limitations set forth therein (we refer to this proposal as the “Nasdaq Proposal” and, collectively with the Business Combination Proposal and the Appreciate Charter Proposal, the “Condition Precedent Proposals”).

        Proposal 6.    The Equity Incentive Plan Proposal — to consider and vote upon a proposal to approve by stockholder approval, assuming the Condition Precedent Proposals are approved and adopted, the 2022 Equity Incentive Plan for Appreciate Holdings, Inc. (the “Equity Incentive Plan”), which, if approved, would take effect on the date it is approved by the PTIC II Stockholders (we refer to this proposal as the “Equity Incentive Plan Proposal”). A copy of the Equity Incentive Plan is attached to this proxy statement as Annex F.

        Proposal 7.    The Adjournment Proposal — to consider and vote upon a proposal to approve by stockholder approval the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, any of the PTIC II Charter Amendment Proposal and the Condition Precedent Proposals would not be duly approved and adopted by our stockholders or we determine that one or more of the closing conditions under the Business Combination Agreement is not satisfied or waived (we refer to this proposal as the “Adjournment Proposal”).

Each of these proposals (collectively, the “Stockholder Proposals”) is more fully described in this proxy statement. Each of the Business Combination Proposal, the Appreciate Charter Proposal and the Nasdaq Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Business Combination is not conditioned on the approval or adoption of the PTIC II Charter Amendment Proposal, the Advisory Governing Documents Proposals, the Equity Incentive Plan Proposal or the Adjournment Proposal. The PTIC II Charter Amendment Proposal and the Adjournment Proposal are not conditioned upon the approval of any other proposal, though the amendments contemplated by the PTIC II Charter Amendment Proposal will be adopted substantially concurrently with the Business Combination only if the Business Combination Proposal is approved, all other conditions to the consummation of the Business Combination are satisfied or waived and the Business Combination is consummated. Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

Only holders of record of PTIC II Common Stock at the close of business on October 4, 2022 are entitled to notice of and to vote and have their votes counted at the Special Meeting and any adjournment of the Special Meeting.

 

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The resolutions to be voted upon in person by virtual attendance or by proxy at the Special Meeting relating to the above proposals are set forth in the proxy statement sections entitled “Proposal No. 1 — The PTIC II Charter Amendment Proposal,” “Proposal No. 2 — The Business Combination Proposal,” “Proposal No. 3 — The Appreciate Charter Proposal,” “Proposal No. 4 — The Advisory Governing Documents Proposals,” “Proposal No. 5 — The Nasdaq Proposal,” “Proposal No. 6 — The Equity Incentive Plan Proposal,” and “Proposal No. 7 — The Adjournment Proposal,” respectively.

The Business Combination Agreement provides for, among other things:

        Concurrent with the execution of the Business Combination Agreement, the Sponsor, the Other PTIC II Class B Stockholders (as defined in the proxy statement), PTIC II, and Renters Warehouse, among others, have entered into the sponsor letter agreement (as the same may be amended, supplemented or otherwise modified from time to time, the “Sponsor Letter Agreement”), a copy of which is attached to this proxy statement as Annex E and pursuant to which, among other things, the Sponsor and the Other PTIC II Class B Stockholders have agreed to (a) vote all PTIC II Common Stock owned by the Sponsor and the Other PTIC II Class B Stockholders in favor of the Business Combination Agreement and the contemplated transactions, (b) subject to, and conditioned upon and effective immediately prior to the occurrence of the Effective Time, waive any adjustment to the conversion ratio set forth in the Existing Governing Documents (as defined in the proxy statement) or waive any anti-dilution or similar protections with respect to all of their PTIC II Class B Common Stock and (c) subject to, and conditioned upon the occurrence of and effective as of, the Closing, terminate certain existing agreements or arrangements, in each case, on the terms and subject to the conditions set forth in the Sponsor Letter Agreement;

        Immediately prior to the Closing, (a) PTIC II shall form NewCo LLC, for purposes of consummating the transactions contemplated by the Business Combination Agreement and the Ancillary Documents, on the terms and subject to the conditions set forth in the Business Combination Agreement, (b) each share of PTIC II Class B Common Stock that is issued and outstanding immediately prior to the Closing shall be converted into one (1) share of PTIC II Class A Common Stock, (c) the Proposed Appreciate Charter and the Proposed Appreciate Bylaws shall become the Governing Documents (as defined in the Business Combination Agreement) of PTIC II, and (d) PTIC II will change its name to “Appreciate Holdings, Inc.” in accordance with the Business Combination Agreement;

        On the Closing Date, (a) Rolling Renters Warehouse Unitholders will contribute all of their Existing Renters Warehouse LLC Interests to NewCo LLC in exchange for non-voting NewCo LLC Class B Units equal to the Transaction Equity Security Amount, (b) the NewCo LLC Agreement will be amended and restated in the required form, (c) PTIC II will contribute the Closing Date Contribution Amount to NewCo LLC in exchange for NewCo LLC Class A Units and (d) the NewCo LLC unitholders (other than PTIC II) will receive a number of shares of Appreciate Class B Common Stock equal to the Transaction Equity Security Amount, on the terms and subject to the conditions set forth in the Business Combination Agreement;

        At the Closing, Appreciate Holdings, Inc., NewCo LLC, Renters Warehouse, Lake Street and each of the members of NewCo LLC that are Rolling Renters Warehouse Unitholders (excluding St. Cloud Capital Partners III SBIC, L.P.) will enter into an income tax receivable agreement substantially in the form attached hereto as Annex J (as the same may be amended, supplemented or otherwise modified from time to time, the “Tax Receivable Agreement”);

        At the Closing, Appreciate will enter into an investor rights agreement, substantially in the form attached hereto as Annex G (as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms, the “Investor Rights Agreement”), with the Sponsor, the other Founder Holders (as defined therein) and the Sellers (as defined therein), pursuant to which, among other things, (a) each Holder (as defined therein) (excluding St. Cloud Capital Partners III SBIC, L.P.) will agree not to effect any sale or distribution of any Appreciate Common Stock held by any of them during the lock-up period described therein and (b) each Holder will be granted certain registration rights with respect to their respective Appreciate Common Stock, in each case, on the terms and subject to the conditions set forth therein;

 

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        In connection with the transactions contemplated by the Business Combination Agreement, PTIC II will file the proxy statement relating to the transactions contemplated by the Business Combination Agreement and the Ancillary Documents and it is a condition to the consummation of the transactions contemplated by the Business Combination Agreement that PTIC II obtain stockholder approval; and

        Subject to the terms set forth in the Business Combination Agreement, the Sellers’ Representative will serve as the representative of the Rolling Renters Warehouse Unitholders.

In connection with the Business Combination, PTIC II will be renamed “Appreciate Holdings, Inc.” Upon consummation of the Business Combination, the Combined Company will be organized in an Up-C structure.

The PTIC II Units (as defined below), PTIC II Class A Common Stock and Public Warrants (as defined in the proxy statement) are currently listed on the Nasdaq Stock Market (“Nasdaq”) under the symbols “PTICU,” “PTIC” and “PTICW,” respectively. PTIC II intends to issue PTIC II Class A Common Stock in connection with the transactions contemplated by the Business Combination Agreement as required by, and pursuant to, the Nasdaq listing requirements.

In connection with the Business Combination, PTIC II entered into a common stock purchase agreement (the “CEF Purchase Agreement”), dated as of May 17, 2022, with CF Principal Investments LLC, a Delaware limited liability company, relating to a committed equity facility that will be available to support Appreciate following the Closing of the Business Combination, subject to certain customary conditions and limitations set forth in the CEF Purchase Agreement.

Pursuant to PTIC II’s amended and restated Certificate of Incorporation, dated as of December 3, 2020, PTIC II is providing holders of PTIC II Class A Common Stock (“PTIC II Class A Stockholders”) with the opportunity to redeem, upon the Closing, shares of PTIC II Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two (2) business days prior to the closing of the Business Combination) in the trust account (the “Trust Account”) that holds the proceeds (including interest but less franchise and income taxes payable) of PTIC II’s initial public offering (the “IPO”). For illustrative purposes, based on funds in the Trust Account of approximately $230.0 million on June 30, 2022, the estimated per-share redemption price would have been approximately $10.00. PTIC II Class A Stockholders may elect to redeem their PTIC II Class A Common Stock in connection with (i) the PTIC II Charter Amendment Proposal, but only if the PTIC II Charter Amendment Proposal is approved and adopted by the PTIC II Board and the amendment to the Existing Charter is effected, which would only occur if the Business Combination is consummated substantially concurrently with such amendment or (ii) the Business Combination Proposal, even if they vote for the PTIC II Charter Amendment Proposal or the Business Combination Proposal. A PTIC II Class A Stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, 15% or more of the shares of PTIC II Common Stock included in the PTIC II units sold in the IPO, which consist of one share of PTIC II Class A Common Stock and one-third of one Public Warrant (the “PTIC II Units”). Holders of outstanding Warrants (as defined in the proxy statement) and PTIC II Units do not have redemption rights with respect to such securities in connection with the Business Combination.

Holders of outstanding PTIC II Units must separate the underlying shares of PTIC II Class A Common Stock and Public Warrants prior to exercising redemption rights with respect to the PTIC II Class A Common Stock. The Sponsor and the Other PTIC II Class B Stockholders have agreed to waive their redemption rights with respect to any Founder Shares and any shares of PTIC II Common Stock they may hold in connection with the consummation of the Business Combination, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the Sponsor and the Other PTIC II Class B Stockholders own an aggregate amount of approximately 20% of the issued and outstanding shares of PTIC II Common Stock, including PTIC II Class A Common Stock underlying the Private Placement Warrants (as defined in the proxy statement). The Sponsor and the Other PTIC II Class B Stockholders, pursuant to the Sponsor Letter Agreement, have agreed to vote any shares of PTIC II Common Stock owned by them in favor of the Business Combination Proposal and the related transactions.

PTIC II is providing this proxy statement and accompanying proxy card to holders of PTIC II Common Stock in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Whether or not you plan to attend the Special Meeting, PTIC II urges you to read this proxy statement (and any documents incorporated into this proxy statement by reference) carefully. Please pay particular attention to the section titled “Risk Factors.

 

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After careful consideration, the board of directors of PTIC II (the “PTIC II Board”) has unanimously approved the Business Combination Agreement and the transactions contemplated therein and, after taking into account certain updated projected financial information of Renters Warehouse as described in “The Business Combination Proposal — September 2022 Update to Renters Warehouse Projected Financial Information,” unanimously recommends that stockholders vote “FOR” adoption and approval of the PTIC II Charter Amendment Proposal, “FOR” adoption and approval of the Business Combination Proposal, “FOR” the Appreciate Charter Proposal, “FOR” the Advisory Governing Documents Proposals, “FOR” the Nasdaq Proposal and “FOR” the Equity Incentive Plan Proposal to be presented at the Special Meeting, and “FOR” the Adjournment Proposal, if presented. When you consider the PTIC II Board’s recommendation of the Stockholder Proposals, you should keep in mind that the directors and officers of PTIC II have interests in the Business Combination that may conflict with your interests as a stockholder. The PTIC II Charter Amendment Proposal and the Adjournment Proposal are not conditioned on the approval of any other proposal set forth in the accompanying proxy statement. The PTIC II Charter Amendment Proposal will be adopted substantially concurrently with the Business Combination only if the Business Combination Proposal is approved, all other conditions to the consummation of the Business Combination are satisfied or waived and the Business Combination is consummated. See the section titled “Business Combination Proposal — Interests of PTIC II Directors and Officers and Others in the Business Combination.”

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting online or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

If you have any questions or need assistance voting your shares of PTIC II Class A Common Stock, please contact Morrow, our proxy solicitor, by calling (800) 662-5200 (toll-free) or (203) 658-9400.

If you would like to receive additional information or if you want additional copies of this document, agreements contained in the appendices or any other documents filed by PTIC II with the SEC, such information is available without charge upon written or oral request. If you have any questions or need assistance with voting, please contact PTIC II’s proxy solicitor.

Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Tel: Toll-Free (800) 662-5200 or (203) 658-9400
Email: PTIC@investor.morrowsodali.com

Your attention is directed to the proxy statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed Business Combination and related transactions and each of the Stockholder Proposals. We encourage you to read this proxy statement carefully. If you have any questions or need assistance voting your shares, please contact CST at 877-634-5370 or email DReed@continentalstock.com.

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

Wilson, WY

October 28, 2022

 

By Order of the Board of Directors,

   

/s/ Thomas D. Hennessy 

   

Thomas D. Hennessy

   

Chairman of the Board of Directors

 

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TABLE OF CONTENTS

 

Page No.

ABOUT THIS PROXY STATEMENT

 

iii

TRADEMARKS

 

iv

FREQUENTLY USED TERMS

 

v

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

 

xi

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

 

xiii

SUMMARY OF THE PROXY STATEMENT

 

1

SELECTED HISTORICAL FINANCIAL INFORMATION OF PTIC II

 

23

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF RENTERS WAREHOUSE

 

25

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

27

MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

 

29

RISK FACTORS

 

30

INFORMATION ABOUT THE PARTIES TO THE BUSINESS COMBINATION

 

86

THE SPECIAL MEETING OF PTIC II STOCKHOLDERS

 

87

PROPOSAL NO. 1 — THE PTIC II CHARTER AMENDMENT PROPOSAL

 

95

PROPOSAL NO. 2 — THE BUSINESS COMBINATION PROPOSAL

 

97

PROPOSAL NO. 3 — THE APPRECIATE CHARTER PROPOSAL

 

143

PROPOSAL NO. 4 — THE ADVISORY GOVERNING DOCUMENTS PROPOSALS

 

144

PROPOSAL NO. 5 — THE NASDAQ PROPOSAL

 

154

PROPOSAL NO. 6 — THE EQUITY INCENTIVE PLAN PROPOSAL

 

156

PROPOSAL NO. 7 — THE ADJOURNMENT PROPOSAL

 

166

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS TO HOLDERS OF PTIC II CLASS A COMMON STOCK EXERCISING REDEMPTION RIGHTS

 

167

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

172

INFORMATION ABOUT PTIC II

 

188

DIRECTORS AND EXECUTIVE OFFICERS OF PTIC II

 

195

PTIC II’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

202

INFORMATION ABOUT RENTERS WAREHOUSE

 

208

RENTERS WAREHOUSE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

221

MANAGEMENT OF RENTERS WAREHOUSE PRIOR TO THE BUSINESS COMBINATION

 

241

EXECUTIVE COMPENSATION OF RENTERS WAREHOUSE OFFICERS AND DIRECTORS

 

243

MANAGEMENT FOLLOWING THE BUSINESS COMBINATION

 

250

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF PTIC II AND THE COMBINED COMPANY

 

257

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

262

DESCRIPTION OF APPRECIATE’S CAPITAL STOCK

 

272

SECURITIES ACT RESTRICTIONS ON RESALE OF APPRECIATE COMMON STOCK

 

283

APPRAISAL RIGHTS

 

284

STOCKHOLDER PROPOSALS AND NOMINATIONS

 

289

STOCKHOLDER COMMUNICATIONS

 

289

EXPERTS

 

290

ADDITIONAL INFORMATION

 

291

WHERE YOU CAN FIND MORE INFORMATION

 

292

INDEX TO FINANCIAL STATEMENTS

 

F-1

ANNEX A — BUSINESS COMBINATION AGREEMENT

 

Annex A-1

ANNEX A-I — FIRST AMENDMENT TO BUSINESS COMBINATION AGREEMENT

 

Annex A-I-1

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ABOUT THIS PROXY STATEMENT

This document constitutes a notice of a meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the Special Meeting at which PTIC II Stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.

PTIC II files reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read PTIC II’s SEC filings, including this proxy statement, over the internet at the SEC’s website at http://www.sec.gov.

If you would like additional copies of this proxy statement or if you have questions about the Business Combination or the Stockholder Proposals to be presented at the Special Meeting, you should contact our proxy solicitation agent at:

Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Tel: Toll-Free (800) 662-5200 or (203) 658-9400
Email: PTIC@investor.morrowsodali.com

If you are a stockholder of PTIC II and have questions about the Business Combination or the Special Meeting or if you would like to request copies of this proxy statement or other documents incorporated by reference in the proxy statement, please do so by November 11, 2022 to receive them before the Special Meeting. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt means. You will not be charged for any of the documents you request.

For a more detailed description of the information incorporated by reference in the enclosed proxy statement and how you may obtain it, see the section captioned “Where You Can Find More Information” beginning on page 292 of this proxy statement.

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TRADEMARKS

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

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FREQUENTLY USED TERMS

When used in this proxy statement, unless the context otherwise requires:

        A&R LLC Agreement” refers to the amended and restated Limited Liability Company Agreement of NewCo LLC, substantially in the form attached hereto as Annex D.

        Adjournment Proposal” refers to the Stockholder Proposal to be considered at the Special Meeting to adjourn 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 Stockholder Proposals at the Special Meeting.

        Advisory Governing Documents Proposals” refers to the nine (9) sub-proposals to take effect at the Closing, if approved.

        Affiliate” refers to, with respect to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto.

        Aggregate Transaction Proceeds” refers to an amount equal to the sum of (i) the cash proceeds from the Trust Account, net any amounts paid to the PTIC II Class A Stockholders that exercise their redemption rights in connection with the Business Combination and (ii) all unrestricted cash proceeds held in the name of and available for us by PTIC II as of the Closing but held in accounts other than the Trust Account, minus the outstanding expenses to be paid by PTIC II prior to the Closing pursuant to the Business Combination Agreement.

        Ancillary Documents” refers to the Tax Receivable Agreement, the Sponsor Letter Agreement, the Transaction Support Agreements, the Investor Rights Agreements and each other agreement, document, instrument and/or certificate contemplated by the Business Combination Agreement executed or to be executed in connection with the Business Combination.

        Appreciate” or “Combined Company” refers to PTIC II and its subsidiaries, including Appreciate Intermediate Holdings, LLC, following the consummation of the Business Combination.

        Appreciate Board” refers to the board of directors of Appreciate.

        Appreciate Charter Proposal” refers to the Stockholder Proposal to consider and vote on the adoption of the Proposed Appreciate Charter.

        Appreciate Class A Common Stock” refers to shares of Class A common stock, par value $0.0001 per share, of Appreciate, following the Effective Time.

        Appreciate Class B Common Stock” refers to shares of Class B common stock, par value $0.0001 per share, of Appreciate, following the Effective Time.

        Appreciate Common Stock” refers to the collective shares of Appreciate Class A Common Stock and Appreciate Class B Common Stock, following the Effective Time.

        Appreciate Preferred Stock” refers to shares of preferred stock, par value $0.0001 per share, of Appreciate.

        Appreciate Private Placement Warrants” refers to the Private Placement Warrants immediately after the Effective Time.

        Appreciate Public Warrants” refers to the Public Warrants immediately after the Effective Time.

        Appreciate Stockholders” refers to the holders of Appreciate Common Stock.

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        Appreciate Warrants” refers collectively to the Appreciate Private Placement Warrants together with the Appreciate Public Warrants.

        Business Combination” refers to the transactions contemplated by the Business Combination Agreement and the related agreements.

        Business Combination Agreement” refers to the Business Combination Agreement, dated as of May 17, 2022 (as the same has been or may be amended, modified, supplemented or waived from time to time), by and among PTIC II, Renters Warehouse, and Lake Street, substantially in the form attached hereto as Annex A.

        Business Combination Proposal” refers to the Stockholder Proposal to approve the Business Combination and adopt the Business Combination Agreement.

        CEF Purchase Agreement” refers to the common stock purchase agreement by and between PTIC II and CF Principal, relating to the Committed Equity Facility, dated as of May 17, 2022, substantially in the form attached hereto as Annex K.

        CEF Registration Rights Agreement” refers to the registration rights agreement by and between the Combined Company and CF Principal, substantially in the form attached hereto as Annex H.

        CF Principal” refers to CF Principal Investments LLC, a Delaware limited liability company.

        Closing” refers to the closing of the Business Combination.

        Closing Date” refers to the date of the Closing.

        Closing Date Contribution Amount” refers to an amount equal to (a) the amount of cash in the Trust Account as of immediately prior to the Closing (and before, for the avoidance of doubt, giving effect to the redemption of PTIC II Class A Common Stock), less (b) the aggregate amount of cash required to fund the redemption of PTIC II Class A Common Stock from the Trust Account.

        Code” refers to the Internal Revenue Code of 1986, as amended and restated from time to time.

        Combination Period” refers to the 24-month period from the closing of the IPO that PTIC II must complete an initial business combination pursuant to the Existing Charter.

        Committed Equity Facility” refers to that certain committed equity facility pursuant to the common stock purchase agreement between PTIC II and CF Principal, dated as of May 17, 2022.

        Condition Precedent Proposals” refers, collectively, to (i) the Business Combination Proposal, (ii) the Appreciate Charter Proposal and (iii) the Nasdaq Proposal.

        CST” refers to Continental Transfer & Trust Company, a New York corporation, and PTIC II’s transfer agent.

        DGCL” refers to the General Corporation Law of the State of Delaware.

        DTC” refers to The Depository Trust Company.

        Effective Time” refers to the time at which the Business Combination has been consummated.

        Equity Incentive Plan” refers to the equity incentive plan of Appreciate in the form substantially attached to this proxy statement as Annex F, as mutually agreed upon between the PTIC II and Renters Warehouse.

        Equity Incentive Plan Proposal” refers to the Stockholder Proposal to adopt the Equity Incentive Plan.

        Exchange Act” refers to the Securities Exchange Act of 1934, as amended.

        Exchange Cap” refers to 19.99% of the voting power or number of shares of Appreciate Class A Common Stock outstanding, calculated in accordance with applicable Nasdaq rules.

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        Existing Bylaws” refers to PTIC II’s Bylaws, effective as of December 3, 2020.

        Existing Charter” refers to PTIC II’s amended and restated Certificate of Incorporation, dated as of December 3, 2020 (as proposed to be amended by the PTIC II Charter Amendment Proposal, unless the context dictates otherwise).

        Existing Governing Documents” refers collectively to the Existing Bylaws and Existing Charter.

        Existing Renters Warehouse LLC Interests” refers to, as of immediately prior to the Closing, the “Company Units,” “Company Class B Units,” “Company Class A Units” and “Company Class A-1 Units” of Renters Warehouse (in each case, as defined in the Company LLC Agreement (as defined in the Business Combination Agreement)) and any other equity interests in Renters Warehouse, whether vested or unvested.

        Founder Shares” refers to shares of PTIC II Class B Common Stock initially purchased by Sponsor in a private placement prior to the IPO.

        GAAP” refers to the generally accepted accounting principles in the United States.

        Initial LLC Agreement” refers to the initial Limited Liability Company Agreement of NewCo LLC.

        Initial Stockholders” refers to the Sponsor and any other any other holders of PTIC II’s Founder Shares prior to the IPO (or their permitted transferees).

        Investment Company Act” refers to the Investment Company Act of 1940, as amended.

        Investor Rights Agreement” refers to the Investor Rights Agreement, to be entered into, and signed at the Closing by and among Appreciate, the Sponsor, the other Founder Holders (as defined therein) and the Sellers (as defined therein) party thereto, pursuant to which, among other things, (a) each Holder (as defined therein) (excluding St. Cloud Capital Partners III SBIC, L.P.) will agree not to effect any sale or distribution of any Appreciate Common Stock held by any of them during the lock-up period described therein and (b) each Holder will be granted certain registration rights with respect to their respective Appreciate Common Stock, in each case, on the terms and subject to the conditions set forth therein, substantially in the form attached hereto at Annex G, as the same may be amended, modified, supplemented or waived from time to time in accordance with its terms.

        IPO” refers to PTIC II’s initial public offering of its PTIC II Class A Common Stock and Public Warrants pursuant to the IPO Registration Statement, which was consummated on December 8, 2020.

        IPO Registration Statement” refers to PTIC II’s Registration Statement on Form S-1, filed with the SEC (File No. 333-249477), on October 14, 2020, as amended.

        IRS” refers to the U.S. Internal Revenue Service.

        Lake Street” or the “Sellers’ Representative” refers to Lake Street Landlords, LLC, a Delaware limited liability company.

        Morrow” refers to Morrow Sodali LLC, the proxy solicitation agent for PTIC II.

        Nasdaq” refers to the Nasdaq Stock Market.

        Nasdaq Listing Condition” refers to that certain condition under the Business Combination Agreement that PTIC II receive approval for listing on Nasdaq of the PTIC II Class A Common Stock to be issued in connection with the transactions contemplated by the Business Combination Agreement.

        Net Tangible Assets Condition” refers to that certain condition (which has been waived subject to the approval of the PTIC II Charter Amendment Proposal and the Business Combination Proposal) under the Business Combination Agreement that PTIC II have at least $5,000,001 of net tangible assets immediately after the consummation of the Closing.

        NewCo LLC” refers to Appreciate Intermediate Holdings, LLC, a Delaware limited liability company, to be formed immediately prior to the Closing.

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        NewCo LLC Class A Units” refers to the “Class A Units” of NewCo LLC as defined in the A&R LLC Agreement.

        NewCo LLC Class B Units” refers to the “Class B Units” of NewCo LLC as defined in the A&R LLC Agreement.

        Northland” refers to Northland Securities, Inc.

        NPG” refers to Northern Pacific Group Investment Partners, L.P.

        Other PTIC II Class B Stockholders” refers to each of Jack Leeney, Courtney Robinson, Gloria Fu, Margaret Whelan and Adam Blake.

        PCAOB” refers to Public Company Accounting Oversight Board (United States).

        Person” refers to an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or other similar entity, whether or not a legal entity.

        Private Placement” refers to PTIC II’s private placement of 4,833,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant to Sponsor, generating proceeds of approximately $7.3 million.

        Private Placement Warrants” refers to the 4,833,333 warrants to purchase PTIC II Class A Common Stock that were issued in the Private Placement concurrently with the IPO.

        Promissory Note” refers to the Promissory Note, dated September 8, 2022, entered into by and between PTIC II and Sponsor with an aggregate principal amount of up to $250,000.

        Proposed Appreciate Bylaws” refers to the proposed new bylaws of Appreciate in connection with the Business Combination.

        Proposed Appreciate Charter” refers to the proposed new certificate of incorporation of Appreciate in connection with the Business Combination.

        Proposed Governing Documents” refers to the Proposed Appreciate Charter and the Proposed Appreciate Bylaws.

        PTIC II” or the “Company” refers to PropTech Investment Corporation II, a Delaware corporation.

        PTIC II Board” refers to the board of directors of PTIC II.

        PTIC II Charter Amendment Proposal” refers to the Stockholder Proposal to consider and vote on the adoption of amendments to the Existing Charter.

        PTIC II Class A Common Stock” refers to the 23,000,000 shares of PTIC II Class A common stock, par value $0.0001 per share, sold as part of the PTIC II Units in the IPO (whether purchased in the IPO or thereafter in the open market) that will automatically convert by operation of law into 23,000,000 shares of Appreciate Class A Common Stock at the Closing.

        PTIC II Class A Stockholders” refers to the holders of PTIC II Class A Common Stock.

        PTIC II Class B Common Stock” refers to the 5,750,000 Class B common stock, par value $0.0001 per share of PTIC II that will automatically convert by operation of law at the Closing into 5,750,000 shares of Appreciate Class A Common Stock.

        PTIC II Class B Stockholders” refers to the holders of PTIC II Class B Common Stock.

        PTIC II Common Stock” refers to PTIC II Class A common stock and PTIC II Class B common stock.

        PTIC II Preferred Stock” refers to shares of preferred stock, par value $0.0001 per share, of PTIC II.

        PTIC II Stockholders” refers to the holders of PTIC II Common Stock.

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        PTIC II Units” refers to the units sold in the IPO, which consist of one share of PTIC II Class A Common Stock and one-third of one Public Warrant.

        Public Warrants” refers to the 7,666,667 PTIC II redeemable warrants sold as part of the PTIC II Units in the IPO (whether purchased in the IPO or thereafter in the open market), to the Private Placement Warrants if held by third parties other than Sponsor (or any permitted transferees), and to any Private Placement Warrants issued upon conversion of working capital loans that are sold to third parties that are not initial purchasers or executive officers or directors (or any permitted transferees), entitling the holder thereof to purchase PTIC II Class A Common Stock.

        Renters Warehouse” refers to RW National Holdings, LLC, a Delaware limited liability company.

        Renters Warehouse Business” refers to all of the current and former businesses of each of the Renters Warehouse Group Companies, including making available a tech-enabled full-service property management, residential leasing and investment services company for both individual owners of and institutional investors in single-family rental houses.

        Renters Warehouse Class A Preferred Units” refers to the “Class A Preferred Units” of Renters Warehouse (as defined in the Second Amended and Restated Limited Liability Company Agreement of Renters Warehouse, dated August 5, 2016, as amended, by and among Renters Warehouse and the unitholders of Renters Warehouse party thereto (“Renters Warehouse LLC Agreement”)).

        Renters Warehouse Class A-1 Preferred Units” refers to the “Class A-1 Preferred Units” of Renters Warehouse (as defined in the Renters Warehouse LLC Agreement).

        Renters Warehouse Class B Units” refers to the “Class B Units” of Renters Warehouse (as defined in the Renters Warehouse LLC Agreement).

        Renters Warehouse Common Units” refers to the “Common Units” of Renters Warehouse (as defined in the Renters Warehouse LLC Agreement).

        Renters Warehouse Group Company” or “Renters Warehouse Group Companies” refer to, collectively, Renters Warehouse and its subsidiaries and any franchise of any Renters Warehouse Group Company.

        Renters Warehouse Members” refers to the members of Renters Warehouse as of the Closing.

        Renters Warehouse Units” refers to, prior to the Closing, the Renters Warehouse Common Units, Renters Warehouse Class B Units, the Renters Warehouse Class A Preferred Units, the Renters Warehouse Class A-1 Preferred Units and any profits interests or similar units issued by Renters Warehouse.

        Rolling Renters Warehouse Unitholders” refers to the “Rolling Company Unitholders” as defined in the Business Combination Agreement.

        Sarbanes-Oxley Act” refers to the Sarbanes-Oxley Act of 2002, as amended.

        SEC” refers to the U.S. Securities and Exchange Commission.

        Securities Act” refers to the Securities Act of 1933, as amended.

        Special Meeting” refers to the special meeting of the PTIC II Stockholders to be held on November 18, 2022 at 11:00 a.m., Eastern Time, to vote on matters relating to the Business Combination via live webcast.

        Sponsor” refers to HC PropTech Partners II LLC, a Delaware limited liability company controlled by certain PTIC II officers, directors and advisors.

        Stockholder Proposals” refer, collectively, to (i) the PTIC II Charter Amendment Proposal, (ii) the Business Combination Proposal, (iii) the Appreciate Charter Proposal, (iv) the Advisory Governing Documents Proposals, (v) the Nasdaq Proposal, (vi) the Equity Incentive Plan Proposal and (vii) the Adjournment Proposal.

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        Supporting Renters Warehouse Unitholders” refers to the “Company Unitholders” listed on Schedule I to the Business Combination Agreement.

        Transaction Equity Security Amount” refers to a number of NewCo LLC Class B Units or shares of Appreciate Class B Common Stock, as applicable, equal, in the aggregate, to (a) the Pre-Transaction Equity Value (being, $312,000,000, as defined in the Business Combination Agreement), divided by (b) $10.00. Under the no redemptions, 25%, 50%, 75% and Maximum Redemptions scenario the Transaction Equity Security Amount will be equal to 22,386,641, 28,136,641, 29,516,000, 31,200,000 and 31,200,000, respectively, of NewCo LLC Class B units or shares of Appreciate Class B Common Stock, as applicable.

        Trust Account” refers to the trust account of PTIC II which holds the net proceeds from the IPO and the sale of the Private Placement Warrants together with interest earned thereon, less amounts released to pay taxes.

        U.S. Holder” refers to a beneficial owner of the PTIC II Class A Common Stock or Public Warrants or Appreciate Common Stock or Appreciate Warrants, as applicable, for U.S. federal income tax purposes.

        Warrants” refers collectively to the Private Placement Warrants together with the Public Warrants.

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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this proxy statement, the attachments hereto and any document incorporated by reference herein are “forward-looking statements.” Forward-looking statements generally relate to future events or Appreciate’s future financial or operating performance, including pro forma and estimated financial information and projections (including EBITDA and Adjusted EBITDA), forecasts or other characterizations of future events or circumstances, including any underlying assumptions and other “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995 (the “PSLRA”)). They include statements regarding the parties ability to close the Business Combination, the anticipated benefits of the Business Combination and may include statements and expectations regarding the combined business. In addition, words such as “estimates,” “projected,” “expects,” “estimated,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “should,” “will,” “would,” “future,” “propose,” “predict,” “potential,” “continue,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.

The forward-looking statements are based on the current expectations of the management of PTIC II and/or Renters Warehouse, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made with the SEC by PTIC II and, include, but are not limited to, the following:

        the timing to complete the Business Combination;

        our ability to complete the Business Combination, or, if we fail to consummate the Business Combination, any other business combination;

        the failure to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the Combined Company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain key employees;

        delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulatory reviews required to complete the Business Combination;

        the outcome of any legal proceedings that may be instituted in connection with the proposed Business Combination;

        the inability to complete the Business Combination;

        the inability to complete the transactions contemplated by the proposed Business Combination due to the failure to satisfy any conditions to closing, including the failure to obtain certain approvals of PTIC II Stockholders;

        the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination Agreement, including the failure to satisfy any of the conditions to closing in the Business Combination Agreement;

        the ability to obtain and/or maintain the listing of the Appreciate Class A Common Stock and the Appreciate Warrants on Nasdaq, and the potential liquidity and trading of such securities;

        the failure to realize anticipated pro forma results or projections and underlying assumptions, including with respect to estimated stockholder redemptions, purchase price and other adjustments;

        the projected financial information, anticipated growth rate and market opportunity of the Combined Company;

        our success in retaining or recruiting, our principal officers, key employees or directors following the Business Combination;

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        our directors and officers potentially having conflicts of interest with our business or in approving the Business Combination, as a result of which they would receive compensation;

        intense competition and competitive pressures from other companies in the industry in which Appreciate will operate;

        factors relating to the business, operations and financial performance of Appreciate including market conditions and global and economic factors beyond Appreciate’s control;

        the risk that the transactions contemplated by the Business Combination Agreement disrupt current plans and operations of Renters Warehouse as a result of the announcement and consummation of the Business Combination Agreement and the transactions contemplated thereby;

        macroeconomic conditions related to the global COVID-19 pandemic;

        costs related to the Business Combination;

        the reduction or elimination of government economic incentives to the renewable energy market;

        impacts of climate change, changing weather patterns and conditions and natural disasters;

        the effect of legal, tax and regulatory changes;

        changes to the proposed structure of the transactions contemplated by the Business Combination Agreement that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval of the transactions contemplated by the Business Combination Agreement;

        the outbreak or escalation of military hostilities, including between Russia and Ukraine, and the potential destabilizing effect such conflicts may pose for global markets; and

        other factors detailed under the section entitled “Risk Factors.

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

The PSLRA provides a safe harbor for forward-looking statements made with respect to certain securities offerings, but excludes such protection for statements made in connection with certain securities offerings, such as tender offers and initial public offerings. The term “initial public offering” is not defined in the PSLRA. Given the particular characteristics of mergers and business combinations completed by special purpose acquisition companies, there has been some question regarding whether such mergers and business combinations are “initial public offerings,” and therefore not subject to the protection of the PSLRA. There is currently no relevant case law on this matter, and accordingly, there can be no assurances that the safe harbor is applicable to forward-looking statements made by PTIC II and Renter’s Warehouse in connection with the Business Combination, and the protections of the safe harbor provided by the PSLRA to PTIC II and Renter’s Warehouse may not be available.

Before you grant your proxy or instruct how your vote should be cast or vote on the Stockholder Proposals to be presented at the Special Meeting, you should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement may adversely affect PTIC II, Renters Warehouse, or, following the consummation of the Business Combination, Appreciate.

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND
THE SPECIAL MEETING

The following are answers to certain questions that you may have regarding the Business Combination and the Special Meeting. We urge you to read carefully the remainder of this proxy statement because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to this proxy statement.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

Q:     WHAT IS THE BUSINESS COMBINATION?

A:     PTIC II entered into the Business Combination Agreement with Renters Warehouse, and Lake Street, in its capacity as the representative of the Rolling Renters Warehouse Unitholders, pursuant to which, among other things:

(a)     Concurrent with the execution of the Business Combination Agreement, the Sponsor, the other PTIC II Class B Stockholders and Renters Warehouse, among others, have entered into the sponsor letter agreement (as the same may be amended, supplemented or otherwise modified from time to time, the “Sponsor Letter Agreement”), pursuant to which, among other things, the Sponsor and the Other PTIC II Class B stockholders have agreed, for no additional consideration, to (i) vote all PTIC II Common Stock owned by the Sponsor and the Other PTIC II Class B stockholders in favor of the Business Combination Agreement and the contemplated transactions, (ii) subject to, and conditioned upon and effective immediately prior to the occurrence of the Effective Time, waive any adjustment to the conversion ratio set forth in the Existing Governing Documents or waive any anti-dilution or similar protections with respect to all of their PTIC II Class B Common Stock and (iii) subject to, and conditioned upon the occurrence of and effective as of, the Closing, terminate certain existing agreements or arrangements, in each case, on the terms and subject to the conditions set forth in the Sponsor Letter Agreement;

(b)    Immediately prior to the Closing, (i) PTIC II shall form NewCo LLC, for purposes of consummating the transactions contemplated by the Business Combination Agreement and the Ancillary Documents, on the terms and subject to the conditions set forth in the Business Combination Agreement, (ii) each share of PTIC II Class B Common Stock that is issued and outstanding immediately prior to the Closing shall be converted into one (1) share of PTIC II Class A Common Stock, (iii) the Proposed Appreciate Charter and the Proposed Appreciate Bylaws shall become the Governing Documents (as defined in the Business Combination Agreement) of PTIC II, and (iv) PTIC II will change its name to “Appreciate Holdings, Inc.” in accordance with the Business Combination Agreement (collectively, clauses (i), (ii), (iii) and (iv), the “PTIC II Pre-Closing Reorganization”);

(c)     On the Closing Date, (i) Rolling Renters Warehouse Unitholders will contribute all of their Existing Renters Warehouse LLC Interests to NewCo LLC in exchange for non-voting NewCo LLC Class B Units, (ii) the Initial LLC Agreement will be amended and restated in the required form, (iii) PTIC II will contribute the Closing Date Contribution Amount to NewCo LLC in exchange for NewCo LLC Class A Units and (iv) the NewCo LLC unitholders (other than PTIC II) will receive a number of shares of Appreciate Class B Common Stock equal to the Transaction Equity Security Amount, on the terms and subject to the conditions set forth in the Business Combination Agreement;

(d)    At the Closing, Appreciate Holdings, Inc., NewCo LLC, Renters Warehouse, Lake Street and each of the members of NewCo LLC that are Rolling Renters Warehouse Unitholders (excluding St. Cloud Capital Partners III SBIC, L.P. (“St. Cloud”)) will enter into an income tax receivable agreement substantially in the form attached hereto as Annex J (as the same may be amended, supplemented or otherwise modified from time to time, the “Tax Receivable Agreement”);

(e)     At the Closing, Appreciate will enter into the Investor Rights Agreement, with the Sponsor, the other Founder Holders (as defined therein) and the Sellers (as defined therein), pursuant to which, among other things, (a) each Holder (as defined therein) (excluding St. Cloud) will agree not to effect any sale or distribution of any Appreciate Common Stock held by any of them during the lock-up period described therein and (b) each Holder will be granted certain registration rights with respect to their respective Appreciate Common Stock, in each case, on the terms and subject to the conditions set forth therein;

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(f)     In connection with the transactions contemplated by the Business Combination Agreement, PTIC II will file the definitive proxy statement relating to the transactions contemplated by the Business Combination Agreement and the Ancillary Documents and it is a condition to the consummation of the transactions contemplated by the Business Combination Agreement that PTIC II obtain Stockholder Approval; and

(g)    Subject to the terms set forth in the Business Combination Agreement, the Sellers’ Representative will serve as the representative of the Rolling Renters Warehouse Unitholders.

PTIC II will hold the Special Meeting to, among other things, obtain the adoption and approval of the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement by the stockholders of PTIC II, and you are receiving this proxy statement in connection with the Special Meeting. See the section entitled “Proposal No. 2 — The Business Combination Proposal” beginning on page 97. In addition, a copy of the Business Combination Agreement is attached to this proxy statement as Annex A. We urge you to read carefully this proxy statement and the Business Combination Agreement in their entirety.

Q:     WHY AM I RECEIVING THIS DOCUMENT?

A:     PTIC II is sending this proxy statement to its stockholders to help them decide how to vote their shares of PTIC II Common Stock with respect to the matters to be considered at the Special Meeting.

The Business Combination cannot be completed unless PTIC II Stockholders approve the Business Combination Proposal, the Appreciate Charter Proposal and the Nasdaq Proposal set forth in this proxy statement. Information about the Special Meeting, the Business Combination, and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement.

This document constitutes a proxy statement of PTIC II. It is a proxy statement because the PTIC II Board is soliciting proxies using this proxy statement from its stockholders. See the section entitled “Proposal No. 2 — The Business Combination Proposal — Vote Required for Approval.

Q:     WHAT WILL PTIC II STOCKHOLDERS OWN AS A RESULT OF THE BUSINESS COMBINATION?

A:     As of the date of this proxy statement, there are 28,750,000 shares of PTIC II Common Stock issued and outstanding, which includes 23,000,000 shares of PTIC II Class A Common Stock and 5,750,000 shares of PTIC II Class B Common Stock, including 5,595,000 shares held by the Sponsor. In addition, there are 12,500,000 Warrants to acquire PTIC II Class A Common Stock, comprised of 7,666,667 Public Warrants and 4,833,333 Private Placement Warrants.

Immediately following the Business Combination, assuming no redemptions, the PTIC II Stockholders and the Sponsor will hold approximately 78.8% and 19.2%, respectively, of the issued and outstanding shares of Appreciate Class A Common Stock and none of the issued and outstanding NewCo LLC Class B Units or shares of Appreciate Class B Common Stock, and will accordingly hold approximately 44.6% and 11.1%, respectively, of the voting power of Appreciate’s Common Stock; however, on a fully-diluted basis, assuming no redemptions and taking into account (i) the exchange of all issued and outstanding NewCo LLC Class B Units and Appreciate Class B Common Stock for Appreciate Class A Common Stock and (ii) the additional dilution sources as described under the question titled “How do redemptions affect the value of my Appreciate Common Stock?” below, the PTIC II Stockholders and Sponsor will hold approximately 38.2% and 13.0%, respectively, of the issued and outstanding shares of Appreciate Class A Common Stock, none of the issued and outstanding NewCo LLC Class B Units or shares of Appreciate Class B Common Stock, and will accordingly hold approximately 38.2% and 13.0%, respectively, of the issued and outstanding shares of Appreciate’s Common Stock and assuming no shares of Appreciate Class B Common Stock will be issued and outstanding. In addition, in connection with the Closing, NewCo LLC will issue 100% of the NewCo LLC Class A Units to PTIC II, such units representing voting and economic rights in NewCo LLC; however, the NewCo LLC Class A Units are not convertible or exchangeable for Appreciate Class A Common Stock.

If approximately 39.7% or more of the shares of PTIC II Class A Common Stock are redeemed prior to the Business Combination, we expect that Appreciate, following the Business Combination, will be considered a “controlled company” within the meaning of the Nasdaq rules and may elect to take advantage of certain “controlled company” exemptions. See the section entitled “Management Following the Business Combination — Independence of the Appreciate Board.

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Q:     WHAT WILL RENTERS WAREHOUSE EXISTING MEMBERS RECEIVE IN THE BUSINESS COMBINATION?

A:     The consideration to be received by the Rolling Renters Warehouse Unitholders at the Closing will be on the terms and subject to the conditions set forth in the Business Combination Agreement and consist of (a) a number of non-voting NewCo LLC Class B Units equal, in the aggregate, to the Transaction Equity Security Amount, and (b) a corresponding number of shares of Appreciate Class B Common Stock equal, in the aggregate, to the Transaction Equity Security Amount. Under the no redemptions, 25%, 50%, 75% and Maximum Redemptions scenarios the Transaction Equity Security Amount will be equal to 22,386,641, 28,136,641, 29,516,000, 31,200,000 and 31,200,000.

On or following the Closing if, at any time prior to the fifth anniversary of the date of the Closing, the closing sale price of the PTIC II Class A Common Stock is greater than or equal to $12.50, $15.00 or $17.50 (which shall be adjusted equitably to reflect any dividend, split, or other noneconomic reclassification of shares of PTIC II’s capital stock) over any twenty (20) trading days within any thirty (30) consecutive trading day period, then Appreciate shall issue to Rolling Renters Warehouse Unitholders holding non-voting NewCo LLC Class B Units as of the Closing Date, in the aggregate, 1,000,000, 2,000,000 or 3,000,000 shares of Appreciate Class B Common Stock, respectively. PTIC II shall issue such Appreciate Class B Common Stock to such Rolling Renters Warehouse Unitholders in accordance with the Allocation Schedule (as defined in the Business Combination Agreement).

Q:     WHAT EQUITY STAKE WILL CURRENT PTIC II STOCKHOLDERS AND RENTERS WAREHOUSE EXISTING MEMBERS HOLD IN APPRECIATE IMMEDIATELY AFTER THE CONSUMMATION OF THE BUSINESS COMBINATION?

A:     The following table summarizes the pro forma equity ownership in Appreciate Common Stock immediately following the Business Combination under five (5) redemption scenarios. For additional information, see the sections entitled “Proposal No. 2 — The Business Combination Proposal — Impact of the Business Combination on Appreciate’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

Assuming
No
Redemptions
(1)(2)

 

Assuming
25%
Redemptions
(1)(3)

 

Assuming
50%
Redemptions
(1)(4)

 

Assuming
75%
Redem
ptions(1)(5)

 

Assuming
Maximum
Redemptions
(1)(6)

PTIC II Class A Stockholders

 

44.6

%

 

33.4

%

 

24.4

%

 

13.3

%

 

 

Sponsor(7)

 

11.1

%

 

11.1

%

 

12.2

%

 

13.3

%

 

15.4

%

CF Principal

 

0.4

%

 

0.4

%

 

0.4

%

 

0.5

%

 

0.5

%

Northland(8)

 

0.5

%

 

0.5

%

 

0.5

%

 

0.6

%

 

0.7

%

Rolling Renters Warehouse Unitholders

 

43.4

%

 

54.5

%

 

62.5

%

 

72.3

%

 

83.4

%

Total(9)(10)

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

____________

(1)      Assumes that the Transaction Equity Security Amount is equal to 22,386,641, 28,136,641, 29,516,000, 31,200,000 and 31,200,000 shares of Appreciate Class B Common Stock, respectively, issued and outstanding at Closing assuming no redemptions, 25%, 50%, 75% and Maximum Redemptions and does not take into effect the dilutive effects of (i) the exercise of approximately 12,500,000 Warrants to purchase Appreciate Class A Common Stock (comprised of 7,666,667 Public Warrants and 4,833,333 Private Placement Warrants) that will be outstanding following the Business Combination or (ii) the 6,000,000 shares of Appreciate Class A Common Stock pursuant to the earnout. If actual facts are different than these assumptions (which is likely), the ownership percentages held by each of the PTIC II Class A Stockholders, the Sponsor, and the Rolling Renters Warehouse Unitholders will be different.

(2)      Assumes that zero shares of PTIC II Class A Common Stock are redeemed in connection with the Business Combination.

(3)      Assumes that a total of 5,750,000 shares of PTIC II Class A Common Stock are redeemed in connection with the Business Combination.

(4)      Assumes that a total of 11,500,000 shares of PTIC II Class A Common Stock are redeemed in connection with the Business Combination.

(5)      Assumes that a total of 17,250,000 shares of PTIC II Class A Common Stock are redeemed in connection with the Business Combination.

(6)      Assumes that a total of 23,000,000 shares of PTIC II Class A Common Stock are redeemed in connection with the Business Combination.

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(7)      Consists of 5,750,000 shares of Appreciate Class A Common Stock, 5,595,000 of which are held directly by the Sponsor; however, if, following the Business Combination and assuming the exercise and conversion of all securities including (i) the exercise of 7,666,667 Appreciate Public Warrants for an equal number of Appreciate Class A Common Stock, (ii) the exercise of 4,833,333 Appreciate Private Placement Warrants for an equal number of Appreciate Class A Common Stock, (iii) 10,204,082 shares of Appreciate Class A Common Stock issuable pursuant to the CEF Purchase Agreement (in addition to 200,000 Commitment Shares payable to CF Principal), assuming the Appreciate Class A Common Stock trades at $10.00 throughout the draw down period and the Combined Company draws down fully the amount of shares of Appreciate Class A Common Stock available under the CEF Purchase Agreement, and (iv) 6,000,000 shares of Appreciate Class B Common Stock that will be issued to the Rolling Renters Warehouse Unitholders contingent upon achieving certain market share price milestones within a period of five (5) years post-Business Combination, the Sponsor and its affiliates will hold an equity stake in Appreciate of 13.0%, 13.0%, 13.7%, 14.5% and 15.8%, respectively, in the no redemptions, 25%, 50%, 75% and Maximum Redemption scenarios. Appreciate will have the right, but not the obligation, from time to time at its sole discretion until the first day of the month following the thirty-six (36-) month period from and after the Commencement, to direct CF Principal to purchase up to a specified maximum amount of Appreciate Class A Common Stock as set forth in the CEF Purchase Agreement. The purchase price of the Appreciate Class A Common Stock that Appreciate elects to sell to CF Principal pursuant to the CEF Purchase Agreement will be 98% of the volume weighted average price of the Appreciate Class A Common Stock during the applicable purchase date on which Appreciate has timely delivered written notice to CF Principal directing it to purchase shares of Appreciate Class A Common Stock under the CEF Purchase Agreement. See “Risk Factors — When the shares of Appreciate Class A Common Stock are issued pursuant to the CEF Purchase Agreement and the Appreciate Warrants are exercised for Appreciate Class A Common Stock, the number of shares eligible for future resale in the public market will increase and result in dilution to our stockholders, and the fact that the additional shares issued pursuant to the CEF Purchase Agreement will be sold at a discounted price may in and of itself place downward pressure on the market price of Appreciate Class A Common Stock.

(8)      Assumes PTIC II elects to pay the $5.0 million transaction fee due to Northland upon closing the Business Combination in equal parts cash and equity securities of PTIC II.

(9)      Assumes the exchange of 100% of NewCo LLC Class B Units that will be outstanding at Closing for shares of Appreciate Class A Common Stock. Rolling Renters Warehouse Unitholders’ total share amount increases in higher redemption scenarios due to reduced cash to redeem existing Renters Warehouse preferred stock.

(10)    Percentages may not add to 100% due to rounding.

PTIC II Class A Stockholders that elect not to redeem their PTIC II Class A Common Stock will experience significant dilution as a result of the Business Combination. PTIC II Class A Stockholders currently own approximately 80% of PTIC II Common Stock. As noted above, if no PTIC II Class A Stockholders redeem their PTIC II Class A Common Stock in the Business Combination and no Public Warrants or Private Placement Warrants are exercised, PTIC II Class A Stockholders will own approximately 44.6% of the total shares outstanding in Appreciate. Assuming maximum redemptions, PTIC II Class A Stockholders will own none of the total shares outstanding. Following the Business Combination, an aggregate of up to 7,666,667 Public Warrants and 4,833,333 Private Placement Warrants will be outstanding. PTIC II Class A Stockholders who redeem their shares of PTIC II Class A Common Stock may continue to hold any Public Warrants that they owned prior to redemption, the exercise of which would result in additional dilution to non-redeeming PTIC II Class A Stockholders.

The following tables summarize the fully diluted share count of Appreciate Common Stock immediately following the Business Combination at illustrative share prices, assuming no redemptions.

 

Illustrative Share Price

Share count in millions

 

$

5.00

 

$

7.00

 

$

9.00

 

$

10.00

 

$

12.50

 

$

15.00

 

$

18.00

PTIC II Class A Common Stock

 

 

23.0

 

 

23.0

 

 

23.0

 

 

23.0

 

 

23.0

 

 

23.0

 

 

23.0

Founder Shares

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

CEF Commitment Shares(1)

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

Northland Fee(2)

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

Public Warrants(3)(4)

 

 

 

 

 

 

 

 

 

 

0.6

 

 

1.8

 

 

2.8

Private Placement Warrants(3)(5)

 

 

 

 

 

 

 

 

 

 

0.4

 

 

1.1

 

 

1.7

Committed Equity Facility Shares(6)

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

Earnout Shares(7)

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

Rolling Renters Warehouse Unitholders

 

 

22.4

 

 

22.4

 

 

22.4

 

 

22.4

 

 

22.4

 

 

22.4

 

 

22.4

Total

 

 

67.8

 

 

67.8

 

 

67.8

 

 

67.8

 

 

68.8

 

 

70.7

 

 

72.3

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Illustrative Share Price

Value of Ownership ($mm)

 

$

5.00

 

$

7.00

 

$

9.00

 

$

10.00

 

$

12.50

 

$

15.00

 

$

18.00

PTIC II Class A Common Stock

 

$

115

 

$

161

 

$

207

 

$

230

 

$

288

 

$

345

 

$

414

Founder Shares

 

 

29

 

 

40

 

 

52

 

 

58

 

 

72

 

 

86

 

 

104

CEF Commitment Shares(1)

 

 

1

 

 

1

 

 

2

 

 

2

 

 

3

 

 

3

 

 

4

Northland Fee(2)

 

 

1

 

 

2

 

 

2

 

 

3

 

 

3

 

 

4

 

 

5

Public Warrants(3)(4)

 

 

 

 

 

 

 

 

 

 

8

 

 

27

 

 

50

Private Placement Warrants(3)(5)

 

 

 

 

 

 

 

 

 

 

5

 

 

17

 

 

31

Committed Equity Facility Shares(6)

 

 

51

 

 

71

 

 

92

 

 

102

 

 

128

 

 

153

 

 

184

Earnout Shares(7)

 

 

30

 

 

42

 

 

54

 

 

60

 

 

75

 

 

90

 

 

108

Rolling Renters Warehouse Unitholders

 

 

112

 

 

157

 

 

201

 

 

224

 

 

280

 

 

336

 

 

403

Total (Pro Forma Equity Value)

 

$

339

 

$

475

 

$

610

 

$

678

 

$

860

 

$

1,061

 

$

1,301

Sponsor Multiple on Invested Capital

 

 

4.0x

 

 

5.5x

 

 

7.1x

 

 

7.9x

 

 

1.2x

 

 

1.6x

 

 

2.1x

____________

(1)      Reflects 200,000 Commitment Shares payable to CF Principal at Closing.

(2)      Assumes PTIC II elects to pay one-half of Northland’s advisory fee in equity securities.

(3)      Assumes treasury share method for the Public Warrants and Private Placement Warrants.

(4)      7,666,667 Public Warrants issued as part of PTIC II’s IPO with strike price of $11.50 and redemption price of $18.00.

(5)      4,833,333 Private Placement Warrants issued as part of PTIC II’s IPO with strike price of $11.50 and redemption price of $18.00.

(6)      Reflects up to 10,204,082 shares of Appreciate Class A Common Stock issuable pursuant to the CEF Purchase Agreement, assuming the Appreciate Class A Common Stock trades at $10.00 throughout the draw down period and the Combined Company draws down fully the amount of shares of Appreciate Class A Common Stock available under the CEF Purchase Agreement. Appreciate will have the right, but not the obligation, from time to time at its sole discretion until the first day of the month following the thirty-six (36-) month period from and after the Commencement, to direct CF Principal to purchase up to a specified maximum amount of Appreciate Class A Common Stock as set forth in the CEF Purchase Agreement. The purchase price of the Appreciate Class A Common Stock that Appreciate elects to sell to CF Principal pursuant to the CEF Purchase Agreement will be 98% of the volume weighted average price of the Appreciate Class A Common Stock during the applicable purchase date on which Appreciate has timely delivered written notice to CF Principal directing it to purchase shares of Appreciate Class A Common Stock under the CEF Purchase Agreement. See “Risk Factors — When the shares of Appreciate Class A Common Stock are issued pursuant to the CEF Purchase Agreement and the Appreciate Warrants are exercised for Appreciate Class A Common Stock, the number of shares eligible for future resale in the public market will increase and result in dilution to our stockholders, and the fact that the additional shares issued pursuant to the CEF Purchase Agreement will be sold at a discounted price may in and of itself place downward pressure on the market price of Appreciate Class A Common Stock.

(7)      Reflects 6,000,000 shares of Appreciate Class B Common Stock that will be issued to the Rolling Renters Warehouse Unitholders contingent upon achieving certain market share price milestones within a period of five (5) years post-Business Combination.

The following tables summarize the fully diluted share count of Appreciate Common Stock immediately following the Business Combination at illustrative share prices, assuming 25% redemptions.

 

Illustrative Share Price

Share count in millions

 

$

5.00

 

$

7.00

 

$

9.00

 

$

10.00

 

$

12.50

 

$

15.00

 

$

18.00

PTIC II Class A Common Stock

 

 

17.3

 

 

17.3

 

 

17.3

 

 

17.3

 

 

17.3

 

 

17.3

 

 

17.3

Founder Shares

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

 

 

5.8

CEF Commitment Shares(1)

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

 

 

0.2

Northland Fee(2)

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

 

 

0.3

Public Warrants(3)(4)

 

 

 

 

 

 

 

 

 

 

0.6

 

 

1.8

 

 

2.8

Private Placement Warrants(3)(5)

 

 

 

 

 

 

 

 

 

 

0.4

 

 

1.1

 

 

1.7

Committed Equity Facility Shares(6)

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

 

 

10.2

Earnout Shares(7)

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

 

 

6.0

Rolling Renters Warehouse Unitholders

 

 

28.1