false FY 0001836100 0001836100 2023-01-01 2023-12-31 0001836100 PUCK:UnitsEachConsistingOfOneShareOfCommonStockAndOneRedeemableWarrantMember 2023-01-01 2023-12-31 0001836100 PUCK:CommonStockParValue0.0001PerShareMember 2023-01-01 2023-12-31 0001836100 PUCK:RedeemableWarrantsExercisableForSharesOfCommonStockAtExercisePriceOf11.50PerShareMember 2023-01-01 2023-12-31 0001836100 2023-06-30 0001836100 2024-04-12 0001836100 2023-12-31 0001836100 2022-12-31 0001836100 us-gaap:RelatedPartyMember 2023-12-31 0001836100 us-gaap:RelatedPartyMember 2022-12-31 0001836100 2022-01-01 2022-12-31 0001836100 PUCK:CommonStockSubjectToRedemptionMember 2023-01-01 2023-12-31 0001836100 PUCK:CommonStockSubjectToRedemptionMember 2022-01-01 2022-12-31 0001836100 PUCK:CommonStockNotSubjectToRedemptionMember 2023-01-01 2023-12-31 0001836100 PUCK:CommonStockNotSubjectToRedemptionMember 2022-01-01 2022-12-31 0001836100 us-gaap:CommonStockMember 2021-12-31 0001836100 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001836100 us-gaap:RetainedEarningsMember 2021-12-31 0001836100 2021-12-31 0001836100 us-gaap:CommonStockMember 2022-12-31 0001836100 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001836100 us-gaap:RetainedEarningsMember 2022-12-31 0001836100 us-gaap:CommonStockMember 2022-01-01 2022-12-31 0001836100 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-12-31 0001836100 us-gaap:RetainedEarningsMember 2022-01-01 2022-12-31 0001836100 us-gaap:CommonStockMember 2023-01-01 2023-12-31 0001836100 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-12-31 0001836100 us-gaap:RetainedEarningsMember 2023-01-01 2023-12-31 0001836100 us-gaap:CommonStockMember 2023-12-31 0001836100 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001836100 us-gaap:RetainedEarningsMember 2023-12-31 0001836100 us-gaap:IPOMember 2021-02-15 2021-02-16 0001836100 us-gaap:IPOMember 2021-02-16 0001836100 us-gaap:PrivatePlacementMember 2021-02-16 2021-02-16 0001836100 us-gaap:PrivatePlacementMember 2023-02-16 0001836100 us-gaap:OverAllotmentOptionMember srt:MaximumMember 2021-02-16 2021-02-16 0001836100 us-gaap:OverAllotmentOptionMember 2021-02-23 2021-02-24 0001836100 us-gaap:OverAllotmentOptionMember 2021-02-24 0001836100 us-gaap:PrivatePlacementMember 2021-02-23 2021-02-24 0001836100 2021-02-24 0001836100 us-gaap:IPOMember 2021-02-23 2021-02-24 0001836100 us-gaap:IPOMember 2021-02-24 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember 2023-02-07 2023-02-07 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember 2023-02-07 0001836100 us-gaap:CommonStockMember 2023-02-07 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember PUCK:SecondCharterMember 2023-08-14 2023-08-14 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember PUCK:SecondCharterMember 2023-08-14 0001836100 us-gaap:CommonStockMember PUCK:SecondCharterMember 2023-08-14 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember PUCK:ThirdCharterMember 2023-11-07 2023-11-08 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember PUCK:ThirdCharterMember 2023-11-08 0001836100 us-gaap:CommonStockMember PUCK:ThirdCharterMember 2023-11-08 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember PUCK:InvestmentManagementTrustAgreementMember us-gaap:SubsequentEventMember 2024-02-06 2024-02-07 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember PUCK:InvestmentManagementTrustAgreementMember us-gaap:SubsequentEventMember 2024-02-07 0001836100 us-gaap:CommonStockMember PUCK:InvestmentManagementTrustAgreementMember us-gaap:SubsequentEventMember 2024-02-07 0001836100 PUCK:AmendedAndRestatedCertificateOfIncorporationMember 2023-01-01 2023-12-31 0001836100 PUCK:AmendedAndRestatedCertificateOfIncorporationMember us-gaap:IPOMember 2023-01-01 2023-12-31 0001836100 us-gaap:IPOMember 2023-12-31 0001836100 PUCK:TrustAccountMember PUCK:HolderMember 2023-01-01 2023-12-31 0001836100 PUCK:PipeInvestorsMember 2023-12-31 0001836100 us-gaap:CommonClassAMember PUCK:PipeInvestorsMember 2023-01-01 2023-12-31 0001836100 PUCK:PreferredClassCMember PUCK:DigitalVirgoMember PUCK:DVEarnoutSharesMember 2023-01-01 2023-12-31 0001836100 PUCK:PreferredClassCMember PUCK:DigitalVirgoMember PUCK:DVEarnoutSharesMember 2023-12-31 0001836100 PUCK:PreferredClassCMember PUCK:DigitalVirgoMember PUCK:SponsorEarnoutSharesMember 2023-01-01 2023-12-31 0001836100 PUCK:PreferredClassCMember PUCK:DigitalVirgoMember PUCK:SponsorEarnoutSharesMember 2023-12-31 0001836100 PUCK:PreferredClassCMember PUCK:DigitalVirgoMember PUCK:DVEarnoutSharesMember srt:MaximumMember 2023-12-31 0001836100 PUCK:DigitalVirgoMember PUCK:DVEarnoutSharesMember 2023-01-01 2023-12-31 0001836100 PUCK:SponsorMember 2023-01-01 2023-12-31 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember 2023-02-06 2023-02-07 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember 2023-08-16 2023-08-17 0001836100 us-gaap:CommonStockMember PUCK:StockholdersMember 2023-11-07 2023-11-08 0001836100 us-gaap:WarrantMember 2023-01-01 2023-12-31 0001836100 PUCK:HolderMember us-gaap:CommonStockMember 2021-02-16 0001836100 us-gaap:OverAllotmentOptionMember PUCK:UnderwritersMember 2021-02-23 2021-02-24 0001836100 us-gaap:CommonClassAMember 2021-12-31 0001836100 us-gaap:CommonClassAMember 2022-01-01 2022-12-31 0001836100 us-gaap:CommonClassAMember 2022-12-31 0001836100 us-gaap:CommonClassAMember 2023-01-01 2023-12-31 0001836100 us-gaap:CommonClassAMember 2023-12-31 0001836100 PUCK:SponsorMember us-gaap:PrivatePlacementMember 2021-02-15 2021-02-16 0001836100 PUCK:SponsorMember us-gaap:PrivatePlacementMember 2021-02-16 0001836100 PUCK:SponsorMember us-gaap:OverAllotmentOptionMember 2021-02-23 2021-02-24 0001836100 PUCK:FounderSharesMember 2020-11-23 2020-11-24 0001836100 PUCK:SponsorMember 2020-11-23 2020-11-24 0001836100 PUCK:FounderSharesMember 2020-11-24 0001836100 PUCK:SponsorMember 2020-12-15 2020-12-16 0001836100 PUCK:PromissoryNoteMember 2021-01-21 0001836100 PUCK:SponsorMember PUCK:PromissoryNoteMember us-gaap:RelatedPartyMember 2021-05-31 0001836100 PUCK:SponsorMember PUCK:PromissoryNoteMember us-gaap:RelatedPartyMember 2021-08-31 0001836100 PUCK:SponsorMember PUCK:PromissoryNoteMember PUCK:AdvancementAgreementMember 2021-11-04 0001836100 PUCK:RelatedPartyLoansMember 2023-01-01 2023-12-31 0001836100 PUCK:RelatedPartyLoansMember 2023-12-31 0001836100 2021-11-03 2021-11-04 0001836100 2023-04-27 2023-04-28 0001836100 PUCK:AdvancementAgreementMember 2023-12-31 0001836100 PUCK:AdvancementAgreementMember 2022-12-31 0001836100 PUCK:AdvancementAgreementMember PUCK:SponsorMember 2023-12-31 0001836100 PUCK:AdvancementAgreementMember PUCK:SponsorMember 2022-12-31 0001836100 PUCK:AdvancementAgreementMember 2023-01-01 2023-12-31 0001836100 PUCK:EarlyBirdCapitalIncMember 2023-12-31 0001836100 PUCK:EarlyBirdCapitalIncMember 2023-01-01 2023-12-31 0001836100 2021-11-03 2021-11-05 0001836100 2023-07-06 2023-07-06 0001836100 PUCK:PublicWarrantsMember 2023-12-31 0001836100 PUCK:PublicWarrantsMember 2023-01-01 2023-12-31 0001836100 PUCK:PublicWarrantsMember PUCK:WarrantAgreementMember 2023-01-01 2023-12-31 0001836100 us-gaap:FairValueInputsLevel1Member 2023-12-31 0001836100 us-gaap:FairValueInputsLevel2Member 2023-12-31 0001836100 us-gaap:FairValueInputsLevel3Member 2023-12-31 0001836100 us-gaap:FairValueInputsLevel1Member 2022-12-31 0001836100 us-gaap:FairValueInputsLevel2Member 2022-12-31 0001836100 us-gaap:FairValueInputsLevel3Member 2022-12-31 0001836100 us-gaap:PrivatePlacementMember us-gaap:WarrantMember us-gaap:MeasurementInputSharePriceMember 2023-12-31 0001836100 us-gaap:PrivatePlacementMember us-gaap:WarrantMember us-gaap:MeasurementInputSharePriceMember 2022-12-31 0001836100 us-gaap:PrivatePlacementMember us-gaap:WarrantMember PUCK:MeasurementInputStrikePriceMember 2023-12-31 0001836100 us-gaap:PrivatePlacementMember us-gaap:WarrantMember PUCK:MeasurementInputStrikePriceMember 2022-12-31 0001836100 us-gaap:MeasurementInputExpectedTermMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2023-12-31 0001836100 us-gaap:MeasurementInputExpectedTermMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2022-12-31 0001836100 us-gaap:MeasurementInputPriceVolatilityMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2023-12-31 0001836100 us-gaap:MeasurementInputPriceVolatilityMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2022-12-31 0001836100 us-gaap:MeasurementInputRiskFreeInterestRateMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2023-12-31 0001836100 us-gaap:MeasurementInputRiskFreeInterestRateMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2022-12-31 0001836100 us-gaap:MeasurementInputExpectedDividendRateMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2023-12-31 0001836100 us-gaap:MeasurementInputExpectedDividendRateMember us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2022-12-31 0001836100 us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2022-12-31 0001836100 us-gaap:WarrantMember us-gaap:PrivatePlacementMember 2023-01-01 2023-12-31 0001836100 us-gaap:PrivatePlacementMember us-gaap:WarrantMember 2023-12-31 0001836100 us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputSharePriceMember 2023-12-31 0001836100 us-gaap:FairValueInputsLevel3Member us-gaap:MeasurementInputSharePriceMember 2022-12-31 0001836100 us-gaap:FairValueInputsLevel3Member PUCK:MeasurementInputStrikePriceMember 2023-12-31 0001836100 us-gaap:FairValueInputsLevel3Member PUCK:MeasurementInputStrikePriceMember 2022-12-31 0001836100 us-gaap:FairValueInputsLevel3Member PUCK:MeasurementInputStrikePriceDebtConversionMember 2023-12-31 0001836100 us-gaap:FairValueInputsLevel3Member PUCK:MeasurementInputStrikePriceDebtConversionMember 2022-12-31 0001836100 us-gaap:MeasurementInputExpectedTermMember us-gaap:FairValueInputsLevel3Member 2023-01-01 2023-12-31 0001836100 us-gaap:MeasurementInputExpectedTermMember us-gaap:FairValueInputsLevel3Member 2022-01-01 2022-12-31 0001836100 us-gaap:MeasurementInputPriceVolatilityMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001836100 us-gaap:MeasurementInputPriceVolatilityMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001836100 us-gaap:MeasurementInputRiskFreeInterestRateMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001836100 us-gaap:MeasurementInputRiskFreeInterestRateMember us-gaap:FairValueInputsLevel3Member 2022-12-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure iso4217:EUR xbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2023

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission file number: 001-40026

 

GOAL ACQUISITIONS CORP.

(Exact name of registrant as specified in its charter)

 

Delaware   85-3660880

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

12600 Hill Country Blvd Building R, Suite 275

Bee Cave, Texas

  78738
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (888) 717-7678

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading
Symbol(s)
  Name of each exchange on which registered
         
Units, each consisting of one share of common stock and one redeemable warrant   PUCKU   The Nasdaq Stock Market LLC
         
Common stock, par value $0.0001 per share   PUCK   The Nasdaq Stock Market LLC
         
Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share   PUCKW   The Nasdaq Stock Market LLC

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer  
    Smaller reporting company  
Non-accelerated filer Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No ☐

 

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $99,091,185 on June 30, 2023 (the last business day of the registrant’s most recently completed second quarter) based on the closing price for the common stock on the NASDAQ Capital Market on June 30, 2023.

 

As of April 12, 2024, a total of 7,500,419 shares of common stock, par value $0.0001 per share, were issued and outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
PART I  
   
Item 1. Business 6
   
Item 1A. Risk Factors 22
   
Item 1B. Unresolved Staff Comments 40
   
Item 1C. Cybersecurity 40
   
Item 2. Properties 40
   
Item 3. Legal Proceedings 40
   
Item 4. Mine Safety Disclosures 40
   
PART II  
   
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41
   
Item 6. [Reserved] 41
   
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 42
   
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47
   
Item 8. Financial Statements and Supplementary Data 47
   
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 47
   
Item 9A. Controls and Procedures 48
   
Item 9B. Other Information 49
   
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 49
   
PART III  
   
Item 10. Directors, Executive Officers and Corporate Governance 49
   
Item 11. Executive Compensation 55
   
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 55
   
Item 13. Certain Relationships and Related Transactions, and Director Independence 57
   
Item 14. Principal Accounting Fees and Services 59
   
PART IV  
   
Item 15. Exhibits, Financial Statement Schedules 59
   
Item 16. Form 10-K Summary 61

 

2
 

 

References to the “Company,” “our,” “us” or “we” refer to Goal Acquisitions Corp., a blank check company incorporated in Delaware on October 26, 2020. References to our “Sponsor” refer to Goal Acquisitions Sponsor LLC, an entity affiliated with our officers, directors and advisors.

 

This annual report on Form 10-K contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. While we believe the industry and market data included in this report are reliable and are based on reasonable assumptions, these data involve many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. While we are not aware of any misstatements regarding any such third-party information presented in this report, we have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. None of the industry publications referred to in this report were prepared on our or on our affiliates’ behalf or at our expense. Our business is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Item 1A. “Risk Factors,” which could cause results to differ materially from those expressed in these publications and other publicly available information.

 

3
 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements contained in this annual report on Form 10-K, which reflect our current views with respect to future events and financial performance, and any other statements of a future or forward-looking nature, constitute “forward-looking statements” for the purpose of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example, statements about:

 

our ability to complete our initial business combination, including our pending business combination with Digital Virgo (as defined below) and the other transactions contemplated by the Amended and Restated Business Combination Agreement (as defined below);
   
our expectations around the performance of the prospective target business or businesses, including Digital Virgo;
   
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
   
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements;
   
our potential ability to obtain additional financing to complete our initial business combination, including our pending business combination with Digital Virgo;
   
the ability to have our securities continue to be listed on Nasdaq, including following a business combination, including our pending business combination with Digital Virgo;
   
our public securities’ potential liquidity and trading;
   
our ability to consummate an initial business combination, including the pending business combination with Digital Virgo, despite the continued uncertainty resulting from the ongoing COVID-19 pandemic or the outbreak of other infectious diseases;
   
the trust account not being subject to claims of third parties;
   
the potential market for our securities; or
   
our financial performance.

 

4
 

 

The forward-looking statements contained in this annual report on Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) 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 in Item 1A. “Risk Factors.” 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.

 

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this annual report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements as predictions of future results. Our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

 

RISK FACTOR SUMMARY

 

Our business is subject to numerous risks and uncertainties, including those highlighted in the section title “Risk Factors,” that represent challenges that we face in connection with the successful implementation of our strategy. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may adversely affect our ability to effect a business combination, and may have an adverse effect on our business, cash flows, financial condition and results of operations. Such risks include, but are not limited to:

 

  our ability to consummate the transactions contemplated by the Amended and Restated Business Combination Agreement, including our pending business combination with Digital Virgo;
  newly formed company without an operating history;
  delay in receiving distributions from the trust account;
  lack of opportunity to vote on our proposed business combination;
  lack of protections afforded to investors of blank check companies;
  deviation from acquisition criteria;
  issuance of equity and/or debt securities to complete a business combination, including our pending business combination with Digital Virgo;
  lack of working capital;
  third-party claims reducing the per-share redemption price;
  negative interest rate for securities in which we invest the funds held in the trust account;
  our stockholders being held liable for claims by third parties against us;
  failure to enforce our sponsor’s indemnification obligations;
  warrant holders limited to exercising warrants only on a “cashless basis”;
  the ability of warrant holders to obtain a favorable judicial forum for disputes with our company;
  our dependence on key personnel;
  conflicts of interest of our sponsor, officers and directors;
  the delisting of our securities by Nasdaq;
  dependence on a single target business with a limited number of products or services;
  our shares being redeemed and our warrants becoming worthless;
  our competitors with advantages over us in seeking business combinations;
  our ability to obtain additional financing;
  our initial stockholders controlling a substantial interest in us;
  warrants adverse effect on the market price of our common stock;
  events which may result in the per-share amount held in our trust account dropping below $10.00 per public share;
  disadvantageous timing for redeeming warrants;
  registration rights’ adverse effect on the market price of our common stock;
  impact of COVID-19 and related risks;
  business combination with a company located in a foreign jurisdiction, including our pending business combination with Digital Virgo;
  changes in laws or regulations; tax consequences to business combinations;
  exclusive forum provisions in our amended and restated certificate of incorporation;
  specific risks related to businesses in the sports and media sectors;
  material weakness in our internal control over financial reporting; and
  potential litigation and other risks as a result of the material weaknesses in our internal control over financial reporting.

 

5
 

 

PART I

 

ITEM 1. BUSINESS.

 

We are a blank check company incorporated on October 26, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this annual report as our initial business combination. We have neither engaged in any operations unrelated to our search for business combination candidates nor generated any revenue to date.

 

While our efforts to identify a prospective target business was not limited to a particular industry, sector or region, we capitalized on the expertise of our management team, board and advisors (collectively, our “Team”) in the professional sports teams and media sectors, including, but not limited to, related areas such as sports technology, gaming and e-sports.

 

Our objective is to generate attractive returns and create value for our shareholders by applying our strategy of capitalizing on the experience of our Team. Our Team has spent their careers working in the global professional sports and media industries. Our Team has particular expertise in operations and turnaround. Our Team’s experience includes negotiating record setting naming rights, cable, TV, radio, licensed merchandise, sponsorship and food service deals with numerous franchises, as well as numerous facility leasing, financing and construction contracts. This experience includes managing the business operations of professional athletes (including Michael Jordan and Patrick Ewing), sports franchises (the New York Yankees, San Francisco 49ers, Florida Panther, Atlanta Thrashers, Atlanta Hawks and Charlotte Bobcats) and leagues (including the WNBA, the PGA Tour and the NCAA’s Southeastern Conference). We will look to acquire and manage a business that can benefit from our Team’s global experience with sports teams, leagues, media, brands, technology and investments.

 

Proposed Business Combination

 

Amended and Restated Business Combination Agreement and Merger Agreement

 

On February 8, 2023, we entered into an Amended and Restated Business Combination Agreement (the “Amended and Restated Business Combination Agreement”) with Goal Acquisitions Nevada Corp., a Nevada corporation (“Goal Nevada”), Digital Virgo Group, a French corporation (société par actions simplifiée) (“Digital Virgo”), all shareholders of Digital Virgo (the “Digital Virgo Shareholders”), and IODA S.A., in its capacity as the “DV Shareholders Representative” (as defined in the Amended and Restated Business Combination Agreement), which amends and restates in its entirety the Business Combination Agreement, dated as of November 17, 2022, by and among the Company, Digital Virgo, and certain other parties.

 

Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Company and Goal Nevada entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will, prior to the Closing (as defined below), reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger (the “Reincorporation Merger”).

 

6
 

 

Pursuant to the Amended and Restated Business Combination Agreement and after the consummation of the Reincorporation Merger, Digital Virgo will acquire all of the outstanding shares of Goal Nevada whereby the outstanding shares of Goal Nevada will be exchanged for shares of Digital Virgo by means of a statutory share exchange under Nevada law (the “Exchange”). The time of the closing of the Exchange is referred to herein as the “Closing.” The date of the Closing is referred to herein as the “Closing Date.”

 

The Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger, were approved by the board of directors of the Company.

 

Below is a description of the Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger. The description below does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amended and Restated Business Combination Agreement, a copy of which is attached hereto as Exhibit 2.2 and the Merger Agreement, a copy of which is attached hereto as Exhibit 2.3.

 

The Reincorporation Merger and the Exchange

 

Subject to, and in accordance with, the terms and conditions of the Merger Agreement, the Company will, prior to the Closing, reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger. Each unit of the Company (which is comprised of one share of common stock of the Company and one warrant to purchase one share of common stock of the Company), share of common stock of the Company and warrant to purchase shares of common stock of the Company issued and outstanding immediately prior to the effective time of the Reincorporation Merger will be converted, respectively, into units of Goal Nevada, shares of common stock of Goal Nevada and warrants to purchase shares of common stock of Goal Nevada (respectively, “Goal Nevada Units,” “Goal Nevada Shares” and “Goal Nevada Warrants”) on a one-for-one basis, which will have substantially identical rights, preferences and privileges as the units sold in the Company’s initial public offering and simultaneous private placement, the Company’s common stock, par value $0.0001 per share, and the warrants which were included in the units that were sold in the Company’s initial public offering and simultaneous private placement.

 

Pursuant to the Amended and Restated Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, Digital Virgo will effect a series of related transactions, in each case, upon the terms and subject to the conditions set forth in the Amended and Restated Business Combination Agreement, including the following:

 

  Prior to the Closing, Digital Virgo will convert into a French public limited company (société anonyme);
  After the conversion into a French public limited company (société anonyme) and prior to the Closing, Digital Virgo and the Digital Virgo Shareholders intend to effect a placement of ordinary shares of Digital Virgo to certain institutional and other investors (the “PIPE Investors”) through both primary and/or secondary offerings (the “PIPE Investment”), including the sale of a number of Digital Virgo ordinary shares held by the Digital Virgo Shareholders in exchange for $125,000,000 in cash;
  Immediately after the PIPE Investment, Digital Virgo will (i) effect a reverse share split of all of its existing shares pursuant to a conversion parity which is expected to be 10 to 26, including the shares purchased by the PIPE Investors in the PIPE Investment, (ii) change the par value of all such existing shares from €0.10 to €0.26 and (iii) rename all such existing shares to Class A ordinary shares (the “Digital Virgo Class A Ordinary Shares”) (together, the “Reverse Share Split”). Immediately after the completion of the Reverse Share Split, the Digital Virgo Class A Ordinary Shares held by IODA S.A., the controlling shareholder of Digital Virgo, will be converted into Class B preferred shares, par value €0.26 per share of Digital Virgo (the “Digital Virgo Class B Shares”), on a one-for-one basis, with such shares having identical rights to the Digital Virgo Class A Ordinary Shares except that the Digital Virgo Class B Shares will have two votes for each share.

 

Subject to, and in accordance with, the terms and conditions of the Amended and Restated Business Combination Agreement, at the Closing, (i) Digital Virgo will acquire all of the issued outstanding Goal Nevada Shares pursuant to articles of exchange filed with the Nevada Secretary of State in accordance with the Nevada Revised Statutes, whereby each issued and outstanding Goal Nevada Share will be exchanged for one Digital Virgo Class A Ordinary Share by means of a statutory share exchange under Nevada law (the “Exchange”) and (ii) each Goal Nevada Warrant will be automatically exchanged for one warrant issued by Digital Virgo that will be exercisable for one Digital Virgo Class A Ordinary Share. All outstanding Goal Nevada Units will be separated into their underlying securities immediately prior to the Exchange.

 

7
 

 

In addition, at the Closing, (i) 5,000,000 Class C preferred shares, par value €0.26 per share, of Digital Virgo (the “DV Earnout Shares”) will be issued to and deposited with one or more escrow agents and will be disbursed to the Digital Virgo Shareholders, in whole or in part, after the Closing, if both an earnout milestone based on “EBITDA” (as defined in the Amended and Restated Business Combination Agreement) and a share price milestone are met and (ii) 1,293,750 Class C preferred shares, par value €0.26 per share, of Digital Virgo (the “Sponsor Earnout Shares”) will be issued to and deposited with an escrow agent and will be disbursed to Goal Acquisitions Sponsor LLC (the “Sponsor”), after the Closing, if a share price milestone is met. The earnout milestone will be met if Digital Virgo’s EBITDA for any fiscal year ending on or before December 31, 2027 is equal or greater than $60,000,000, in which case 2,500,000 DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders. The share price milestone will be met if Digital Virgo’s share price is equal to or greater than $15.00 for at least 20 out of 30 consecutive trading days (counting only those trading days in which there is trading activity) from the period starting from the date immediately following the Closing Date and ending on December 31, 2026, in which case 2,500,000 DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders and all of the Sponsor Earnout Shares will be released to the Sponsor. Any DV Earnout Shares remaining in the earnout escrow account that have not been released to the Digital Virgo Shareholders will be released to Digital Virgo, and any Sponsor Earnout Shares remaining in the earnout escrow account that have not been released to the Sponsor will be released to Digital Virgo. The Class C preferred shares of Digital Virgo will have identical rights to the Digital Virgo Class A Ordinary Shares except that the Class C preferred shares will have no voting rights. If and when the Class C preferred shares are released from escrow to the Digital Virgo Shareholders or the Sponsor, as applicable, such shares shall be automatically be converted into Digital Virgo Class A Ordinary Shares, on a one-for-one basis, with full voting rights as of their respective date of disbursement by the escrow agent. “EBITDA” means the “Adjusted EBITDA” of Digital Virgo as currently calculated by Digital Virgo for its reporting requirements under its existing credit facility, which is a non-GAAP measure and should not be construed as more relevant measures of operational performance than financial information under generally accepted accounting principles (GAAP).

 

As described below, the Sponsor has agreed to forfeit 646,875 shares of common stock of the Company for no consideration effective as of the Closing.

 

Representations and Warranties; Covenants

 

The parties to the Amended and Restated Business Combination Agreement have agreed to customary representations and warranties for transactions of this type. Except in certain limited instances, the representations and warranties made under the Amended and Restated Business Combination Agreement will not survive the Closing.

 

In addition, the parties to the Amended and Restated Business Combination Agreement agreed to be bound by certain customary covenants for transactions of this type, including, among others, (i) a covenant of each party to use its commercially reasonable efforts to cause the transactions contemplated by the Amended and Restated Business Combination Agreement (the “Transactions”) to be consummated in an expeditious manner, (ii) a covenant of the Company to convene a special meeting of the stockholders of the Company to approve the stockholder proposals, except that the board of directors of the Company may fail to make, amend, change, withdraw, modify, withhold or qualify its recommendation (a “Change in Recommendation”) in response to an Intervening Event (as defined in the Amended and Restated Business Combination Agreement, which does not include matters relating to an alternative transaction) if it determines in good faith, after consultation with its outside legal counsel and financial advisors, that a failure to make a Change in Recommendation would be a breach by the board of directors of its fiduciary obligations to the Company’s stockholders under applicable law, (iii) covenants providing that the parties will not solicit, initiate, submit, facilitate, discuss or negotiate any inquiry, proposal or offer with respect to any alternative transaction, (iv) a covenant by Digital Virgo to deliver to the Company audited financial statements that have been audited in accordance with PCAOB auditing standards by a PCAOB qualified auditor and other audited and unaudited financial statements of Digital Virgo that are required to be included in the proxy statement, and (v) if the Company or Digital Virgo has received a proposal that it believes is superior to the proposed committed capital on demand facility (“CCOD”), for which the Company has received a term sheet, a covenant by the Company and Digital Virgo to discuss the terms of such proposal in good faith and whether to proceed with such proposal instead of the proposed CCOD.

 

8
 

 

Conditions to Each Party’s Obligations

 

Under the Amended and Restated Business Combination Agreement, the obligations of the parties (or, in some cases, some of the parties) to consummate the Transactions are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, among others, (i) the accuracy of representations and warranties as of the signing of the Amended and Restated Business Combination Agreement and as of the Closing Date, subject to materiality and material adverse effect qualifiers set forth in the Amended and Restated Business Combination Agreement, (ii) material compliance with pre-closing covenants, (iii) no material adverse effect both for the Company and Digital Virgo, (iv) the delivery of customary closing certificates, (v) the absence of a legal prohibition on consummating the Transactions, (vi) approval by the Company’s stockholders and the consummation of the Reincorporation Merger, (vii) approval of a listing application on Nasdaq for the Digital Virgo Class A Ordinary Shares, (viii) the “Available Cash” (which is defined to include the amount released from the Company’s trust account, after giving effect to redemptions, repayment of the Company’s working capital loans and the Transactions, but without giving effect to payment of any of the parties’ transaction expenses, plus any amounts delivered to the Company or Digital Virgo at or prior to the Closing pursuant to any investments) is equal to or greater than $20,000,000, (ix) the delivery of a fully executed and binding committed capital on demand facility for at least $100,000,000 (or a lesser amount as determined by Digital Virgo) of post-Closing capital (the “CCOD”), (x) the Company having at least $5,000,001 of net tangible assets remaining after giving effect to redemptions and (xi) dissenters’ rights under Nevada law not being available in connection with the Exchange.

 

Termination

 

The Amended and Restated Business Combination Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among others, (i) by mutual written consent of the Company and Digital Virgo, (ii) upon any injunction or other governmental order preventing the consummation of the Transactions which shall have become final and non-appealable, (iii) upon a material breach of any representation, warranty, covenant or agreement (subject to an opportunity to cure, if such violation or breach is capable of being cured), (iv) if the Closing has not occurred by April 30, 2023 (the “Termination Date”), provided, that the Termination Date shall be automatically extended for two (2) months if the Closing shall not have occurred by April 30, 2023, (v) by Digital Virgo, if the Company fails to consummate the Transactions following the satisfaction of the conditions to the Company’s closing, (vi) by Digital Virgo, if the Company fails to consummate the Transactions prior to the Termination Date (as such date may be extended, if at all) as a result of the Company’s failure to satisfy the Available Cash closing condition and/or the CCOD closing condition, and (vii) by the Company, if Digital Virgo fails to consummate the Transactions following the satisfaction of the conditions to Digital Virgo’s closing.

 

Digital Virgo will be obligated to pay the Company a termination fee of $2,000,000 if the Amended and Restated Business Combination Agreement is terminated by the Company pursuant to clause (vii) of the preceding paragraph. The Company will be obligated to pay Digital Virgo a termination fee of $2,000,000 if the Amended and Restated Business Combination Agreement is terminated by Digital Virgo pursuant to clauses (v) or (vi) of the preceding paragraph.

 

9
 

 

Note Regarding the Amended and Restated Business Combination Agreement

 

The Amended and Restated Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Amended and Restated Business Combination Agreement. The Amended and Restated Business Combination Agreement has been included as Exhibit 2.3 hereto to provide investors with information regarding its terms. It is not intended to provide any other factual information about the parties to the Amended and Restated Business Combination Agreement. In particular, the representations, warranties, covenants and agreements contained in the Amended and Restated Business Combination Agreement, which were made only for purposes of the Amended and Restated Business Combination Agreement and as of specific dates, were solely for the benefit of the parties to the Amended and Restated Business Combination Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Amended and Restated Business Combination Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and reports and documents filed with the U.S. Securities and Exchange Commission (the “SEC”). Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Amended and Restated Business Combination Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Amended and Restated Business Combination Agreement may be subject to subsequent waiver or modification by the parties in their sole discretion without prior public notice. Moreover, information concerning the subject matter of the representations and warranties and other terms may change after the date of the Amended and Restated Business Combination Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

 

Other Agreements

 

The Amended and Restated Business Combination Agreement contemplates the execution of various additional agreements and instruments, including, among others, the following:

 

Amended and Restated Sponsor Support Agreement

 

Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Sponsor and certain other persons parties thereto entered into an Amended and Restated Sponsor Support Agreement (the “Amended and Restated Sponsor Support Agreement”), which amends and restates the Sponsor Support Agreement, dated as of November 17, 2022, by and among the Sponsor and certain other parties in its entirety, pursuant to which each of the Sponsor and such other persons has agreed to, among other things, (i) vote all of its shares of common stock of the Company in favor of the Transactions and each of the other proposals presented by the Company at the special meeting of stockholders with respect to the Transactions, (ii) waive its redemption rights with respect to its shares of common stock of the Company in connection with the Transactions and (iii) not transfer any securities of the Company until the Closing or termination of the Amended and Restated Business Combination Agreement (except in limited circumstances).

 

The foregoing description of the Amended and Restated Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amended and Restated Sponsor Support Agreement, a copy of which is attached hereto as Exhibit 10.12.

 

Amended and Restated Investor Rights Agreement

 

Concurrently with the execution of the Amended and Restated Business Combination Agreement, Digital Virgo, the Company, the Sponsor, the Digital Virgo Shareholders and certain other persons parties thereto entered into an Amended and Restated Investor Rights Agreement (the “Amended and Restated Investor Rights Agreement”), which amends and restates the Investor Rights Agreement, dated as of November 17, 2022, by and among the Company, Sponsor, the Digital Virgo Shareholders and certain other parties in its entirety. Pursuant to the Amended and Restated Investor Rights Agreement, (i) the board of directors of Digital Virgo shall be comprised of thirteen (13) directors at and immediately following the Closing, of which, five (5) individuals shall be proposed by the Sponsor (the “Sponsor Directors”) for so long as the Sponsor and the “Other Holders” (as defined in the Amended and Restated Investor Rights Agreement, and their respective permitted transferees) own at least 50% of the number of the Digital Virgo Shares owned by the Sponsor and the Other Holders on the Closing Date (which shall be reduced to three (3) individuals if that percentage drops to 25%) and eight (8) individuals shall be proposed by the Digital Virgo Shareholders (acting through their representative, IODA S.A.) for so long as the Digital Virgo Shareholders (and their permitted transferees) own at least 50% of the number of the Digital Virgo Shares owned by the Digital Virgo Shareholders on the Closing Date (which shall be reduced to five (5) individuals if that percentage drops to 25%), (ii) the board of directors of Digital Virgo shall be divided into three classes of directors, with each class serving for staggered three-year terms, provided that the Sponsor Directors shall be Class III directors, (iii) the Sponsor shall be able to propose two (2) non-voting board observers, (iv) the Digital Virgo Shareholders shall be able to propose one (1) non-voting board observer, (v) Digital Virgo will agree to undertake certain resale shelf registration obligations in accordance with the U.S. Securities Act of 1933, as amended (the “Securities Act”) and certain holders have been granted customary demand and piggyback registration rights, and (vi) the Digital Virgo Shareholders, the Sponsor and the Other Holders agree to a six (6) month lock-up period for their Digital Virgo Shares, subject to certain exceptions, provided that the Digital Virgo Shares held by IODA S.A. will be subject to additional transfer restrictions if such transfer would result in a default or event of default under Digital Virgo’s existing credit facility.

 

10
 

 

The foregoing description of the Amended and Restated Investor Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amended and Restated Investor Rights Agreement, a copy of which is attached hereto as Exhibit 10.13.

 

Amended and Restated Initial Shareholders Forfeiture Agreement

 

Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Sponsor and the Company entered into an Amended and Restated Initial Shareholders Forfeiture Agreement (the “Amended and Restated Initial Shareholders Forfeiture Agreement”), which amends and restates the Initial Shareholders Forfeiture Agreement, dated as of November 17, 2022, by and between the Sponsor and the Company in its entirety, pursuant to which the Sponsor agreed to forfeit 646,875 shares of common stock of the Company for no consideration effective as of the Closing.

 

The foregoing description of the Amended and Restated Initial Shareholders Forfeiture Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amended and Restated Initial Shareholders Forfeiture Agreement, a copy of which is attached hereto as Exhibit 10.14.

 

Extension; Redemption

 

On February 7, 2023, stockholders of Goal Acquisitions Corp. (the “Company”) approved an amendment (the “Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between the Company and Continental Stock Transfer & Trust Company (“Continental”) (the “Trust Agreement”), to change the date on which Continental must commence liquidation of the amount on deposit in the trust account (the “Trust Account”) established in connection with the Company’s initial public offering from February 16, 2023 to March 18, 2023, subject to extension by the board of directors for up to five additional thirty-day periods (the latest of which such date is referred to as the “New Termination Date”).

 

The foregoing description of the Trust Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.15.

 

On February 7, 2023, the Company’s stockholders also approved an amendment (the “First Charter Amendment”) to the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to (i) extend the initial period of time by which the Company has to consummate an initial business combination to the New Termination Date and (ii) make other administrative and technical changes in the Charter in connection with the New Termination Date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Charter Amendment with the Secretary of State of the State of Delaware on February 8, 2023.

 

The foregoing description of the Charter Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 3.4.

 

In connection with the stockholders’ approval and implementation of the First Charter Amendment, the holders of 16,328,643 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $165,489,172. Following such redemptions, 9,546,357 Public Shares remain outstanding and the Company expects to have approximately $96,751,378 remaining in the Trust Account. Also, see below Part I, Item 1. Business – Effecting a Business Combination: Liquidation if No Business Combination for additional redemption activity.

 

11
 

 

Our Team

 

Harvey Schiller serves as our Chief Executive Officer. General Schiller is Chairman of Charlestowne Holdings, a financial advisory firm (2018-present). He is Vice Chairman of the digital, media and sports practice of the Diversified Search Group (2015-present). He previously served as Commissioner of the Southeastern Conference (1986-1990) and America’s Cup (2015-2017), executive director of the United States Olympic Committee (1990-1995), president of Turner Sports (1995-2000), president of Atlanta Thrashers NHL hockey team (1997-1999), Chairman of the financial services firm Assante USA (2002-2004), Chairman of the security firm Global Options (2006-2013), and Chairman of YankeeNets, owners of the New York Yankees, New Jersey Devils, and New Jersey Nets (2000-2002) and developer of the YES network (2001-2002). He is also lead director of Mesa Air Group (2015-present), board member of Blinktbi (2018-present) and chair of Sportsgrid and the Collegiate Sports Management Group (2018-present). General Schiller served a distinguished career as an Air Force pilot (1962-1986) and was a Presidential appointed permanent professor (1980-1986) at the U.S. Air Force Academy and White House Commission on Presidential Scholars (2005-2009). Other appointments include NCAA executive committee (1982-1988), Olympic Games consultant (1984-2012), International Baseball President, board member of the Baseball Hall of Fame (present) and World Baseball Classic (present). General Schiller is a distinguished graduate of The Citadel and earned a PhD in Chemistry from the University of Michigan.

 

William T. Duffy serves as our Chief Financial Officer and Chief Operating Officer. Mr. Duffy served as the Vice Chairman of The Aspire Sports Marketing Group, LLC (“Aspire”), a sports consulting firm which he co-founded in 2008 and held the position of Vice-Chairman from January 2020 until May 2023. From 2016 to 2019, he was the CEO of Aspire and he previously held other positions at Aspire, including two years as COO, and has served on its board of managers since 2014. Mr. Duffy’s career has focused on turnarounds of underperforming franchises with a focus on maximizing employee performance and revenue generation and reducing operating costs, while creating cultures of accountability through hands on leadership and career development of employees. His international experience at Aspire includes consulting on projects with The R & A, Leicester City FC and Tijuana Xolos (Liga MX). From 2010 to 2013, Mr. Duffy briefly left Aspire and oversaw finance and arena operations in a variety of roles at Bobcats Sports and Entertainment, including roles as EVP, CFO and CAO. He served as liaison to the City of Charlotte for the expansion NBA Franchise Charlotte Bobcats and Time Warner Cable Arena. Prior to Aspire, Mr. Duffy held the positions of CFO of the San Francisco 49ers (1996-1999), CAO of the Buffalo Bills (1999-2000), CFO of the Florida Panthers (2001-2003) and EVP, CFO of Atlanta Spirit, LLC (2004-2008), a group that bought the operating rights of the Atlanta Hawks, Atlanta Thrashers and Philips Arena in 2004 Mr. Duffy holds a Masters of Science in Accounting from New York University, and AB in Economics from Princeton University and has earned a CPA.

 

David B. Falk will serve as a member of our board of directors and as our Senior Advisor. Mr. Falk is the founder of Falk Associates Management Enterprises (FAME) which provides specialized and personal representation services to the company’s elite clientele of NBA superstars. Prior to founding FAME in 1992, Mr. Falk served as vice chairman of ProServ where he represented numerous professional athletes. Mr. Falk has successfully negotiated a number of large and notable NBA contracts, including Alonzo Mourning’s historical $100 million contract in 1995 and Michael Jordan’s 1996 one-year contract for $30 million. Mr. Falk was also influential in the creation of the “Air Jordan” brand and was an executive producer of the movie “Space Jam.” Mr. Falk is an investor in Consumable, a digital advertising company, Hyperwave, a cooking technology company, Ostendo, a quantum photonics technology company, Wheels Up, an aviation company, and Block Six Analytics. Mr. Falk first attended and is now a member of the Board of Trustees for Syracuse University. Mr Falk endowed and founded the David B. Falk College of Sports and Human Dynamics at Syracuse University, a leading sports program in the U.S.

 

Donna Orender serves as a member of our board of directors. Ms. Orender spent 17 years at the PGA TOUR where she served as one of three senior executives in the Office of the Commissioner. During her time there, she exponentially grew the TOUR’s television rights and led a major expansion of global production, programming distribution and digital business while also founding PGA TOUR Radio with partner Sirius XM. From 2005 to 2010, Ms. Orender served as the President of the WNBA. During her term business metrics that saw growth included sponsorship, television ratings, profitability and attendance growth (following an eight year decline). Ms. Orender began her current role as Chief Executive Officer of Orender Unlimited, a consulting and advisory firm, in 2011. Ms. Orender serves on the nominating and compensation committees for the V Foundation for Cancer Research board, the board of the World Surf League, and is the founder of Generation W, an organization that focuses on educating, inspiring and connecting women and girls in the service of building better communities. Ms. Orender received a B.A. from Queens College and is a multiple hall of fame athlete.

 

12
 

 

Kenneth L. Shropshire will serve as a member of our board of directors. Mr. Shropshire has been a faculty member of the Wharton School at the University of Pennsylvania (“Wharton”) since 1986, where he is now an emeritus professor, with an expertise in sports business and law. During his tenure at Wharton, Mr. Shropshire founded the Wharton Sports Business Initiative in 2004, a sports business research center and served as a director until 2017. One such example of the innovative programming Mr. Shropshire developed at Wharton includes the NFL/NFLPA Player Business Education Transition Program. Currently, in addition to being a professor emeritus at Wharton, Mr. Shropshire is the Chief Executive Officer of the Global Sport Institute, and serves as the Adidas Distinguished Professor of Global Sport at Arizona State University since joining in 2017. Mr. Shropshire has served as a director of Moelis & Company since 2014. In addition, Mr. Shropshire acts as an advisor to multiple organizations in the sports industry, including Altius Sports Partners, Arctos Sports Partners, Overtime Elite, and Pro Sports Assembly. Mr. Shropshire earned an undergraduate degree in economics from Stanford University and a law degree from Columbia University, and is a member of the California bar. He joined the law firm of Manatt, Phelps, Rothenberg and Tunney in Los Angeles prior to working with the 1984 Olympic Games and beginning his lengthy career at Wharton. Mr. Shropshire was also the former President of the Sports Lawyers Association, the largest organization of sports lawyers in the world.

 

Past performance of our Team is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical performance record of our Team as indicative of our future performance. Additionally, in the course of their respective careers, members of our Team have been involved in businesses and deals that were unsuccessful. Our officers and directors have no experience with special purpose acquisition companies. In addition, our officers and directors may have conflicts of interest with other entities to which they owe fiduciary or contractual obligations with respect to initial business combination opportunities. For a list of our officers and directors and entities for which a conflict of interest may or does exist between such persons and the company, as well as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.

 

Advisors

 

Jon Miller will serve as Chairman of our advisory board as well as a board observer. Mr. Miller currently serves as a director of Akamai Technologies, Inc., Nielsen Holdings plc., AMC Networks Inc., Interpublic Group of Companies, Inc. and J2 Global, Inc. From 2013 until January 2018, Mr. Miller was a partner at Advancit Capital, where he continues to serve as an advisor and member of the Investment Committee. He previously has served as Chairman and Chief Executive Officer of the Digital Media Group at News Corp., and was its Chief Digital Officer from April 2009 to September 2012. Mr. Miller was a founding partner of Velocity Interactive Group, an investment firm focusing on internet and digital media, from its inception in 2007 to 2009. Prior to founding Velocity, Mr. Miller served as the Chairman and Chief Executive Officer of America Online, Inc. (“AOL”) from 2002 to 2006. Prior to joining AOL, Mr. Miller served as Chief Executive Officer and President of USA Information and Services. Mr. Miller previously served as a director of, among others, Houghton Mifflin Harcourt Co., Ticketmaster, LiveNation Entertainment, Inc., RTL Group SA, Shutterstock, Inc. and TripAdvisor, Inc.. Mr. Miller is a trustee of the American Film Institute and The Paley Center for Media. Mr. Miller holds a B.A. from Harvard College.

 

Alex Greystoke will serve as a member of our advisory board and is one of our founders. Mr. Greystoke is a successful serial entrepreneur with a breadth of skills in a diverse range of industries. Mr. Greystoke is the founder of multiple AI technology companies including TripChamp, VacationChamp and TravelChamp. He is the inventor of three granted artificial intelligence patents, with eight pending patent applications. Mr. Greystoke is also an investor with investments in real estate, food and beverage, technology and other sectors. Mr. Greystoke founded HSC, a boutique corporate finance business raising money for and helping emerging companies commercialize in a range of sectors including technology, energy, healthcare and consumer products utilizing his wide network of partners throughout Asia, Europe, the Middle East and the U.S. Mr. Greystoke has served as director to numerous companies in the education, technology, AI and renewable energy spaces, and has served as a Chairman to a U.K. listed Chinese manufacturing company.

 

13
 

 

Raghu Kilambi will serve as a member of our advisory board and is one of our founders. Mr. Kilambi has been CEO of PowerTap Hydrogen Fueling Corp. since May 2020. Mr. Kilambi previously served as Vice Chairman and Chief Financial Officer of ConversionPoint Technologies from December 2017 to January 2020. ConversionPoint was sold in two transactions to a private equity-backed group and a strategic buyer. Mr. Kilambi has also been the principal of Kirarv Capital, a technology investment firm, since June 2009. Mr. Kilambi has raised over $1 billion of equity and debt capital for growth private and public companies in his career and has also been a senior officer and director of companies that were awarded Barron’s ASAP Magazine Top Ramp Champ awards and Profit Magazine’s Top 3 Growth Company awards. Previously, from 1998 to 2001, Mr. Kilambi was the Co-Founder, CFO and Chief Strategy Officer of FutureLink Corp., a leading first-generation VC-backed cloud computing technology company that grew from startup to over $100 million in annualized revenues. Mr. Kilambi graduated with Great Distinction with a Bachelor of Commerce (University Scholar), received a Graduate Diploma in Public Accounting from McGill University (Top 10 List), and qualified as a Canadian Chartered Accountant in 1989 (inactive).

 

Amber Allen will serve as a member of our advisory board. Ms. Allen’s experience has been focused in the technology, entertainment and gaming industries, having spent her career at major companies including Reebok, Disney, Warner Bros., and Riot Games. Currently, Ms. Allen serves as the founder of Double A Labs, a leader in developing transformative technologies and experiences for brand engagement. Ms. Allen serves on the Advisory Board of University of Texas Game and Development Design and is a member of the Fashion Institute of Technology. Ms. Allen also volunteers with Women Who Code and is an advisor to both Dell Women’s Entrepreneurship Network and Dell Project Innovate.

 

Bart Oates will serve as a member of our advisory board. Mr. Oates was a starting center for the USFL Philadelphia Stars, New York Giants and San Francisco 49ers, for a total 14 seasons of professional football. In the offseasons, Mr. Oates attended Seton Hall Law School where he graduated with honors and joined the law firm of Ribis, Graham & Curtin in Morristown N.J., where he focused on litigation and real estate tax appeal work. Currently, Mr. Oates serves as President of the NFL Alumni Association, a position that allows him to advocate on behalf of former players to establish benefits and opportunities.

 

Martin Gruschka will serve as a member of our advisory board. Mr. Gruschka began his career in 1990 as a management consultant for a Deutsche Bank Group subsidiary, with a focus on East German Privatization projects. Thereafter, he led the European media practice of Arthur D. Little, a global management consulting group, from 1996 to 1999. Having spent time as an associate director at Deutsche Morgan Grenfell’s media investment banking division, he co-founded Springwater Capital LLC in 2002 where he currently acts as Managing Partner. Mr. Gruschka has served as Chairman, President, Board Member and CEO of more than forty companies throughout Europe and the U.S. in a diverse range of sectors, including media & communications, aerospace, engineering, logistics, recycling, technology, tourism and business process outsourcing.

 

Danielle Cantor Jeweler will serve as a member of our advisory board. Ms. Jeweler is the Executive Vice President and Partner at FAME, and is an NBPA Certified Agent, representing current and retired NBA talent. Together with partner David Falk, Danielle negotiates contracts for a number of NBA players. Ms. Jeweler has also negotiated a myriad of national and international endorsement deals for her basketball clients. In September 2017, Danielle was honored by the Sports Business Journal as a Gamechanger in the sports industry, as the only female registered agent with active NBA clients. In July 2019, she negotiated the largest guaranteed sports contract by a female agent (Malcolm Brogdon, with the Indiana Pacers, for 4 years and $85 million). Ms. Jeweler is a member of the Leadership Council for PeacePlayers, International, and she serves on the Board of Advisors for Most Valuable Kids, the Roy Hibbert Foundation, and Little Smiles. A native Washingtonian, Ms. Jeweler graduated from the University of Pennsylvania (“UPenn”) in the Annenberg School for Communications and from The Wharton School for Business. Ms. Jeweler is a competitive youth girls soccer coach and played Division 1 soccer at UPenn.

 

Marc Wade will serve as a member of our advisory board. Mr. Wade is a financier, philanthropist and founder of Wade & Company, a family office. Mr. Wade has historically invested in a diversified portfolio of businesses with a primary focus on asset backed lending. His portfolio has included commercial real estate, banking, energy, sports and entertainment, technology and securities lending. Mr. Wade was a minority investor in the NHL franchise New Jersey Devils and Devils Entertainment. Mr. Wade is also Co-Founder of BTI, one of South America’s largest aggregators of cell phone towers.

 

14
 

 

Garret Klugh will serve as a member of our advisory board. Mr. Klugh is the COO of Falk Ventures. He is an internationally recognized Olympian and frequent guest speaker, lecturer and panelist in the sports-tech industry. Mr. Klugh earned his undergraduate degree at San Diego State University and his MBA from George Washington University. At SDSU, Mr. Klugh served as the President of the men’s rowing team. He went on to represent the U.S. on six National Teams and one Olympic Team (Athens 2004). Mr. Klugh won the World Rowing Championship in 1999 and was honored to be selected by his peers as the Athlete Representative on the Board of Directors for USRowing.

 

Doug Perlman will serve as a member of our advisory board. Mr. Perlman is the founder and CEO of Sports Media Advisors (“SMA”), a boutique advisory firm which focuses on the intersection of sports, television and digital media. Mr. Perlman has worked on all of SMA’s client engagements including those with the NFL, NASCAR, USTA, UFC, Hockey Canada, Little League, NextVR and several leading private equity firms. Prior to SMA, he established himself throughout the sports industry in senior executive roles at the NHL and IMG. Among other accolades, Mr. Perlman has been named to the prestigious Sports Business Journal Forty Under 40 three times, earning a spot in their “Hall of Fame.” Mr. Perlman has been recognized by multiple industry publications and organizations as a leader in the sports, media, and technology industries, including being named one of the 100 Most Powerful People in Sports by the Sporting News while at the NHL. Mr. Perlman regularly appears on television and is often a featured speaker at industry and other events.

 

We currently expect our advisors to (i) assist us in sourcing, negotiating and consummating a potential business combination, (ii) provide their business insights when we assess potential business combination targets and (iii) upon our request, provide their business insights as we work to create additional value in the businesses that we acquire. However, they have no written advisory agreement with us. Additionally, these individuals have no other employment or compensation arrangements with us. They will not serve on the board or any committee thereof, nor will they have any voting or decision making capacity on our behalf. They will also not be required to devote any specific amount of time to our efforts or be subject to the fiduciary requirements to which our board members are subject. Accordingly, if any of them become aware of a business combination opportunity which is suitable for us, they are under no obligation to introduce it to us before any other prospective acquiror.

 

Business Strategy

 

The impact of the COVID-19 pandemic on U.S. and global professional sports and entertainment industries has been profound. In-stadium revenue opportunities, such as ticket and premium seating sales, concessions, merchandise and parking have reduced substantially compared to pre-COVID levels. As a result, sports franchises and vendors are facing a huge strain on cash flow, leaving ownership groups without the appetite, nor liquidity to continue franchise funding for an undetermined period of time. Organizations with inefficient operating models are experiencing significantly more stress during these times, leading many groups to reevaluate their management relationships. COVID-19 has also had a significant impact on businesses associated with or dependent on sports, for example groups holding media rights, sports marketing groups and agencies and suppliers to the sports industry. We believe the totality of these circumstances presents a unique opportunity to acquire special situation sports and media assets that would not otherwise be for sale and/or to acquire these businesses at opportunistic prices.

 

With the resulting pressures of these limitations and uncertainties in general, the need for innovative and dynamic operating models is evident. We believe that with the current landscape, our Team will have the leverage to identify and acquire assets with great potential at opportunistic price points. As more sports franchises, and sports and media related businesses understand the necessity of building global brands in order to compete for revenue and brand recognition across fan bases, mature management teams, experiences and expertise will be required to enhance visibility and profitability.

 

We believe that our Team can provide all of these attributes to a potential initial business combination target. Our Team has a demonstrated extensive track record of successful value creation and enhancement (including complex turnarounds) with sports-oriented and media assets and also has access to proprietary opportunities globally that can be leveraged to drive value. Our Team’s experience includes negotiating record setting naming rights, cable, TV, radio, licensed merchandise, sponsorship and food service deals with numerous franchises, as well as numerous facility leasing, financing and construction contracts. This experience includes managing the business operations of professional athletes (including Michael Jordan and Patrick Ewing), sports franchises (the New York Yankees, Florida Panthers, San Francisco 49ers, Atlanta Thrashers, Atlanta Hawks and Charlotte Bobcats) and leagues (including the WNBA, the PGA Tour and the NCAA’s Southeastern Conference).

 

15
 

 

Our Team has also directly worked in the trenches to turnaround organizations, athletes and brands. In addition, we intend to utilize the established global relationships of our Team both for sourcing opportunities and to grow the opportunity which we pursue. Over the course of their careers, the members of our Team have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of acquisition opportunities.

 

Our Team has experience globally in:

 

  Managing brands, athletes and sports entities;
     
  Significant experience in the media, sports gaming and new technologies sectors;
     
  Operating and turning around companies, implementing and executing growth strategies and cost saving initiatives;
     
  Developing and growing companies, both organically and through acquisitions and strategic transactions, and expanding the product range;
     
  Providing strategic guidance to develop revenue and commercial opportunities; and
     
  Identifying, mentoring and recruiting world-class talent.

 

Acquisition Criteria

 

Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We intend to use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet any of these criteria and guidelines.

 

We intend to seek to acquire companies, brands, assets and/or teams that we believe meet certain of the following criteria:

 

  Minimum enterprise values of between $600 million and $1 billion;
     
  Impacted by recent factors such as COVID-19, mismanagement, media issues, overextension or arbitrage (what we call special situation opportunities);
     
  Could benefit from the substantial expertise, experience and network of our Team;
     
  Have attractive growth prospects or have the potential for having attractive growth prospects;
     
  Have a competitive advantage or have the potential for having a competitive advantage;
     
  Exhibit industry leadership or have the potential for exhibiting industry leadership;
     
  Exhibit potential for global expansion in sports, sponsorship and brand recognition;
     
  Would benefit from a public acquisition currency; or ownership would benefit from liquidity;
     
  Demonstrate attractive valuation;
     
  Demonstrate potential for free cash flow generation; and
     
  Have secondary potential revenue streams.

 

16
 

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines, as well as other considerations, factors and criteria deemed relevant by our management in effecting our initial business combination consistent with our business objectives. In the event that we decide to enter into our initial business combination with a target business that does not meet any of the above criteria and guidelines, we will disclose that the target business does not meet any of the above criteria in our shareholder communications related to our initial business combination.

 

Effecting a Business Combination

 

General

 

We intend to utilize cash derived from the proceeds of our initial public offering (“IPO”) and the private placement of private units, our capital stock, debt or a combination of these in effecting a business combination. Please see Part I, Item 1. Business – Proposed Business Combination above for information regarding a definitive agreements we have entered into in respect of a potential business combination with Digital Virgo and our Charter Amendments that were filed with the Secretary of State of the State of Delaware.

 

Conversion Rights

 

At any meeting called to approve an initial business combination (including the meeting called to approve the Digital Virgo transaction), public stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or do not vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, less any taxes then due but not yet paid. Alternatively, we may provide our public stockholders with the opportunity to sell their shares of our common stock to us through a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid.

 

Our sponsor, initial stockholders and our officers and directors do not have conversion rights with respect to any shares of common stock owned by them, directly or indirectly, whether acquired prior to our IPO or purchased by them in our IPO or in the aftermarket. Additionally, the holders of the representative shares do not have conversion rights with respect to the representative shares.

 

We may require public stockholders, whether they are a record holder or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination.

 

There is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a nominal amount and it would be up to the broker whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise conversion rights. The need to deliver shares is a requirement of exercising conversion rights regardless of the timing of when such delivery must be effectuated. However, in the event we require stockholders seeking to exercise conversion rights prior to the consummation of the proposed business combination and the proposed business combination is not consummated this may result in an increased cost to stockholders.

 

17
 

 

Any proxy solicitation materials we furnish to stockholders in connection with a vote for any proposed business combination will indicate whether we are requiring stockholders to satisfy such certification and delivery requirements. Accordingly, a stockholder would have from the time the stockholder received our proxy statement up until the vote on the proposal to approve our initial business combination to deliver his shares if he wishes to seek to exercise his conversion rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process can be accomplished by the stockholder, whether or not he is a record holder or his shares are held in “street name,” in a matter of hours by simply contacting the transfer agent or his broker and requesting delivery of his shares through the DWAC System, we believe this time period is sufficient for an average investor. However, we cannot assure you of this fact. Please see the risk factor titled “In connection with any stockholder meeting called to approve a proposed initial business combination, we may require stockholders who wish to convert their shares in connection with a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights” for further information on the risks of failing to comply with these requirements.

 

Any request to convert such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or the expiration of the tender offer. Furthermore, if a holder of public shares delivered his certificate in connection with an election of their conversion and subsequently decides prior to the applicable date not to elect to exercise such rights, he may simply request that the transfer agent return the certificate (physically or electronically).

 

If the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any shares delivered by public holders.

 

Liquidation if No Business Combination

 

Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of our IPO to complete an initial business combination. This time period was extended to the New Termination Date pursuant to the Charter Amendment described above under Part I, Item 1. Business – Proposed Business Combination. If we have not completed an initial business combination by such date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest not previously released to us but net of taxes payable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

Our sponsor, initial stockholders, officers and directors have agreed that they will not propose any amendment to our amended and restated certificate of incorporation that would affect our public stockholders’ ability to convert or sell their shares to us in connection with a business combination as described herein or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination prior to the New Termination Date unless we provide our public stockholders with the opportunity to convert their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest not previously released to us but net of franchise and income taxes payable, divided by the number of then outstanding public shares. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, initial stockholders, executive officers, directors or any other person.

 

Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our outstanding public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. It is our intention to redeem our public shares as soon as reasonably possible following the New Termination Date, and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

 

18
 

 

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the Delaware General Corporation Law, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.

 

Because we will not be complying with Section 280 of the Delaware General Corporation Law, Section 281(b) of the Delaware General Corporation Law requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses (including Digital Virgo).

 

We are required to seek to have all third parties (including any vendors or other entities we engage after our IPO) and any prospective target businesses enter into agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account. As a result, the claims that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any liability extending to the trust. We therefore believe that any necessary provision for creditors will be reduced and should not have a significant impact on our ability to distribute the funds in the trust account to our public stockholders. Nevertheless, Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the trust account. Furthermore, there is no guarantee that other vendors, service providers and prospective target businesses will execute such agreements. Nor is there any guarantee that, even if they execute such agreements with us, they will not seek recourse against the trust account. Our sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us, but we cannot assure you that it will be able to satisfy its indemnification obligations if it is required to do so. We have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we believe it is unlikely that our sponsor will be able to satisfy its indemnification obligations if it is required to do so. Additionally, the agreement our sponsor entered into specifically provides for two exceptions to the indemnity it has given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who has executed an agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, or (2) as to any claims for indemnification by the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. As a result, if we liquidate, the per-share distribution from the trust account could be less than $10.00 due to claims or potential claims of creditors.

 

We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after the New Termination Date and anticipate it will take no more than 10 business days to effectuate such distribution. The holders of the founders’ shares and private shares have waived their rights to participate in any liquidation distribution from the trust account with respect to such shares. There will be no distribution from the trust account with respect to our warrants, which will expire worthless. We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, our sponsor has contractually agreed to advance us the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has contractually agreed not to seek repayment for such expenses.

 

If we are unable to complete an initial business combination and expend all of the net proceeds of our IPO, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share redemption price would be $10.00. As discussed above, the proceeds deposited in the trust account could become subject to claims of our creditors that are in preference to the claims of public stockholders. Also, as discussed above under above under Part I, Item 1. Business – Proposed Business Combination, in February 2023 we redeemed 16,328,643 public shares at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $165,489,172, in connection with the First Charter Amendment filed with the Secretary of State of the State of Delaware on February 8, 2023.

 

19
 

 

On August 14, 2023, we redeemed 8,708,098 public shares at a redemption price of approximately $10.50 per share, for an aggregate redemption amount of approximately $91,398,232, in connection with the Second Charter Amendment filed with the Secretary of State of the State of Delaware on August 14, 2023.

 

On November 8, 2023, we redeemed 571,909 public shares at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of approximately $6,077,050, in connection with the Third Charter Amendment filed with the Secretary of State of the State of Delaware on November 8, 2023.

 

On February 7, 2024, we redeemed 52,181 public shares at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of approximately $554,562, in connection with the Fourth Charter Amendment filed with the Secretary of State of the State of Delaware on February 7, 2024.

 

Our public stockholders shall be entitled to receive funds from the trust account only in the event of our failure to complete a business combination within the required time period, if the stockholders seek to have us convert or purchase their respective shares upon a business combination which is actually completed by us or upon certain amendments to our amended and restated certificate of incorporation prior to consummating an initial business combination. In no other circumstances shall a stockholder have any right or interest of any kind to or in the trust account.

 

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public stockholders at least $10.00 per share.

 

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after the New Termination Date, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

Amended and Restated Certificate of Incorporation

 

Our amended and restated certificate of incorporation (as amended in February 2023 by the Charter Amendment described above) contains certain requirements and restrictions relating to our IPO that will apply to us until the consummation of our initial business combination. These provisions cannot be amended without the approval of a majority of our stockholders. If we seek to amend any provisions of our amended and restated certificate of incorporation that would affect our public stockholders’ ability to convert or sell their shares to us in connection with a business combination as described herein or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination prior to the New Termination Date, we will provide dissenting public stockholders with the opportunity to convert their public shares in connection with any such vote. This conversion right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director, or any other person. Our sponsor, officers and directors have agreed to waive any conversion rights with respect to any founders’ shares, private shares and any public shares they may hold in connection with any vote to amend our amended and restated certificate of incorporation. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

 

  we shall either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein;

 

  we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 immediately prior to or upon consummation of such business combination and, if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination;

 

20
 

 

  if our initial business combination is not consummated prior to the New Termination Date, then we will redeem all of the outstanding public shares and thereafter liquidate and dissolve our company;
     
  upon the consummation of our IPO, approximately $258.75 million was placed into the trust account, although as noted above an aggregate of 25,660,831 Public Shares were redeemed for $262.96 million in connection with the Charter Amendments described above;
     
  we may not consummate any other business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination; and
     
  prior to our initial business combination, we may not issue additional stock that participates in any manner in the proceeds of the trust account, or that votes as a class with the common stock sold in our IPO on an initial business combination.

 

Employees and Human Capital Resources

 

We have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of our initial business combination process the Company is in. Accordingly, once a suitable target business to acquire has been located, management may spend more time investigating such target business and negotiating and processing the business combination (and consequently spend more time on our affairs) than had been spent prior to locating a suitable target business. We presently expect our executive officers to devote such amount of time as they reasonably believe is necessary to our business. We do not intend to have any full-time employees prior to the consummation of our initial business combination.

 

Periodic Reporting and Audited Financial Statements

 

We have registered our units, common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports, such as this annual report on Form 10-K, contain financial statements audited and reported on by our independent registered public accountants.

 

We will provide stockholders with audited financial statements of the prospective target business as part of any proxy solicitation sent to stockholders to assist them in assessing the target business. In all likelihood, the financial information included in the proxy solicitation materials will need to be prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), or international financial reporting standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. The financial statements may also be required to be prepared in accordance with U.S. GAAP for the Form 8-K announcing the closing of an initial business combination, which would need to be filed within four business days thereafter. We cannot assure you that any particular target business selected by us as a potential acquisition candidate will have the necessary financial information. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business.

 

We have evaluated our internal control over financial reporting for the fiscal year ending December 31, 2022. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

 

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by The Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

21
 

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering (“IPO”), (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

 

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our shares of common stock held by non-affiliates does not equal or exceed $250.0 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value of our shares of common stock held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

 

ITEM 1A. RISK FACTORS.

 

An investment in our securities involves a high degree of risk. You should consider carefully the risks described below, which we believe represent some of the material risks related to our securities, together with the other information contained in this annual report, before making a decision to invest in our securities. This annual report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below.

 

Risks Relating to our Business Combination and Post-Business Combination Risks

 

The Amended and Restated Business Combination Agreement may be terminated in accordance with its terms and the Transaction may not be consummated.

 

The Amended and Restated Business Combination Agreement contains a number of conditions that must be fulfilled to complete the Transaction. Those conditions include, but are not limited to: the approval of the Transaction by our shareholders; absence of any law enacted, issued, promulgated enforced or entered by any specified governmental entity of competent jurisdiction that is in effect and makes illegal, permanently enjoining or otherwise prohibiting the consummation of the merger; the continued accuracy of the representations and warranties of both parties subject to specified materiality standards; the performance by both parties of their covenants and agreements in all material respects; and that, since the date of the Amended and Restated Business Combination Agreement, there has been no occurrence, effect, incident, action, failure to act or transaction that has had or would reasonably be expected to have, a material adverse effect on our company. These conditions to the closing of the Transaction may not be fulfilled and, accordingly, the Transaction may not be consummated. In addition, we or Digital Virgo may elect to terminate the Amended and Restated Business Combination Agreement in certain other circumstances, and the parties can mutually decide to terminate the Amended and Restated Business Combination Agreement at any time prior to the closing of the Transaction, whether before or after our shareholders approve the Merger. If the Amended and Restated Business Combination Agreement is terminated under certain circumstances, we would be required to pay Digital Virgo a termination fee equal to $2 million. In July of 2023, Digital Virgo purported to terminate the Amended and Restated Business Combination Agreement, and the Company is pursuing all available remedies in ICC arbitration.

 

22
 

 

Failure to complete the Transaction could negatively impact our stock price and our future business and financial results.

 

If the Transaction is not consummated, our ongoing businesses may be materially and adversely affected and, without realizing any of the benefits of having completed the Transaction, we will be subject to a number of risks, including the following:

 

  matters relating to the Transaction (including integration planning) have required and will continue to require substantial commitments of time and resources by our management, which could otherwise have been devoted to searching for a different target company for our initial business combination;
  we will be required to pay certain costs relating to the Transaction, including legal, accounting, filing and other fees expenses, whether or not the Transaction is completed; and
  the current price of our common stock may reflect a market assumption that the Transaction will occur, meaning that a failure to complete the Transaction could result in a material decline in the price of our common stock;

 

Our directors and officers may have interests in the Transaction different from the interests of our shareholders.

 

Certain of our directors and executive officers negotiated the terms of the Amended and Restated Business Combination Agreement, and our board of directors approved the Amended and Restated Business Combination Agreement and recommended that our shareholders vote in favor of the Transaction. These directors and executive officers may have interests in the Transaction that are different from, or in addition to, those of our shareholders generally. These interests include, but are not limited to, the treatment in the Transaction of warrants and other rights held by our directors and executive officers, and provisions in the Amended and Restated Business Combination Agreement regarding continued indemnification of and advancement of expenses to our directors and officers. Our shareholders should be aware of these interests when they consider our board of directors’ recommendation that they vote in favor of the Transaction.

 

Our board of directors was aware of these interests when it determined that the Transaction, on the terms and subject to the conditions set forth in the Amended and Restated Business Combination Agreement, was fair to and in the best interests of the Company and its shareholder and approved and declared advisable the Amended and Restated Business Combination Agreement, the Transaction and the other transactions contemplated by the Amended and Restated Business Combination Agreement.

 

We will incur direct and indirect costs as a result of the Transaction.

 

We will incur substantial expenses in connection with and as a result of completing the Transaction and over a period of time following the consummation of the Transaction. While we have assumed that a certain level of transaction expenses will be incurred, factors beyond our control could affect the total amount or the timing of these expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately.

 

If we are unable to consummate a business combination, our public stockholders may be forced to wait until the New Termination Date before receiving distributions from the trust account.

 

We have until the New Termination Date to complete a business combination. We have no obligation to return funds to investors prior to such date unless we consummate a business combination prior thereto and only then in cases where investors have sought to convert or sell their shares to us. Only after the expiration of this full time period will public security holders be entitled to distributions from the trust account if we are unable to complete a business combination. Accordingly, investors’ funds may be unavailable to them until after such date and to liquidate your investment, public security holders may be forced to sell their public shares or warrants, potentially at a loss.

 

23
 

 

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption price received by stockholders may be less than $10.00.

 

Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors and service providers we engage and prospective target businesses we negotiate with execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, they may not execute such agreements. Furthermore, even if such entities execute such agreements with us, they may seek recourse against the trust account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of our public stockholders. If we are unable to complete a business combination and distribute the proceeds held in the trust account to our public stockholders, our sponsor has agreed (subject to certain exceptions described elsewhere in this annual report) that it will be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we believe it is unlikely that our sponsor will be able to satisfy its indemnification obligations if it is required to do so. As a result, the per-share distribution from the trust account may be less than $10.00, plus interest, due to such claims.

 

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our public stockholders at least $10.00.

 

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them.

 

Our amended and restated certificate of incorporation (as amended by the Charter Amendment) provides that we will continue in existence only until the New Termination Date. If we have not completed a business combination by such date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest not previously released to us but net of taxes payable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, we cannot assure you that third parties will not seek to recover from our stockholders amounts owed to them by us.

 

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after expiration of the time we have to complete an initial business combination, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

24
 

 

A provision of our warrant agreement may make it more difficult for us to consummate our initial business combination.

 

If:

 

  we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock,
     
  the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and
     
  the Market Value is below $9.20 per share,

 

then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the price at which we issue the additional shares of common stock or equity-linked securities. This may make it more difficult for us to consummate an initial business combination with a target business.

 

Since we have not yet completed our initial business combination, we are unable to currently ascertain the merits or risks of the industry or business in which we may ultimately operate.

 

Although we intend to focus on an acquisition in the sports industry, we may pursue an acquisition opportunity in any business industry or sector we choose. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which we may ultimately acquire. To the extent we complete our initial business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the business operations of those entities. If we complete our initial business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. Although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors.

 

Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following consummation of our initial business combination. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct.

 

Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. We believe that our success depends on the continued service of our key personnel, at least until we have consummated our initial business combination. We cannot assure you that any of our key personnel will remain with us for the immediate or foreseeable future. In addition, none of our officers is required to commit any specified amount of time to our affairs and, accordingly, our officers will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have employment agreements with, or key-man insurance on the life of, any of our officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us.

 

The role of our key personnel after consummation of our initial business combination, however, cannot presently be ascertained. Although some of our key personnel serve in senior management or advisory positions following our initial business combination, it is likely that most, if not all, of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

 

Our officers and directors may not have significant experience or knowledge regarding the jurisdiction or industry of the target business we may seek to acquire.

 

We may consummate our initial business combination with a target business in any geographic location or industry we choose. We cannot assure you that our officers and directors will have enough experience or have sufficient knowledge relating to the jurisdiction of the target or its industry to make an informed decision regarding our initial business combination.

 

25
 

 

Our key personnel may negotiate employment or consulting agreements with a target business in connection with our initial business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous for us.

 

Our key personnel will be able to remain with the company after the consummation of our initial business combination only if they are able to negotiate employment or consulting agreements or other appropriate arrangements in connection with our initial business combination. Such negotiations will take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they will render to the company after the consummation of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business.

 

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This could have a negative impact on our ability to consummate our initial business combination.

 

Our officers and directors will not commit their full time to our affairs. We presently expect each of our officers and directors to devote such amount of time as they reasonably believe is necessary to our business. We do not intend to have any full-time employees prior to the consummation of our initial business combination. The foregoing could have a negative impact on our ability to consummate our initial business combination.

 

Our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination.

 

Our sponsor has waived its right to convert its founders’ shares or any other shares purchased in our IPO or thereafter, or to receive distributions from the trust account with respect to its founders’ shares upon our liquidation if we are unable to consummate a business combination. Accordingly, the shares acquired prior to our IPO, as well as the private units and any warrants purchased by our officers or directors in the aftermarket, will be worthless if we do not consummate our initial business combination. The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing our initial business combination and in determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest.

 

Our officers and directors or their affiliates have pre-existing fiduciary and contractual obligations and may in the future become affiliated with other entities engaged in business activities similar to those intended to be conducted by us. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

 

Our officers and directors or their affiliates have pre-existing fiduciary and contractual obligations to other companies. Accordingly, they may participate in transactions and have obligations that may be in conflict or competition with our consummation of our initial business combination. As a result, a potential target business may be presented by our management team to another entity prior to its presentation to us and we may not be afforded the opportunity to engage in a transaction with such target business. Additionally, our officers and directors may in the future become affiliated with entities that are engaged in a similar business, including another blank check company that may have acquisition objectives that are similar to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Delaware law. For a more detailed description of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, see the sections titled “Management — Directors and Executive Officers” and “Management — Conflicts of Interest.”

 

26
 

 

EarlyBirdCapital may have a conflict of interest in rendering services to us in connection with our initial business combination.

 

We have engaged EarlyBirdCapital to assist us in connection with our initial business combination. We will pay EarlyBirdCapital a cash fee for such services in an aggregate amount equal to up to 3.5% of the total gross proceeds raised in the offering only if we consummate our initial business combination. The representative shares will also be worthless if we do not consummate an initial business combination. These financial interests may result in EarlyBirdCapital having a conflict of interest when providing the services to us in connection with an initial business combination.

 

The ability of our stockholders to exercise their conversion rights or sell their shares to us in a tender offer may not allow us to effectuate the most desirable business combination or optimize our capital structure.

 

If our business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many stockholders may exercise conversion rights or seek to sell their shares to us in a tender offer, we may either need to reserve part of the trust account for possible payment upon such conversion, or we may need to arrange third party financing to help fund our business combination. In the event that the acquisition involves the issuance of our stock as consideration, we may be required to issue a higher percentage of our stock to make up for a shortfall in funds. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.

 

In connection with any vote to approve a business combination, we will offer each public stockholder the option to vote in favor of a proposed business combination and still seek conversion of his, her or its shares.

 

In connection with any vote to approve a business combination, we will offer each public stockholder (but not our sponsor, officers or directors) the right to have his, her or its shares of common stock converted to cash (subject to the limitations described elsewhere in this annual report) regardless of whether such stockholder votes for or against such proposed business combination or does not vote at all. The ability to seek conversion while voting in favor of our proposed business combination may make it more likely that we will consummate a business combination.

 

We do not have a specified maximum conversion threshold. The absence of such a conversion threshold may make it easier for us to consummate a business combination even where a substantial number of public stockholders seek to convert their shares to cash in connection with the vote on the business combination.

 

We have no specified percentage threshold for conversion in our amended and restated certificate of incorporation. As a result, we may be able to consummate a business combination even though a substantial number of our public stockholders do not agree with the transaction and have converted their shares. However, in no event will we consummate an initial business combination unless we have net tangible assets of at least $5,000,001 immediately prior to or upon consummation of our initial business combination.

 

In connection with any stockholder meeting called to approve a proposed initial business combination, we may require stockholders who wish to convert their shares in connection with a proposed initial business combination to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising their rights.

 

In connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right, regardless of whether he is voting for or against such proposed business combination or does not vote at all, to demand that we convert his shares into a pro rata share of the trust account as of two business days prior to the consummation of the initial business combination. We may require public stockholders who wish to convert their shares in connection with a proposed business combination to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holders’ option, in each case prior to a date set forth in the tender offer documents or proxy materials sent in connection with the proposal to approve the business combination. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than we anticipate for stockholders to deliver their shares, stockholders who wish to convert may be unable to meet the deadline for exercising their conversion rights and thus may be unable to convert their shares.

 

27
 

 

If, in connection with any stockholder meeting called to approve a proposed business combination, we require public stockholders who wish to convert their shares to comply with specific requirements for conversion, such converting stockholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved.

 

If we require public stockholders who wish to convert their shares to comply with specific requirements for conversion and such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders. Accordingly, investors who attempted to convert their shares in such a circumstance will be unable to sell their securities after the failed acquisition until we have returned their securities to them. The market price for our shares of common stock may decline during this time and you may not be able to sell your securities when you wish to, even while other stockholders that did not seek conversion may be able to sell their securities.

 

We may be unable to obtain additional financing, if required, to consummate our initial business combination or to fund the operations and growth of the target business, which could compel us to restructure or abandon a particular business combination.

 

Although we believe that the net proceeds of our IPO are sufficient to allow us to consummate our initial business combination, because we have not yet consummated any business combination, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of our IPO prove to be insufficient, either because of the size of the business combination, the depletion of the available net proceeds in search of a target business, or the obligation to convert into cash a significant number of shares from dissenting stockholders, we will be required to seek additional financing. Such financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate a particular business combination, we will be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our sponsor, officers, directors or stockholders is required to provide any financing to us in connection with or after a business combination.

 

Our outstanding warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect our initial business combination.

 

We issued warrants to purchase 22,500,000 shares of common stock as part of the units offered in our IPO and private warrants included within the private units to purchase 600,000 shares of common stock. We may also issue other units to our sponsor, initial stockholders, officers, directors or their affiliates in payment of working capital loans made to us as described in this annual report. To the extent we issue shares of common stock to effect our initial business combination, the potential for the issuance of a substantial number of additional shares upon exercise of these warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such securities, when exercised, will increase the number of issued and outstanding shares of common stock and reduce the value of the shares issued to complete the business combination. Accordingly, our warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business. Additionally, the sale, or even the possibility of sale, of the shares underlying the warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing. If and to the extent these warrants are exercised, you may experience dilution to your holdings.

 

28
 

 

Our search for an initial business combination, and any target business with which we ultimately consummate an initial business combination, may be materially adversely affected by the coronavirus (COVID-19) pandemic and other events, and the status of debt and equity markets.

 

The COVID-19 pandemic has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, the economies and financial markets worldwide, and the business of any potential target business with which we consummate an initial business combination could be materially and adversely affected. The COVID-19 pandemic has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, the economies and financial markets worldwide, and the business of any potential target business with which we consummate an initial business combination could be materially and adversely affected. Furthermore, we may be unable to complete an initial business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for an initial business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to consummate an initial business combination, or the operations of a target business with which we ultimately consummate an initial business combination, may be materially adversely affected.

 

In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.

 

If we do not conduct an adequate due diligence investigation of a target business (including Digital Virgo), we may be required to subsequently take write-downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

 

We must conduct a due diligence investigation of the target businesses we intend to acquire. Intensive due diligence is time consuming and expensive due to the operations, accounting, finance and legal professionals who must be involved in the due diligence process. Even if we conduct extensive due diligence on a target business, this diligence may not reveal all material issues that may affect a particular target business, and factors outside the control of the target business and outside of our control may later arise. If our diligence fails to identify issues specific to a target business, industry or the environment in which the target business operates, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our common stock. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.

 

The requirement that we complete our initial business combination prior to the New Termination Date may give potential target businesses leverage over us in negotiating a business combination.

 

We have until the New Termination Date to complete our initial business combination. Any potential target business with which we enter into negotiations concerning a business combination will be aware of this requirement. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete a business combination with that particular target business, we may be unable to complete a business combination with any other target business. This risk will increase as we get closer to the time limit referenced above.

 

29
 

 

We may not obtain a fairness opinion with respect to the target business that we seek to acquire and therefore you may be relying solely on the judgment of our board of directors in approving a proposed business combination.

 

We will only be required to obtain a fairness opinion with respect to the target business that we seek to acquire if it is an entity that is affiliated with any of our sponsor, initial stockholders, officers, directors or their affiliates. In all other instances, we will have no obligation to obtain an opinion. Accordingly, investors will be relying solely on the judgment of our board of directors in approving a proposed business combination.

 

Resources could be spent researching acquisitions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

 

It is anticipated that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to complete a specific business combination, the costs incurred up to that point for the proposed transaction likely will not be recoverable. Furthermore, even if an agreement is reached relating to a specific target business, we may fail to consummate the business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

 

Compliance with the Sarbanes-Oxley Act of 2002 will require substantial financial and management resources and may increase the time and costs of completing an acquisition.

 

Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and report on our system of internal controls. If we fail to maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties and/or stockholder litigation. Any inability to provide reliable financial reports could harm our business. Section 404 of the Sarbanes-Oxley Act also requires that our independent registered public accounting firm report on management’s evaluation of our system of internal controls. As stated above, because we are an emerging growth company we are not yet required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Furthermore, any failure to implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

 

If we effect a business combination with a company located in a foreign jurisdiction, we will be subject to a variety of additional risks that may negatively impact our operations.

 

If we consummate a business combination with a target business in a foreign country (such as Digital Virgo), we will be subject to any special considerations or risks associated with companies operating in the target business’ home jurisdiction, including any of the following:

 

  rules and regulations or currency conversion or corporate withholding taxes on individuals;
     
  tariffs and trade barriers;
     
  regulations related to customs and import/export matters;
     
  longer payment cycles;
     
  tax issues, such as tax law changes and variations in tax laws as compared to the United States;
     
  currency fluctuations and exchange controls;
     
  challenges in collecting accounts receivable;
     
  cultural and language differences;
     
  employment regulations;
     
  crime, strikes, riots, civil disturbances, terrorist attacks and wars; and
     
  deterioration of political relations with the United States.

 

30
 

 

We cannot assure you that we will be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.

 

If we effect a business combination with a company located outside of the United States, the laws applicable to such company will likely govern all of our material agreements and we may not be able to enforce our legal rights.

 

If we effect a business combination with a company located outside of the United States (such as Digital Virgo), the laws of the country in which such company operates will govern almost all of the material agreements relating to its operations. We cannot assure you that the target business will be able to enforce any of its material agreements or that remedies will be available in this new jurisdiction. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital. Additionally, if we acquire a company located outside of the United States, it is likely that substantially all of our assets will be located outside of the United States and some of our officers and directors might reside outside of the United States. As a result, it may not be possible for investors in the United States to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties of our directors and officers under federal securities laws.

 

Because we must furnish our stockholders with target business financial statements prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards, we will not be able to complete a business combination with prospective target businesses unless their financial statements are prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards.

 

The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP, or international financial reporting standards, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. We will include the same financial statement disclosure in connection with any tender offer documents we use, whether or not they are required under the tender offer rules. Additionally, to the extent we furnish our stockholders with financial statements prepared in accordance with IFRS, such financial statements will need to be audited in accordance with U.S. GAAP at the time of the consummation of the business combination. These financial statement requirements may limit the pool of potential target businesses we may acquire.

 

There may be tax consequences to our business combinations that may adversely affect us.

 

While we expect to undertake any merger or acquisition so as to minimize taxes both to the acquired business and/or assets and us, such business combination might not meet the statutory requirements of a tax-deferred reorganization, or the parties might not obtain the intended tax-deferred treatment upon a transfer of shares or assets. A non-qualifying reorganization could result in the imposition of substantial taxes.

 

31
 

 


We may face risks related to businesses in the sports and media sectors.

 

Business combinations with companies in the sports and media sectors entail special considerations and risks, including potential limitations and restrictions on our ability to complete business combinations imposed by professional sports leagues that prospective target businesses may be associated with. If we are successful in completing a business combination with such a target business, we may be subject to, and possibly adversely affected by, the following risks:

 

  The popularity of any sports franchises that we control or have partnerships with, and, in varying degrees, the ability of those franchises achieving competitive success, depends on the viability and the popularity of the sports leagues and sports that such franchises are associated with, which can generate or impact supporter enthusiasm, resulting in increased or decreased revenues;
     
  An inability to build or maintain strong brand identity and reputation and improve customer and supporter satisfaction and loyalty,
     
  A dependence in part on relationships with third parties and an inability to attract or retain sponsorships, advertisers or partners;
     
  An inability to attract or retain key personnel, including players for any sports franchises we may control, and an inability of professional sports leagues to maintain labor relations or successfully negotiate new collective bargaining agreements with unionized players, referees or other employees on favorable terms;
     
  An inability to negotiate and control pricing of key media contracts for any sports franchises we may control;
     
  An inability of any sports franchises that we control or have partnerships with to qualify for playoffs or certain competitions;
     
  Changes in pricing, including changes in the demand for tickets, media rights or consumer products associated with our target business;
     
  An inability to sell, license, market, protect and enforce the intellectual property and other rights on which our target business may depend;
     
  Seasonality and weather conditions that may cause our operating results to vary from quarter to quarter;
     
  Potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute;
     
  Special rules and regulations imposed by sports leagues on franchises, including rules and regulations regarding confidentiality, investments and sales of interests in sports franchises, financing transactions (including the ability to incur indebtedness, make distributions or engage in other liquidity transactions) and insolvency and bankruptcy;
     
  The ability of the member teams of sports leagues to take actions contrary to the interests of sports franchises, including asserting control over certain matters such as telecast rights, licensing rights, the length and format of the playing season, the operating territories of member teams, admission of new members, franchise relocations, labor relations with players associations, collective bargaining, free agency, and luxury taxes and revenue sharing, and the imposition of sanctions or suspension on sports franchises; and
     
  Business interruptions due to natural disasters, terrorist incidents, outbreak of disease (including the recent COVID-19 pandemic and related shelter-in-place orders, travel, social distancing and quarantine policies, boycotts, curtailment of trade and other business restrictions), and other events;

 

Any of the foregoing risks, and others, could have an adverse impact on our operations following a business combination. Our efforts in identifying prospective target businesses will not be limited to the sports and entertainment sectors. Accordingly, if we acquire a target business in another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate or target businesses which we acquire, none of which can be presently ascertained.

 

32
 

 


Risks Relating to Investing in our Securities

 

You will not be entitled to protections normally afforded to investors of blank check companies.

 

Since the net proceeds of our IPO are intended to be used to complete a business combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States securities laws. However, since we have net tangible assets in excess of $5,000,001, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules which completely restrict the transferability of our securities, require us to complete a business combination prior to the New Termination Date and restrict the use of interest earned on the funds held in the trust account. Because we are not subject to Rule 419, our units were immediately tradable, we have a longer period of time to consummate an initial business combination and we are entitled to withdraw amounts from the funds held in the trust account prior to the completion of a business combination.

 

The securities in which we invest the proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in the trust account such that the per share redemption amount received by public stockholders may be less than $10.00 per share.

 

The net proceeds of our IPO and certain proceeds from the sale of the private placement warrants, in the amount of $258,750,000, have been held in an interest-bearing trust account. As of the date of this Form 10-K, in connection with the stockholders’ approval and implementation of the Charter Amendments described above, the holders of 25,660,831 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately for an aggregate redemption amount of approximately $262,964,454. The proceeds held in the trust account may only be invested in direct U.S. government securities with a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes) will be reduced. In the event that we are unable to complete our initial business combination, our public stockholders are entitled to receive their share of the proceeds held in the trust account, plus any interest income.

 

We may issue shares of our capital stock or debt securities to complete a business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership.

 

Our amended and restated certificate of incorporation will authorize the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. After our IPO and the purchase of the private units, including the exercise of over-allotment options, there was 40,296,250 authorized but unissued shares of common stock available for issuance (after appropriate reservation for the issuance of the shares underlying the private units and public and private warrants). Although we have no commitment as of the date of this annual report, we may issue a substantial number of additional shares of common stock or shares of preferred stock, or a combination of common stock and preferred stock, to complete a business combination. The issuance of additional shares of common stock will not reduce the per-share conversion amount in the trust account. The issuance of additional shares of common stock or preferred stock:

 

  may significantly reduce the equity interest of our existing investors;
     
  may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock;
     
  may cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and
     
  may adversely affect prevailing market prices for our shares of common stock.

 

33
 

 

Similarly, if we issue debt securities, it could result in:

 

  default and foreclosure on our assets if our operating revenues after a business combination are insufficient to repay our debt obligations;
     
  acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
     
  our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and
     
  our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding.

 

If we incur indebtedness, our lenders will not have a claim on the cash in the trust account and such indebtedness will not decrease the per-share conversion amount in the trust account.

 

If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants, holders will only be able to exercise such warrants on a “cashless basis.”

 

If we do not file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available. As a result, the number of shares of common stock that holders will receive upon exercise of the warrants will be fewer than it would have been had such holder exercised his warrant for cash. Further, if an exemption from registration is not available, holders will not be able to exercise on a cashless basis and will only be able to exercise their warrants for cash if a current and effective prospectus relating to the common stock issuable upon exercise of the warrants is available. Under the terms of the warrant agreement, we have agreed to use our best efforts to meet these conditions and to file and maintain a current and effective prospectus relating to the common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so. If we are unable to do so, the potential “upside” of the holder’s investment in our company may be reduced or the warrants may expire worthless.

 

An investor will only be able to exercise a warrant if the issuance of shares of common stock upon such exercise has been registered or qualified or is deemed exempt under the securities laws of the state of residence of the holder of the warrants.

 

No warrants are exercisable and we will not be obligated to issue shares of common stock unless the shares of common stock issuable upon such exercise has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. If the shares of common stock issuable upon exercise of the warrants are not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside, the warrants may be deprived of any value, the market for the warrants may be limited and they may expire worthless if they cannot be sold.

 

The private warrants may be exercised at a time when the public warrants may not be exercised.

 

Once the private warrants become exercisable, such warrants may immediately be exercised on a cashless basis, at the holder’s option, so long as they are held by the initial purchasers or their permitted transferees. The public warrants, however, will only be exercisable on a cashless basis at the option of the holders if we fail to register the shares issuable upon exercise of the warrants under the Securities Act within 90 days following the closing of our initial business combination. Accordingly, it is possible that the holders of the private warrants could exercise such warrants at a time when the holders of public warrants could not.

 

34
 

 


We may amend the terms of the warrants in a manner that may be adverse to holders with the approval by the holders of at least a majority of the then outstanding public warrants.

 

Our warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. The warrant agreement requires the approval by the holders of at least a majority of the then outstanding public warrants in order to make any change that adversely affects the interests of the registered holders.

 

Nasdaq may delist our securities from quotation on its exchange which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

Nasdaq issued a delisting notice to the Company in February of 2024 (see Form 8k filed by the Company on February 16, 2024.), and the Company requested a Panel hearing to appeal the decision. Although we expect to meet on a pro forma basis Nasdaq’s minimum initial listing standards, which generally only requires that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements, we cannot assure you that our securities will continue to be listed on Nasdaq in the future prior to an initial business combination. Additionally, in connection with our initial business combination, it is likely that Nasdaq will require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time. Nasdaq will also have discretionary authority to not approve our listing if Nasdaq determines that the listing of the company to be acquired is against public policy at that time.

 

If Nasdaq delists our securities from trading on its exchange, or we are not listed in connection with our initial business combination, we could face significant material adverse consequences, including:

 

  a limited availability of market quotations for our securities;
     
  reduced liquidity with respect to our securities;
     
  a determination that our shares of common stock are “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;
     
  a limited amount of news and analyst coverage for our company; and
     
  a decreased ability to issue additional securities or obtain additional financing in the future.

 

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our units, common stock and warrants are listed on Nasdaq, our units, common stock and warrants are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

 

Our initial stockholders control a substantial interest in us and thus may influence certain actions requiring a stockholder vote.

 

Our initial stockholders own approximately 95.1% of our issued and outstanding shares of common stock. None of our sponsor, officers, directors, advisors, initial stockholders or their affiliates has indicated any intention to purchase any units or shares of common stock from persons in the open market or in private transactions. However, our sponsor, officers, directors, advisors, initial stockholders or their affiliates could determine in the future to make such purchases in the open market or in private transactions, to the extent permitted by law, in order to influence the vote or magnitude of the number of shareholders seeking to tender their shares to us. In connection with any vote for a proposed business combination, our initial stockholders, as well as all of our officers and directors, have agreed to vote the shares of common stock owned by them in favor of such proposed business combination. EarlyBirdCapital has also agreed to vote the representative shares in favor of such proposed business combination.

 

35
 

 


Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of a business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. Accordingly, you may not be able to exercise your voting rights under corporate law until the New Termination Date. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the consummation of a business combination.

 

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 

We have the ability to redeem outstanding warrants (excluding the private warrants and any warrants underlying additional units issued to our sponsor, officers or directors in payment of working capital loans made to us) at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private warrants are redeemable by us so long as they are held by the initial purchasers or their permitted transferees.

 

Our management’s ability to require holders of our warrants to exercise such warrants on a cashless basis will cause holders to receive fewer shares of common stock upon their exercise of the warrants than they would have received had they been able to exercise their warrants for cash.

 

If we call our public warrants for redemption after the redemption criteria described elsewhere in this annual report have been satisfied, our management will have the option to require any holder that wishes to exercise his warrant (including any private warrants) to do so on a “cashless basis.” If our management chooses to require holders to exercise their warrants on a cashless basis, the number of shares of common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his warrant for cash. This will have the effect of reducing the potential “upside” of the holder’s investment in our company.

 

If our security holders exercise their registration rights, it may have an adverse effect on the market price of our shares of common stock and the existence of these rights may make it more difficult to effect our initial business combination.

 

Our initial stockholders are entitled to make a demand that we register the resale of the founders’ shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, the holders of representative shares, the private units and any units and warrants our sponsor, initial stockholders, officers, directors, or their affiliates may be issued in payment of working capital loans made to us, are entitled to demand that we register the resale of the representative shares, private units and any other units and warrants we issue to them (and the underlying securities) commencing at any time after we consummate our initial business combination. The presence of these additional securities trading in the public market may have an adverse effect on the market price of our securities. In addition, the existence of these rights may make it more difficult to effectuate our initial business combination or increase the cost of acquiring the target business, as the stockholders of the target business may be discouraged from entering into a business combination with us or will request a higher price for their securities because of the potential effect the exercise of such rights may have on the trading market for our shares of common stock.

 

36
 

 

If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete a business combination.

 

A company that, among other things, is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, owning, trading or holding certain types of securities will be deemed an investment company under the Investment Company Act, as amended, or the Investment Company Act. Since we will invest the proceeds held in the trust account, it is possible that we could be deemed an investment company. Notwithstanding the foregoing, we do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may be invested by the trustee only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. By restricting the investment of the proceeds to these instruments, we intend to meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act.

 

If we are nevertheless deemed to be an investment company under the Investment Company Act, we may be subject to certain restrictions that may make it more difficult for us to complete a business combination, including:

 

  restrictions on the nature of our investments; and
     
  restrictions on the issuance of securities.

 

In addition, we may have imposed upon us certain burdensome requirements, including:

 

  registration as an investment company;
     
  adoption of a specific form of corporate structure; and
     
  reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations.

 

Compliance with these additional regulatory burdens would require additional expense for which we have not allotted.

 

Provisions in our amended and restated certificate of incorporation and bylaws and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management.

 

Our amended and restated certificate of incorporation and bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. As a result, at a given annual meeting only a minority of the board of directors may be considered for election. Since our “staggered board” may prevent our stockholders from replacing a majority of our board of directors at any given annual meeting, it may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of stockholders. Moreover, our board of directors has the ability to designate the terms of and issue new series of preferred stock.

 

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

 

37
 

 


A market for our securities may not develop or may not be sustained, which will adversely affect the liquidity and price of our securities.

 

The price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

 

Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

 

Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.

 

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers or employees, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder and may therefore bring a claim in another appropriate forum. We cannot be certain that a court will decide that this provision is either applicable or enforceable, and if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

 

Our amended and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

 

Risks Relating to our Sponsor and Management Team

 

Our directors may decide not to enforce our sponsor’s indemnification obligations, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

 

In the event that the proceeds in the trust account are reduced below $10.00 per public share and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors will determine whether to take legal action against our sponsor to enforce such indemnification obligations. It is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Additionally, each of our independent directors is a member of our sponsor. As a result, they may have a conflict of interest in determining whether to enforce our sponsor’s indemnification obligations. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

 

38
 

 

General Risk Factors

 

We have no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective.

 

We have no operating results to date. Therefore, our ability to commence operations is dependent upon obtaining financing through the public offering of our securities. Since we do not have an operating history, you will have no basis upon which to evaluate our ability to achieve our business objective, which is to acquire an operating business. We have neither engaged in any operations unrelated to our search for business combination candidates nor generated any revenue to date. We will not generate any revenues until, at the earliest, after the consummation of our initial business combination.

 

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our shares of common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an “emerging growth company” for up to five years. However, if our non-convertible debt issued within a three year period or revenues exceeds $1.235 billion, or the market value of our shares of common stock that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We cannot predict if investors will find our shares of common stock less attractive because we may rely on these provisions. If some investors find our shares of common stock less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile.

 

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

 

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

 

We have identified a material weakness in our internal control over financial reporting. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

 

Management identified material weaknesses in our internal control over financial reporting as of December 31, 2023. The material weakness related to the proper safeguarding of trust assets and the monitoring process over the use of trust funds.

 

In addition to the above, in light of guidance provided by the SEC in late 2021, our management re-evaluated our application of ASC 480-10-S99-3A to our accounting classification of public shares. After consultation with our independent registered public accounting firm, our management and our audit committee concluded that it was appropriate to restate our previously issued audited balance sheet, dated February 16, 2021, included as an exhibit to our current report on Form 8-K filed with the SEC on February 22, 2021, and our unaudited interim financial statements included in our quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2021 and June 30, 2021, filed with the SEC on May 28, 2021 and August 16, 2021, respectively. As part of such process, we identified a material weakness in our internal control over financial reporting related to accounting for complex financial instruments.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.

 

39
 

 

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the identified material weaknesses. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

 

If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

 

We, and following our initial business combination, the post-business combination company, may face litigation and other risks as a result of the material weaknesses in our internal control over financial reporting.

 

As part of the restatements of our previously issued financial statements, we identified a material weakness in our internal control over financial reporting. As a result of such material weakness, the restatements, the changes in accounting for our public shares and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatements and material weakness in our internal control over financial reporting and the preparation of our financial statements. As of the date of this annual report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a business combination.

 

We have no operating history and are subject to a mandatory liquidation and a subsequent dissolution requirement if we do not complete an initial business combination by August 8, 2024. As such, there is a risk that we will be unable to continue as a going concern if we do not consummate an initial business combination by the applicable deadline. If we are unable to complete an initial business combination by the deadline, we will be forced to liquidate.

 

We are a blank check company, and as we have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement, there is a risk that we will be unable to continue as a going concern if we do not consummate an initial business combination by August 8, 2024. There can be no assurance that we will complete a business combination by this time. If we do not complete our initial business combination by August 8, 2024, we will (i) ease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 1C. CYBERSECURITY

 

As a blank check company, we do not have any operations and our sole business activity has been to search for and consummate a business combination. However, because we have investments in our Trust Account and bank deposits and we depend on the digital technologies of third parties, we and third parties may be subject to attacks on or security breaches in our or their systems. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. In the event of a cybersecurity incident impacting us, our management team will report to our board of directors and provide updates on our management team’s incident response plan for addressing and mitigating any risks associated with such an incident. As an early-stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We also lack sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have material adverse consequences on our business and lead to financial loss. We have not encountered any cybersecurity incidents since our initial public offering.

 

ITEM 2. PROPERTIES

 

We currently maintain our executive offices at 12600 Hill Country Blvd Building R, Suite 275, Bee Cave, Texas 78738. We consider our current office space adequate for our current operations.

 

ITEM 3. LEGAL PROCEEDINGS.

 

In September of 2023, the Company commenced arbitration with the International Chamber of Commerce (“ICC”) against Digital Virgo for breach of the Amended and Restated Business Combination Agreement, seeking damages and equitable remedies. Digital Virgo has asserted a counterclaim for a “Termination Fee” as defined in the Amended and Restated Business Combination Agreement. Apart from the ICC Arbitration, there is no material litigation, arbitration or governmental proceeding currently pending against us or any of our officers or directors in their capacity as such, and we and our officers and directors have not been subject to any such proceeding in the 12 months preceding the date of this annual report on Form 10-K.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not Applicable.

 

40
 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Market Information

 

Our units, common stock and warrants are traded on The Nasdaq Capital Market under the symbols “PUCKU”, “PUCK,” and “PUCKW”, respectively.

 

Holders

 

As of April 12, 2024, there were 72 holders of record of our common stock. This number does not include “street name,” or beneficial holders, whose shares are held of record by banks, brokers, financial institutions and other nominees.

 

Dividends

 

We have not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time and subject to the Delaware law. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future.

 

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings

 

Our initial stockholders purchased an aggregate of 5,750,000 founders’ shares for an aggregate purchase price of $25,000 in November 2020. On December 16, 2020, we effected a stock dividend of .125 of a share of common stock for each outstanding share of common stock, and as a result, our initial shareholders hold 6,468,750 founder shares as of the date of this annual report. In December 2020, our sponsor transferred an aggregate of 2,354,000 founder shares to our officers, directors and advisors. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon completion of our initial public offering. Such securities were issued to our sponsor in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

 

In addition, our sponsor purchased 667,500 private units at $10.00 per private unit for a total purchase price of $6,675,000 pursuant to subscription agreements with us. These purchases took place on a private placement basis. The issuances were made to our sponsor pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D under the Securities Act. No underwriting discounts or commissions were paid with respect to such sales.

 

Use of Proceeds

 

On February 16, 2021, we consummated our initial public offering of 22,500,000 units, and on February 24, 2021, we issued 3,375,000 Units pursuant to the full exercise by the underwriters of their over-allotment option, at $10.00 per unit, generating gross proceeds of $258,750,000. EarlybirdCapital, Inc., acted as the representative of the several underwriters in the initial public offering.

 

Concurrently with the closing of the initial public offering and over-allotment, we consummated the private placement to our sponsor generating gross proceeds of $6,675,000.

 

There has been no material change in the planned use of the proceeds from the initial public offering and private placement as is described in our final prospectus related to the initial public offering. For a description of the planned use of the proceeds generated from the initial public offering and private placement, see “Item 1. Business.”

 

ITEM 6. RESERVED

 

41
 

 


ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.

 

Overview

 

We are a blank check company incorporated on October 26, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). The registration statement for the Company’s IPO was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on February 10, 2021. On February 16, 2021, the Company consummated the IPO of 22,500,000 units (the “Units”) at a price of $10.00 per Unit, for total gross proceeds of $225,000,000. On February 24, 2021, the underwriters exercised the over-allotment option in full resulting in the closing of the issuance and sale of an additional 3,375,000 Units (the “Over-Allotment Units”). The issuance by the Company of the Over-Allotment Units at a price of $10.00 per unit resulted in total gross proceeds of $33,750,000. Each Unit consists of one shares of common stock, $0.0001 par value, and one redeemable warrant entitling its holder to purchase one share of common stock at a price of $11.50 per share.

 

Simultaneously with the closing of the IPO, the Company consummated the sale of 600,000 units (the “Private Units”), at a price of $10.00 per Private Unit. On February 24, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional 67,500 Private Units (together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of $6,675,000.

 

Results of Operations

 

For the year ended December 31, 2023, we had a net loss of $1,137,038. We had investment income of $3,810,230 on the amount held in the Trust Account. We recognized a $31,381 gain on the change in the fair value of the warrant liability. We incurred $4,140,232 of operating costs and business combination expenses. We also incurred a $798,570 provision for income taxes.

 

For the year ended December 31, 2022, we had net loss of $296,853. We incurred $3,656,059 of operating costs consisting mostly of general and administrative expenses and business combination expenses. We also recognized a $709,969 provision for income taxes. We had investment income of $3,730,147 on amounts held in the trust account and also recognized a $339,028 gain from the change in the fair value of the warrant liability.

 

Proposed Business Combination

 

On February 8, 2023, we entered into an Amended and Restated Business Combination Agreement (the “Amended and Restated Business Combination Agreement”) with Goal Acquisitions Nevada Corp., a Nevada corporation (“Goal Nevada”), Digital Virgo Group, a French corporation (société par actions simplifiée) (“Digital Virgo”), all shareholders of Digital Virgo (the “Digital Virgo Shareholders”), and IODA S.A., in its capacity as the “DV Shareholders Representative” (as defined in the Amended and Restated Business Combination Agreement), which amends and restates the Business Combination Agreement, dated as of November 17, 2022, by and among the Company, Digital Virgo, and certain other parties in its entirety.

 

Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Company and Goal Nevada entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will, prior to the Closing (as defined in the Merger Agreement), reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger (the “Reincorporation Merger”).

 

Pursuant to the Amended and Restated Business Combination Agreement and after the consummation of the Reincorporation Merger, Digital Virgo will acquire all of the outstanding shares of Goal Nevada whereby the outstanding shares of Goal Nevada will be exchanged for shares of Digital Virgo by means of a statutory share exchange under Nevada law (the “Exchange”).

 

The Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger, were approved by the board of directors of the Company.

 

The Amended and Restated Business Combination Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the transactions contemplated by the Amended and Restated Business Combination Agreement is subject to certain conditions as further described therein.

 

The Merger Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the proposed Merger is subject to certain conditions as further described in the Merger Agreement.

 

In July of 2023, Digital Virgo purported to unilaterally terminate the Amended and Restated Business Combination Agreement and has refused to negotiate. Therefore the Company commenced arbitration to before the International Chamber of Commerce (“ICC”) to enforce the Company’s rights under the Amended and Restated Business Combination Agreement.

 

42
 

 

Extension and Redemptions

 

On February 7, 2023, our stockholders approved an amendment (the “First Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021 (the “Investment Management Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to change the date on which Continental must commence liquidation of the amount on deposit in the trust account (the “Trust Account”) established in connection with the Company’s initial public offering from February 16, 2023 to March 18, 2023, subject to extension by the board of directors for up to five additional thirty-day periods (the latest of which such date is August 15, 2023 if the board of directors exercises all five extensions). The Board exercised all five additional thirty-day extensions.

 

On February 7, 2023, our stockholders also approved an amendment (the “First Charter Amendment”) to the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to (i) extend the initial period of time by which the Company has to consummate an initial business combination to through August 15, 2023 and (ii) make other related administrative and technical changes in the Charter, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement that the Company filed with the SEC on January 9, 2023. The Company filed the First Charter Amendment with the Secretary of State of the State of Delaware on February 8, 2023.

 

In connection with our stockholders’ approval and implementation of the Charter Amendment Proposal, the holders of 16,328,643 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $165,489,173. Following such redemptions, 9,546,357 Public Shares remained outstanding.

 

On August 14, 2023, our stockholders approved an amendment (the “Second Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between us and Continental, to change the date on which Continental must commence liquidation of the amount on deposit in the Trust Account established in connection with the Company’s initial public offering from August 16, 2023 to August 23, 2023, subject to extension by the board of directors on a day-by-day basis, with the ability to extend up to seven days at a time in advance, for a maximum of ninety-days to November 15, 2023.

 

On August 14, 2023, our stockholders also approved an amendment (the “Second Charter Amendment”) to the “Charter to (i) extend the period of time by which we have to consummate an initial business combination to November 15, 2023 and (ii) make other administrative and technical changes in the Charter in connection with the new termination date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. We filed the Second Charter Amendment with the Secretary of State of the State of Delaware on August 14, 2023.

 

In connection with the stockholders’ approval and implementation of the Second Charter Amendment, the holders of 8,708,098 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.50 per share, for an aggregate redemption amount of $91,398,232. Following such redemptions, 838,259 Public Shares remained outstanding.

 

On November 8, 2023, we held a meeting and our stockholders’ approved an amendment to the Charter (the “Third Charter Amendment”) to extend the period of time by which we have to consummate an initial business combination to February 10, 2024.  In connection with the stockholders’ approval and implementation of the Third Charter Amendment, the holders of 571,909 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of $6,077,050. Following such redemptions, 266,360 Public Shares remained outstanding.

 

On February 7, 2024, the stockholders’ approved an amendment (the “Third Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between us and Continental Stock Transfer & Trust Company to change the date on which Continental must commence liquidation of the amount on deposit in the trust account established in connection with our initial public offering from February 10, 2024 to August 8, 2024 (the “New Termination Date”).

 

In connection with the stockholders’ approved an amendment to the Charter (the “Fourth Charter Amendment”), the holders of 52,181 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of approximately $554,562. Following such redemptions, 214,169 Public Shares remain outstanding.

 

See the proxy statements filed by us with the SEC on January 9, 2023 and July 27, 2023 and the Current Report on Form 8-K filed by us with the SEC on February 8, 2023 and August 14, 2023, February 7, 2024 for additional information.

 

43
 

 

Use of Funds Restricted for Payment of Taxes

 

From inception to date, we have withdrawn a total of $2,041,690 of interest from the Trust Account of which $541,719 was paid for franchise taxes. Of the aggregate withdrawals, $1,499,971 was restricted for the payment of income taxes. During the year ended December 31, 2023, we utilized the restricted amount of $1,499,971 to fund the monthly extension deposits.

 

As of the date of this Form 10-K, the Company has not yet filed it’s corporate tax return and intends to remit payment for income taxes upon completion of the return.

 

Liquidity, Capital Resources and Going Concern

 

As of December 31, 2023, we had $303,746 in cash and a working capital deficit of $12,038,630. In addition, in order to finance transaction costs in connection with a Business Combination, our initial stockholders, or certain of our officers and directors may, but are not obligated to, provide us with working capital loans (see Note 5 of the accompanying financial statements). There are currently no amounts outstanding under any working capital loans.

 

In addition, in May 2021, we received a commitment letter from the Sponsor whereby the Sponsor committed to fund any working capital shortfalls through the earlier of an initial Business Combination or our liquidation. The loans would be issued as required and each loan would be evidenced by a promissory note, up to an aggregate of $300,000. In August 2021, we received a new commitment letter from the Sponsor to increase such loan amount up to $500,000. The loans will be non-interest bearing, unsecured and payable upon the consummation of our initial Business Combination or at the holder’s discretion, convertible into warrants of the Company at a price of $2.00 per warrant.

 

Effective as of November 4, 2021, upon approval of the Board of Directors, we entered into an Expense Advancement Agreement with Goal Acquisitions Sponsor, LLC (the “Funding Party”). Pursuant to the Expense Advancement Agreement, the Funding Party has agreed to advance to us from time to time, upon request by us, a maximum of $1,500,000 in the aggregate, in each instance issued pursuant to the terms of a promissory note, as may be necessary to fund our expenses relating to the investigation and selection of a target business and other working capital requirements prior to completion of any potential Business Combination. On April 28, 2023 the Company executed its first amendment to the Expense Advancement Agreement and increased the maximum funding allowable under the agreement to $2,000,000.

 

Pursuant to the terms of the Expense Advancement Agreement, if we complete a Business Combination, we will repay all outstanding loaned amounts. No interest accrues on the unpaid principal balance of any Promissory Note. The Funding Party cannot seek repayment from the trust account for amounts owed under the Expense Advancement Agreement. All loans from the Funding Party are convertible into warrants to purchase shares of common stock (the “Conversion Warrants”), at the option of the Funding Party. The number of Conversion Warrants granted will be equal to the portion of the principal amount of the Promissory Note being converted, divided by $2.00, as amended per First Amendment to the Expense Advance Agreement, (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction related to our common stock occurring after the date of the Expense Advancement Agreement), rounded up to the nearest whole number of shares. The Conversion Warrants shall be identical to those warrants that were issued in a private placement that closed concurrently with our initial public offering. The holders of Conversion Warrants or shares of common stock underlying the Conversion Warrants are entitled to certain demand and piggyback registration rights pursuant to the terms of the Expense Advancement Agreement. All previously outstanding commitments from the Sponsor have been consolidated under the Expense Advancement Agreement, effective November 4, 2021.

 

Until consummation of its Business Combination, the Company will be using the funds not held in the trust account, and any additional Working Capital Loans for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

 

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or its affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we will repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such working capital loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units. To date, the Company had no borrowings under the working capital loans.

 

We will need to raise additional capital through loans or additional investments from the Sponsor, stockholders, officers, directors, or third parties. Our officers, directors and the Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern one year from the date that our financial statements included in this Annual Report on Form 10-K are issued.

 

44
 

 

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements – Going Concern,” the Company has until the New Termination Date, currently November 14, 2023 to consummate a business combination. On August 14, 2023, the Company’s stockholders approved another amendment to the Investment Management Trust Agreement to change the date on which Continental must commence liquidation of the Trust Account to the New Termination Date. It is uncertain that we will be able to consummate a business combination by this time. If a business combination is not consummated by this date and an extension of the period of time the Company has to complete a business combination has not been approved by the Company’s stockholders, there will be a mandatory liquidation and subsequent dissolution of the Company. We have determined that our insufficient capital and mandatory liquidation, should a business combination not occur, and an extension not approved by the stockholders of the Company, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 14, 2023. We intend to continue to complete a business combination, including the Transaction, before the mandatory liquidation date. The Company is within 12 months of its mandatory liquidation date as of the time of filing of this Annual Report on Form 10-K.

 

Our financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of this Annual Report on Form 10-K and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of this Annual Report on Form 10-K.

 

Under the current rules and regulations of the SEC we are not deemed an investment company for purposes of the Investment Company Act of 1940 (the “Investment Company Act”); however, on March 30, 2022, the SEC proposed new rules (the “Proposed Rules”) relating, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The Proposed Rules provide a safe harbor for companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the Proposed Rules would require a company to file a Current Report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of the SPAC’s registration statement for its initial public offering. The company would then be required to complete its initial business combination no later than 24 months after the effective date of such registration statement.

 

There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours. We did not enter into a definitive business combination agreement within 18 months after the effective date of our registration statement relating to our initial public offering and there is a risk that we may not complete our initial business combination within 24 months of such date. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company. If we were deemed to be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate. If we are required to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction.

 

Currently, the funds in our trust account are held only in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. The Investment Company Act defines an investment company as any issuer which (i) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; (ii) is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or (iii) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of Government securities and cash items) on an unconsolidated basis.

 

45
 

 

The longer that the funds in the trust account are held in money market funds, there is a greater risk that we may be considered an unregistered investment company. In the event we are deemed an investment company under the Investment Company Act, whether based upon our activities, the investment of our funds, or as a result of the Proposed Rules being adopted by the SEC, we may determine that we are required to liquidate the money market funds held in our trust account and may thereafter hold all funds in our trust account in cash until the earlier of consummation of our business combination or liquidation. As a result, if we were to switch all funds to cash, we will likely receive minimal interest, if any, on the funds held in our trust account after such time, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of our Company.

 

Critical Accounting Policies and Estimates

 

This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies:

 

Warrant Liabilities

 

We account for the warrants issued in connection with our initial public offering in accordance with Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815”), under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statement of Operations in the period of change.

 

Common stock subject to possible redemption

 

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of both December 31, 2023 and 2022, 266,350 and 25,875,000 shares of common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets.

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit.

 

Net Loss Per Common Share

 

The Company has one class of common stock. The common stock sold in the IPO is subject to possible redemption. The 25,875,000 common stock underlying the outstanding warrants were excluded from diluted earnings per common stock for the period ended December 31, 2023 and 2022 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods.

 

46
 

 

Recent Accounting Pronouncements

 

In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for the fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The adoption of ASU 2020-06 is not expected to have an impact on our financial position, results of operations or cash flows.

 

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

 

JOBS Act

 

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 

As an “emerging growth company”, we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

Item 8. Financial Statements and Supplementary Data

 

This information appears following Item 15 of this Annual Report on Form 10-K and is included herein by reference.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None.

 

47
 

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15€ and 15d-15€ under the Exchange Act) were not effective, due to the material weakness in our internal control over financial reporting related to the Company’s accounting for complex financial instruments and proper safeguarding of trust assets. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

 

Management has identified a material weakness in internal controls related to the accounting for complex financial instruments. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to continue to enhance our system of evaluating and implementing the accounting standards that apply to our financial statements, including through enhanced analyses by our personnel and third-party professionals with whom we consult regarding complex accounting applications; we have also improved our review of material agreements to ensure adherence to various stipulations in the agreement, specifically the Trust Agreement, where we improved our monitoring process on the use of funds from the Trust Account to be paid for taxes. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

 

Management’s Report on Internal Controls Over Financial Reporting

 

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

 

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,

 

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and

 

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2023. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based on our assessments and those criteria, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2023.

 

Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.

 

48
 

 

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.

 

Changes in Internal Control over Financial Reporting

 

Other than mentioned above, there were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 

Not applicable.

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Directors and Executive Officers

 

Our current directors and executive officers are as follows:

 

Name   Age   Title
Harvey Schiller   85   Chief Executive Officer
William T. Duffy   68   Chief Financial Officer and Chief Operating Officer
David Falk   74   Director, Senior Advisor
Donna Orender   65   Director
Kenneth L. Shropshire   69   Director

 

Harvey Schiller has served as our Chief Executive Officer since November 2020. General Schiller is Chairman of Charlestowne Holdings, a financial advisory firm (2018-present). He is Vice Chairman of the digital, media and sports practice of the Diversified Search Group (2015-present). He previously served as Commissioner of the Southeastern Conference (1986-1990) and America’s Cup (2015-2017), executive director of the United States Olympic Committee (1990-1995), president of Turner Sports (1995-2000), president of Atlanta Thrashers NHL hockey team (1997-1999), Chairman of the financial services firm Assante USA (2002-2004), Chairman of the security firm Global Options (2006-2013), and Chairman of YankeeNets, owners of the New York Yankees, New Jersey Devils, and New Jersey Nets (2000-2002) and developer of the YES network (2001-2002). He is lead director of Mesa Air Group (2015-present), and board member of Blinktbi (2018-present) and chair of Sportsgrid and the Collegiate Sports Management Group (2018-present). General Schiller served a distinguished career as an Air Force pilot (1962-1986) and was a Presidential appointed permanent professor (1980-1986) at the U.S. Air Force Academy and White House Commission on Presidential Scholars (2005-2009). Other appointments include NCAA executive committee (1982-1988), Olympic Games consultant (1984-2012), International Baseball President, board member of the Baseball Hall of Fame (present) and World Baseball Classic (present). General Schiller is a distinguished graduate of The Citadel and earned a PhD in Chemistry from the University of Michigan.

 

49
 

 

William T. Duffy has served as our Chief Financial Officer and Chief Operating Officer since November 2020. Mr. Duffy served as the Vice Chairman of The Aspire Sports Marketing Group, LLC (“Aspire”), a sports consulting firm which he co-founded in 2008 and held the position of Vice-Chairman from January 2020 until May 2023. From 2016 to 2019, he was the CEO of Aspire and he previously held other positions at Aspire, including two years as COO, and has served on its board of managers since 2014. Mr. Duffy’s career has focused on turnarounds of underperforming franchises with a focus on maximizing employee performance and revenue generation and reducing operating costs, while creating cultures of accountability through hands on leadership and career development of employees. His international experience at Aspire includes consulting on projects with The R & A, Leicester City FC and Tijuana Xolos (Liga MX). From 2010 to 2013, Mr. Duffy briefly left Aspire and oversaw finance and arena operations in a variety of roles at Bobcats Sports and Entertainment, including roles as EVP, CFO and CAO. He served as liaison to the City of Charlotte for the expansion NBA Franchise Charlotte Bobcats and Time Warner Cable Arena. Prior to Aspire, Mr. Duffy held the positions of CFO of the San Francisco 49ers (1996-1999), CAO of the Buffalo Bills (1999-2000), CFO of the Florida Panthers (2001-2003) and EVP, CFO of Atlanta Spirit, LLC (2004-2008), a group that bought the operating rights of the Atlanta Hawks, Atlanta Thrashers and Philips Arena in 2004 Mr. Duffy holds a Masters of Science in Accounting from New York University, and AB in Economics from Princeton University and has earned a CPA.

 

David B. Falk serves as a member of our board of directors and as our Senior Advisor. Mr. Falk is the founder of Falk Associates Management Enterprises (FAME) which provides specialized and personal representation services to the company’s elite clientele of NBA superstars. Prior to founding FAME in 1992, Mr. Falk served as vice chairman of ProServ where he represented numerous professional athletes. Mr. Falk has successfully negotiated a number of large and notable NBA contracts, including Alonzo Mourning’s historical $100 million contract in 1995 and Michael Jordan’s 1996 one-year contract for $30 million. Mr. Falk was also influential in the creation of the “Air Jordan” brand and was an executive producer of the movie “Space Jam.” Mr. Falk is an investor in Consumable, a digital advertising company, Hyperwave, a cooking technology company, Ostendo, a quantum photonics technology company, Wheels Up, an aviation company, and Block Six Analytics. Mr. Falk first attended and is now a member of the Board of Trustees for Syracuse University. Mr Falk endowed and founded the David B. Falk College of Sports and Human Dynamics at Syracuse University, a leading sports program in the U.S. Mr. Falk was selected to serve on the board of directors due to his significant and world-renowned experience in the sports industry.

 

Donna Orender serves as a member of our board of directors. Ms. Orender spent 17 years at the PGA TOUR where she served as one of three senior executives in the Office of the Commissioner. During her time there, she exponentially grew the TOUR’s television rights and led a major expansion of global production, programming distribution and digital business while also founding PGA TOUR Radio with partner Sirius XM. From 2005 to 2010, Ms. Orender served as the President of the WNBA. During her term business metrics that saw growth included sponsorship, television ratings, profitability and attendance growth (following an eight year decline). Ms. Orender began her current role as Chief Executive Officer of Orender Unlimited, a consulting and advisory firm, in 2011. Ms. Orender serves on the nominating and compensation committees for the V Foundation for Cancer Research board, the board of the World Surf League, and is the founder of Generation W, an organization that focuses on educating, inspiring and connecting women and girls in the service of building better communities. Ms. Orender received a B.A. from Queens College and is a multiple hall of fame athlete. Ms. Orender received a B.A. from Queens College. Ms. Orender was selected to serve on the board of directors due to her significant and trailblazing experience in the sports industry.

 

Kenneth L. Shropshire serves as a member of our board of directors. Mr. Shropshire has been a faculty member of the Wharton School at the University of Pennsylvania (“Wharton”) since 1986, where he is now an emeritus professor, with an expertise in sports business and law. During his tenure at Wharton, Mr. Shropshire founded the Wharton Sports Business Initiative in 2004, a sports business research center and served as a director until 2017. One such example of the innovative programming Mr. Shropshire developed at Wharton includes the NFL/NFLPA Player Business Education Transition Program. Currently, in addition to being a professor emeritus at Wharton, Mr. Shropshire is the Chief Executive Officer of the Global Sport Institute, and serves as the Adidas Distinguished Professor of Global Sport at Arizona State University since joining in 2017. Mr. Shropshire has served as a director of Moelis & Company since 2014. In addition, Mr. Shropshire acts as an advisor to multiple organizations in the sports industry, including Altius Sports Partners, Arctos Sports Partners, Overtime Elite, and Pro Sports Assembly. Mr. Shropshire earned an undergraduate degree in economics from Stanford University and a law degree from Columbia University, and is a member of the California bar. He joined the law firm of Manatt, Phelps, Rothenberg and Tunney in Los Angeles prior to working with the 1984 Olympic Games and beginning his lengthy career at Wharton. Mr. Shropshire was also the former President of the Sports Lawyers Association, the largest organization of sports lawyers in the world. Mr. Shropshire was selected to serve on the board of directors due to his significant and world-renowned experience in the sports industry as well as his experience serving on boards of directors.

 

50
 

 

Past performance of our Team is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical performance record of our Team as indicative of our future performance. Additionally, in the course of their respective careers, members of our Team have been involved in businesses and deals that were unsuccessful. Our officers and directors have no experience with special purpose acquisition companies. In addition, our officers and directors may have conflicts of interest with other entities to which they owe fiduciary or contractual obligations with respect to initial business combination opportunities. For a list of our officers and directors and entities for which a conflict of interest may or does exist between such persons and the company, as well as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.

 

Advisors

 

Jon Miller serves as Chairman of our advisory board as well as a board observer. Mr. Miller currently serves as a director of Akamai Technologies, Inc., Nielsen Holdings plc., AMC Networks Inc., Interpublic Group of Companies, Inc. and J2 Global, Inc. From 2013 until January 2018, Mr. Miller was a partner at Advancit Capital, where he continues to serve as an advisor and member of the Investment Committee. He previously has served as Chairman and Chief Executive Officer of the Digital Media Group at News Corp., and was its Chief Digital Officer from April 2009 to September 2012. Mr. Miller was a founding partner of Velocity Interactive Group, an investment firm focusing on internet and digital media, from its inception in 2007 to 2009. Prior to founding Velocity, Mr. Miller served as the Chairman and Chief Executive Officer of America Online, Inc. (“AOL”) from 2002 to 2006. Prior to joining AOL, Mr. Miller served as Chief Executive Officer and President of USA Information and Services. Mr. Miller previously served as a director of, among others, Houghton Mifflin Harcourt Co., Ticketmaster, LiveNation Entertainment, Inc., RTL Group SA, Shutterstock, Inc. and TripAdvisor, Inc.. Mr. Miller is a trustee of the American Film Institute and The Paley Center for Media. Mr. Miller holds a B.A. from Harvard College.

 

Alex Greystoke serves as a member of our advisory board and is one of our founders. Mr. Greystoke is a successful serial entrepreneur with a breadth of skills in a diverse range of industries. Mr. Greystoke is the founder of multiple AI technology companies including TripChamp, VacationChamp and TravelChamp. He is the inventor of three granted artificial intelligence patents, with eight pending patent applications. Mr. Greystoke is also an investor with investments in real estate, food and beverage, technology and other sectors. Mr. Greystoke founded HSC, a boutique corporate finance business raising money for and helping emerging companies commercialize in a range of sectors including technology, energy, healthcare and consumer products utilizing his wide network of partners throughout Asia, Europe, the Middle East and the U.S. Mr. Greystoke has served as director to numerous companies in the education, technology, AI and renewable energy spaces, and has served as a Chairman to a U.K. listed Chinese manufacturing company.

 

Raghu Kilambi serves as a member of our advisory board and is one of our founders. Mr. Kilambi has been CEO of PowerTap Hydrogen Fueling Corp. since May 2020. Mr. Kilambi previously served as Vice Chairman and Chief Financial Officer of ConversionPoint Technologies from December 2017 to January 2020. ConversionPoint was sold in two transactions to a private equity-backed group and a strategic buyer. Mr. Kilambi has also been the principal of Kirarv Capital, a technology investment firm, since June 2009. Mr. Kilambi has raised over $1 billion of equity and debt capital for growth private and public companies in his career and has also been a senior officer and director of companies that were awarded Barron’s ASAP Magazine Top Ramp Champ awards and Profit Magazine’s Top 3 Growth Company awards. Previously, from 1998 to 2001, Mr. Kilambi was the Co-Founder, CFO and Chief Strategy Officer of FutureLink Corp., a leading first-generation VC-backed cloud computing technology company that grew from startup to over $100 million in annualized revenues. Mr. Kilambi graduated with Great Distinction with a Bachelor of Commerce (University Scholar), received a Graduate Diploma in Public Accounting from McGill University (Top 10 List), and qualified as a Canadian Chartered Accountant in 1989 (inactive).

 

Amber Allen serves as a member of our advisory board. Ms. Allen’s experience has been focused in the technology, entertainment and gaming industries, having spent her career at major companies including Reebok, Disney, Warner Bros., and Riot Games. Currently, Ms. Allen serves as the founder of Double A Labs, a leader in developing transformative technologies and experiences for brand engagement. Ms. Allen serves on the Advisory Board of University of Texas Game and Development Design and is a member of the Fashion Institute of Technology. Ms. Allen also volunteers with Women Who Code and is an advisor to both Dell Women’s Entrepreneurship Network and Dell Project Innovate.

 

51
 

 

Bart Oates serves as a member of our advisory board. Mr. Oates was a starting center for the USFL Philadelphia Stars, New York Giants and San Francisco 49ers, for a total 14 seasons of professional football. In the offseasons, Mr. Oates attended Seton Hall Law School where he graduated with honors and joined the law firm of Ribis, Graham & Curtin in Morristown N.J., where he focused on litigation and real estate tax appeal work. Currently, Mr. Oates serves as President of the NFL Alumni Association, a position that allows him to advocate on behalf of former players to establish benefits and opportunities.

 

Martin Gruschka serves as a member of our advisory board. Mr. Gruschka began his career in 1990 as a management consultant for a Deutsche Bank Group subsidiary, with a focus on East German Privatization projects. Thereafter, he led the European media practice of Arthur D. Little, a global management consulting group, from 1996 to 1999. Having spent time as an associate director at Deutsche Morgan Grenfell’s media investment banking division, he co-founded Springwater Capital LLC in 2002 where he currently acts as Managing Partner. Mr. Gruschka has served as Chairman, President, Board Member and CEO of more than forty companies throughout Europe and the U.S. in a diverse range of sectors, including media & communications, aerospace, engineering, logistics, recycling, technology, tourism and business process outsourcing.

 

Danielle Cantor Jeweler serves as a member of our advisory board. Ms. Jeweler is the Executive Vice President and Partner at FAME, and is an NBPA Certified Agent, representing current and retired NBA talent. Together with partner David Falk, Danielle negotiates contracts for a number of NBA players. Ms. Jeweler has also negotiated a myriad of national and international endorsement deals for her basketball clients. In September 2017, Danielle was honored by the Sports Business Journal as a Gamechanger in the sports industry, as the only female registered agent with active NBA clients. In July 2019, she negotiated the largest guaranteed sports contract by a female agent (Malcolm Brogdon, with the Indiana Pacers, for 4 years and $85 million). Ms. Jeweler is a member of the Leadership Council for PeacePlayers, International, and she serves on the Board of Advisors for Most Valuable Kids, the Roy Hibbert Foundation, and Little Smiles. A native Washingtonian, Ms. Jeweler graduated from the University of Pennsylvania (“UPenn”) in the Annenberg School for Communications and from The Wharton School for Business. Ms. Jeweler is a competitive youth girls soccer coach and played Division 1 soccer at UPenn.

 

Marc Wade serves as a member of our advisory board. Mr. Wade is a financier, philanthropist and founder of Wade & Company, a family office. Mr. Wade has historically invested in a diversified portfolio of businesses with a primary focus on asset backed lending. His portfolio has included commercial real estate, banking, energy, sports and entertainment, technology and securities lending. Mr. Wade was a minority investor in the NHL franchise New Jersey Devils and Devils Entertainment. Mr. Wade is also Co-Founder of BTI, one of South America’s largest aggregators of cell phone towers.

 

Garret Klugh serves as a member of our advisory board. Mr. Klugh is the COO of Falk Ventures. He is an internationally recognized Olympian and frequent guest speaker, lecturer and panelist in the sports-tech industry. Mr. Klugh earned his undergraduate degree at San Diego State University and his MBA from George Washington University. At SDSU, Mr. Klugh served as the President of the men’s rowing team. He went on to represent the U.S. on six National Teams and one Olympic Team (Athens 2004). Mr. Klugh won the World Rowing Championship in 1999 and was honored to be selected by his peers as the Athlete Representative on the Board of Directors for USRowing.

 

Doug Perlman serves as a member of our advisory board. Mr. Perlman is the founder and CEO of Sports Media Advisors (“SMA”), a boutique advisory firm which focuses on the intersection of sports, television and digital media. Mr. Perlman has worked on all of SMA’s client engagements including those with the NFL, NASCAR, USTA, UFC, Hockey Canada, Little League, NextVR and several leading private equity firms. Prior to SMA, he established himself throughout the sports industry in senior executive roles at the NHL and IMG. Among other accolades, Mr. Perlman has been named to the prestigious Sports Business Journal Forty Under 40 three times, earning a spot in their “Hall of Fame.” Mr. Perlman has been recognized by multiple industry publications and organizations as a leader in the sports, media, and technology industries, including being named one of the 100 Most Powerful People in Sports by the Sporting News while at the NHL. Mr. Perlman regularly appears on television and is often a featured speaker at industry and other events.

 

52
 

 

We currently expect our advisors to (i) assist us in sourcing, negotiating and consummating a potential business combination, (ii) provide their business insights when we assess potential business combination targets and (iii) upon our request, provide their business insights as we work to create additional value in the businesses that we acquire. However, they have no written advisory agreement with us. Additionally, these individuals have no other employment or compensation arrangements with us. They will not serve on the board or any committee thereof, nor will they have any voting or decision making capacity on our behalf. They will also not be required to devote any specific amount of time to our efforts or be subject to the fiduciary requirements to which our board members are subject. Accordingly, if any of them become aware of a business combination opportunity which is suitable for us, they are under no obligation to introduce it to us before any other prospective acquiror.

 

Family Relationships

 

There are no family relationships among any of our directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

There are currently no legal proceedings, and during the past 10 years there have been no legal proceedings, that are material to the evaluation of the ability or integrity of any of our directors.

 

Delinquent Section 16(a) Reports

 

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent of any publicly traded class of our equity securities, to file reports of ownership and changes in ownership of equity securities of the Company with the SEC. Officers, directors, and greater-than-ten-percent stockholders are required by the SEC’s regulations to furnish the Company with copies of all Section 16(a) forms that they file.

 

Based solely upon a review of Forms 3 and Forms 4 furnished to the Company during the most recent fiscal year, and Forms 5 with respect to its most recent fiscal year, we believe that all such forms required to be filed pursuant to Section 16(a) of the Exchange Act were timely filed by the officers, directors, and security holders required to file the same during the fiscal year ended December 31, 2022.

 

Certain Corporate Governance Matters

 

Code of Ethics

 

We adopted a code of ethics that applies to all of our officers, directors and employees. The code of ethics codifies the business and ethical principles that govern all aspects of our business. A copy of the code of ethics is available on our website at www.goalacquisitions.com/#governance, and will be provided without charge upon request. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a current report on Form 8-K.

 

Identification of Audit Committee and Financial Expert

 

Our board of directors has a standing audit committee that operates under a written charter approved by our board of directors, which charter reflects the applicable standards and requirements adopted by the SEC and The Nasdaq Stock Market LLC, or Nasdaq.

 

The audit committee is chaired by Ms. Orender and consists of Ms. Orender, Messrs. Falk and Shropshire, each of whom is an independent director. Our board of directors has determined that Ms. Orender qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.

 

53
 

 


Conflicts of Interest

 

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

 

  the corporation could financially undertake the opportunity;
     
  the opportunity is within the corporation’s line of business; and
     
  it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

 

Our amended and restated certificate of incorporation provides that:

 

  except as may be prescribed by any written agreement with us, we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and
     
  our officers and directors will not be liable to our company or our stockholders for monetary damages for breach of any fiduciary duty by reason of any of our activities or any of our sponsor or its affiliates to the fullest extent permitted by Delaware law.

 

Our officers and directors are, and may in the future become, affiliated with other companies. In order to minimize potential conflicts of interest which may arise from such other corporate affiliations, each of our officers and directors has contractually agreed, pursuant to a written agreement with us, until the earliest of our execution of a definitive agreement for a business combination, our liquidation or such time as he ceases to be an officer or director, to present to our company for our consideration, prior to presentation to any other entity, any suitable business opportunity which may reasonably be required to be presented to us, subject to any fiduciary or contractual obligations he might have. The foregoing agreement does not restrict our officers and directors from becoming affiliated with other companies in the future which could take priority over our company. However, we believe that such agreement still benefits us because our officers and directors are obligated to present suitable business opportunities to us to the extent that none of their other fiduciary or contractual obligations require them to present it to another entity.

 

The following table summarizes the pre-existing fiduciary or contractual obligations of our officers and directors besides our sponsor:

 

Name of Individual   Name of Affiliated Entity
Harvey Schiller   Diversified Search, Sportsgrid, Charlestowne Holdings, Schiller Management Group, Mesa Airlines, Blinktbi
William T. Duffy   The Aspire Sports Marketing Group, LLC
David Falk   Falk Associates Management Enterprises
Donna Orender   Orender Unlimited
Kenneth L. Shropshire   Moelis & Company, Global Sport Institute at Arizona State University, Wharton School, University of Pennsylvania

 

While the foregoing may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.

 

Investors should also be aware of the following additional potential conflicts of interest:

 

  None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities.
     
  Unless we consummate our initial business combination, our officers, directors and sponsor will not receive reimbursement or repayment for any out-of-pocket expenses incurred by them, or loans made to us, to the extent that such expenses exceed the amount of available proceeds not deposited in the trust account.
     
  The founders’ shares beneficially owned by our initial stockholders and the private units purchased by our sponsor, and any warrants which our officers or directors may purchase in the aftermarket will expire worthless if a business combination is not consummated. Additionally, our officers and directors and affiliates will not receive liquidation distributions from the trust account with respect to any of the founders’ shares or private shares.

 

54
 

 


For the foregoing reasons, our board may have a conflict of interest in determining whether a particular target business is appropriate to effect a business combination with.

 

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our officers, directors, sponsor or initial stockholders unless we have obtained an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated stockholders from a financial point of view. We will also need to obtain the approval of a majority of our disinterested independent directors. Furthermore, in no event will any of our sponsor, members of our management team or their respective affiliates be paid any compensation prior to, or for any services they render in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is) other than the payment of consulting, success or finder fees to our sponsor, officers, directors, advisors, initial stockholders or their affiliates in connection with the consummation of our initial business combination, repayment of the $200,000 loan and reimbursement of any out-of-pocket expenses.

 

ITEM 11. EXECUTIVE COMPENSATION

 

No executive officer has received any cash compensation for services rendered to us.

 

Other than the payment of consulting, success or finder fees to our sponsor, officers, directors, advisors, initial stockholders or their affiliates in connection with the consummation of our initial business combination and the repayment of the $200,000 loan made by our sponsor to us, no compensation or fees of any kind will be paid to our sponsor, initial stockholders, members of our Team or their respective affiliates, for services rendered prior to or in connection with the consummation of our initial business combination (regardless of the type of transaction that it is). However, they will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of consulting, success or finder fees payable by us upon consummation of an initial business combination. Additionally, there is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account, such expenses will not be reimbursed by us unless we consummate an initial business combination.

 

After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. However, the amount of such compensation may not be known at the time of the stockholder meeting held to consider an initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a current report on Form 8-K or a periodic report, as required by the SEC.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table sets forth information regarding the beneficial ownership of our shares of common stock as of the date of this annual report by:

 

  each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
     
  each of our officers and directors; and
     
  all of our officers and directors as a group.

 

55
 

 

Our sponsor purchased an aggregate of 5,750,000 founders’ shares for an aggregate purchase price of $25,000. On December 16, 2020, we effected a stock dividend of .125 of a share of common stock for each outstanding share of common stock, and as a result, our initial shareholders hold 6,468,750 founder shares as of the date of this annual report. In December 2020, our sponsor transferred an aggregate of 2,354,000 founder shares to our officers, directors and advisors. In January 2021, we issued to EarlyBirdCapital and its designees 150,000 shares of common stock. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record of beneficial ownership of the warrants included in the units or the private warrants as these warrants are not exercisable within 60 days of April 7, 2023.

 

Name and Address of Beneficial Owner(1) 

Amount and

Nature of

Beneficial

Ownership

  

Approximate

Percentage of Outstanding

Shares of

Common Stock

 
Goal Acquisitions Sponsor, LLC   4,782,250(2)   63.8%
Harvey Schiller (Chief Executive Officer)   560,000(3)   7.5%
William T. Duffy (Chief Financial Officer and Chief Operating Officer)   250,000(3)   3.3%
David Falk (Director, Senior Advisor)   150,000(3)   2.0%
Donna Orender (Director)   50,000(3)   * 
Kenneth L. Shropshire (Director)   75,000(3)   * 
All directors and executive officers as a group (5 individuals)   1,085,000    14.5%

 

* Less than 1%.
(1) Unless otherwise indicated, the business address of each of the individuals is c/o Goal Acquisitions Corp., 12600 Hill Country Blvd Building R, Suite 275, Bee Cave, Texas 78738.
(2) According to the Schedule 13D/A filing on February 14, 2024, Goal Acquisitions Sponsor, LLC holds 4,114,750 founders’ shares and 667,500 private shares. The amount reported in this table represents securities held by Goal Acquisitions Sponsor, LLC, our sponsor. Alex Greystoke, Raghu Kilambi and William T. Duffy comprise the Board of Managers of our sponsor. Any action by our sponsor with respect to our company or the founder shares, including voting and dispositive decisions, requires a majority vote of the managers of the board of managers. Under the so-called “rule of three,” because voting and dispositive decisions are made by a majority of our sponsor’s managers, none of the managers of our sponsor is deemed to be a beneficial owner of our sponsor’s securities, even those in which such manager holds a pecuniary interest. Accordingly, none of our directors or officers is deemed to have or share beneficial ownership of the founder shares held by our sponsor.
(3) Does not include any securities held by Goal Acquisitions Sponsor, LLC, of which each person is a member. Each such person disclaims beneficial ownership of the reported shares other than to the extent of his ultimate pecuniary interest therein.

 

56
 

 


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

In November 2020, we issued 5,750,000 shares of common stock to our initial stockholders for $25,000 in cash, at a purchase price of approximately $0.004 per share, in connection with our organization. On December 16, 2020, we effected a stock dividend of .125 of a share of common stock for each outstanding share of common stock, resulting in our initial stockholders holding an aggregate of 6,468,750 founder shares as of the date of this annual report. In December 2020, our sponsor transferred an aggregate of 2,354,000 founder shares to our officers, directors and advisors. If the underwriters do not exercise all or a portion of their over-allotment option, our initial stockholders will forfeit up to an aggregate of 843,750 shares of common stock in proportion to the portion of the over-allotment option that was not exercised.

 

Our sponsor purchased, pursuant to written subscription agreements with us, the 667,500 private units (for a total purchase price of $6,675,000) from us. The private units are identical to the units sold in our IPO except that the private warrants: (i) are not redeemable by us and (ii) may be exercised for cash or on a cashless basis, as described in this annual report, so long as they are held by the initial purchaser or any of their permitted transferees. Once the private warrants are transferred to anyone other than a permitted transferee, the private warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units sold in our IPO. Our purchasers have agreed not to transfer, assign or sell any of the private units and underlying securities (except to certain permitted transferees) until after the completion of our initial business combination. Furthermore, they have agreed (A) to vote the private shares in favor of any proposed business combination, (B) not to convert any private shares in connection with a stockholder vote to approve a proposed initial business combination or sell any private shares to us in a tender offer in connection with a proposed initial business combination and (C) that the private shares shall not participate in any liquidating distribution from our trust account upon winding up if a business combination is not consummated. In the event of a liquidation prior to our initial business combination, the private units will likely be worthless.

 

Effective as of November 4, 2021, upon approval of the Board, the Company entered into an Expense Advancement Agreement with Goal Acquisitions Sponsor, LLC (the “Funding Party”). Pursuant to the Expense Advancement Agreement, the Funding Party has agreed to advance to the Company from time to time, upon request by the Company, a maximum of $1,500,000 in the aggregate, in each instance issued pursuant to the terms of the form of promissory note as may be necessary to fund the Company’s expenses relating to the investigation and selection of a target business and other working capital requirements prior to completion of any potential Business Combination.

 

The holders of our founders’ shares issued and outstanding on the date of this annual report, as well as the holders of the representative shares, private units and any units our sponsor, initial stockholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us (and all underlying securities), are entitled to registration rights pursuant to an agreement signed in connection with our IPO. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the founders’ shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the private units and units issued in payment of working capital loans made to us (or underlying securities) can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of a business combination. Notwithstanding anything to the contrary, EarlyBirdCapital and the other holders of the representative shares may only make a demand on one occasion and only during the five-year period beginning on February 10, 2021. In addition, EarlyBirdCapital and the other holders of the representative shares may participate in a “piggy-back” registration only during the seven-year period beginning on February 10, 2021. We will bear the expenses incurred in connection with the filing of any such registration statements.

 

We have entered into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation.

 

57
 

 


Other than the payment of consulting, success or finder fees to our sponsor, officers, directors, advisors, initial stockholders or their affiliates in connection with the consummation of our initial business combination and repayment of the $200,000 loan, no compensation or fees of any kind will be paid to our sponsor, initial stockholders, members of our Team or their respective affiliates, for services rendered prior to or in connection with the consummation of our initial business combination (regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. There is no limit on the amount of consulting, success or finder fees payable by us upon consummation of an initial business combination. Additionally, there is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account, such expenses will not be reimbursed by us unless we consummate an initial business combination.

 

After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. However, the amount of such compensation may not be known at the time of the stockholder meeting held to consider an initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this event, such compensation will be publicly disclosed at the time of its determination in a current report on Form 8-K or a periodic report, as required by the SEC.

 

All ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by a majority of our uninterested “independent” directors or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested “independent” directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

 

Related Party Policy

 

Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our shares of common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

 

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable to us than terms generally available from an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. No director may participate in the approval of any transaction in which he is a related party, but that director is required to provide the audit committee with all material information concerning the transaction. We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.

 

58
 

 

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

 

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we have obtained an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated stockholders from a financial point of view. We will also need to obtain approval of a majority of our disinterested independent directors.

 

Director Independence

 

Currently David Falk, Donna Orender and Kenneth L. Shropshire are each considered an “independent director” under the Nasdaq listing rules, which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors will interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

 

Our independent directors will have regularly scheduled meetings at which only independent directors are present.

 

Any affiliated transactions will be on terms no less favorable to us than could be obtained from independent parties. Our board of directors will review and approve all affiliated transactions with any interested director abstaining from such review and approval.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

The following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered.

 

Audit Fees. Audit fees consist of fees for professional services rendered for the audit of our year-end financial statements, reviews of our quarterly financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings. The aggregate fees for Marcum LLP for audit fees, inclusive of required filings with the SEC for the year ended December 31, 2023 and 2022 totaled $102,947 and $77,250, respectively.

 

Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. We did not pay Marcum LLP any audit related fees during the year ended December 31, 2023. The audit related fees for Marcum LLP during the year ended December 31, 2022 totaled $5,150.

 

Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. The tax fees for Marcum LLP during the year ended December 31, 2023 and 2022, totaled $9,266 and $5,008, respectively.

 

 

All Other Fees. All other fees consist of fees billed for all other services. We did not pay Marcum LLP any other fees during the year ended December 31, 2023 and 2022.

 

Pre-Approval Policy

 

Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

(a) The following documents are included as part of this annual report on Form 10-K:

1. Financial Statements — See Index to Financial Statements in Item 8.

2. Financial Statement Schedules — Not Applicable.

3. Exhibits

 

59
 

 

GOAL ACQUISITIONS CORP.

 

INDEX TO FINANCIAL STATEMENTS

 

     
Report of Independent Registered Public Accounting Firm (PCAOB Firm ID Number 688)   F-2
Financial Statements:    
Balance Sheets   F-3
Statements of Operations   F-4
Statements of Changes in Stockholders’ Deficit   F-5
Statements of Cash Flows   F-6
Notes to Financial Statements   F-7 to F-19

 

F-1

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of

Goal Acquisitions Corp

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Goal Acquisitions Corp (the “Company”) as of December 31, 2023 and 2022, the related statements of operations, stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph – Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s business plan is dependent on the completion of a business combination and the Company’s cash and working capital as of December 31, 2023 are not sufficient to complete its planned activities for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Additionally, the liquidation deadline is within 12 months of the filing date. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Marcum llp

 

Marcum LLP

 

We have served as the Company’s auditor since 2020.

 

Houston, TX
April 16, 2024

 

F-2

 

 

GOAL ACQUISITIONS CORP.

BALANCE SHEETS

 

   December 31,   December 31, 
   2023   2022 
         
ASSETS          
CURRENT ASSETS:          
Cash  $303,746   $10,897 
Prepaid expenses and other current assets   166,385    56,720 
TOTAL CURRENT ASSETS   470,131    67,617 
           
Marketable securities held in the trust account   2,862,207    262,220,950 
TOTAL ASSETS  $3,332,338   $262,288,567 
           
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT          
CURRENT LIABILITIES:          
Accounts payable and accrued expenses  $5,733,193   $3,020,456 
Sponsor loans issued under the Expense Advancement Agreement   2,000,000    1,006,895 
Income taxes payable   1,508,539    709,969 
Excise tax payable attributable to redemption of common stock   2,629,644     
Advances - Related Party   677,232    5,000 
TOTAL CURRENT LIABILITIES   12,548,608    4,742,320 
           
Warrant liabilities   2,662    34,043 
TOTAL LIABILITIES   12,551,270    4,776,363 
           
COMMITMENTS AND CONTINGENCIES (NOTE 6)          
Common stock subject to possible redemption, 266,350 and 25,875,000 shares at redemption value at December 31, 2023 and 2022, respectively   2,853,639    261,416,732 
           
STOCKHOLDERS’ DEFICIT          
Preferred stock, $0.0001 par value per share; 1,000,000 shares authorized; none issued and outstanding at December 31, 2023 and 2022        
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 7,286,250 shares issued and outstanding at December 31, 2023 and 2022   729    729 
Additional paid-in capital        
Accumulated deficit   (12,073,300)   (3,905,257)
TOTAL STOCKHOLDERS’ DEFICIT   (12,072,571)   (3,904,528)
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT  $3,332,338   $262,288,567 

 

The accompanying notes are an integral part of the financial statements.

 

F-3

 

 

GOAL ACQUISITIONS CORP.

STATEMENTS OF OPERATIONS

 

   2023   2022 
   For the Year Ended December 31, 
   2023   2022 
         
Operating costs  $915,685   $1,180,194 
Business combination expenses   3,264,394    2,475,865 
Loss from operations   (4,180,079)   (3,656,059)
           
Other income:          
Interest income on marketable securities held in the trust account   3,810,230    3,730,147 
Change in fair value of warrant liability   31,381    339,028 
Total other income   3,841,611    4,069,175 
           
Loss before provision for income taxes   (338,468)   413,116 
Provision for income taxes   (798,570)   (709,969)
Net loss  $(1,137,038)  $(296,853)
           
Weighted average shares outstanding, common stock subject to possible redemption   7,915,486    25,875,000 
Basic and diluted net loss per share, common stock subject to possible redemption  $(0.07)  $(0.01)
Weighted average shares outstanding, non-redeemable common stock   7,286,250    7,286,250 
Basic and diluted net loss per share, non-redeemable common stock  $(0.07)  $(0.01)

 

The accompanying notes are an integral part of the financial statements.

 

F-4

 

 

GOAL ACQUISITIONS CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2023 and 2022

 

   Shares   Amount   Capital   Deficit   Deficit 
   Common Stock   Paid-In   Accumulated   Stockholders’ 
   Shares   Amount   Capital   Deficit   Deficit 
Balance as of December 31, 2021   7,286,250   $729   $336,908   $(1,278,580)  $       (940,943)
Remeasurement of common stock subject to possible redemption           (336,908)   (2,329,824)   (2,666,732)
Net loss                (296,853)   (296,853)
Balance as of December 31, 2022   7,286,250    729        (3,905,257)   (3,904,528)
Remeasurement of common stock subject to possible redemption               (4,401,361)   (4,401,361)
Excise tax payable attributable to redemption of common stock               (2,629,644)   (2,629,644)
Net loss               (1,137,038)   (1,137,038)
Balance as of December 31, 2023   7,286,250   $729   $   $(12,073,300)  $(12,072,571)

 

The accompanying notes are an integral part of the financial statements.

 

F-5

 

 

GOAL ACQUISITIONS CORP.

STATEMENTS OF CASH FLOWS

 

   2023   2022 
   For the Year Ended December 31, 
   2023   2022 
Cash Flows from Operating Activities:          
Net loss  $(1,137,038)  $(296,853)
Adjustments to reconcile net loss to net cash used in operating activities:          
Interest earned on cash and investments held in the trust account   (3,810,230)   (3,730,041)
Change in fair value of warrant liabilities   (31,381)   (339,028)
Formation cost paid by sponsor        
Changes in current assets and current liabilities:          
Prepaid expenses and other current assets   (109,665)   434,604 
Accounts payable and accrued expenses   2,712,737    2,163,524 
Income taxes payable   798,570    709,969 
Net cash used in operating activities   (1,577,008)   (1,057,825)
           
Cash Flows from Investing Activities:          
Principal deposited in Trust Account in connection with monthly extension deposits   (1,552,500)    
Cash withdrawn from Trust Account for redemption of common shares   262,964,454     
Cash withdrawn from Trust Account to pay franchise taxes and monthly extensions   1,757,020    284,670 
Net cash provided by investing activities   263,168,974    284,670 
           
Cash Flows from Financing Activities:          
Proceeds from Initial Public Offering, net of underwriters’ discount        
Proceeds from issuance of Private Placement Warrants        
Proceeds of sponsor loan   993,105    1,032,500 
Repayment of sponsor loan       (261,156)
Advances from Sponsor   677,232    7,557 
Repayment of advances from Sponsor   (5,000)   (2,557)
Redemption of common shares   (262,964,454)    
Net cash (used in) provided by financing activities   (261,299,117)   776,344 
           
Net Change in Cash   292,849    3,189 
Cash – Beginning   10,897    7,708 
Cash – Ending  $303,746   $10,897 
           
Supplemental Disclosure of Non-cash Financing Activities:          
Excise tax payable attributable to redemption of common stock  $2,629,644   $ 
Remeasurement of common shares subject to redemption  $4,401,361   $2,666,732 

 

The accompanying notes are an integral part of the financial statements.

 

F-6

 

 

Note 1 — Organization, Business Operations and Going Concern

 

Organization and General

 

Goal Acquisitions Corp. (the “Company”) was incorporated in Delaware on October 26, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses that service the sports industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

 

As of December 31, 2023, the Company had not yet commenced any operations. All activity from October 26, 2020 (inception) through December 31, 2023, relates to the Company’s formation and the initial public offering (“IPO”) described below, and, since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on marketable securities held in the trust account and will recognize changes in the fair value of warrant liabilities as other income (expense).

 

Financing

 

The registration statement for the Company’s IPO was declared effective on February 10, 2021 (the “Effective Date”). On February 16, 2021, the Company consummated the IPO of 22,500,000 units (the “Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $225,000,000.

 

Simultaneously with the closing of the IPO, the Company consummated the sale of 600,000 units (the “Private Units”), at a price of $10.00 per Private Unit to Goal Acquisition Sponsor, LLC (the “Sponsor”), generating total gross proceeds of $6,000,000.

 

The Company granted the underwriters in the IPO a 45-day option to purchase up to 3,375,000 additional Units to cover over-allotments, if any. On February 24, 2021, the underwriters exercised the over-allotment option in full, and the closing of the issuance and sale of the additional 3,375,000 Units (the “Over-Allotment Units”). The issuance by the Company of the Over-Allotment Units at a price of $10.00 per unit resulted in total gross proceeds of $33,750,000. On February 24, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional 67,500 Private Units (together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of $675,000.

 

Transaction costs amounted to $5,695,720 consisting of $5,175,000 of underwriting discount, and $520,720 of other offering costs.

 

Trust Account

 

Following the closing of the IPO on February 16, 2021 and the underwriters’ full exercise of the over-allotment option on February 24, 2021, $258,750,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO, the sale of Over-Allotment Units, and the sale of the Private Units was placed in a Trust Account, which are held as cash or invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account.

 

Initial Business Combination

 

The Company will provide holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the IPO in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”

 

On February 7, 2023, the Company’s stockholders approved an amendment to the Investment Management Trust Agreement (the “First Trust Agreement Amendment”), dated February 10, 2021 (the “Investment Management Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to change the date on which Continental must commence liquidation of the amount on deposit in the trust account (the “Trust Account”) established in connection with the Company’s IPO from February 16, 2023 to March 18, 2023, subject to extension by the board of directors for up to five additional thirty-day periods (the latest of which such date (August 15, 2023 if the board of directors exercises all five extensions). The Board exercised all five additional thirty-day extensions.

 

On February 7, 2023, the Company’s stockholders also approved an amendment (the “First Charter Amendment”) to the Amended and Restated Certificate of Incorporation of the Company (the “Charter”) to (i) extend the initial period of time by which the Company has to consummate an initial business combination through August 15, 2023 and (ii) make other related administrative and technical changes in the Charter, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement the Company filed with the SEC on January 9, 2023. The Company filed the First Charter Amendment with the Secretary of State of the State of Delaware on February 8, 2023.

 

In connection with the Company’s stockholders’ approval and implementation of the First Charter Amendment, the holders of 16,328,643 shares of the Company’s common stock exercised their right to redeem their shares for cash at a redemption price of approximately $10.13 per share, for an aggregate redemption amount of approximately $165,489,173. Following such redemptions, 9,546,357 Public Shares remained outstanding.

 

F-7

 

 

On August 14, 2023, the Company’s stockholders approved an amendment (the “Second Trust Agreement Amendment”) to the Investment Management Trust Agreement, dated February 10, 2021, by and between the Company Continental, to change the date on which Continental must commence liquidation of the amount on deposit in the Trust Account established in connection with the Company’s initial public offering from August 16, 2023 to August 23, 2023, subject to extension by the board of directors on a day-by-day basis, with the ability to extend up to seven days at a time in advance, for a maximum of ninety-days, or November 15, 2023.

 

On August 14, 2023, the Company’s stockholders also approved an amendment (the “Second Charter Amendment”) to the Charter to (i) extend the initial period of time by which the Company has to consummate an initial business combination to November 14, 2023 and (ii) make other administrative and technical changes in the Charter in connection with the new termination date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Second Charter Amendment with the Secretary of State of the State of Delaware on August 14, 2023.

 

In connection with the stockholders’ approval and implementation of the Second Charter Amendment proposal, the holders of 8,708,098 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.50 per share, for an aggregate redemption amount of $91,398,232. Following such redemptions, 838,259 Public Shares remained outstanding.

 

On November 8, 2023, the Company held a meeting and approved an amendment to the Charter (the “Third Charter Amendment”) to extend the initial period of time by which the Company has to consummate an initial business combination to February 10, 2024. In connection with the stockholders’ approval and implementation of the Third Charter Amendment proposal, the holders of 571,909 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of $6,077,050. Following such redemptions, 266,360 Public Shares remained outstanding.

 

On February 7, 2024, the Company approved an amendment to the Investment Management Trust Agreement (the “Third Trust Agreement Amendment”), dated February 10, 2021, by and between the Company and Continental Stock Transfer & Trust Company to change the date on which Continental must commence liquidation of the amount on deposit in the trust account established in connection with the Company’s initial public offering from February 10, 2024 to August 8, 2024 (the “New Termination Date”).

 

On February 7, 2024, the Company’s stockholders also approved an amendment to the Charter (the “Fourth Charter Amendment”) to the Charter to (i) extend the period of time by which the Company has to consummate an initial business combination to the New Termination Date and (ii) make other administrative and technical changes in the Charter in connection with the New Termination Date, in each case, pursuant to an amendment in the form set forth in Annex A of the proxy statement. The Company filed the Fourth Charter Amendment with the Secretary of State of the State of Delaware on February 7, 2024.

 

In connection with the stockholders’ approval and implementation of the Fourth Charter Amendment proposal, the holders of 52,181 Public Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.63 per share, for an aggregate redemption amount of approximately $554,562. Following such redemptions, 214,169 Public Shares remain outstanding, see also Note 10.

 

The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the then outstanding shares of common stock present and entitled to vote at the meeting to approve the Business Combination are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Charter, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.

 

Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.

 

The Sponsor and the Company’s officers and directors have agreed (a) to waive redemption rights with respect to the Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Charter (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination and certain amendments to the Charter or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

 

As a result of the stockholder approval of the Trust Agreement Amendment, the Company will have until the New Termination Date to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period and stockholders do not approve any further amendment to the Charter to further extend this date, (or if the proposals submitted to the Company’s stockholders at the August 14, 2023 stockholder meeting are not approved), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

 

The holders of the Founder Shares have agreed to waive liquidation distributions with respect to such shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquired Public Shares in or after the IPO, such Public Shares would be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the IPO price per Unit ($10.00).

 

F-8

 

 

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay the Company’s tax obligation and up to $100,000 for liquidation expenses, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account (even if such waiver is deemed to be unenforceable) and except as to any claims under the Company’s indemnity of the underwriters of IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (with the exception of its independent registered public accountant), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

 

Amended and Restated Business Combination Agreement and Merger Agreement

 

On February 8, 2023, the Company entered into an Amended and Restated Business Combination Agreement (the “Amended and Restated Business Combination Agreement”) with Goal Acquisitions Nevada Corp., a Nevada corporation (“Goal Nevada”), Digital Virgo Group, a French corporation (société par actions simplifiée) (“Digital Virgo”), all shareholders of Digital Virgo (the “Digital Virgo Shareholders”), and IODA S.A., in its capacity as the “DV Shareholders Representative” (as defined in the Amended and Restated Business Combination Agreement), which amends and restates the Business Combination Agreement, dated as of November 17, 2022, by and among the Company, Digital Virgo, and certain other parties in its entirety.

 

Concurrently with the execution of the Amended and Restated Business Combination Agreement, the Company and Goal Nevada entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will, prior to the Closing (as defined in the Merger Agreement), reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger (the “Reincorporation Merger”).

 

Pursuant to the Amended and Restated Business Combination Agreement and after the consummation of the Reincorporation Merger, Digital Virgo will acquire all of the outstanding shares of Goal Nevada whereby the outstanding shares of Goal Nevada will be exchanged for shares of Digital Virgo by means of a statutory share exchange under Nevada law (the “Exchange”).

 

The Amended and Restated Business Combination Agreement and the Exchange, as well as the Merger Agreement and the Reincorporation Merger, were approved by the board of directors of the Company.

 

The Amended and Restated Business Combination Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the transactions contemplated by the Amended and Restated Business Combination Agreement is subject to certain conditions as further described therein.

 

The Merger Agreement contains customary representations, warranties and covenants of the parties thereto. The consummation of the proposed Merger is subject to certain conditions as further described in the Merger Agreement.

 

The Reincorporation Merger and the Exchange

 

Subject to, and in accordance with, the terms and conditions of the Merger Agreement, the Company will, prior to the Closing, reincorporate as a Nevada corporation by merging with and into Goal Nevada, a newly-formed wholly-owned subsidiary of the Company, with Goal Nevada surviving the merger. Each unit of the Company (which is comprised of one share of common stock of the Company and one warrant to purchase one share of common stock of the Company), share of common stock of the Company and warrant to purchase shares of common stock of the Company issued and outstanding immediately prior to the effective time of the Reincorporation Merger will be converted, respectively, into units of Goal Nevada, shares of common stock of Goal Nevada and warrants to purchase shares of common stock of Goal Nevada (respectively, “Goal Nevada Units,” “Goal Nevada Shares” and “Goal Nevada Warrants”) on a one-for-one basis, which will have substantially identical rights, preferences and privileges as the units sold in the Company’s IPO and simultaneous private placement, the Company’s common stock, par value $0.0001 per share, and the warrants which were included in the units that were sold in the Company’s IPO and simultaneous private placement.

 

Pursuant to the Amended and Restated Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, Digital Virgo will effect a series of related transactions, in each case, upon the terms and subject to the conditions set forth in the Amended and Restated Business Combination Agreement, including the following:

 

 

Prior to the Closing, Digital Virgo will convert into a French public limited company (société anonyme);

     
 

After the conversion into a French public limited company (société anonyme) and prior to the Closing, Digital Virgo and the Digital Virgo Shareholders intend to effect a placement of ordinary shares of Digital Virgo to certain institutional and other investors (the “PIPE Investors”) through both primary and/or secondary offerings (the “PIPE Investment”), including the sale of a number of Digital Virgo ordinary shares held by the Digital Virgo Shareholders in exchange for $125,000,000 in cash;

     
  Immediately after the PIPE Investment, Digital Virgo will (i) effect a reverse share split of all of its existing shares pursuant to a conversion parity which is expected to be 10 to 26, including the shares purchased by the PIPE Investors in the PIPE Investment, (ii) change the par value of all such existing shares from €0.10 to €0.26 and (iii) rename all such existing shares to Class A ordinary shares (the “Digital Virgo Class A Ordinary Shares”) (together, the “Reverse Share Split”). Immediately after the completion of the Reverse Share Split, the Digital Virgo Class A Ordinary Shares held by IODA S.A., the controlling shareholder of Digital Virgo, will be converted into Class B preferred shares, par value €0.26 per share of Digital Virgo (the “Digital Virgo Class B Shares”), on a one-for-one basis, with such shares having identical rights to the Digital Virgo Class A Ordinary Shares except that the Digital Virgo Class B Shares will have two votes for each share.

 

F-9

 

 

Subject to, and in accordance with, the terms and conditions of the Amended and Restated Business Combination Agreement, at the Closing, (i) Digital Virgo will acquire all of the issued outstanding Goal Nevada Shares pursuant to articles of exchange filed with the Nevada Secretary of State in accordance with the Nevada Revised Statutes, whereby each issued and outstanding Goal Nevada Share will be exchanged for one Digital Virgo Class A Ordinary Share by means of the Exchange and (ii) each Goal Nevada Warrant will be automatically exchanged for one warrant issued by Digital Virgo that will be exercisable for one Digital Virgo Class A Ordinary Share. All outstanding Goal Nevada Units will be separated into their underlying securities immediately prior to the Exchange.

 

In addition, at the Closing, (i) 5,000,000 Class C preferred shares, par value €0.26 per share, of Digital Virgo (the “DV Earnout Shares”) will be issued to and deposited with one or more escrow agents and will be disbursed to the Digital Virgo Shareholders, in whole or in part, after the Closing, if both an earnout milestone based on “EBITDA” (as defined in the Amended and Restated Business Combination Agreement) and a share price milestone are met and (ii) 1,293,750 Class C preferred shares, par value €0.26 per share, of Digital Virgo (the “Sponsor Earnout Shares”) will be issued to and deposited with an escrow agent and will be disbursed to the Sponsor, after the Closing, if a share price milestone is met. The earnout milestone will be met if Digital Virgo’s EBITDA for any fiscal year ending on or before December 31, 2027 is equal or greater than $60,000,000, in which case 2,500,000 DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders. The share price milestone will be met if Digital Virgo’s share price is equal to or greater than $15.00 for at least 20 out of 30 consecutive trading days (counting only those trading days in which there is trading activity) from the period starting from the date immediately following the Closing Date and ending on December 31, 2026, in which case 2,500,000 DV Earnout Escrow Shares will be released to the Digital Virgo Shareholders and all of the Sponsor Earnout Shares will be released to the Sponsor. Any DV Earnout Shares remaining in the earnout escrow account that have not been released to the Digital Virgo Shareholders will be released to Digital Virgo, and any Sponsor Earnout Shares remaining in the earnout escrow account that have not been released to the Sponsor will be released to Digital Virgo. The Class C preferred shares of Digital Virgo will have identical rights to the Digital Virgo Class A Ordinary Shares except that the Class C preferred shares will have no voting rights. If and when the Class C preferred shares are released from escrow to the Digital Virgo Shareholders or the Sponsor, as applicable, such shares shall automatically be converted into Digital Virgo Class A Ordinary Shares, on a one-for-one basis, with full voting rights as of their respective date of disbursement by the escrow agent. “EBITDA” means the “Adjusted EBITDA” of Digital Virgo as currently calculated by Digital Virgo for its reporting requirements under its existing credit facility.

 

The Sponsor has agreed to forfeit 646,875 shares of common stock of the Company for no consideration effective as of the Closing.

 

The Company has received two notices from Digital Virgo purporting to unilaterally terminate the Amended and restated Business Combination Agreement pursuant to Section 8.03(d) of the Amended and Restated Business Combination Agreement. Since receipt of that correspondence, the Company has attempted to communicate with Digital Virgo have about these matters to resolve the dispute and proceed with the transaction, but Digital Virgo has refused. Therefore, the Company commenced Arbitration with the International Chamber of Commerce (“ICC”) to enforce its rights under the Amended and Restated Business Combination Agreement.

 

Other Agreements

 

The Amended and Restated Business Combination Agreement contemplates the execution of various additional agreements and instruments, including, among others, an Amended and Restated Sponsor Support Agreement, Amended and Restated Investor Rights Agreement, and Amended and Restated Initial Shareholders Forfeiture Agreement.

 

Use of Funds Restricted for Payment of Taxes

 

From inception to date, the Company has withdrawn a total of $2,041,690 of interest from the Trust Account of which $541,719 was paid for franchise taxes. Of the aggregate withdrawals, $1,499,971 was restricted for the payment of the Company’s income taxes. During the year ended December 31, 2023, the Company utilized the restricted amount of $1,499,971 to fund the Company’s monthly extension deposits.

 

As of the date of these financial statements, the Company has not yet filed it’s corporate tax return and intends to remit payment for income taxes upon completion of the return.

 

Liquidity, Capital Resources and Going Concern

 

As of December 31, 2023, the Company had $303,746 in cash and a working capital deficit of $12,078,477. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s initial stockholders, or certain of our officers and directors may, but are not obligated to, provide us with working capital loans. There are currently no amounts outstanding under any working capital loans. See Note 5 for a description of all the Sponsor and other related party funding transactions.

 

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or its affiliates may, but are not obligated to, loan us funds as may be required. If the Company completes a Business Combination, the Company will repay such loaned amounts. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Up to $1,500,000 of such working capital loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units. To date, the Company had no borrowings under the working capital loans.

 

The Company will need to raise additional capital through loans or additional investments from the Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and the Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, the Company may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.

 

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements - Going Concern,” the Company has until the New Termination Date, currently November 14, 2023 to consummate a business combination. On August 14, 2023, the Company’s stockholders voted and approved the Second Trust Agreement Amendment to change the date on which Continental must commence liquidation of the Trust Account to the New Termination Date. It is uncertain that the Company will be able to consummate a business combination by this time. If a business combination is not consummated by this date and an extension of the period of time the Company has to complete a business combination has not been approved by the Company’s stockholders, there will be a mandatory liquidation and subsequent dissolution of the Company. The Company has determined that the Company’s insufficient capital and mandatory liquidation, should a business combination not occur, and an extension not approved by the stockholders of the Company, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after August 8, 2024. The Company intends to continue to complete a business combination, including the transactions contemplated by the Amended and Restated Business Combination Agreement (the “Transaction”), before the mandatory liquidation date. The Company is within 12 months of its mandatory liquidation date as of the date that these financial statements were issued.

 

The Company’s financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

F-10

 

 

Risks and Uncertainties

 

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

 

Under the current rules and regulations of the SEC the Company is not deemed an investment company for purposes of the Investment Company Act of 1940 (the “Investment Company Act”); however, on March 30, 2022, the SEC proposed new rules (the “Proposed Rules”) relating, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations