Delaware |
6770 |
86-1328728 | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Adam M. Givertz Ian M. Hazlett Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 (212) 373-3000 |
William J. Schnoor Paul R. Rosie Goodwin Procter LLP 100 Northern Avenue Boston, Massachusetts 02210 (617) 570-1000 |
Large accelerated filer |
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Accelerated filer |
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☒ | Smaller reporting company | |||||
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Emerging growth company |
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
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Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
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Title of Each Class of Securities to be Registered |
Amount to be Registered (1) |
Maximum Offering Price Per Security (2) |
Proposed Maximum Aggregate Offering Price (2) |
Amount of Registration Fee (3)(4) | ||||
Class A Common Stock, par value $0.0001 |
31,118,653 |
N/A |
$3,025.22 |
$0.28 | ||||
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(1) |
Based on the maximum number of shares of Class A common stock, $0.0001 par value per share (“ Class A Common Stock Business Combination PTAC Tomorrow.io |
(2) |
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f) of the Securities Act of 1933, as amended (the “ Securities Act one-third of the aggregate par value of the Tomorrow.io securities to be exchanged in the Business Combination as of immediately prior to the Business Combination. Tomorrow.io is a private company, no market exists for its securities and Tomorrow.io has an accumulated capital deficit. |
(3) |
Calculated pursuant to Rule 457 under the Securities Act by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0000927. |
(4) |
The filing fee has been previously paid. |
Sincerely, | ||
Christopher Longo | ||
Chief Executive Officer and Director | ||
Pine Technology Acquisition Corp. |
By Order of the Board of Directors | ||
Christopher Longo | ||
Chief Executive Officer and Director |
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F-1 |
Merger Agreement | ||
Form of Amended and Restated Certificate of Incorporation of the Combined Entity | ||
Form of Amended and Restated Bylaws of the Combined Entity | ||
The Tomorrow Companies Inc. 2022 Stock Option and Incentive Plan | ||
The Tomorrow Companies Inc. 2022 Employee Stock Purchase Plan | ||
Opinion of Houlihan Lokey |
• | the ability of PTAC and Tomorrow.io to complete the Business Combination or, if PTAC does not consummate such Business Combination, any other initial business combination; |
• | satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things: (i) approval of the Business Combination and related agreements and transactions by the respective stockholders of PTAC and Tomorrow.io, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (iii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act Minimum Cash Condition |
• | the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | the projected financial information, anticipated growth rate, market opportunity and business prospect of Tomorrow.io; |
• | the ability to obtain or maintain the listing of PTAC Class A Common Stock and Public Warrants on the Nasdaq following the Business Combination; |
• | our public securities’ potential liquidity and trading; |
• | our ability to raise financing in the future; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination; |
• | the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the Combined Entity to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; |
• | the effect of uncertainties related to the global COVID-19 pandemic on Tomorrow.io’s business, results of operations, and financial condition, including the impact of any variants such as Omicron; |
• | the anticipated growth of the Combined Entity; |
• | the Combined Entity’s ability to achieve and maintain profitability in the future; |
• | the impact of the regulatory environment and complexities with compliance related to such environment on the Combined Entity; |
• | the Combined Entity’s ability to respond to general economic, political and business conditions; |
• | the Combined Entity’s ability to access sources of capital, including debt financing and other sources of capital to finance operations and growth; |
• | the success of the Combined Entity’s marketing efforts and its ability to expand its customer base; |
• | the Combined Entity’s ability to develop new products, features and functionality that are competitive and meet market needs; |
• | the ability of the Combined Entity to defend its intellectual property; |
• | the ability of the Combined Entity to maintain an effective system of internal controls over financial reporting; |
• | the Combined Entity’s ability to grow and manage growth profitably and retain key employees; |
• | the amount of redemption requests made by PTAC’s Public Stockholders; |
• | the outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination; and |
• | other factors detailed under the section titled “ Risk Factors. |
Q: |
Why am I receiving this proxy statement/prospectus? |
A: | PTAC stockholders are being asked to consider and vote upon a proposal to approve and adopt the Merger Agreement, among other proposals. PTAC has entered into the Merger Agreement as a result of which Merger Sub, a wholly-owned subsidiary of PTAC, shall merge with and into Tomorrow.io with Tomorrow.io surviving such merger, and as a result of which Tomorrow.io will become a wholly-owned subsidiary of PTAC. We refer to this merger and the other transactions contemplated by the Merger Agreement, as the “ Business Combination Annex A |
Q: |
Who Is Tomorrow.io? |
A: | Tomorrow.io is a is a software-as-a-service (“ SaaS “Information About Tomorrow.io” |
Q: |
Why is PTAC proposing the Business Combination? |
A: | PTAC 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. |
Q: |
What matters will be considered at the Special Meeting? |
A: | The following is a list of proposals upon which PTAC stockholders will be asked to vote at the Special Meeting: |
1. | The Business Combination Proposa |
2. | The Nasdaq Stock Issuance Proposal The Business Combination Proposal — Acquisition of Tomorrow.io; Merger Consideration, The Business Combination Proposal — Acquisition of Tomorrow.io; Merger Consideration |
3. | The Charter Amendment Proposal Annex B |
(a) | to provide that any amendment to Article VII of the Proposed Charter will require the approval by affirmative vote of holders of at least 66 2 ⁄3 % of the voting power of the Combined Entity’s then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class;. |
(b) | to provide that any amendment to the Combined Entity’s Bylaws in the absence of the Board’s recommendation will require the approval by affirmative vote of holders of at least 66 2 ⁄3 % of the voting power of the Combined Entity’s then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class; |
(c) | to provide that the Combined Entity be subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in a “business combination” with an “interested stockholder” (each as defined in the DGCL) for three years following the time that the “interested stockholder” becomes such, subject to certain exceptions; and |
(d) | to provide that directors may only be removed (i) with cause and (ii) only by the affirmative vote of stockholders holding at least 66 2 ⁄3 % of the Combined Entity’s then outstanding shares of capital stock entitled to vote generally at an election of directors. |
4. | The Incentive Plan Proposal Annex D |
5. | The ESPP Proposal Annex E |
6. | The Election of Directors Proposal |
7. | The Bylaws Proposal Annex C |
8. | The Adjournment Proposal |
Q: |
When and where will the Special Meeting take place? |
A: | The PTAC Special Meeting will be held on , 2022, at a.m., Eastern time, via live webcast at the following address: https://www.cstproxy.com/pinetechnology/2022 |
Q: |
Is my vote important? |
A: | Yes. The Business Combination will be completed only if a majority of the shares of PTAC Common Stock cast votes “FOR” the Business Combination Proposal. Only PTAC stockholders as of the close of business on , 2022, the Record Date, are entitled to vote at the Special Meeting. The Board unanimously recommends that such PTAC stockholders vote “ FOR FOR FOR FOR FOR FOR FOR FOR FOR |
Q: |
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
A: | No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. PTAC believes the proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your bank, broker or other nominee to vote your shares in accordance with directions you provide. |
Q: |
What vote is being sought for the Proposals presented at the Special Meeting? |
A: | The Charter Amendment Proposal and each of the Governance Proposals will be approved and adopted in its entirety only if holders of (i) a majority of the issued and outstanding shares of PTAC Common Stock as of the Record Date for the Special Meeting, voting together as a single class, and (ii) a majority of the |
outstanding shares of PTAC Class A Common Stock, voting separately as a single series, vote “FOR” the Charter Amendment Proposal and each of the Governance Proposals, respectively. Accordingly, a PTAC stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or an abstention will have the same effect as a vote “AGAINST” the Charter Amendment Proposal and each of the Governance Proposals. |
Q: |
Are the Proposals conditioned on one another? |
A: | Unless the Business Combination Proposal is approved, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposal, the Governance Proposals, the Incentive Plan Proposal, the ESPP Proposal, the Election of Directors Proposal and the Bylaws Proposal will not be presented to the stockholders of PTAC at the Special Meeting. The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposal, the Governance Proposals, the Incentive Plan Proposal, the ESPP Proposal, the Election of Directors Proposal and the Bylaws Proposal are preconditions to the Closing. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that in the event that the Business Combination Proposal does not receive the requisite vote for approval, then we will not consummate the Business Combination. If PTAC does not consummate the Business Combination and fails to complete an initial business combination by March 15, 2023, PTAC will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to its Public Stockholders. |
Q: |
What conditions must be satisfied to complete the Business Combination? |
A: | There are a number of closing conditions in the Merger Agreement, including the approval by the stockholders of PTAC of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposal, the Governance Proposals, the Incentive Plan Proposal, the ESPP Proposal, the Election of Directors Proposal, the Bylaws Proposal, and PTAC having Aggregate Transaction Proceeds at the Closing of at least $150 million. The Nasdaq Stock Issuance Proposal, the Charter Amendment Proposal, the Governance Proposals, the Incentive Plan Proposal, the ESPP Proposal, the Election of Directors Proposal and the Bylaws Proposal are subject to and conditioned on the approval of the Business Combination Proposal. The Business Combination Proposal is subject to and conditioned on the approval of the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposal, the Governance Proposals, the Incentive Plan Proposal, the ESPP Proposal, the Election of Directors Proposal and the Bylaws Proposal. For a summary of the conditions that must be satisfied or waived prior to the Closing of the Business Combination, see the section titled “ The Business Combination Proposal — The Merger Agreement |
Q: |
What will happen in the Business Combination? |
A: | At the closing of the Business Combination, Merger Sub will merge with and into Tomorrow.io, with Tomorrow.io surviving such merger as the surviving entity. Upon the Closing, Tomorrow.io will become a |
wholly-owned subsidiary of PTAC. In connection with the Business Combination, the cash held in the Trust Account and the proceeds from the PIPE Investment will be used to pay (i) PTAC stockholders who properly exercise their redemption rights, (ii) the underwriters their deferred underwriting commissions from the PTAC IPO, (iii) certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by PTAC or Tomorrow.io in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement, (iv) unpaid franchise and income taxes of PTAC, and (v) for general corporate purposes including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions. |
Q: |
What equity stake will current stockholders of PTAC and Tomorrow.io Equityholders hold in the Combined Entity after the Closing? |
A: | It is anticipated that, upon the Closing, PTAC’s Public Stockholders (other than the PIPE Investors) will retain an ownership interest of approximately 28.6% of the Combined Entity’s common stock, the Other PIPE Investors (as defined below) will own approximately 4% of the Combined Entity’s common stock (such that Public Stockholders, including Other PIPE Investors, will own approximately 32.6% of the Combined Entity’s common stock), the Sponsor will own approximately 9.4% of the Combined Entity’s common stock (including as a result of its participation in the PIPE Investment) and the Tomorrow.io Equityholders will own approximately 58% of the Combined Entity’s common stock. The ownership percentage with respect to the Combined Entity’s common stock following the Business Combination does not take into account (i) the redemption of any Public Shares by PTAC’s Public Stockholders, (ii) the exercise of any PTAC Warrants outstanding as of immediately prior to the Closing, (iii) the issuance of any shares upon the Closing under the Equity Incentive Plan (including shares issuable upon exercise of options exercisable for Tomorrow.io Stock) or the Employee Stock Purchase Plan, which is intended to be adopted following the Closing or (iv) the issuance of any shares upon vesting of the Closing Parent RSU Grants. If the actual facts are different from these assumptions (which they are likely to be), the percentage ownership retained by PTAC’s existing stockholders in the Combined Entity will be different. Additionally, Public Stockholders who continue to remain stockholders of the Combined Entity will be subject to dilution as a result of (i) the exercise of PTAC Warrants, (ii) the Closing Parent RSU Grant and (iii) issuances under the Equity Incentive Plan and Employee Stock Purchase Plan. |
Q: |
Did the Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
A: | Yes. As disclosed elsewhere in this proxy statement/prospectus, affiliates of Peel Acquisition Company II, LLC, a managing member of the Sponsor, hold, through an unaffiliated private equity fund, an indirect passive investment in Tomorrow.io, which investment represents approximately 1% of Tomorrow.io’s outstanding capital stock. Such affiliates of Peel Acquisition Company II, LLC exercise no control over the unaffiliated private equity fund, no control over the unaffiliated private equity fund’s investment in Tomorrow.io and no control over Tomorrow.io, and such investment is not material to such affiliates of Peel Acquisition Company II, LLC. In light of the existence of such investment, the Board elected to obtain an opinion from Houlihan Lokey Capital, Inc. (“ Houlihan Lokey |
Q: |
Why is PTAC providing stockholders with the opportunity to vote on the Business Combination? |
A: | Under the Current Charter, PTAC must provide all holders of its Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of PTAC’s initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, PTAC has elected to provide its stockholders with the opportunity to have their Public Shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, PTAC is seeking to obtain the approval of its stockholders of the Business Combination Proposal in order to allow its Public Stockholders to effectuate redemptions of their Public Shares in connection with the Closing. |
Q: |
Are there any arrangements to help ensure that the Combined Entity will have sufficient funds, together with the proceeds in its Trust Account, to fund the Business Combination? |
A: | Yes. On December 7, 2021, PTAC entered into Subscription Agreements (the “ PIPE Subscription Agreements Other PIPE Investors PIPE Investors |
Q: |
How many votes do I have at the Special Meeting? |
A: | PTAC stockholders are entitled to one vote at the Special Meeting for each share of PTAC Common Stock held as of the Record Date. As of the close of business on the Record Date, there were 43,125,000 outstanding shares of PTAC Common Stock. |
Q: |
May PTAC, the Sponsor or PTAC’s directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination? |
A: | In connection with the stockholder vote to approve the proposed Business Combination, the Sponsor, directors, officers or advisors or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per-share pro rata portion of the Trust Account. None of PTAC’s Sponsor, directors, officers or advisors or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of PTAC Common Stock, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser. In the event that the Sponsor, PTAC’s directors, officers or advisors or their |
affiliates purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares of PTAC Common Stock. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per-share pro rata portion of the Trust Account. |
Q: |
What constitutes a quorum at the Special Meeting? |
A: | Holders of a majority in voting power of PTAC Common Stock issued and outstanding and entitled to vote at the Special Meeting constitute a quorum. In the absence of a quorum, the chairman of the meeting has power to adjourn the Special Meeting. As of the Record Date, 21,562,501 shares of PTAC Common Stock would be required to achieve a quorum. |
Q: |
How will the Sponsor, directors and officers vote? |
A: | The Sponsor, as PTAC’s initial stockholder, has agreed to vote its Founders Shares and the Sponsor and PTAC’s directors and officers have agreed to vote any Public Shares purchased during or after the PTAC IPO in favor of the Business Combination. As of the date of this proxy statement/prospectus, the Sponsor owns approximately 20.0% of the issued and outstanding shares of PTAC Common Stock, including all of PTAC’s Class B Common Stock (the “ Founder Shares |
Q: |
What interests do PTAC’s current directors and officers have in the Business Combination? |
A: | The Sponsor, members of the Board and its executive officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. These interests include, among other things: |
• | Affiliates of Peel Acquisition Company II, LLC, a managing member of the Sponsor, have a $5 million investment in an unaffiliated private equity fund, which unaffiliated private equity fund has an investment in Tomorrow.io. The affiliates’ investment, which represents an approximate 1% indirect equity interest in Tomorrow.io, is controlled by the unaffiliated private equity fund and Peel and its affiliates exercise no control over the private equity fund, the private equity fund’s investment in Tomorrow.io or Tomorrow.io. |
• | Unless PTAC consummates an initial business combination by March 15, 2023, PTAC 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 (net of any amounts withdrawn to pay PTAC’s taxes and up to $100,000 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), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of PTAC’s remaining stockholders and the Board, dissolve and liquidate, subject in each case to PTAC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
• | There will be no liquidating distributions from the Trust Account with respect to the Founders Shares if PTAC fails to complete a business combination within the required period. Our Sponsor purchased the Founders Shares (valued at $ based on the closing price of the PTAC Class A Common Stock on the Record Date) prior to the PTAC IPO for an aggregate purchase price of $25,000. |
• | Simultaneously with the closing of the PTAC IPO, PTAC consummated the sale of 5,933,333 Private Placement Warrants, with each Private Placement Warrant entitling the holder thereof to purchase one |
share of PTAC Class A Common Stock at an exercise price of $11.50 per share at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor. If PTAC does not consummate a business combination transaction by March 15, 2023, then the Private Placement Warrants (valued at $7,476,000 based on a valuation as of September 30, 2021, the most recent date for which a valuation is available) held by the Sponsor will be worthless. |
• | The Sponsor and PTAC’s directors and officers will lose their entire investment ($9,274,999.50 in the aggregate, consisting of (i) the $25,000 paid by our Sponsor for the Founder Shares, (ii) $8,899,999.50 paid by our Sponsor for the Private Placement Warrants and (iii) $350,000 advanced by Sponsor to PTAC in respect of the Note (to the extent there are insufficient funds outside the Trust Account to repay the Note) in PTAC if PTAC does not complete a business combination by March 15, 2023. Additionally, our Sponsor, directors and officers are entitled to reimbursement of $2,000 in fees and out-of-pocket expenses they have incurred in connection with the Business Combination. At least one of them may continue to serve as a director of PTAC after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the Board determines to pay to its directors and/or officers. |
• | The Sponsor, directors and officers collectively (including entities controlled by directors and officers) have made an aggregate average investment of $1.03 per Founder Share (including their investment in the Founders Shares and Private Placement Warrants) as of the consummation of the PTAC IPO. As a result of the significantly lower investment per Founder Share of our Sponsor, directors and officers as compared with the investment per share of PTAC Common Stock of our Public Stockholders, our Sponsor, directors and officers can earn a positive rate of return on their investment even if Public Stockholders experience a negative rate of return in the Combined Entity. |
• | PTAC’s initial stockholder and directors and officers have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founders Shares if PTAC fails to complete a business combination by March 15, 2023. |
• | In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to PTAC if and to the extent any claims by a third party for services rendered or products sold to PTAC, or a prospective target business with which PTAC has entered into a letter of intent, confidentiality or other similar agreement for a business combination, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share is then held in the Trust Account due to reductions in the value of the trust assets less any amounts withdrawn to pay PTAC’s taxes. This liability will not apply with respect to any claims by a third party that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) or to any claims under PTAC’s indemnity of the underwriters of the PTAC IPO against certain liabilities, including liabilities under the Securities Act. |
• | Following the Closing, the Sponsor would be entitled to the repayment of any working capital loans and advances that have been made to PTAC and remain outstanding. On December 6, 2021, PTAC issued an unsecured promissory note in the principal amount of $350,000 to the Sponsor (the “ Note |
• | Following the Closing, PTAC will continue to indemnify PTAC’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy. |
• | Upon the Closing, subject to the terms and conditions of the Merger Agreement, the Sponsor, PTAC’s directors and officers and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket |
• | Sponsor, an entity in which each of our directors and officers has an indirect interest, as well as an entity associated with principals of Peel, has subscribed for PTAC Common Stock in the PIPE Investment. |
Q: |
What happens if I sell my shares of PTAC Common Stock before the Special Meeting? |
A: | The Record Date is earlier than the date of the Special Meeting. If you transfer your shares of PTAC Common Stock after the Record Date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares because you will no longer be able to deliver them for cancellation upon Closing. If you transfer your shares of PTAC Common Stock prior to the Record Date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account. |
Q: |
What happens if I vote against the Business Combination Proposal? |
A: | Pursuant to the Current Charter, if the Business Combination Proposal is not approved and PTAC does not otherwise consummate an alternative business combination by March 15, 2023, PTAC will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the Public Stockholders. |
Q: |
Do I have redemption rights? |
A: | Pursuant to the Current Charter, holders of Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with the Current Charter. As of September 30, 2021, based on funds in the Trust Account of approximately $345.1 million, this would have amounted to approximately $10.00 per share. If a holder exercises its redemption rights, then such holder will be exchanging its Public Shares for cash. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to PTAC’s transfer agent prior to the Special Meeting. Holders of PTAC’s outstanding warrants sold in the PTAC IPO, which are exercisable for shares of PTAC Class A Common Stock under certain circumstances, do not have redemption rights in connection with the Business Combination. See the section titled “ Special Meeting of PTAC Stockholders in Lieu of the 2022 Annual Meeting of PTAC Stockholders — Redemption Rights |
Q: |
If I hold PTAC Warrants, can I exercise redemption rights with respect to my warrants? |
A: | No. There are no redemption rights with respect to the PTAC Warrants. |
Q: |
Will how I vote affect my ability to exercise redemption rights? |
A: | No. You may exercise your redemption rights whether you vote your Public Shares “FOR” or “AGAINST” the Business Combination Proposal or any other Proposal described by this proxy statement/prospectus. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of the Nasdaq Capital Market. |
Q: |
What happens to the PTAC Warrants I hold if I vote my shares of PTAC Common Stock against approval of the Business Combination Proposal and validly exercise my redemption rights? |
A: | Properly exercising your redemption rights as a PTAC stockholder does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal. If the Business Combination is not completed, you will continue to hold your PTAC Warrants, and if PTAC does not otherwise consummate an initial business combination by March 15, 2023 or obtain the approval of PTAC stockholders to extend the deadline for PTAC to consummate an initial business combination, PTAC will be required to dissolve and liquidate, and your PTAC Warrants will expire worthless. |
Q: |
How do I exercise my redemption rights? |
A: | In order to exercise your redemption rights, you must prior to 5:00 p.m., Eastern time, on , 2022 (two (2) business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that PTAC redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address: |
Q: |
What are the U.S. federal income tax consequences of exercising my redemption rights? |
A: | The U.S. federal income tax consequences of PTAC stockholders who exercise their redemption rights to receive cash in exchange for their Public Shares depend on the stockholder’s particular facts and circumstances. Such stockholder generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the Public Shares redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. The redemption, however, may be treated as a distribution to a redeeming stockholder for U.S. federal income tax purposes if the redemption does not effect a sufficient reduction (as determined under applicable federal income tax law) in the redeeming stockholder’s percentage ownership in us (whether such ownership is direct or through the application of certain attribution and constructive ownership rules). Any amounts treated as such a distribution will constitute a dividend to the extent not in excess of our current and accumulated earnings and profits as measured for U.S. federal income tax purposes. Any amounts treated as a distribution and that are in excess of our current and accumulated earnings and profits will reduce the redeeming stockholder’s basis in his or her redeemed Public Shares, and any remaining amount will be treated as gain realized on the sale or other disposition of Public Shares. These tax consequences are described in more detail in the section titled “ The Business Combination Proposal — The Merger Agreement Certain Material U.S. Federal Income Tax Considerations of the Redemption |
Q: |
Do I have dissenter rights if I object to the proposed Business Combination? |
A: | No. PTAC stockholders and PTAC warrantholders are not entitled to exercise dissenters’ rights under Delaware law in connection with the Business Combination. |
Q: |
What happens to the funds held in the Trust Account upon Closing? |
A: | If the Business Combination is consummated, the funds held in the Trust Account will be released to pay: |
• | PTAC stockholders who properly exercise their redemption rights; |
• | the underwriters of the PTAC IPO their deferred underwriting commissions; |
• | certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by PTAC or Tomorrow.io in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement including for the avoidance of doubt, repayment of any loans provided to PTAC by the Sponsor or its affiliates; |
• | unpaid franchise and income taxes of PTAC; and |
• | for general corporate purposes including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions. |
Q: |
What happens if the Business Combination is not consummated? |
A: | There are certain circumstances under which the Merger Agreement may be terminated. See the section titled “ The Business Combination Proposal — The Merger Agreement — Termination |
Q: |
When is the Business Combination expected to be completed? |
A: | The Closing is expected to take place (a) the second business day following the satisfaction or waiver of the conditions described below under the section titled “ The Business Combination Proposal — The Merger Agreement — Conditions to Closing |
Q: |
What do I need to do now? |
A: | You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee. |
Q: |
How do I vote? |
A. | If you were a holder of record of PTAC Common Stock on , 2022, the Record Date, you may vote with respect to the applicable proposals online at the Special Meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you choose to participate in the Special Meeting, you can vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/pinetechnology/2022 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. PTAC recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. |
Q: |
What will happen if I abstain from voting or fail to vote at the Special Meeting? |
A: | At the Special Meeting, PTAC will count a properly executed proxy card marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. The failure to vote, abstentions and broker non-votes will have the same effect as a vote “AGAINST” the Charter Amendment Proposal and each of the Governance Proposals. The failure to vote, abstentions and broker non-votes will not be counted as votes cast and will have no effect on any of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Incentive Plan Proposal, the ESPP Proposal, the Election of Directors Proposal, the Bylaws Proposal or the Adjournment Proposal. |
Q: |
What will happen if I sign and return my proxy card without indicating how I wish to vote? |
A: | Signed and dated proxies received by PTAC without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting. |
Q: |
How can I attend the Special Meeting? |
A: | You may attend the Special Meeting and vote your shares online during the Special Meeting via live webcast by visiting https://www.cstproxy.com/pinetechnology/2022 12-digit meeting control number. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. If you do not have your 12-digit meeting control number, contact CST at 917-262-2373 or e-mail CST at proxy@continentalstock.com. Please note that you will not be able to physically attend the special meeting in person, but may attend the Special Meeting online by following the instructions below. |
Q: |
If I am not going to attend the Special Meeting, should I return my proxy card instead? |
A: | Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. |
Q: |
May I change my vote after I have mailed my signed proxy card? |
A: | Yes. If you are a stockholder of record of PTAC Common Stock as of the close of business on the Record Date, you can change or revoke your proxy before it is voted at the meeting in one of the following ways: |
• | submit a new proxy card bearing a later date; |
• | give written notice of your revocation to PTAC’s Corporate Secretary, which notice must be received by PTAC’s Corporate Secretary prior to the vote at the Special Meeting; or |
• | vote electronically at the Special Meeting by visiting https://www.cstproxy.com/pinetechnology/2022 |
Q: |
What should I do if I receive more than one set of voting materials? |
A: | You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares. |
Q: |
Who will solicit and pay the cost of soliciting proxies? |
A: | PTAC will pay the cost of soliciting proxies for the Special Meeting. PTAC has engaged Innisfree M&A Incorporated , which we refer to as “Innisfree M&A Incorporated,” to assist in the solicitation of proxies for the Special Meeting. PTAC has agreed to pay Innisfree M&A Incorporated a fee of $40,000, plus disbursements. PTAC will reimburse Innisfree M&A Incorporated for reasonable out-of-pocket |
Q: |
Are there any risks that I should consider as a PTAC stockholder in deciding how to vote or whether to exercise my redemption rights? |
A: | Yes. You should read and carefully consider the risk factors set forth in the section titled “ Risk Factors |
Q: |
Who can help answer my questions? |
A: | If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card, please call us at (212) 402-8216. Please visit www.pinetechnology.com |
• | the Class I directors will be and , and their terms will expire at the annual meeting of stockholders to be held in 2023; |
• | the Class II directors will be , and , and their terms will expire at the annual meeting of stockholders to be held in 2024; and |
• | the Class III directors will be and , and their terms will expire at the annual meeting of stockholders to be held in 2025. |
• | Opportunity for growth. |
• | Large addressable market. |
• | Reliable and recurring revenue model. |
• | Experienced management team. |
• | Broad, Diverse and Growing Global Customer Base |
• | Fairness Opinion. |
• | Substantial post-closing economic interest in Tomorrow.io. |
• | Continued Ownership by Tomorrow.io Equityholders. |
of PTAC’s stockholders exercise their redemption rights and up to 73,500,000 Closing Payment Shares are issued in connection with the Business Combination. |
• | Involvement of the PIPE Investors. |
• | Due diligence. |
• | Support of key stockholders. |
• | Tomorrow.io Equityholder lock-up. |
• | Transaction proceeds. |
• | Other alternatives. |
• | Negotiated transaction. |
• | Risk that benefits may not be achieved. |
• | Risks Associated with Tomorrow.io’s business Risk Factors — Risks Related to Tomorrow.io |
• | Liquidation of PTAC. |
• | Redemption risk. |
to Tomorrow.io from the Business Combination, which could hinder Tomorrow.io’s ability to continue its development or result in the Business Combination failing to close if the Minimum Cash Condition is not satisfied. |
• | Exclusivity. |
• | Stockholder vote. |
• | Macroeconomic risks. |
• | Closing conditions. |
• | Post-Business Combination corporate governance. |
• | Fees and expenses. |
• | Interests of certain indirect equityholders of the Sponsor. |
• | Interests of certain other persons. |
• | Other risks. Risk Factors |
No Redemption Scenario (1) |
Maximum Redemption Scenario (1)(4) |
|||||||||||||||
Shares |
% |
Shares |
% |
|||||||||||||
PTAC Public Stockholders |
34,500,000 | 28.6 | % | 10,792,025 | 11.2 | % | ||||||||||
PTAC Sponsor (2) |
11,375,000 | 9.4 | % | 11,375,000 | 11.7 | % | ||||||||||
Tomorrow.io Equityholders (3) |
70,000,000 | 58.0 | % | 70,000,000 | 72.2 | % | ||||||||||
Other PIPE Investors |
4,750,000 | 4.0 | % | 4,750,000 | 4.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
120,265,000 |
100.0 |
% |
96,917,025 |
100.0 |
% |
(1) | Excludes all 17,433,333 PTAC Warrants. If all 17,433,333 PTAC Warrants were exercised for cash and all 17,433,333 shares of PTAC Class A Common Stock underlying such PTAC Warrants (5,933,333 of which |
are owned by Sponsor) were included, the post-Closing share ownership of the Combined Entity’s common stock, in the no redemption scenario, would be as follows: PTAC Public Stockholders, 34,500,000 (25.0%); holders of Public Warrants, 11,500,000 (8.3%); PTAC Sponsor, 17,308,333 (12.5%); Tomorrow.io Equityholders, 70,000,000, (50.7%); and Other PIPE Investors, 4,750,000 (3.5%), and in the maximum redemption scenario, would be as follows: PTAC Public Stockholders, 10,792,025 (9.4%), holders of Public Warrants 11,500,000 (10.1%), PTAC Sponsor, 17,308,333 (15.1%), Tomorrow.io Equityholders 70,000,000 (61.2%) and other PIPE Investors 4,750,000 (4.2%). |
(2) | Includes 2,750,000 shares of PTAC Class A Common Stock purchased by Sponsor in the PIPE Investment. |
(3) | Includes shares of PTAC Class A Common Stock underlying options of Tomorrow.io that are assumed by PTAC. See “ The Business Combination Proposal — Acquisition of Tomorrow.io; Merger Consideration |
(4) | The maximum redemption scenario reflects a reduction in advisory fees of approximately $12.9 million, including a reduction in the deferred underwriting commissions payable to the underwriters of the PTAC IPO in the amount of $4.0 million. |
No Redemption Scenario |
Intermediate Redemption Scenario |
Maximum Redemption Scenario (3) |
||||||||||||||||||||||
Shares |
% |
Shares |
% |
Shares |
% |
|||||||||||||||||||
PTAC Public Stockholders |
34,500,000 | % | 22,646,012 | % | 10,792,025 | % | ||||||||||||||||||
Holders of Public Warrants |
11,500,000 | % | 11,500,000 | % | 11,500,000 | % | ||||||||||||||||||
PTAC Sponsor (1) |
17,308,333 | % | 17,308,333 | % | 17,308,333 | % | ||||||||||||||||||
Tomorrow.io Equityholders (2) |
70,000,000 | % | 70,000,000 | % | 70,000,000 | % | ||||||||||||||||||
Other PIPE Investors |
4,750,000 | % | 4,750,000 | % | 4,750,000 | % | ||||||||||||||||||
Closing Parent RSU Grant |
3,000,000 | % | 3,000,000 | % | 3,000,000 | % | ||||||||||||||||||
Issuances under the Equity Incentive Plan |
% | % | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
100.0% |
100.0% |
100.0% |
(1) | Includes 2,750,000 shares of PTAC Class A Common Stock purchased by Sponsor in the PIPE Investment and 5,933,333 shares of PTAC Class A Common Stock issuable upon exercise of 5,933,333 Private Placement Warrants. |
(2) | Includes shares of PTAC Class A Common Stock underlying options of Tomorrow.io that are assumed by PTAC. See “ The Business Combination Proposal — Acquisition of Tomorrow.io; Merger Consideration |
(3) | The maximum redemption scenario reflects a reduction in advisory fees of approximately $12.9 million, including a reduction in the deferred underwriting commissions payable to the underwriters of the PTAC IPO in the amount of $4.0 million. |
• | Affiliates of Peel Acquisition Company II, LLC, a managing member of the Sponsor, have a $5 million investment in an unaffiliated private equity fund, which unaffiliated private equity fund has an investment in Tomorrow.io. The affiliates’ investment, which represents an approximate 1% indirect equity interest in Tomorrow.io, is controlled by the unaffiliated private equity fund and Peel and its affiliates exercise no control over the private equity fund, the private equity fund’s investment in Tomorrow.io or Tomorrow.io. |
• | Unless PTAC consummates an initial business combination by March 15, 2023, PTAC 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 (net of any amounts withdrawn to pay PTAC’s taxes and up to $100,000 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), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of PTAC’s remaining stockholders and the Board, dissolve and liquidate, subject in each case to PTAC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
• | There will be no liquidating distributions from the Trust Account with respect to the Founders Shares if PTAC fails to complete a business combination within the required period. Our Sponsor purchased the Founders Shares (valued at $ based on the closing price of the PTAC Class A Common Stock on the Record Date) prior to the PTAC IPO for an aggregate purchase price of $25,000. |
• | Simultaneously with the closing of the PTAC IPO, PTAC consummated the sale of 5,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor. If PTAC does not consummate a business combination transaction by March 15, 2023, then the Private Placement Warrants (valued at $7,476,000 based on a valuation as of September 30, 2021, the most recent date for which a valuation is available) held by the Sponsor will be worthless. |
• | The Sponsor and PTAC’s directors and officers will lose their entire investment ($9,274,999.50 in the aggregate, consisting of (i) the $25,000 paid by our Sponsor for the Founder Shares, (ii) $8,899,999.50 paid by our Sponsor for the Private Placement Warrants and (iii) $350,000 advanced by Sponsor to PTAC in respect of the Note (to the extent there are insufficient funds outside the Trust Account to repay the Note) in PTAC if PTAC does not complete a business combination by March 15, 2023. Additionally, our Sponsor, directors and officers are entitled to reimbursement of $2,000 in fees and out-of-pocket expenses they have incurred in connection with the Business Combination. At least one of them may continue to serve as a director of PTAC after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the Board determines to pay to its directors and/or officers. |
• | The Sponsor, directors and officers collectively (including entities controlled by directors and officers) have made an aggregate average investment of $1.03 per Founder Share (including their investment in the Founders Shares and Private Placement Warrants) as of the consummation of the PTAC IPO. As a result of the significantly lower investment per Founder Share of our Sponsor, directors and officers as compared with the investment per share of PTAC Common Stock of our Public Stockholders, our Sponsor, directors and officers can earn a positive rate of return on their investment even if Public Stockholders experience a negative rate of return in the Combined Entity. |
• | PTAC’s initial stockholder and directors and officers have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founders Shares if PTAC fails to complete a business combination by March 15, 2023. |
• | In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to PTAC if and to the extent any claims by a third party for services rendered or products sold to PTAC, or a prospective target business with which PTAC has entered into a letter of intent, confidentiality or other similar agreement for a business combination, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share is then held in the Trust Account due to reductions in the value of the trust |
assets less any amounts withdrawn to pay PTAC’s taxes. This liability will not apply with respect to any claims by a third party that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) or to any claims under PTAC’s indemnity of the underwriters of the PTAC IPO against certain liabilities, including liabilities under the Securities Act. |
• | Following the Closing, the Sponsor would be entitled to the repayment of any working capital loans and advances that have been made to PTAC and remain outstanding. On December 6, 2021, PTAC issued the Note in the principal amount of $350,000 to the Sponsor. The Note bears interest at 0.33% per annum and is repayable in full at the earlier of (i) March 15, 2023 or (ii) the date on which PTAC consummates an initial business combination as contemplated by the Current Charter. If PTAC does not complete an initial business combination within the required period, PTAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans. |
• | Following the Closing, PTAC will continue to indemnify PTAC’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy. |
• | Upon the Closing, subject to the terms and conditions of the Merger Agreement, the Sponsor, PTAC’s directors and officers and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket |
• | Sponsor, an entity in which each of our directors and officers has an indirect interest, as well as an entity associated with principals of Peel, has subscribed for PTAC Common Stock in the PIPE Investment. |
• | We have incurred losses each year since our inception, we expect our operating expenses to increase and the future, and we may not be able to achieve or maintain profitability. |
• | We may not continue to grow at or near our historical rates. |
• | We may be unable to manage our future growth, which could make it difficult to execute our business strategy. |
• | Our arguments for the importance of climate security may not resonate with customers and the market for weather intelligence and offerings responsive to environmental, social and governance concerns may not develop in a manner or at a speed as we expect. |
• | Our limited operating history makes it difficult to evaluate our future prospects. The future of technologies we have developed and hope to develop and productize is not guaranteed. |
• | There are many other providers of weather data. Weather data derived from space-borne sensors may not add sufficient value to, or interest in, our solution or future product development to justify its cost. |
• | Our global approach may not be viable. Geographic areas around the world that are most underserved with weather data may be the least lucrative addressable market for our solution. |
• | We may be unable to develop our solutions to meet the growing needs of our current and prospective customers. |
• | Our business relies on sales and marketing and we may not be successful in achieving an adequate level of sales or brand recognition to meet our growth plans. |
• | We may require substantial additional funding or fail to raise capital when needed or on acceptable terms. |
• | We compete against many weather data providers that are better-known and better-financed than us. |
• | Although we have set out to disrupt the weather market, we may not successfully compete with our competitors, who may have more resources than we do. |
• | The measurements and insights that we incorporate into our product and the industry focuses on which we have focused may not match market demand. |
• | We may fail to timely rectify problems in our solution due to its increasing complexity. |
• | We rely on third parties for our core product solution and failure of the third parties will adversely impact our ability to provide services to our customers. |
• | Our software and application programming interface rely on third-party inputs and complex integration and management of tools and data that may be difficult to sustain. |
• | Direct-to-consumer |
• | We have not yet deployed satellites and any setbacks we may experience could have a material adverse effect on our business, financial condition and results of operation and could harm our reputation. |
• | The projections and forecasts presented in this proxy statement/prospectus may not be an indication of the actual results of the transaction or Tomorrow.io’s future results. |
• | PTAC’s Sponsor, directors and officers have interests in the Business Combination which may be different from or in addition to (and which may conflict with) the interests of its stockholders. |
• | PTAC may not be able to consummate an initial business combination within the required time period, in which case it would cease all operations except for the purpose of winding up and it would redeem the Public Shares and liquidate, in which case the Public Stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and the Public Warrants will expire worthless. |
• | PTAC may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Warrants worthless. |
• | If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of PTAC’s securities may decline. |
• | The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all. |
(i) | No redemptions |
Sources of Funds |
Uses |
|||||||||
(in thousands) |
||||||||||
Cash From PTAC (1) |
$345,537 | Tomorrow.io Equityholders’ Retained Equity Value (2) | $700,000 | |||||||
PIPE Investment |
75,000 | Remaining Cash on Balance Sheet (1) | 374,240 | |||||||
Tomorrow.io Equityholders’ Retained Equity Value (2) |
700,000 | PTAC Estimated Transaction Costs and Other (3) | 46,297 | |||||||
Total Sources |
1,120,537 | Total Uses | $1,120,537 | |||||||
|
|
|
|
(1) | Assumes no holder of PTAC Class A Common Stock has exercised its redemption rights to receive cash from the Trust Account. This amount will be reduced by the amount of cash used to satisfy any redemptions. Includes $345.1 million held in the Trust Account and $0.4 million held by PTAC outside the Trust Account. |
(2) | Assumes 70,000,000 Closing Payment Shares are issued in connection with the Business Combination. Dollar amount, $700.0 million, represents the number of shares existing Tomorrow.io Equityholders will receive valued at a per share price of $10.00. This amount is not impacted by the number of redemptions. |
(3) | Includes approximately $45.9 million in estimated transaction costs and the $0.4 million payable under the Note. |
(ii) | Maximum redemptions |
Sources of Funds |
Uses |
|||||||||
(in thousands) |
||||||||||
Cash from PTAC (1) |
$108,419 | Tomorrow.io Equityholders’ Retained Equity Value (2) | $700,000 | |||||||
PIPE Investment |
75,000 | Remaining Cash on Balance Sheet (1) | 150,000 | |||||||
Tomorrow.io Equityholders’ Retained Equity Value (2) |
700,000 | PTAC Estimated Transaction Costs and Other (3) | 33,419 | |||||||
Total Sources |
883,419 | Total Uses | $883,419 | |||||||
|
|
|
|
(1) | Assumes approximately 68.7% of the outstanding PTAC Class A Common Stock have been redeemed for cash from the Trust Account, reducing the amount of cash available for distribution from the Trust Account by approximately $237.1 million. Includes $108.0 million held in the Trust Account and $0.4 million held by PTAC outside the Trust Account. |
(2) | Assumes 70,000,000 Closing Payment Shares are issued in connection with the Business Combination. Dollar amount, $700.0 million, represents the number of shares existing Tomorrow.io Equityholders will receive valued at a share price of $10.00. This amount is not impacted by the number of redemptions. |
(3) | Includes approximately $33.0 million in estimated transaction costs and the $0.4 million payable under the Note. |
Nine-Months Ended September 20, |
Year Ended December 31, |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Unaudited |
Audited |
|||||||||||||||
Revenue |
$ | 6,648 | $ | 3,959 | $ | 5,969 | $ | 2,927 | ||||||||
Cost of revenue |
2,980 | 1,721 | 2,351 | 1,614 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
3,668 | 2,238 | 3,618 | 1,313 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
||||||||||||||||
Research and development |
18,793 | 7,601 | 11,775 | 11,925 | ||||||||||||
Selling and marketing |
13,279 | 7,274 | 10,054 | 9,306 | ||||||||||||
General and administrative |
8,170 | 5,123 | 6,338 | 4,937 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
40,242 | 19,998 | 28,167 | 26,168 | ||||||||||||
Operating loss |
(36,574 | ) | (17,760 | ) | (24,549 | ) | (24,855 | ) | ||||||||
Tranche rights and warrant remeasurement expenses (income), net |
3,264 | (235 | ) | 2,813 | (177 | ) | ||||||||||
Financing expense (income), net |
798 | (423 | ) | (299 | ) | (1,068 | ) | |||||||||
Loss before income taxes (tax benefit) |
(40,636 | ) | (17,102 | ) | (27,063 | ) | (23,610 | ) | ||||||||
Income tax expense (benefit), net |
(1,938 | ) | 76 | 117 | 252 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (38,698 | ) | $ | (17,178 | ) | $ | (27,180 | ) | $ | (23,862 | ) | ||||
|
|
|
|
|
|
|
|
As of September 30, |
As of December 31, |
|||||||||||||||
2021 |
2020 |
2020 |
2019 |
|||||||||||||
(in thousands) |
Unaudited |
Audited |
||||||||||||||
Cash and cash equivalents |
$ | 24,239 | $ | 54,315 | $ | 52,713 | $ | 48,123 | ||||||||
Marketable securities |
75,650 | 3,527 | — | — | ||||||||||||
Total current assets |
105,670 | 60,268 | 55,913 | 49,919 | ||||||||||||
Total assets |
123,643 | 61,512 | 57,336 | 50,785 | ||||||||||||
Total current liabilities |
10,997 | 6,794 | 11,224 | 4,924 | ||||||||||||
Total liabilities, commitments and contingencies |
219,199 | 114,933 | 120,363 | 88,219 | ||||||||||||
Total shareholders’ deficit |
$ | (95,556 | ) | $ | (53,421 | ) | $ | (63,027 | ) | $ | (37,434 | ) |
Nine months Ended September 30, |
Year Ended December 31, |
|||||||||||||||
2021 |
2021 |
2020 |
2019 |
|||||||||||||
(in thousands) |
Unaudited |
Audited |
||||||||||||||
Net cash used in operating activities |
$ | (30,050 | ) | $ | (17,872 | ) | $ | (24,028 | ) | $ | (18,554 | ) | ||||
Net cash used in investing activities |
(92,062 | ) | (3,735 | ) | (185 | ) | (387 | ) | ||||||||
Net cash provided by financing activities |
93,638 | 27,799 | 28,803 | 9,352 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
$ | (28,474 | ) | $ | 6,192 | 4,590 | $ | (9,589 | ) | |||||||
|
|
|
|
|
|
|
|
For The Period From January 1, 2021 through September 30, 2021 |
||||
Formation and operating costs |
$ | 799,820 | ||
Loss from operations |
$ | (799,820 | ) | |
Other income (loss) |
||||
Interest income |
$ | 55,688 | ||
Excess fair value over cash received for private placement warrants |
$ | (355,999 | ) | |
Change in fair value of warrant liabilities |
$ | 8,680,011 | ||
Offering expenses related to warrant issuance |
$ | (844,080 | ) | |
Total other income |
$ | 7,535,620 | ||
Net Income |
$ | 6,735,800 | ||
Weighted average shares outstanding, Class A common stock subject to possible redemption |
34,500,000 | |||
Basic and diluted net income per share, Class A common stock |
$ | 0.16 | ||
Weighted average shares outstanding, non-redeemable Class B common stock |
8,324,176 | |||
Basic and diluted net loss per share, Class B common stock |
$ | 0.16 |
September 30, 2021 |
||||
Balance Sheet Data: |
||||
Total assets |
$ | 345,979,309 | ||
Total liabilities |
$ | 27,805,145 | ||
Value of Class A Common Stock subject to possible redemption |
$ | 345,055,688 | ||
Stockholder’s (deficit) equity |
$ | (26,881,524 | ) |
• | Assuming No Redemptions |
• | Maximum Redemption |
(in thousands, except share and per share data) |
Assuming No Redemption |
Assuming Max Redemption |
||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations — Year Ended December 31, 2020 |
||||||||
Total revenue |
$ | 8,523 | 8,523 | |||||
Gross profit |
4,773 | 4,773 | ||||||
Total expenses |
29,472 | 29,472 | ||||||
Operating loss |
(24,699 | ) | (24,699 | ) | ||||
Net loss |
(28,818 | ) | (28,818 | ) | ||||
Loss per share |
(0.24 | ) | (0.30 | ) | ||||
Weighted average shares outstanding — basic and diluted |
120,625,000 | 96,917,025 | ||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations — Nine Months Ended September 30, 2021 |
|
|
|
|
|
| ||
Total revenue |
$ | 7,462 | $ | 7,462 | ||||
Gross profit |
4,088 | 4,088 | ||||||
Total expenses |
41,813 | 41,813 | ||||||
Operating loss |
(37,725 | ) | (37,725 | ) | ||||
Net loss |
(66,101 | ) | (53,223 | ) | ||||
Income per share |
(0.55 | ) | (0.55 | ) | ||||
Weighted average shares outstanding — basic and diluted |
120,625,000 | 96,917,025 | ||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Financial Position as of September 30, 2021 |
|
|
|
|
|
| ||
Total current assets |
480,575 | 256,336 | ||||||
Total assets |
498,675 | 274,436 | ||||||
Total current liabilities |
23,288 | 23,288 | ||||||
Total liabilities |
23,288 | 23,288 | ||||||
Total stockholders’ equity |
475,387 | 251,148 |
• | Assuming Minimum Redemptions: this scenario assumes that no holders of Public Shares exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account. |
• | Assuming Contractual Maximum Redemptions: this scenario assumes holders of approximately 23,707,975 Public Shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. The Merger Agreement provides that the consummation of the Business Combination is conditioned on PTAC having Aggregate Transaction Proceeds (which, for the avoidance of doubt, is calculated net of transaction expenses) at the Closing of at least $150 million. |
For the Nine Months Ended September 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||||||||||
Assuming No Redemption |
Assuming Maximum Redemption |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||||||||
Company Converted Options |
11,003,107 | 11,003,107 | 11,003,107 | 11,003,107 | ||||||||||||
PTAC’s Private and Public Warrants |
17,433,333 | 17,433,333 | 17,433,333 | 17,433,333 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
28,436,440 | 28,436,440 | 28,436,440 | 28,436,440 | ||||||||||||
|
|
|
|
|
|
|
|
Pro Forma Combined Per Share Data |
Tomorrow.io Equivalent Pro Forma Per Share Data (3) |
|||||||||||||||||||||||
Pine Technology Acquisition Corp. (Historical) |
The Tomorrow Companies Inc. (Historical) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
|||||||||||||||||||
As of and for the nine months ended September 30, 2021 |
||||||||||||||||||||||||
Weighted average shares outstanding of Class A common stock-basic and diluted |
34,500,000 | N/A | N/A | |||||||||||||||||||||
Basic and diluted net income per share, Class A |
$ | 0.16 | N/A | N/A | ||||||||||||||||||||
Weighted average shares outstanding of Class B common stock-basic and diluted |
8,324,176 | N/A | N/A | |||||||||||||||||||||
Basic and diluted net income per share, Class B |
$ | 0.16 | N/A | N/A | ||||||||||||||||||||
Weighted average common shares used in computing basic and diluted net loss per common share |
9,630,241 | N/A | N/A | |||||||||||||||||||||
Basic and diluted net loss per common share |
$ | (4. 02 | ) | N/A | N/A | |||||||||||||||||||
Total book value per share (1) |
$ | (0.78 | ) | $ | (9.92 | ) | N/A | N/A | ||||||||||||||||
Weighted average shares outstanding of PTAC Class A common stock, basic and diluted |
120,625,000 | 96,917,025 | N/A | N/A | ||||||||||||||||||||
Basic and diluted net loss per share, PTAC Class A common stock |
$ | (0.55 | ) | $ | (0.55 | ) | $ | (0.44 | ) | $ | (0.45 | ) | ||||||||||||
Total Book Value per share of PTAC Class A common stock (1) |
$ | 3.94 | $ | 2.59 | $ | 3.20 | $ | 2.10 |
Pro Forma Combined Per Share Data |
Tomorrow.io Equivalent Pro Forma Per Share Data (3) |
|||||||||||||||||||||||
Pine Technology Acquisition Corp. (Historical) |
The Tomorrow Companies Inc. (Historical) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
(Assuming No Redemptions Scenario) |
(Assuming Maximum Redemptions Scenario) |
|||||||||||||||||||
As of and for the Year ended December 31, 2020 |
||||||||||||||||||||||||
Weighted average shares outstanding of Class A common stock-basic and diluted |
N/A | N/A | N/A | |||||||||||||||||||||
Basic and diluted net income per share, Class A |
N/A | N/A | N/A | |||||||||||||||||||||
Weighted average shares outstanding of Class B common stock-basic and diluted |
7,500,000 | N/A | N/A | |||||||||||||||||||||
Basic and diluted net income per share, Class B |
$ | — | N/A | N/A | ||||||||||||||||||||
Weighted average common shares used in computing basic and diluted net loss per common share |
9,212,841 | N/A | N/A | |||||||||||||||||||||
Basic and diluted net loss per common share |
$ | (2.95 | ) | N/A | N/A | |||||||||||||||||||
Total book value per share (2) |
N/A | (2) | N/A | (2) | N/A | N/A | ||||||||||||||||||
Weighted average shares outstanding of PTAC Class A common stock, basic and diluted |
12,625,000 | 96,917,025 | N/A | N/A | ||||||||||||||||||||
Basic and diluted net loss per share, PTAC Class A common stock |
$ | (0.24 | ) | $ | (0.30 | ) | $ | (0.19 | ) | $ | (0.24 | ) | ||||||||||||
Total Book Value per share of PTAC Class A common stock (2) |
N/A | (2) | N/A | (2) | N/A | N/A |
(1) | Book value per share = Total equity excluding preferred shares/shares outstanding. |
(2) | A pro forma balance sheet for the year ended December 31, 2020 is not required to be included herein and as such, no calculation is included in this table. |
(3) | The equivalent per share data for Tomorrow.io is calculated by multiplying the combined pro forma per share data by the Conversion Ratio. |
(in thousands, except share and per share amounts) |
Historical |
Pro Forma Combined |
Tomorrow.io equivalent pro forma per share data (3) |
|||||||||||||||||||||
PTAC |
Tomorrow.io |
Assuming No Redemptions |
Assuming Max Redemptions |
Assuming No Redemptions |
Assuming Max Redemptions |
|||||||||||||||||||
As of and for the Nine Months Ended September 30, 2021 (4) |
||||||||||||||||||||||||
Book value per share, basic and diluted (1)(2) |
$ | (0.78 | ) | N/A | (2) | $ | 3.94 | $ | 2.59 | $ | 3.20 | $ | 2.10 | |||||||||||
Net income (loss) per share, basic and diluted — Class A (2) |
$ | 0.16 | N/A | (2) | $ | (0.55 | ) | $ | (0.55 | ) | $ | (0.44 | ) | $ | (0.45 | ) | ||||||||
Weighted average shares outstanding of Class A, basic and diluted (2) |
34,500,000 | N/A | (2) | 120,625,000 | 96,917,025 | N/A | N/A | |||||||||||||||||
Net income (loss) per share, basic and diluted — Class B (2) |
$ | 0.16 | N/A | (2) | N/A | |
N/A |
|
N/A | N/A | ||||||||||||||
Weighted average shares outstanding of Class B, basic and diluted (2) |
8,324,176 | N/A | (2) | N/A | |
N/A |
|
N/A | N/A | |||||||||||||||
As of and for the Year Ended December 31, 2020 (4) |
||||||||||||||||||||||||
Net income (loss) per share, basic and diluted — Class A (2) |
$ | (0.00 | ) | N/A | (2) | $ | (0.24 | ) | $ | (0.30 | ) | $ | (0.19 | ) | $ | (0.24 | ) | |||||||
Weighted average shares outstanding — Class A, basic and diluted (2) |
8,625,000 | N/A | (2) | N/A | |
N/A |
|
N/A | N/A |
(1) | Book value per share = Total equity (deficit)/shares outstanding at September 30, 2021 for PTAC, Tomorrow.io and the pro forma. |
(2) | Historical Book value per share and Net income (loss) per share are based on PTAC Class A Common Stock and PTAC Class B Common Stock and total Tomorrow.io Stock. |
(3) | The equivalent pro forma basic and diluted per share data for Tomorrow.io is based on the expected Conversion Ratio of 0.81128 (calculated as of the Record Date) for both No Redemptions and Max Redemptions scenarios. The equivalent pro forma shares outstanding for Tomorrow.io represent the total consideration shares of up to million, less shares underlying unvested, unissued, and/or unexercised stock options and warrants, as described in more detail under the heading titled “ The Business Combination Proposal — Acquisition of Tomorrow.io; Merger Consideration |
(4) | There were no cash dividends declared in the periods presented. |
• | Mechanical and electrical failures due to manufacturing error or defect, including: |
• | mechanical failures that degrade the functionality of a satellite, such as the failure of solar array panel drive mechanisms, rate gyros, or momentum wheels; |
• | ARENA radar failures |
• | antenna failures and defects that degrade the communications capability of the satellite; |
• | circuit failures that reduce the power output of the solar array panels on the satellites; |
• | failure of the battery cells that power the payload and spacecraft operations during daily solar eclipse periods; |
• | power system failures that result in a shutdown or loss of the satellite; |
• | avionics system failures, including GPS, that degrade or cause loss of the satellite; |
• | control system failures that degrade or cause the inoperability of the satellite; |
• | transmitter or receiver failures that degrade or cause the inability of the satellite to communicate with our ground stations; |
• | communications system failures that affect overall system capacity; |
• | satellite computer or processor re-boots or failures that impair or cause the inoperability of the satellites; and |
• | radio frequency interference emitted internally or externally from the spacecraft affecting the communication links. |
• | Equipment degradation during the satellite’s lifetime, including: |
• | degradation of the batteries’ ability to accept a full charge; |
• | degradation of solar array panels due to radiation; |
• | general degradation of the radar, antenna, and other components resulting from operating in the harsh space environment or other factors, such as from solar flares; |
• | degradation or failure of reaction wheels; |
• | degradation of the thermal control surfaces; |
• | degradation and/or corruption of memory devices; and |
• | system failures that degrade the ability to reposition the satellite. |
• | Deficiencies of control or communications software, including: |
• | failure of the charging algorithm that may damage the satellite’s batteries; |
• | problems with the communications functions of the satellite; |
• | limitations on the satellite’s digital signal processing capability that limit satellite communications capacity; and |
• | problems with the fault control mechanisms embedded in the satellite. |
• | Affiliates of Peel Acquisition Company II, LLC, a managing member of the Sponsor, have a $5 million investment in an unaffiliated private equity fund, which unaffiliated private equity fund has an investment in Tomorrow.io. The affiliates’ investment, which represents an approximate 1% indirect equity interest in Tomorrow.io, is controlled by the unaffiliated private equity fund and Peel and its affiliates exercise no control over the private equity fund, the private equity fund’s investment in Tomorrow.io or Tomorrow.io. |
• | If we are unable to complete our initial business combination by March 15, 2023, PTAC 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 (net of any amounts withdrawn to pay PTAC’s taxes and up to $100,000 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), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of PTAC’s remaining stockholders and the Board, dissolve and liquidate, subject in each case to PTAC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
• | There will be no liquidating distributions from the Trust Account with respect to the Founders Shares if PTAC fails to complete a business combination within the required period. Our Sponsor purchased the Founders Shares (valued at $ based on the closing price of the PTAC Class A Common Stock on the Record Date) prior to the PTAC IPO for an aggregate purchase price of $25,000. |
• | Simultaneously with the closing of the PTAC IPO, PTAC consummated the sale of 5,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor. If PTAC does not consummate a business combination transaction by March 15, 2023, then the Private Placement Warrants (valued at $7,476,000 based on a valuation as of September 30, 2021, the most recent date for which a valuation is available) held by the Sponsor will be worthless. |
• | The Sponsor and PTAC’s directors and officers will lose their entire investment ($9,274,999.50 in the aggregate, consisting of (i) the $25,000 paid by our Sponsor for the Founder Shares, (ii) $8,899,999.50 paid by our Sponsor for the Private Placement Warrants and (iii) $350,000 advanced by Sponsor to PTAC in respect of the Note (to the extent there are insufficient funds outside the Trust Account to repay the Note) in PTAC if PTAC does not complete a business combination by March 15, 2023. Additionally, our Sponsor, directors and officers are entitled to reimbursement of $2,000 in fees and out-of-pocket expenses they have incurred in connection with the Business Combination. At least one of them may continue to serve as a director of PTAC after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the Board determines to pay to its directors and/or officers. |
• | The Sponsor, directors and officers collectively (including entities controlled by directors and officers) have made an aggregate average investment of $1.03 per Founder Share (including their investment in the Founders Shares and Private Placement Warrants) as of the consummation of the PTAC IPO. As a result of the significantly lower investment per Founder Share of our Sponsor, directors and officers as compared with the investment per share of PTAC Common Stock of our Public Stockholders, our Sponsor, directors and officers can earn a positive rate of return on their investment even if Public Stockholders experience a negative rate of return in the Combined Entity. |
• | PTAC’s initial stockholder and directors and officers have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founders Shares if PTAC fails to complete a business combination by March 15, 2023. |
• | In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to PTAC if and to the extent any claims by a third party for services rendered or products sold to PTAC, or a prospective target business with which PTAC has entered into a letter of intent, confidentiality or other similar agreement for a business combination, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share is then held in the Trust Account due to reductions in the value of the trust assets less any amounts withdrawn to pay PTAC’s taxes. This liability will not apply with respect to any claims by a third party that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) or to any claims under PTAC’s indemnity of the underwriters of the PTAC IPO against certain liabilities, including liabilities under the Securities Act. |
• | Following the Closing, the Sponsor would be entitled to the repayment of any working capital loans and advances that have been made to PTAC and remain outstanding. On December 6, 2021, PTAC issued the Note in the principal amount of $350,000 to the Sponsor. The Note bears interest at 0.33% per annum and is repayable in full at the earlier of (i) March 15, 2023 or (ii) the date on which PTAC consummates an initial business combination as contemplated by the Current Charter. If PTAC does not complete an initial business combination within the required period, PTAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans. |
• | Following the Closing, PTAC will continue to indemnify PTAC’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy. |
• | Upon the Closing, subject to the terms and conditions of the Merger Agreement, the Sponsor, PTAC’s directors and officers and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket |
• | Sponsor, an entity in which each of our directors and officers has an indirect interest, as well as an entity associated with principals of Peel, has subscribed for PTAC Common Stock in the PIPE Investment. |
(i) | PTAC issues additional shares of PTAC Class A Common Stock or equity-linked securities for capital raising purposes in connection with the closing of PTAC’s initial business combination at an issue price or effective issue price of less than $9.20 per share of PTAC Class A Common Stock, |
(ii) | the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of PTAC’s initial business combination on the date of the consummation of our initial business combination (net of redemptions), and |
(iii) | the Market Value (as defined herein) is below $9.20 per share, |
• | a limited availability of market quotations for PTAC’s securities; |
• | a determination that PTAC Class A Common Stock is a “penny stock” which will require brokers trading in its PTAC Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for PTAC Class A Common Stock; |
• | a limited amount of analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | actual or anticipated fluctuations in the Combined Entity’s quarterly financial results or the quarterly financial results of companies perceived to be similar to the Combined Entity; |
• | changes in the market’s expectations about the Combined Entity’s operating results; |
• | success of competitors; |
• | the Combined Entity’s operating results failing to meet the expectation of securities analysts or investors in a particular period; |
• | changes in financial estimates and recommendations by securities analysts concerning the Combined Entity or the market in general; |
• | operating and stock price performance of other companies that investors deem comparable to the Combined Entity; |
• | the Combined Entity’s ability to develop product candidates; |
• | changes in laws and regulations affecting the Combined Entity’s business, including any changes that affect development of Tomorrow.io’s products; |
• | commencement of, or involvement in, litigation involving the Combined Entity; |
• | changes in the Combined Entity’s capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of the Combined Entity’s securities available for public sale; |
• | any major change in the board of directors or management; |
• | sales of substantial amounts of common stock by PTAC’s directors, executive officers or significant stockholders or the perception that such sales could occur; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. |
• | a classified board with a three-year staggered term; |
• | the ability of the Combined Entity’s board of directors to issue one or more series of “blank check” preferred stock; |
• | certain limitations on convening special stockholder meetings; |
• | advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at the Combined Entity’s annual meetings; and |
• | amendment of certain provisions of the organizational documents only by the affirmative vote of at least two-thirds of the Combined Entity’s then-outstanding shares of capital stock entitled to vote generally at an election of directors. |
• | the parties may be liable for damages to one another under the terms and conditions of the Merger Agreement; |
• | negative reactions from the financial markets, including declines in the price of PTAC’s Class A Common Stock due to the fact that current prices may reflect a market assumption that the Business Combination will be completed; and |
• | the attention of PTAC’s management will have been diverted to the Business Combination rather than the pursuit of other opportunities in respect of an initial business combination. |
• | any derivative action or proceeding brought on behalf of the Combined Entity; |
• | any action asserting a breach of fiduciary duty; |
• | any action asserting a claim against the Combined Entity arising under the Delaware General Corporation Law, the Proposed Charter, or the Amended Bylaws; |
• | any action to interpret, apply, enforce or determine the validity of the Proposed Charter or the Amended Bylaws; |
• | any action asserting a claim against the Combined Entity that is governed by the internal affairs doctrine; and |
• | any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL. |
• | vote “FOR” the Business Combination Proposal; |
• | vote “FOR” the Nasdaq Stock Issuance Proposal; |
• | vote “FOR” the Charter Amendment Proposal; |
• | vote “FOR” each of the Governance Proposals; |
• | vote “FOR” the Incentive Plan Proposal; |
• | vote “FOR” the ESPP Proposal; |
• | vote “FOR” the Election of Directors Proposal; |
• | vote “FOR” the Bylaws Proposal; and |
• | vote “FOR” the Adjournment Proposal, if it is presented to the meeting. |
• | You Can Vote By Signing and Returning the Enclosed Proxy Card |
• | You Can Attend the Special Meeting and Vote Through the Internet https://www.cstproxy.com/pinetechnology/2022 |
• | submit a new proxy card bearing a later date; |
• | give written notice of your revocation to PTAC’s Corporate Secretary, which notice must be received by PTAC’s Corporate Secretary prior to the vote at the Special Meeting; or |
• | vote electronically at the Special Meeting by visiting https://www.cstproxy.com/pinetechnology/2022 |
• | check the box on the enclosed proxy card to elect redemption; |
• | provide, in the written request to redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, a “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of PTAC Common Stock; |
• | prior to 5:00 p.m., Eastern time, on , 2022 (two (2) business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, PTAC’s transfer agent, at the following address: |
• | deliver your Public Shares either physically or electronically through DTC to PTAC’s transfer agent at least two (2) business days before the Special Meeting. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is PTAC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, PTAC does not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and deliver your Public Shares as described above, your shares will not be redeemed. |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | the historical audited consolidated financial statements (as restated) of PTAC as of and for the year ended December 31, 2020 and the related notes, which are included elsewhere in this proxy statement/prospectus; |
• | the historical unaudited financial statements (as restated) of PTAC as of and for the nine months ended September 30, 2021 and the related notes, which are included elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of Tomorrow.io as of and for the year ended December 31, 2020 and the related notes, which are included elsewhere in this proxy statement/prospectus; |
• | the historical unaudited financial statements of Tomorrow.io as of and for the nine months ended September 30, 2021 and the related notes, which are included elsewhere in this proxy statement/prospectus; |
• | the historical audited financial statements of RSS as of and for the year ended December 31, 2020 and the related notes, which are included elsewhere in this proxy statement/prospectus; |
• | the historical unaudited financial statements of RSS as of and for the ended April 14, 2021; and |
• | other information relating to PTAC and Tomorrow.io contained in this proxy statement/prospectus, including the Merger Agreement and the description of certain terms thereof set forth in the section titled “The Business Combination Proposal” and the risk factors set forth under the section titled “Risk Factors” beginning on page 49 of this proxy statement/prospectus. |
• | each share of Tomorrow.io Stock will be converted into the right to receive a number of shares of PTAC Class A Common Stock based on the Conversion Ratio (as defined in the Merger Agreement); |
• | each share of Tomorrow.io Stock issued and outstanding immediately prior to the Merger Agreement will be canceled and automatically converted into the right to receive a number of shares of PTAC Class A Common Stock based on the Conversion Ratio; |
• | each Tomorrow.io Warrant will no longer be outstanding, as such warrants will be exercised via a cashless exercise as already agreed by the warrantholders, and the warrantholders will cease to have any rights to Tomorrow.io Stock; and |
• | each outstanding vested and unvested Tomorrow.io stock option will be assumed by PTAC and converted into a Converted Company Option (as defined in the Merger Agreement), exercisable for shares of PTAC Class A Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which will be adjusted using the Conversion Ratio (as defined in the Merger Agreement) that will be determined at the Closing. |
• | Pursuant to PTAC’s existing charter, PTAC’s Public Stockholders will be offered the opportunity to redeem, with such redemption to occur upon the Closing, Public Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account; and |
• | The issuance and sale of 7,500,000 shares of PTAC Class A Common Stock for a purchase price of $10.00 per share for an aggregate purchase price of $75.0 million (the “ PIPE Funds |
• | On April 14, 2021, Tomorrow.io entered into the RSS Purchase Agreement (“ Purchase Agreement |
outstanding shares of capital of RSS, an S Corporation headquartered in Massachusetts, U.S. for a total cash consideration of $11,486,000. On the Purchase Agreement date, Tomorrow.io issued an aggregate of 1,834,044 restricted common shares to certain employees of RSS valued at a total of $7,905,000. The value of these grants was not included in the purchase price of RSS, since their vesting is subject to continued employment (i.e., post combination compensation). This acquisition is referred to as the “ RSS Acquisition |
• | Tomorrow.io’ existing stockholders will have the greater voting interest in the Combined Entity with an estimated 58% voting interest under the no redemption scenario and 72.2% voting interest under the maximum redemption scenario, as of immediately following the Closing; |
• | Tomorrow.io’s senior management will be the senior management of the Combined Entity, including Tomorrow.io’s CEO retaining that position; |
• | Immediately after the Closing, Combined Entity’s board of directors will consist of seven (7) directors: (i) one (1) of whom shall be designated by PTAC and (ii) six (6) of whom shall be designated by Tomorrow.io; and |
• | Tomorrow.io’s operations prior to the Business Combination will comprise the ongoing operations of the Combined Entity. |
• | Assuming No Redemptions |
• | Maximum Redemption |
Assuming No Redemption |
% |
Assuming Maximum Redemption |
% |
|||||||||||||
Public shares |
34,500,000 | 28.6 | % | 10,792,025 | 11.2 | % | ||||||||||
Sponsor shares — Class B to Class A |
8,625,000 | 7.2 | % | 8,625,000 | 8.9 | % | ||||||||||
Shares issued in Business Combination |
70,000,000 | 58.0 | % | 70,000,000 | 72.2 | % | ||||||||||
PIPE Shares |
7,500,000 | 6.2 | % | 7,500,000 | 7.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Shares outstanding |
120,625,000 | 100 | % | 96,917,025 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
No Redemption Scenario |
Intermediate Redemption Scenario |
Maximum Redemption Scenario (3) |
||||||||||||||||||||||
Shares |
% |
Shares |
% |
Shares |
% | |||||||||||||||||||
PTAC Public Stockholders |
34,500,000 | % | 22,646,012 | % | 10,792,025 | % | ||||||||||||||||||
Holders of Public Warrants |
11,500,000 | % | 11,500,000 | % | 11,500,000 | % | ||||||||||||||||||
PTAC Sponsor (1) |
17,308,333 | % | 17,308,333 | % | 17,308,333 | % | ||||||||||||||||||
Tomorrow.io Equityholders (2) |
70,000,000 | % | 70,000,000 | % | 70,000,000 | % | ||||||||||||||||||
Other PIPE Investors |
4,750,000 | % | 4,750,000 | % | 4,750,000 | % | ||||||||||||||||||
Closing Parent RSU Grant |
3,000,000 | % | 3,000,000 | % | 3,000,000 | % | ||||||||||||||||||
Issuances under the Equity Incentive Plan |
% | % | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total |
100.0 |
% |
100.0 |
% |
100.0 |
% |
(1) | Includes 2,750,000 shares of PTAC Class A Common Stock purchased by Sponsor in the PIPE Investment and 5,933,333 shares of PTAC Class A Common Stock issuable upon exercise of 5,933,333 Private Placement Warrants. |
(2) | Includes shares of PTAC Class A Common Stock underlying options of Tomorrow.io that are assumed by PTAC. See “ The Business Combination Proposal — Acquisition of Tomorrow.io; Merger Consideration |
(3) | The maximum redemption scenario reflects a reduction in advisory fees of approximately $12.9 million, including a reduction in the deferred underwriting commissions payable to the underwriters of the PTAC IPO in the amount of $4.0 million. |
PTAC – public and private placement warrants |
17,433,333 | |||
Tomorrow.io – stock options |
11,003,107 | |||
|
|
|||
28,436,440 | ||||
|
|
PTAC |
Tomorrow.io |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||||||||
Pro Forma Adjustments |
Notes |
Pro Forma Combined |
Additional Pro Forma Adjustments |
Notes |
Pro Forma Combined |
|||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||
CURRENT ASSETS: |
||||||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 482 | $ | 24,239 | $ | 75,000 | (1 |
)a |
$ | 398,829 | $ | (237,118 | ) | (1 |
)k |
$ | 174,590 | |||||||||||||||
(45,948 | ) | (1 |
)f |
$ | 12,878 | (1 |
)l |
|||||||||||||||||||||||||
345,056 | (1 |
)j |
PTAC |
Tomorrow.io |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||||||||||||||||
Pro Forma Adjustments |
Notes |
Pro Forma Combined |
Additional Pro Forma Adjustments |
Notes |
Pro Forma Combined |
|||||||||||||||||||||||||||
Marketable securities |
— | 75,650 | 75,650 | 75,650 | ||||||||||||||||||||||||||||
Short-term bank deposits |
— | 126 | 126 | 126 | ||||||||||||||||||||||||||||
Trade receivables, net |
— | 3,256 | 3,256 | 3,256 | ||||||||||||||||||||||||||||
Prepaid expenses and other current assets |
315 | 659 | 974 | 974 | ||||||||||||||||||||||||||||
Inventory |
— | 1,740 | 1,740 | 1,740 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total current assets |
797 | 105,670 | 374,108 | 480,575 | (224,240 | ) | 256,336 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Long-term prepaid expense |
127 | — | 127 | 127 | ||||||||||||||||||||||||||||
Long-term restricted cash |
— | 243 | 243 | 243 | ||||||||||||||||||||||||||||
Long-term marketable securities |
— | 2,505 | 2,505 | 2,505 | ||||||||||||||||||||||||||||
Property and equipment, net |
— | 2,151 | 2,151 | 2,151 | ||||||||||||||||||||||||||||
Contract acquisition costs |
— | 1,118 | 1,118 | 1,118 | ||||||||||||||||||||||||||||
Other non-current assets |
— | 389 | 389 | 389 | ||||||||||||||||||||||||||||
Intangible assets, net |
— | 7,138 | 7,138 | 7,138 | ||||||||||||||||||||||||||||
Goodwill |
— | 4,429 | 4,429 | 4,429 | ||||||||||||||||||||||||||||
Cash held in trust account |
345,056 | — | (345,056 | ) | (1 |
)j |
— | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total assets |
$ | 345,980 | $ | 123,643 | $ | 29,052 | $ | 498,675 | $ | (224,240 | ) | $ | 274,436 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
LIABILITIES |
||||||||||||||||||||||||||||||||
Accounts payable |
204 | 1,666 | 1,870 | 1,870 | ||||||||||||||||||||||||||||
Deferred revenue |
— | 2,695 | 2,695 | 2,695 | ||||||||||||||||||||||||||||
Other accounts payable and accrued expenses |
— | 3,197 | 3,197 | 3,197 | ||||||||||||||||||||||||||||
Warrant liability |
15,526 | 3,439 | (3,439 | ) | (1 |
)c |
15,526 | 15,526 | ||||||||||||||||||||||||
Deferred underwriting fee payable |
12,075 | — | (12,075 | ) | (1 |
)f |
— | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total liabilities |
27,805 | 10,997 | (15,514 | ) | 23,288 | — | 23,288 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
||||||||||||||||||||||||||||||||
Class A common stock subject to possible redemption |
345,056 | — | (345,056 | ) | (1 |
)i |
— | — | ||||||||||||||||||||||||
Convertible Preferred Stock |
— | 208,202 | (208,202 | ) | (1 |
)b |
— | — | ||||||||||||||||||||||||
SHAREHOLDERS’ DEFICIT |
||||||||||||||||||||||||||||||||
Class A common stock |
— | — | 1 | (1 |
)a |
12 | (2 | ) | (1 |
)k |
10 | |||||||||||||||||||||
6 | (1 |
)b |
||||||||||||||||||||||||||||||
7 | (1 |
)e |
||||||||||||||||||||||||||||||
1 | (1 |
)g |
||||||||||||||||||||||||||||||
3 | (1 |
)i |
||||||||||||||||||||||||||||||
Class B common stock |
1 | — | (1 | ) | (1 |
)g |
— | |||||||||||||||||||||||||
Common Shares |
— | 1 | (7 | ) | (1 |
)e |
— | |||||||||||||||||||||||||
Treasury shares |
— | (1,175 | ) | 1,175 | (1 |
)d |
— | — | ||||||||||||||||||||||||
Additional paid-in capital |
— | 8,484 | 74,999 | (1 |
)a |
612,114 | (237,116 | ) | (1 |
)k |
374,998 | |||||||||||||||||||||
208,196 | (1 |
)b |
||||||||||||||||||||||||||||||
3,439 | (1 |
)c |
||||||||||||||||||||||||||||||
(1,175 | ) | (1 |
)d |
|||||||||||||||||||||||||||||
(26,882 | ) | (1 |
)h |
|||||||||||||||||||||||||||||
345,053 | (1 |
)i |
||||||||||||||||||||||||||||||
Accumulated deficit |
(26,882 | ) | (102,866 | ) | (33,873 | ) | (1 |
)f |
(136,739 | ) | 12,878 | (1 |
)l |
(123,860 | ) | |||||||||||||||||
26,882 | (1 |
)h |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Shareholders’ deficit |
(26,881 | ) | (95,55 | ) | 597,824 | 475,387 | (224,240 | ) | 251,148 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total liabilities and shareholders’ deficit |
345,980 | 123,643 | 29,052 | 498,675 | (224,240 | ) | 274,436 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
PTAC |
Tomorrow.io |
RSS |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||||||||||||||||||||||||||||
Pro Forma Adjustments |
Notes |
Pro Forma Combined |
Additional Pro Forma Adjustments |
Notes |
Pro Forma Combined |
|||||||||||||||||||||||||||||||
Revenue |
$ | — | $ | 5,969 | $ | 2,807 | $ | (253 | ) | (2 |
)f |
$ | 8,523 | $ | — | $ | 8,523 | |||||||||||||||||||
Cost of revenues |
2,351 | 1,496 | (97 | ) | (2 |
)f |
3,750 | 3,750 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Gross profit (loss) |
— | 3,618 | 1,311 | (156 | ) | 4,773 | — | 4,773 | ||||||||||||||||||||||||||||
Operating Expenses: |
||||||||||||||||||||||||||||||||||||
Research and development |
— | 11,775 | — | — | 11,775 | 11,775 | ||||||||||||||||||||||||||||||
Sales and marketing |
— | 10,054 | — | — | 10,054 | 10,054 | ||||||||||||||||||||||||||||||
General and administrative |
2 | 6,338 | 1,303 | — | 7,643 | 7,643 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total operating expenses |
2 | 28,167 | 1,303 | — | 29,472 | 29,472 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Operating loss |
(2 | ) | (24,549 | ) | 8 | (156 | ) | (24,699 | ) | (24,699 | ) | |||||||||||||||||||||||||
Other expense (income), net 1 |
2,813 | 23 | (2,813 | ) | (2 |
)b |
4,300 | 4,300 | ||||||||||||||||||||||||||||
3,290 | (2 |
)f |
||||||||||||||||||||||||||||||||||
988 | (2 |
)h |
||||||||||||||||||||||||||||||||||
Financing expense (income), net |
(299 | ) | — | — | (299 | ) | (299 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before income taxes |
(2 | ) | (27,063 | ) | (15 | ) | (1,621 | ) | (28,701 | ) | (28,701 | ) | ||||||||||||||||||||||||
Income tax expense (benefit), net |
— | 117 | — | 117 | 117 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income (loss) |
$ | (2 | ) | $ | (27,180 | ) | $ | (15 | ) | $ | (1,621 | ) | $ | (28,818 | ) | $ | — | $ | (28,818 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net loss per share attributable to Common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | (28,818 | ) | |
|
|
|
|
|
$ | (28,818 | ) | |||||||||
Basic and diluted net loss per Common share |
$ | (0.24 | ) | $ | (0.30 | ) | ||||||||||||||||||||||||||||||
Weighted average number of Common shares used in computing basic and diluted net loss per Common share |
120,625,000 | 96,917,025 |
1 |
For purposes of our pro forma analysis, we have included within “Other expense (income), net”, the “Tranche rights and warrant remeasurement expense (income).” Per adjustment 2(b), the “Tranche rights and warrants remeasurement expense (income), net” is eliminated as part of the pro forma adjustments. |
PTAC |
Tomorrow.io |
RSS 1 |
Assuming No Redemptions |
Assuming Maximum Redemptions |
||||||||||||||||||||||||||||||||
Pro Forma Adjustments |
Notes |
Pro Forma Combined |
Additional Pro Forma Adjustments |
Notes |
Pro Forma Combined |
|||||||||||||||||||||||||||||||
Revenue |
$ | — | $ | 6,648 | $ | 2,024 | $ | (1,210 | ) | (2 |
)f |
$ | 7,462 | $ | — | $ | 7,462 | |||||||||||||||||||
Cost of revenues |
2,980 | 548 | (154 | ) | (2 |
)f |
3,374 | 3,374 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Gross profit (loss) |
— | 3,668 | 1,476 | (1,056 | ) | 4,088 | — | 4,088 | ||||||||||||||||||||||||||||
Operating Expenses: |
||||||||||||||||||||||||||||||||||||
Research and development |
— | 18,793 | 9 | — | 18,802 | 18,802 | ||||||||||||||||||||||||||||||
Sales and marketing |
— | 13,279 | — | — | 13,279 | 13,279 | ||||||||||||||||||||||||||||||
General and administrative |
800 | 8,170 | 762 | 9,732 | 9,732 | |||||||||||||||||||||||||||||||
Total operating expenses |
800 | 40,242 | 771 | 41,813 | 41,813 | |||||||||||||||||||||||||||||||
Operating loss |
(800 | ) | (36,574 | ) | 705 | (1,056 | ) | (37,725 | ) | (37,725 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Other expense (income), net 2 |
(7,536 | ) | 3,264 | (73 | ) | (8,801 | ) | (2 |
)a |
29,460 | (12,878 | ) | 2 |
(d) |
16,582 | |||||||||||||||||||||
5,537 | (2 |
)b |
||||||||||||||||||||||||||||||||||
33,873 | (2 |
)d |
||||||||||||||||||||||||||||||||||
2,461 | (2 |
)e |
||||||||||||||||||||||||||||||||||
736 | (2 |
)g |
||||||||||||||||||||||||||||||||||
Financing expense (income), net |
— | 798 | — | 56 | (2 |
)c |
854 | 854 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before income taxes |
6,736 | (40,636 | ) | 778 | (34,917 | ) | (68,039 | ) | 12,878 | (55,161 | ) | |||||||||||||||||||||||||
Income tax expense (benefit), net |
— | (1,938 | ) | — | — | (1,938 | ) | (1,938 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income (loss) |
$ | 6,736 | $ | (38,698 | ) | $ | 778 | $ | (34,917 | ) | $ | (66,101 | ) | $ | 12,878 | $ | (53,223 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income per share attributable to Common shareholders: |
$ | (66,101 | ) | $ | (53,223 | ) | ||||||||||||||||||||||||||||||
Basic and diluted net income per Common share |
$ | (0.55 | ) | $ | (0.55 | ) | ||||||||||||||||||||||||||||||
Weighted average number of Common shares used in computing basic and diluted net income per Common share |
120,625,000 | 96,917,025 |
1 |
RSS information is from January 1, 2021 through April 14, 2021, the date of acquisition |
2 |
For purposes of our pro forma analysis, we have included within “Other expense (income), net”, the “Tranche rights and warrant remeasurement expense (income).” Per adjustment 2(b), the “Tranche rights and warrants remeasurement expense (income), net” is eliminated as part of the pro forma adjustments. |
• | PTAC’s unaudited condensed consolidated balance sheet as of September 30, 2021 and the related notes, which is included elsewhere in this proxy statement /prospectus; |
• | Tomorrow.io’s unaudited condensed consolidated balance sheet as of September 30, 2021 and the related notes, which is included elsewhere in this proxy statement/prospectus. |
• | PTAC’s audited consolidated statement of operations for the year ended December 31, 2020 and the related notes, which is included elsewhere in this proxy statement/prospectus; |
• | Tomorrow.io’s audited consolidated statement of operations for the year ended December 31, 2020 and the related notes, which is included elsewhere in this proxy statement/prospectus; and |
• | RSS’s audited statement of operations for the year ended December 31, 2020 and the related notes, which is included elsewhere in this proxy statement/prospectus. |
• | PTAC’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 and the related notes, which is included elsewhere in this proxy statement/prospectus; and |
• | Tomorrow.io’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 and the related notes, which is included elsewhere in this proxy statement/prospectus. |
(1) | Represents pro forma adjustments to the condensed combined balance sheet: |
a. | Reflects the proceeds of $75,000,000 from the issuance and sale of 7,500,000 shares of PTAC Class A Common Stock at $10.00 per share with par value of $0.0001 to PIPE Investors. |
b. | Reflects the conversion of Tomorrow.io convertible preferred shares into PTAC Class A Common Stock based on the Conversion Ratio Stock effective immediately at the closing of the Business Combination. |
c. | Reflects the cashless exercise of Tomorrow.io warrants which was treated as a reclassification of the warrant liability of $3.4 million to APIC, with no repurchase of the common stock. |
d. | Reflects the Tomorrow.io treasury stock cancellation and extinguishment without any conversion. |
e. | Reflects the conversion of Tomorrow.io Stock to PTAC Class A Common Stock based on the Conversion Ratio effective immediately at the closing of the Business Combination. |
f. | Reflects Tomorrow.io and PTAC’s total preliminary estimated advisory, legal, accounting and other professional fees of approximately $48.9 million incurred in connection with the Business Combination in the No Redemption Scenario, including approximately $12.1 million of deferred underwriting fees. This adjustment does take into consideration the $3.0 million that have already been paid and are included within PTAC and Tomorrow.io’s Balance Sheets as of September 30, 2021. These expected transaction costs are in connection with the consummation of the Business Combination and other related events and are deemed to be direct and incremental costs of the Business Combination, which have been recorded as a reduction to accumulated deficit. |
g. | Reflects the conversion of PTAC Class B Common Stock to PTAC Class A Common Stock. In connection with the Closing of the Business Combination, all shares of PTAC Class B Common Stock will convert into shares of PTAC Class A Common Stock. |
h. | Reflects the elimination of historical accumulated deficit of PTAC. |
i. | Reflects the No Redemption scenario, in which no shares of PTAC Class A Common Stock are redeemed and PTAC Class A Common Stock subject to possible redemption totaling $345.1 million would be transferred to permanent equity. |
j. | Reflects the liquidation and reclassification of $345.1 million of cash and investments held in the Trust Account to cash that becomes available following the closing of the Business Combination, assuming no redemptions. |
k. | Reflects the Maximum Redemption scenario, in which 23,707,975 shares of PTAC’s Class A Common Stock subject to possible redemption are redeemed for an aggregate payment of approximately $237.1 million (based on the estimated per share redemption price of approximately $10.00 per share). |
l. | Reflects Tomorrow.io and PTAC’s total preliminary estimated advisory, legal, accounting and other professional fees of approximately $36.0 million incurred in connection with the Business Combination in the Maximum Redemption Scenario, including a total discount of approximately $12.9 million to the fees incurred in (1)f above in the no redemption scenario which takes into consideration a discount of $4.0 million of deferred underwriting fees. |
(2) | Represents pro forma adjustments to the condensed combined statements of operations: |
a. | Represents pro forma adjustment to eliminate the change in fair value of convertible preferred shares that would be converted into Combined Entity common stock and the change in fair value of the Tomorrow.io warrants that would have been cancelled as a result of the Business Combination that would not be incurred if the Business Combination was consummated on January 1, 2020. |
b. | Reflects the elimination of the impact of change in fair value of Tomorrow.io warrant liabilities as the warrants are expected to be exercised prior to the Closing of the Business Combination, and therefore will not be marked to market at each reporting period. |
c. | Represents pro forma adjustment to eliminate investment income related to the investment held in the Trust Account of PTAC that would not be earned if the Business Combination was consummated on January 1, 2020. |
d. | Reflects certain non-recurring transaction costs incurred by Tomorrow.io and PTAC subsequent to September 30, 2021, principally related to the Merger. |
e. | Represents incremental stock-based compensation expense associated with $5.7 million restricted stock granted to employees as a result of the RSS acquisition which vest upon satisfaction of a service condition, which will be satisfied if the RSS acquisition took place as of January 1, 2020. |
f. | Represents the elimination of certain revenues and expenses between RSS and Tomorrow.io, which would have been intercompany revenues had the Business Combination occurred as of January 1, 2020. |
g. | Reflects the approximately $0.9 million and $0.7 million increases in the intangible assets amortization expense resulting from the fair value adjustments recognized for intangible assets acquired with the acquisitions of RSS for the year ended December 31, 2020 and for the nine months ended September 30, 2021, respectively. Note, the fair value of RSS assets as of January 1, 2020 was assumed to be the same as the fair value as of the acquisition date. |
Amount |
||||
Intangible Assets |
7,615 | |||
Goodwill |
4,429 | |||
Deferred tax liability |
(2,071 | ) | ||
Net assets acquired |
1,513 | |||
|
|
|||
Total purchase consideration |
11,486 |
Preliminary |
Pro Forma Amortization Expense |
|||||||||||||||
Estimated Asset air Value |
Average Useful Life (Years) |
For the Nine Months Ended September 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||||||||
Core technology |
5,860 | 8 | 546 | 733 | ||||||||||||
Customer relationships |
1,237 | 6 | 147 | 198 | ||||||||||||
Trade name |
518 | 9 | 43 | 58 |
For the Nine Months Ended September 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||||||||||
Assuming No Redemption |
Assuming Maximum Redemption |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||||||||
(in thousands, except share and per share data) |
||||||||||||||||
Pro forma net income (loss) |
(66,101 | ) | (53,223 | ) | (28,818 | ) | (28,818 | ) | ||||||||
Weighted average shares outstanding of Class A Stock |
120,625,000 | 96,917,025 | 120,625,000 | 96,917,025 | ||||||||||||
Net income (loss) per share of Class A Stock — basic and diluted |
$ | (0.55 | ) | $ | (0.55 | ) | $ | (0.24 | ) | $ | (0.30 | ) | ||||
Weighted average shares outstanding — basic and diluted |
|
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|
|
|
|
|
|
|
|||||||
Public shares |
34,500,000 | 10,792,025 | 34,500,000 | 10,792,025 | ||||||||||||
Founder shares — Class B to Class A |
8,625,000 | 8,625,000 | 8,625,000 | 8,625,000 | ||||||||||||
Shares issued in Business Combination |
70,000,000 | 70,000,000 | 70,000,000 | 70,000,000 | ||||||||||||
PIPE Shares |
7,500,000 | 7,500,000 | 7,500,000 | 7,500,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
120,625,000 | 96,917,025 | 120,625,000 | 96,917,025 | ||||||||||||
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2021 |
For the Year Ended December 31, 2020 |
|||||||||||||||
Assuming No Redemption |
Assuming Maximum Redemption |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||||||||
Company Converted Options |
11,003,107 | 11,003,107 | 11,003,107 | 11,003,107 | ||||||||||||
PTAC’s Private Placement and Public Warrants |
17,433,333 | 17,433,333 | 17,433,333 | 17,433,333 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Total |
28,436,440 | 28,436,440 | 28,436,440 | 28,436,440 | ||||||||||||
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|
• | Opportunity for growth. |
• | Large addressable market. |
• | Reliable and recurring revenue model. follow-on orders from existing customers. |
• | Experienced management team. |
• | Broad, Diverse and Growing Global Customer Base on-demand and governmental agencies. |
• | Fairness Opinion. |
• | Substantial post-closing economic interest in Tomorrow.io. |
• | Continued Ownership by Tomorrow.io Equityholders. |
• | Involvement of the PIPE Investors. |
• | Due diligence. |
• | Support of key stockholders. |
• | Tomorrow.io Equityholder lock-up. lock-up in respect of their shares of the Combined Entity received in the Business Combination (subject to a potential share price trigger release and certain other customary exceptions). |
• | Transaction proceeds. |
• | Other alternatives. |
• | Negotiated transaction. arm’s-length negotiations between PTAC and Tomorrow.io. |
• | Risk that benefits may not be achieved. |
• | Risks Associated with Tomorrow.io’s business Risk Factors — Risks Related to Tomorrow.io |
• | Liquidation of PTAC. |
• | Redemption risk. |
• | Exclusivity. |
• | Stockholder vote. |
• | Macroeconomic risks. |
• | Closing conditions. |
• | Post-Business Combination corporate governance. |
• | Fees and expenses. |
• | Interests of certain indirect equityholders of the Sponsor. |
passive investment in Tomorrow.io, which investment represents approximately 1% of Tomorrow.io’s outstanding capital stock. Such affiliates of Peel exercise no control over the unaffiliated private equity fund, no control over the unaffiliated private equity fund’s investment in Tomorrow.io and no control over Tomorrow.io, and such investment is not material to such affiliates of Peel. The Board was aware of these facts and considered them during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination. |
• | Interests of certain other persons. |
• | Other risks. Risk Factors |
Fiscal Year Ended December 31, |
Fiscal Year Ending December 31, |
|||||||||||||||||||||||||||||||
2019 |
2020 |
2021E |
2022E |
2023E |
2024E |
2025E |
2026E |
|||||||||||||||||||||||||
Enterprise |
$ | 7.8 | $ | 13.3 | $ | 40.4 | $ | 115.8 | $ | 268.4 | $ | 471.5 | ||||||||||||||||||||
Government |
1.0 | 9.4 | 16.3 | 41.4 | 95.9 | 230.0 | ||||||||||||||||||||||||||
Other |
1.8 | 5.4 | 8.8 | 14.3 | 24.3 | 45.4 | ||||||||||||||||||||||||||
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|
|||||||||||||||||
Total Revenue |
$ |
2.9 |
$ |
6.0 |
$ |
10.6 |
$ |
28.1 |
$ |
65.4 |
$ |
171.5 |
$ |
388.6 |
$ |
746.9 |
||||||||||||||||
Growth % |
702.0 |
% |
103.9 |
% |
77.8 |
% |
164.6 |
% |
133.0 |
% |
162.1 |
% |
126.6 |
% |
92.2 |
% | ||||||||||||||||
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|
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Gross Profit |
$ | 1.3 | $ | 3.6 | $ | 7.5 | $ | 23.3 | $ | 44.4 | $ | 128.3 | $ | 316.9 | $ | 648.7 | ||||||||||||||||
Margin % |
NMF |
60.6 |
% |
70.8 |
% |
82.9 |
% |
67.8 |
% |
74.8 |
% |
81.5 |
% |
86.8 |
% | |||||||||||||||||
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|
|||||||||||||||||
Total Operating Expenses |
(26.2 | ) | (28.2 | ) | (63.1 | ) | (97.4 | ) | (137.2 | ) | (228.3 | ) | (338.7 | ) | (493.1 | ) | ||||||||||||||||
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|
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EBITDA(1) |
$ | (24.8 | ) | $ | (24.4 | ) | $ | (54.3 | ) | $ | (69.2 | ) | $ | (78.6 | ) | $ | (69.7 | ) | $ | 20.6 | $ | 209.0 | ||||||||||
Margin % |
NMF |
NMF |
NMF |
NMF |
NMF |
NMF |
5.3 |
% |
28.0 |
% | ||||||||||||||||||||||
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|
(1) | “EBITDA” means earnings before interest, taxes, depreciation and amortization. EBITDA was calculated as gross profit less operating expenses plus depreciation and amortization. |
(2) | Includes deferred contract costs |
• | assessments of fixed vs variable costs and headcount requirements: |
• | headcount and labor cost from sales and marketing functions growing in conjunction with the support needed for existing and future product launches; |
• | marketing investment being a higher percentage of revenue in early years to support growth, new services and broader brand recognition, while decreasing over time as a percentage of revenue as the business scales; |
• | estimating research and development headcount and other related costs associated with bringing additional satellites and services to market, developing new technologies and supporting existing services, based on Tomorrow.io’s experience and expectations of future costs; |
• | general and administrative costs increasing more quickly in the near-term to provide infrastructure in support of the business’ overall growth, and then increasing at a more moderate pace in future periods due to operating leverage from fixed overhead costs as the business matures; |
• | capital expenditures, and depreciation and amortization forecasts based on the capital requirements to support the launch of satellite constellations and administrative operations; |
• | stock based compensation, and other costs growing in proportion to operating expenses; |
• | working capital requirements based on Tomorrow.io’s historical data; |
• | other one-time non-recurring cost estimates based on management’s estimates; and |
• | costs associated with public company operations and compliance were excluded from the projections. |
• | its and its subsidiaries’ corporate organization, qualification to do business in each jurisdiction in which their properties are owned or leased by them or the operation of their business as currently conducted, good standing and corporate power required to own and operate their properties and assets, to carry out the business as presently conducted and non-violation of their organizational documents; |
• | its having requisite corporate authority to enter into the Merger Agreement and to complete the Business Combination; |
• | the absence of conflicts with Tomorrow.io’s and its subsidiaries’ organizational documents, applicable laws or certain agreements and instruments as a result of entering into the Merger Agreement or consummating the Business Combination; |
• | the required consents and approvals that Tomorrow.io and its subsidiaries must obtain for the Merger Agreement and to consummate the Business Combination; |
• | its capital structure, including with respect to (i) the duly authorized and validly issued and outstanding shares of capital stock of Tomorrow.io; (ii) common stock reserved for issuance under its outstanding unexercised options and equity incentive plans; (iii) warrants to purchase shares of Tomorrow.io Series D Preferred Stock; and (iv) additional matters with respect to its options; |
• | the accuracy of its corporate records, including the approvals of its board of directors, including all committees thereof, stockholders and all consents to actions taken thereby; |
• | its subsidiaries and their outstanding capital stock; |
• | Tomorrow.io’s financial statements for the periods ended December 31, 2019, December 31, 2020 and the six-month period ended June 30, 2021 fairly present, in all material respects, the financial position of Tomorrow.io as of the dates thereof and the results of operations of Tomorrow.io for the periods reflected therein, and have been prepared in conformity with U.S. GAAP applied on a consistent basis and in accordance with the requirements of the Public Company Accounting Oversight Board for public companies; |
• | (i) its maintenance of proper financial books and records which accurately and fairly, in reasonable detail, reflect the transactions and dispositions of assets of and providing services by Tomorrow.io; (ii) its proper internal controls over accounting which are sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with Tomorrow.io’s historical practices and to maintain asset accountability; (C) access to assets is |
permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (iii) the absence of any significant deficiency or material weakness in its controls and any fraud involving management or employees who have a role in preparing Tomorrow.io’s financial statements or controls utilized by Tomorrow.io; |
• | that each of its and its subsidiaries’ material contracts (i) is a valid and binding agreement, (ii) in full force and effect and (iii) enforceable by the parties thereto, and there are no known breaches or events that would become breaches of such material contracts; |
• | (i) Tomorrow.io and its subsidiaries have all material necessary permits and licenses to conduct their businesses, (ii) all such permits are valid and in full force and effect and (iii) additional matters relating to such permits including with respect to the absence of breaches or violations of default; |
• | it and its subsidiaries are in compliance with all applicable laws, including, without limitation, those relating to foreign corrupt practices, sanctions, money laundering and environmental matters; |
• | there is no (i) pending litigation against Tomorrow.io, its subsidiaries or its officers or directors or action with any governmental authority, (ii) pending audits, examinations or investigations by any governmental authority against Tomorrow.io or its subsidiaries or (iii) pending litigation by Tomorrow.io or its subsidiaries against any third party; |
• | Tomorrow.io and its subsidiaries have good and marketable title to the tangible assets and properties they own or lease; |
• | Tomorrow.io’s and its subsidiaries’ ownership or appropriate licenses to use intellectual property used in their businesses, including with respect to the absence of rights of third parties to any of their intellectual property rights, any infringement by a third party of Tomorrow.io’s and its subsidiaries’ intellectual property rights or any infringement by Tomorrow.io or its subsidiaries of a third party’s intellectual property rights and the functionality of Tomorrow.io’s information technology systems; |
• | matters related to its and its subsidiaries’ employees as well as its compliance with applicable laws related to employment matters, proper tax withholding and employee benefit plans, including with respect to ERISA and tax matters relating thereto; |
• | various matters related to taxes, including that (i) Tomorrow.io and its subsidiaries have duly and timely filed all income and other material tax returns, which are true, correct and complete and accurate in all material respects; (ii) there is no action with respect to taxes of Tomorrow.io or its subsidiaries in the past five years; (iii) no statute of limitations in respect of the assessment or collection of any taxes of Tomorrow.io or its subsidiaries has been waived or extended, which waiver or extension is in effect and Tomorrow.io or its subsidiaries are not presently contesting the tax liability before any taxing authority or other authority; (iv) Tomorrow.io and its subsidiaries have complied in all respects with all applicable laws relating to the reporting, payment, collection and withholding of taxes and have duly and timely withheld or collected, paid over to the applicable taxing authority and reported all taxes required to be withheld or collected by Tomorrow.io or its subsidiaries, (v) no stock transfer tax, sales tax, use tax, real estate transfer tax or other similar tax will be imposed on the transfer of the shares of Tomorrow.io capital stock by Tomorrow.io Equityholders to PTAC pursuant to the Merger Agreement; (vi) there is no outstanding request for a ruling from any taxing authority, request for consent by a taxing authority for a change in a method of accounting, subpoena or request for information by any taxing authority or agreement with any taxing authority with respect to Tomorrow.io or its subsidiaries; (vii) there is no lien (other than certain permitted liens specified in the Merger Agreement) for taxes upon Tomorrow.io or its subsidiaries or any of the assets of Tomorrow.io or its subsidiaries; (viii) no claim has ever been made by a taxing authority in a jurisdiction where Tomorrow.io or its subsidiaries has not paid any tax or filed tax returns, asserting that Tomorrow.io or its subsidiaries is or may be subject to tax in such jurisdiction, neither Tomorrow.io nor its subsidiaries have ever been subject to tax in any country other than the country of incorporation of Tomorrow.io or its subsidiaries by virtue of having a permanent establishment |
or other place of business in that country, and Tomorrow.io is and has always been tax resident solely in its country of incorporation; (ix) Tomorrow.io has provided to PTAC true, complete and correct copies of all tax returns relating to, and all audit reports and correspondence relating to each proposed adjustment, if any, made by any taxing authority with respect to, any taxable period ending after December 31, 2016; (x) Tomorrow.io and its subsidiaries are not, and have never been, a party to any tax sharing, allocation, indemnification or similar contract; (xi) Tomorrow.io and its subsidiaries have not taken any action, and is not aware of any fact or circumstances, that would reasonably be expected to prevent the Business Combination from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; and (xii) Tomorrow.io and its subsidiaries are not “United States real property holding corporations” within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the “ Code |
• | except as disclosed by Tomorrow.io, no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Tomorrow.io and its affiliates will be entitled to, directly or indirectly, any fee or commissions from Tomorrow.io upon consummation of the Business Combination; |
• | absence of related party transactions other than those that Tomorrow.io has disclosed; |
• | its maintenance of proper insurance policies; and |
• | other customary representations and warranties. |
• | its proper corporate organization and similar corporate matters; |
• | authorization, execution, delivery and enforceability of the Merger Agreement and other transaction documents; |
• | except as disclosed by PTAC, no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of PTAC and its affiliates will be entitled to, directly or indirectly, any fee or commissions from Tomorrow.io upon consummation of the Business Combination; |
• | (i) its capital structure, including with respect to the duly authorized and validly issued and outstanding shares of capital stock of PTAC and Merger Sub; (ii) absence of any other shares of capital stock or other voting securities of PTAC that are issued, reserved for issuance or outstanding; and (iii) except as disclosed by PTAC organizational documents, there are no outstanding contractual obligations of PTAC to repurchase, redeem or otherwise acquire any shares of PTAC Common Stock or any equity capital of PTAC; |
• | the subscription agreements relating to the PIPE Investment and the holders of PTAC Class B Common Stock’s waiver of certain anti-dilution adjustments; |
• | validity of its share issuance; |
• | minimum trust fund amount at Closing, including the validity of the trust agreement; |
• | various matters related to taxes, including that (i) PTAC has duly and timely filed all income and other material tax returns, which are true, correct and complete and accurate in all material respects; (ii) no |
statute of limitations in respect of the assessment or collection of any taxes of PTAC has been waived or extended, which waiver or extension is in effect, and PTAC is not presently contesting the tax liability before any taxing authority or other authority; (iii) there is no action with respect to taxes of PTAC in the past five years; (iv) PTAC has complied in all respects with all applicable laws relating to the reporting, payment, collection and withholding of taxes and has duly and timely withheld or collected, paid over to the applicable taxing authority and reported all taxes required to be withheld or collected by PTAC; (v) there is no lien (other than certain permitted liens specified in the Merger Agreement) for taxes upon PTAC or any of the assets of PTAC; (vi) no claim has ever been made by a taxing authority in a jurisdiction where PTAC has not paid any tax or filed tax returns, asserting that PTAC is or may be subject to tax in such jurisdiction, PTAC is not nor has it ever been subject to tax in any country other than the country of incorporation of PTAC by virtue of having a permanent establishment or other place of business in that country, and PTAC is and has always been tax resident solely in its country of incorporation; (vii) PTAC has provided to Tomorrow.io true, complete and correct copies of all tax returns (if any) relating to, and all audit reports and correspondence relating to each proposed adjustment (if any) made by any taxing authority with respect to, any taxable period ending after December 31, 2020; (viii) there is no outstanding power of attorney from PTAC authorizing anyone to act on behalf of PTAC in connection with any tax, tax return or action relating to any tax or tax return of PTAC; (ix) PTAC is not, and has never been, a party to any tax sharing, allocation, indemnification or similar contract; (x) PTAC has not taken any action, and is not aware of any fact or circumstances, that would reasonably be expected to prevent the Business Combination from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; and (xi) PTAC is not a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code at any time during the five-year period before the Closing Date; |
• | Nasdaq listing of the Units, PTAC Class A Common Stock and Public Warrants, with trading tickers “PTOCU,” “PTOC” and “PTOCW”; |
• | SEC filing requirements, including that PTAC has filed all forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be filed or furnished by PTAC with the SEC since PTAC’s formation under the Exchange Act or the Securities Act, together with any amendments, restatements or supplements thereto, and will use commercially reasonable efforts to file all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of the Merger Agreement; |
• | PTAC’s financial statements for the nine-month period ended September 30, 2021 fairly present, in all material respects, the financial position of Tomorrow.io as of the dates thereof and the results of operations of PTAC for the periods reflected therein, and have been prepared in conformity with U.S. GAAP applied on a consistent basis and in accordance with the requirements of the Public Company Accounting Oversight Board for public companies; and |
• | other customary representations and warranties. |
• | PTAC and Merger Sub shall each have duly performed or complied with, in all material respects, all of its respective obligations under the Merger Agreement required to be performed or complied with by PTAC or Merger Sub, as applicable, at or prior to the Closing Date. |
• | (i) The representations and warranties of PTAC and Merger Sub regarding corporate existence and power, corporate authorization, finder’s fees and capitalization (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect (as defined in the Merger Agreement)) shall be true and correct at and as of the date of the Merger Agreement and the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct at and as of such specific date), in all material respects, (ii) the other representations and warranties of PTAC and Merger Sub contained in the Merger Agreement (disregarding all qualifications contained therein relating to materiality or Material Adverse Effect (as defined in the Merger Agreement)) shall have been true and correct as of the date of the Merger Agreement and as of the Closing Date, as if made at and as of such date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct at and as of such earlier date), except for any failure of such representations and warranties which would not in the aggregate reasonably be expected to have a Material Adverse Effect on PTAC or on PTAC’s ability to consummate the transactions contemplated by the Merger Agreement and other specified agreements. |
• | Sponsor shall have executed and delivered to Tomorrow.io a copy of the Registration Rights Agreement. |
• | Tomorrow.io shall have duly performed or complied with, in all material respects, all of its obligations under the Merger Agreement required to be performed or complied with by Tomorrow.io at or prior to the Closing Date. |
• | (i) The representations and warranties of Tomorrow.io regarding corporate existence and power, corporate authorization, capitalization, subsidiaries and finder’s fees and (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect (as defined in the Merger Agreement)) shall be true and correct at and as of the date of the Merger Agreement and the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct at and as of such specific date), in all material respects, (ii) the other representations and warranties of Tomorrow.io contained in the Merger Agreement (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) shall be true and correct in all respects at and as of the date of the Merger Agreement and as of the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct at and as of such specific date), except, in each case, for any failure of such representations and warranties (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) to be so true and correct that would not in the aggregate have or reasonably be expected to have a Material Adverse Effect. |
• | No Material Adverse Effect (as defined in the Merger Agreement) of Tomorrow.io shall have occurred between the date of the Merger Agreement and the Closing Date. |
• | Tomorrow.io and certain securityholders of Tomorrow.io shall have duly executed and delivered to PTAC a copy of the Registration Rights Agreement. |
• | PTAC or Tomorrow.io, in the event (i) a governmental authority shall have issued an order having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order is final and non-appealable or (ii) any applicable law is in effect making the consummation of the Merger illegal. |
• | PTAC or Tomorrow.io, if the Closing has not occurred on or prior to June 30, 2022 (the “ Outside Closing Date |
• | PTAC or Tomorrow.io, in the event (i) that the proposals set forth in this proxy statement/prospectus shall not have been approved at the Special Meeting or at any postponement or adjournment thereof or (ii) at any time following the Special Meeting, the Aggregate Transaction Proceeds (as defined in the Merger Agreement), giving effect to the requested redemptions of PTAC Class A Common Stock as of such time, would not be equal or greater than $150 million. |
• | PTAC, if: (i) Tomorrow.io shall have breached any representation, warranty, agreement or covenant contained in the Merger Agreement such that the conditions set forth in Section 9.2 of the Merger Agreement would not be satisfied; and (ii) such breach cannot be cured, Tomorrow.io is not promptly using reasonable best efforts to cure such breach or such breach or is not cured by the earlier of the Outside Closing Date and thirty (30) days following receipt by the breaching party of a written notice from the non-breaching party describing in reasonable detail the nature of such breach. |
• | PTAC, if: Tomorrow.io has not delivered evidence of the Tomorrow.io Equityholders’ approval by written consent of the Merger Agreement and the transactions contemplated thereby to PTAC by no later than two business days following the effective date of this proxy statement/prospectus (the “ Tomorrow.io Equityholder Approval Termination Right |
• | Tomorrow.io, if: (i) PTAC shall have breached any representation, warranty, agreement or covenant contained in the Merger Agreement such that the conditions set forth in Section 9.3 of the Merger Agreement would not be satisfied; and (ii) such breach cannot be cured, PTAC is not promptly using reasonable best efforts to cure such breach or such breach is not cured by the earlier of the Outside Closing Date and thirty (30) days following receipt by PTAC of a written notice from Tomorrow.io describing in reasonable detail the nature of such breach. |
• | the Class I directors will be and , and their terms will expire at the annual meeting of stockholders to be held in 2023; |
• | the Class II directors will be , and , and their terms will expire at the annual meeting of stockholders to be held in 2024; and |
• | the Class III directors will be and , and their terms will expire at the annual meeting of stockholders to be held in 2025. |
• | Affiliates of Peel Acquisition Company II, LLC, a managing member of the Sponsor, have a $5 million investment in an unaffiliated private equity fund, which unaffiliated private equity fund has an investment in Tomorrow.io. The affiliates’ investment, which represents an approximate 1% indirect equity interest in Tomorrow.io, is controlled by the unaffiliated private equity fund and Peel and its affiliates exercise no control over the private equity fund, the private equity fund’s investment in Tomorrow.io or Tomorrow.io. |
• | If we are unable to complete our initial business combination by March 15, 2023, PTAC 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 (net of any amounts withdrawn to pay PTAC’s taxes and up to $100,000 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), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of PTAC’s remaining stockholders and the Board, dissolve and liquidate, subject in each case to PTAC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
• | There will be no liquidating distributions from the Trust Account with respect to the Founders Shares if PTAC fails to complete a business combination within the required period. Our Sponsor purchased the Founders Shares (valued at $ based on the closing price of the PTAC Class A Common Stock on the Record Date) prior to the PTAC IPO for an aggregate purchase price of $25,000. |
• | Simultaneously with the closing of the PTAC IPO, PTAC consummated the sale of 5,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor. If PTAC does not consummate a business combination transaction by March 15, 2023, then the Private Placement Warrants (valued at $7,476,000 based on a valuation as of September 30, 2021, the most recent date for which a valuation is available) held by the Sponsor will be worthless. |
• | The Sponsor and PTAC’s directors and officers will lose their entire investment ($9,274,999.50 in the aggregate, consisting of (i) the $25,000 paid by our Sponsor for the Founder Shares, (ii) $8,899,999.50 paid by our Sponsor for the Private Placement Warrants and (iii) $350,000 advanced by Sponsor to PTAC in respect of the Note (to the extent there are insufficient funds outside the Trust Account to repay the Note) in PTAC if PTAC does not complete a business combination by March 15, 2023. Additionally, our Sponsor, directors and officers are entitled to reimbursement of $2,000 in fees and out-of-pocket expenses they have incurred in connection with the Business Combination. At least one |
of them may continue to serve as a director of PTAC after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the Board determines to pay to its directors and/or officers. |
• | The Sponsor, directors and officers collectively (including entities controlled by directors and officers) have made an aggregate average investment of $1.03 per Founder Share (including their investment in the Founders Shares and Private Placement Warrants) as of the consummation of the PTAC IPO. As a result of the significantly lower investment per Founder Share of our Sponsor, directors and officers as compared with the investment per share of PTAC Common Stock of our Public Stockholders, our Sponsor, directors and officers can earn a positive rate of return on their investment even if Public Stockholders experience a negative rate of return in the Combined Entity. |
• | PTAC’s initial stockholder and directors and officers have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founders Shares if PTAC fails to complete a business combination by March 15, 2023. |
• | In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to PTAC if and to the extent any claims by a third party for services rendered or products sold to PTAC, or a prospective target business with which PTAC has entered into a letter of intent, confidentiality or other similar agreement for a business combination, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share is then held in the Trust Account due to reductions in the value of the trust assets less any amounts withdrawn to pay PTAC’s taxes. This liability will not apply with respect to any claims by a third party that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) or to any claims under PTAC’s indemnity of the underwriters of the PTAC IPO against certain liabilities, including liabilities under the Securities Act. |
• | Following the Closing, the Sponsor would be entitled to the repayment of any working capital loan and advances that have been made to PTAC and remain outstanding. On December 6, 2021, PTAC issued the Note in the principal amount of $350,000 to the Sponsor. The Note bears interest at 0.33% per annum and is repayable in full at the earlier of (i) March 15, 2023 or (ii) the date on which PTAC consummates an initial business combination as contemplated by the Current Charter. If PTAC does not complete an initial business combination within the required period, PTAC may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans. |
• | Following the Closing, PTAC will continue to indemnify PTAC’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy. |
• | Upon the Closing, subject to the terms and conditions of the Merger Agreement, the Sponsor, PTAC’s directors and officers and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket |
• | Sponsor, an entity in which each of our directors and officers has an indirect interest, as well as an entity associated with principals of Peel, has subscribed for PTAC Common Stock in the PIPE Investment. |
(i) | No redemptions |
Sources of Funds |
Uses |
|||||||||
(in thousands) |
||||||||||
Cash from PTAC (1) |
$345,537 | Tomorrow.io Equityholders’ Retained Equity Value (2) |
$700,000 | |||||||
PIPE Investment |
75,000 | Remaining Cash on Balance Sheet (1) |
374,240 | |||||||
Tomorrow.io Equityholders’ Retained Equity Value (2) |
700,000 | PTAC Estimated Transaction Costs and Other (3) |
46,297 | |||||||
Total Sources |
$1,120,537 | Total Uses | $1,120,537 | |||||||
|
|
|
|
(1) | Assumes no holder of PTAC Class A Common Stock has exercised its redemption rights to receive cash from the Trust Account. This amount will be reduced by the amount of cash used to satisfy any redemptions. Includes $345.1 million held in the Trust Account and $0.4 million held by PTAC outside the Trust Account. |
(2) | Assumes 70,000,000 Closing Payment Shares are issued in connection with the Business Combination. Dollar amount, $700.0 million, represents the number of shares existing Tomorrow.io Equityholders will receive valued at a per share price of $10.00. This amount is not impacted by the number of redemptions. |
(3) | Includes approximately $45.9 million in estimated transaction costs and the $0.4 million payable under the Note. |
(ii) | Maximum redemptions |
Sources of Funds |
Uses |
|||||||||
(in thousands) |
||||||||||
Cash from PTAC (1) |
$108,419 | Tomorrow.io Equityholders’ Retained Equity Value (2) |
$700,000 | |||||||
PIPE Investment |
75,000 | Remaining Cash on Balance Sheet (1) |
150,000 | |||||||
Tomorrow.io Equityholders’ Retained Equity Value (2) |
700,000 | PTAC Estimated Transaction Costs and Other (3) |
33,419 | |||||||
Total Sources |
$883,419 | Total Uses | $883,419 | |||||||
|
|
|
|
(1) | Assumes approximately 68.7% of the outstanding PTAC Class A Common Stock have been redeemed for cash from the Trust Account, reducing the amount of cash available for distribution from the Trust Account by approximately $237.1 million. Includes $108.0 million held in the Trust Account and $0.4 million held by PTAC outside the Trust Account. |
(2) | Assumes 70,000,000 Closing Payment Shares are issued in connection with the Business Combination. Dollar amount, $700.0 million, represents the number of shares existing Tomorrow.io Equityholders will receive valued at a share price of $10.00. This amount is not impacted by the number of redemptions. |
(3) | Includes approximately $33.0 million in estimated transaction costs and the $0.4 million payable under the Note. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust (A) the administration of which is subject to the primary supervision of a U.S. court and that has one or more United States persons (within the meaning of the Code) with the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury Regulations to be treated as a United States person. |
• | the gain is effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, under certain income tax treaties, is attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States), in which case, unless an applicable income tax treaty provides otherwise, the Non-U.S. Holder will generally be subject to the same treatment as a U.S. Holder with respect to the Redemption, and a corporate Non-U.S. Holder may be subject to an additional branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty); |
• | the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year in which the Redemption takes place and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax on the individual’s net capital gain (including any gain realized in connection with the Redemption) for the year (which gain may be offset by certain U.S.-source capital losses), even though the Non-U.S. Holder is not considered a resident of the United States; or |
• | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held PTAC Common Stock, and, in the case where shares of PTAC Common Stock are regularly traded on an established securities market, the Non-U.S. Holder has owned, directly or constructively, more than 5% of PTAC Common Stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. Holder’s holding period for the shares of PTAC Common Stock, in which case, gain recognized by such holder in connection with the Redemption will be subject to tax at generally applicable U.S. federal income tax rates. In addition, we may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such Redemption. There can be no assurance that PTAC Common Stock is or has been treated as regularly traded on an established securities market for this purpose. We believe that we are not, and have not been at any time since our formation, a United States real property holding corporation and we do not expect to be a United States real property holding corporation immediately after the Business Combination is completed. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust (A) the administration of which is subject to the primary supervision of a U.S. court and that has one or more United States persons (within the meaning of the Code) with the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury Regulations to be treated as a United States person. |
• | Tomorrow.io Holders will not recognize gain or loss on the exchange of Tomorrow.io Stock for shares of PTAC Common Stock in the Business Combination. |
• | The aggregate tax basis in shares of PTAC Common Stock received in the Business Combination will be equal to the aggregate tax basis of the Tomorrow.io Stock exchanged in the Business Combination. |
• | The holding period of PTAC Common Stock received in the Business Combination by a Tomorrow.io Holder will include the holding period of the Tomorrow.io Stock that it surrendered in exchange therefor. |
1. | reviewed a draft, dated December 5, 2021, of the Merger Agreement; |
2. | reviewed certain publicly available business and financial information relating to PTAC and Tomorrow.io that Houlihan Lokey deemed to be relevant; |
3. | reviewed certain information relating to the historical, current and future operations, financial condition and prospects of Tomorrow.io made available to Houlihan Lokey by Tomorrow.io and PTAC, including the Projections; |
4. | spoke with certain members of the managements of PTAC and Tomorrow.io and certain of their respective representatives and advisors regarding the business, operations, financial condition and prospects of Tomorrow.io, the Business Combination and related matters; |
5. | compared the financial and operating performance of Tomorrow.io with that of companies with publicly traded equity securities that Houlihan Lokey deemed to be relevant; and |
6. | conducted such other financial studies, analyses and inquiries and considered such other information and factors as Houlihan Lokey deemed appropriate. |
• | Enterprise value as a multiple of estimated revenue for the 2023 fiscal year, or “FY 2023E” revenue; and |
• | Enterprise value as a multiple of estimated revenue for the 2024 fiscal year, or “FY 2024E” revenue. |
Enterprise Value to Revenue |
||||||||
FY 2023E |
FY 2024E |
|||||||
High Growth Data & Analytics |
||||||||
Alfa Laval AB |
2.9x | 2.8x | ||||||
Alteryx, Inc. |
5.9x | 4.7x | ||||||
Datadog, Inc. |
26.6x | 17.5x | ||||||
Elastic N.V. |
9.0x | 7.4x | ||||||
FactSet Research Systems Inc. |
9.3x | 8.8x | ||||||
International Business Machines Corporation |
2.0x | 2.3x | ||||||
IHS Markit Ltd. |
2.3x | 2.1x | ||||||
MSCI Inc. |
20.6x | 18.9x | ||||||
RELX PLC |
6.1x | 5.8x | ||||||
Splunk Inc. |
5.5x | 4.6x | ||||||
Verisk Analytics, Inc. |
11.4x | 10.6x | ||||||
Earth Intelligence Data & Analytics |
||||||||
BlackSky Technology Inc. |
3.4x | 2.0x | ||||||
Maxar Technologies Inc. |
2.0x | 1.9x | ||||||
Spire Global, Inc. |
2.4x | 1.0x |
Enterprise Value to Revenue |
||||||||
FY 2023E |
FY 2024E |
|||||||
Low |
2.0x | 1.0x | ||||||
High |
26.6x | 18.9x | ||||||
Median |
5.7x | 3.8x | ||||||
Mean |
7.8x | 6.3x |
• | (i) PTAC, Tomorrow.io and any person that is a party to a declaration filing (a “ CFIUS Declaration CFIUS CFIUS Notice |
Agreement submitted to CFIUS pursuant to 31 C.F.R. Part 800 Subpart E (collectively, the “ CFIUS Parties DPA CFIUS Report POTUS CFIUS Approval |
• | the termination or expiration of any waiting period (or extension thereof) applicable to the transactions contemplated by the merger agreement under the HSR Act. |
Current Charter |
Proposed Charter | |||
Charter Amendment |
PTAC reserves the right to amend, alter, change or repeal any provision of the Current Charter, provided that provisions in the Current Charter related to (i) the powers, preferences or relative, participating, optional or other or special rights of the Class B Common Stock may only be amended with the approval of the holders of at least a majority of the then-outstanding shares of Class B Common Stock and (ii) the provisions set forth in Article IX (provisions related to a blank check company) may only be amended with the approval of the holders of at least 65% of the then issued and outstanding shares of common stock, voting together as a single class. | Any amendment to the Proposed Charter will require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment, provided that provisions in the Proposed Charter in Article VII (limitation on director liability) will require approval of the holders of at least 66 2 ⁄3 % of the Combined Entity’s then-outstanding shares of capital stock entitled to vote generally at an election of directors. | ||
Bylaws Amendment |
Under the Current Charter, Bylaws can be amended or repealed by: (i) the Board and (ii) an affirmative vote of stockholders holding a majority of the voting power of then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. | Under the Proposed Charter, Bylaws can be amended or repealed by: (i) the board and (ii) an affirmative vote of stockholders holding 66 2 ⁄3 % of the voting power of then outstanding shares of capital stock, voting together as a single class, provided, if the board recommends that stockholders approve such amendment or repeal, an affirmative vote of stockholders holding only a majority of the voting power of then outstanding shares of capital stock, voting together as a single class, is required. | ||
Section 203 |
The Current Charter provides for the opt out of Section 203 of the DGCL. | The Proposed Charter does not provide that the Combined Entity opts out of Section 203 of the DGCL. |
Current Charter |
Proposed Charter | |||
Director Removal |
The Current Charter has a provision providing for the removal of a director with or without cause, by the affirmative vote of holders of a majority of the voting power of the outstanding shares of PTAC Class B Common Stock. | Under the Proposed Charter, a director can only be removed for cause by the approval of the holders of at least 66 2 ⁄3 % of the Combined Entity’s then outstanding shares of capital stock entitled to vote generally at an election of directors. | ||
Name Change |
PTAC’s current name is Pine Technology Acquisition Corp. | Under the Proposed Charter, the Combined Entity’s name will be The Tomorrow Companies Inc. | ||
Common Stock |
The Current Charter authorizes 300,000,000 shares of Common Stock, including (i) 240,000,000 shares of Class A Common Stock and (ii) 60,000,000 shares of Class B Common Stock. | The Proposed Charter will authorize shares of Common Stock. | ||
Preferred Stock |
The Current Charter authorizes 1,000,000 shares of “blank check” preferred stock, that the Board could issue to discourage a takeover attempt. | The Proposed Charter will authorize the issuance of shares of “blank check” preferred stock that the Combined Entity’s board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt. | ||
Provisions Specific to a Blank Check Company |
Under the Current Charter, Article IX sets forth various provisions related to its operations as a blank check company prior to the consummation of an initial business combination. Furthermore, PTAC is required to be dissolved and liquidated 24 months following the closing of its initial public offering in the event that it has not consummated an initial business combination. | The Proposed Charter does not include these blank check company provisions because, upon Closing, PTAC will cease to be a blank check company. In addition, the provisions requiring that the proceeds from its initial public offering be held in a trust account until a business combination or liquidation of PTAC and the terms governing PTAC’s consummation of a proposed business combination will not be applicable following Closing. The Combined Entity will have a perpetual existence. |
• | Initially, the maximum number of shares of common stock that may be reserved and available for issuance under the Equity Incentive Plan is shares. The number of shares common stock reserved for issuance under the Equity Incentive Plan will automatically increase on January 1 of each year, beginning on January 1, 2023 by % of the total number of shares of common stock issued and outstanding on the immediately preceding December 31, or a lesser number of shares determined by the administrator of the Equity Incentive Plan; |
• | The award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock, restricted stock awards, unrestricted stock, cash-based awards, and dividend equivalent rights is permitted; |
• | Stock options and stock appreciation rights will not be repriced in any manner without stockholder approval; |
• | The value of all awards awarded under the Equity Incentive Plan and all other cash compensation paid by the Combined Entity to any non-employee director in any calendar year may not exceed $750,000 or $1,000,000 for the year in which a non-employee director is first appointed or elected to Combined Entity’s board of directors; |
• | Any material amendment to the Equity Incentive Plan is subject to approval by our stockholders; and |
• | The term of the Equity Incentive Plan will expire on the tenth anniversary of the effective date of the Equity Incentive Plan is approved by the Board. |
Name |
Age |
Title | ||||
Christopher Longo |
48 | Chief Executive Officer, Director | ||||
Ciro M. DeFalco |
66 | Chief Financial Officer, Treasurer and Secretary | ||||
Adam Karkowsky |
46 | Non-Executive Chairman | ||||
J. Eric Smith |
64 | Director | ||||
Bradley Tusk |
48 | Director | ||||
Nicolas D. Zerbib |
49 | Director |
• | the corporation could financially undertake the opportunity; |
• | the opportunity is within the corporation’s line of business; and |
• | it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Name of Individual |
Entity Name |
Entity’s Business |
Affiliation | |||
Christopher Longo |
Novum Underwriting Partners, LLC | Insurance | Chief Executive Officer | |||
Ciro M. DeFalco |
Adar Tree Capital Corp. | Insurance | Director |
Name of Individual |
Entity Name |
Entity’s Business |
Affiliation | |||
Adam Karkowsky | AmTrust Financial Services Inc. | Insurance | President | |||
Evergreen Parent GP, LLC Amynta Agency Inc. | Private equity | Chief Financial Officer | ||||
Canopius Holdings | Insurance | Director | ||||
Bermuda Limited | Insurance | Director | ||||
J. Eric Smith | QBE Group | Insurance | Director | |||
Deutsche Bank | Financial Services | Director | ||||
Americas Health iQ | Insurance | Director | ||||
Bradley Tusk |
Tusk Holdings | Venture capital | Chief Executive Officer | |||
Tusk Ventures | Consulting | Chief Executive Officer | ||||
Tusk Strategies | Political consulting | Chief Executive Officer | ||||
Tusk Venture Partners | Venture capital | Managing Director | ||||
Ivory Gaming Group | Casino management | Co-Founder and Chairman | ||||
IG Acquisition Corp. | Blank check company | Chairman | ||||
Nicolas D. Zerbib |
Alliant Insurance Services Inc. | Insurance Brokerage | Director | |||
Amherst Holdings LLC | Asset Management | Director | ||||
Applied Systems Inc. | Software | Director | ||||
Bullhorn, Inc. | Software | Director | ||||
DealerPolicy | Insurance Brokerage | Director | ||||
Evergreen Parent GP, LLC | Private equity | Director and Manager | ||||
Freepoint Commodities, LLC | Commodities | Director | ||||
ITM 21 HoldCo GP LLC | Business Services | Director | ||||
LTCG, Inc. | Business Services | Director | ||||
Mitchell International, Inc. | Business Services | Director | ||||
PHR Acquisition Holdings GP, LLC | Software | Director | ||||
Stone Point Capital LLC | Private equity | Managing Director | ||||
The ARC Group, LLC | Insurance Brokerage | Director |
For The Period From January 1, 2021 through September 30, 2021 |
||||
Formation and operating costs |
$ | 799,820 | ||
Loss from operations |
$ | (799,820 | ) | |
Other income (loss) |
||||
Interest income |
$ | 55,688 | ||
Excess fair value over cash received for private placement warrants |
$ | (355,999 | ) | |
Change in fair value of warrant liabilities |
$ | 8,680,011 | ||
Offering expenses related to warrant issuance |
$ | (844,080 | ) | |
Total other income |
$ | 7,535,620 | ||
Net Income |
$ | 6,735,800 | ||
Weighted average shares outstanding, Class A common stock subject to possible redemption |
34,500,000 | |||
Basic and diluted net income per share, Class A common stock |
$ | 0.16 | ||
Weighted average shares outstanding, non-redeemable Class B common stock |
8,324,176 | |||
Basic and diluted net loss per share, Class B common stock |
$ | 0.16 |
September 30, 2021 |
||||
Balance Sheet Data: |
||||
Total assets |
$ | 345,979,309 | ||
Total liabilities |
$ | 27,805,145 | ||
Value of Class A Common Stock subject to possible redemption |
$ | 345,055,688 | ||
Stockholder’s (deficit) equity |
$ | (26,881,524 | ) |
• | Scientific advancements and technological innovation is led by governmental agencies, with limited contribution from the private sector, especially with regards to improving coverage or accuracy. |
• | Raw weather data published by the agencies has resulted in the creation of a group of weather downstream businesses that repackage the information from agencies into forecasts. |
• | Existing weather providers offer professional, bespoke, consulting services leaving businesses reactive to weather, without the ability to prepare for the impacts and automate decision-making. |
• | Proprietary Global Weather Data: first-of-its |
• | High-Resolution Forecasting Models: in-situ observations, public datasets, proprietary sources and as we expect in the near future, data from our satellites, our in-house weather models allow users access to weather information at macro and micro scales, through APIs and through our SaaS platform. |
• | Weather Intelligence SaaS Platform |
• | Flood Risk Index: |
• | Lightning Forecast: 15-30 minute lightning forecasts allow users to anticipate the severity of impact with increased certainty, and communicate shelter or evacuation plans to prevent harm or injuries. |
• | Fire Index: |
• | Air Quality: |
• | Pollen: |
• | Dashboard: hour-by-hour day-by-day at-a-glance |
• | Library: Tomorrow.io-created Insights are stored in an easy-to-access |
• | The Tomorrow.io Platform |
• | The Tomorrow.io API month-to-month standard 12-month contracts. |
• | The Tomorrow.io Consumer Application |
• | Throughput Optimization: |
• | Operational Continuity: |
• | Enhanced Safety: |
• | Procedural Alignment: |
• | Passenger Experience |
• | Routing and real-time system monitoring, at scale: |
• | Demand and supply forecasting so-called “surge pricing” to deliver backlogged delayed deliveries after a weather event causes delivery delays. |
• | Streamlined decision making: |
• | Digital Marketing: end-to-end. |
• | Employee Welfare: |
• | We are the only fully vertically-integrated player in the weather and climate industry, with technological innovations across the value chain — proprietary data through our satellites, cutting-edge models, and pioneering weather intelligence software; |
• | We expect to be the world’s first comprehensive global weather data, at high data quality and hourly refresh rates, by deploying active radars in space 330 times less expensively than the comparable NASA mission (GPM); |
• | We are a multi-vertical, global, SaaS solution applicable to any use case globally in order to enable key operational decisions for adapting to weather events and climate change, at a scale that no one person or team of people could achieve. |
• | We have a focus on providing actionable insights to customers and generating contextual recommendations using a comprehensive all-in-one |
• | Shimon Elkabetz, our Chief Executive Officer; |
• | Rei Goffer, our Chief Strategy Officer; |
• | Itai Zlotnik, our Chief Customer Officer; and |
• | Stephen Gregorio, our Chief Financial Officer. |
Name and Principal Position |
Year |
Salary ($) |
Bonus(1) |
Option Awards ($)(2) |
Non-Equity Incentive Plan Compensation ($)(3) |
All Other Compensation ($) |
Total($) |
|||||||||||||||||||||
Shimon Elkabetz |
||||||||||||||||||||||||||||
Chief Executive Officer |
2021 | 225,000 | 125,000 | — | 634,841 | — | 859,841 | |||||||||||||||||||||
Rei Goffer |
||||||||||||||||||||||||||||
Chief Strategy Officer |
2021 | 225,000 | 125,000 | |
— |
|
509,831 | — | 734,831 | |||||||||||||||||||
Itai Zlotnik |
||||||||||||||||||||||||||||
Chief Customer Officer |
2021 | 225,000 | 125,000 | |
— |
|
509,831 | — | 734,831 | |||||||||||||||||||
Stephen Gregorio, |
||||||||||||||||||||||||||||
Chief Financial Officer |
2021 | 203,125 | 100,834 | 1,491,806 | — | — | [1,854,931 | ] |
(1) | The amounts reported represent the amount paid for Mr. Gregorio’s guaranteed bonus pursuant to the terms of his offer letter for 2021. For more information on his bonus, see description of annual bonuses under “Annual Cash Bonuses” below. |
(2) | The amounts reported represent the aggregate grant date fair value of the stock options awarded to the named executive officers during fiscal year 2021, calculated in accordance with Financial Accounting Standards Board, or FASB Accounting Standards Codification, or ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in the notes to our financial statements included elsewhere in this proxy statement/prospectus. The amounts reported in this column reflect the accounting cost for the stock options and does not correspond to the actual economic value that may be received upon exercise of the stock option or any sale of any of the underlying shares of common stock. |
(3) | The amounts reported represent actual bonuses earned for 2021 by Messrs. Elkabetz, Goffer and Zlotnik, approved by our board of directors based upon company achievement of corporate goals and individual performance. |
Option Awards |
||||||||||||||||||||
Name |
Vesting Commencement Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
|||||||||||||||
Shimon Elkabetz Chief Executive Officer |
|
1/30/2018 4/8/2020 8/1/2019 9/18/2020 |
(1) (2) (2) (3) |
|
347,362 62,665 167,577 207,648 |
|
|
23,158 104,444 130,338 456,826 |
|
$ $ $ $ |
0.51 0.78 0.78 1.41 |
|
|
1/29/2028 4/7/2030 7/31/2029 10/11/2030 |
| |||||
Rei Goffer Chief Strategy Officer |
|
1/30/2018 4/8/2020 8/1/2019 9/18/2020 |
(1) (2) (1) (3) |
|
347,362 62,665 167,577 207,648 |
|
|
23,158 104,444 130,338 456,826 |
|
$ $ $ $ |
0.51 0.78 0.78 1.41 |
|
|
1/29/2028 4/7/2030 7/31/2029 10/11/2030 |
| |||||
Itai Zlotnik Chief Customer Officer |
|
1/30/2018 4/8/2020 8/1/2019 9/18/2020 |
(1) (2) (1) (3) |
|
347,362 62,665 167,577 207,648 |
|
|
23,158 104,444 130,338 456,826 |
|
$ $ $ $ |
0.51 0.78 0.78 1.41 |
|
|
1/29/2028 4/7/2030 7/31/2029 10/11/2030 |
| |||||
Stephen Gregorio Chief Financial Officer |
5/17/2021 | — | 899,000 | $ | 3.20 | 11/16/2031 |
(1) | Subject to the executive’s continuous service, the shares subject to this option vest 25% on first anniversary of the Vesting Commencement Date and in 12 equal quarterly installments thereafter. If the executive’s service relationship with the Company is terminated (i) by the Company without cause (as defined in the 2016 Plan) and (ii) by the executive for good reason (as defined below), in each case, within the twelve (12) month period following a Change in Control Transaction (as defined in the 2016 Plan), one hundred percent (100%) of the outstanding and unvested shares of common stock underlying the option will vest and become exercisable. For purposes of the option grants, “good reason” means the occurrence of any of the following conditions without the executive’s prior consent: (i) a material change in the executive’s title, duties or responsibilities or (ii) a material reduction in the executive’s base salary or benefits (other than reductions in benefits applying equally to all Company employees) or (iii) a relocation of the executive’s principal place of employment to a facility that results in a commute more than fifty (50) miles from the geographic location at which the executive provides services to the Company, so long as the executive provides at least 90 days’ notice to the Company following the initial occurrence of such event, and the Company fails to cure such event within 30 days thereafter. |
(2) | Subject to the executive’s continuous service, the shares subject to this option vest in 16 equal quarterly installments following the Vesting Commencement Date. If the executive’s service relationship with the Company is terminated (i) by the Company without cause (as defined in the 2016 Plan) and (ii) by the executive for good reason, in each case, within the twelve (12) month period following a Change in Control Transaction, one hundred percent (100%) of the outstanding and unvested shares of common stock underlying the option will vest and become exercisable. |
(3) | Subject to the executive’s continuous service, the shares subject to this option vest in 16 equal quarterly installments from the Vesting Commencement Date. Upon the occurrence of a Change in Control Transaction one hundred percent (100%) of the outstanding and unvested shares of common stock underlying the option will vest and become exercisable. |
(4) | Subject to the executive’s continuous service, the shares subject to this option vest 25% on first anniversary of the Vesting Commencement Date and in 12 equal quarterly installments thereafter. |
Annual Retainer |
||||
Board of Directors |
$ | 40,000 | ||
Board of Directors Chair |
$ | 70,000 | ||
Audit Committee Chair |
$ | 15,000 | ||
Audit Committee Member |
$ | 7,500 | ||
Compensation Committee Chair |
$ | 10,000 | ||
Compensation Committee Member |
$ | 5,000 | ||
Nominating and Corporate Governance Committee Chair |
$ | 6,500 | ||
Nominating and Corporate Governance Committee Member |
$ | 2,500 |
Name |
Age |
Position | ||
Shimon Elkabetz |
35 | Chief Executive Officer | ||
Rei Goffer |
36 | Chief Strategy Officer | ||
Itai Zlotnik |
36 | Chief Customer Officer | ||
Leigha Kemmett |
33 | Chief Operating Officer | ||
Stephen Gregorio |
61 | Chief Financial Officer |
• | the Class I directors will be , and their terms will expire at the annual meeting of stockholders to be held in 2023; |
• | the Class II directors will be , and , and their terms will expire at the annual meeting of stockholders to be held in 2024; and |
• | the Class III directors will be , and , and their terms will expire at the annual meeting of stockholders to be held in 2025. |
• | selecting a qualified firm to serve as the independent registered public accounting firm to audit the Combined Entity’s financial statements; |
• | helping to ensure the independence and performance of the independent registered public accounting firm; |
• | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
• | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
• | reviewing policies on risk assessment and risk management; |
• | reviewing related party transactions; |
• | obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the Combined Entity’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and |
• | approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm. |
• | reviewing and approving, or recommending that our board of directors approve, the compensation of our executive officers; |
• | reviewing and recommending to our board of directors the compensation of our directors; |
• | reviewing and approving, or recommending that our board of directors approve, the terms of compensatory arrangements with our executive officers; |
• | administering our stock and equity incentive plans; |
• | selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors; |
• | reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control |
• | reviewing and establishing general policies relating to compensation and benefits of our employees; and |
• | reviewing our overall compensation philosophy. |
• | identifying, evaluating and selecting, or recommending that our board of directors approve, nominees for election to our board of directors; |
• | evaluating the performance of our board of directors and of individual directors; |
• | reviewing developments in corporate governance practices; |
• | evaluating the adequacy of our corporate governance practices and reporting; |
• | reviewing management succession plans; and |
• | developing and making recommendations to our board of directors regarding corporate governance guidelines and matters. |
Consolidated Statement of Operations |
Nine-Months Ended September 20, |
Year Ended December 31, |
||||||||||||||
(in thousands) |
2021 |
2020 |
2020 |
2019 |
||||||||||||
Unaudited |
Audited |
|||||||||||||||
Revenue |
$ | 6,648 | $ | 3,959 | $ | 5,969 | $ | 2,927 | ||||||||
Cost of revenue |
2,980 | 1,721 | 2,351 | 1,614 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
3,668 | 2,238 | 3,618 | 1,313 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
||||||||||||||||
Research and development |
18,793 | 7,601 | 11,775 | 11,925 | ||||||||||||
Selling and marketing |
13,279 | 7,274 | 10,054 | 9,306 | ||||||||||||
General and administrative |
8,170 | 5,123 | 6,338 | 4,937 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
40,242 | 19,998 | 28,167 | 26,168 | ||||||||||||
Operating loss |
(36,574 | ) | (17,760 | ) | (24,549 | ) | (24,855 | ) | ||||||||
Tranche rights and warrant remeasurement expense (income), net |
3,264 | (235 | ) | 2,813 | (177 | ) | ||||||||||
Financing expense (income), net |
798 | (423 | ) | (299 | ) | (1,068 | ) | |||||||||
Loss before income tax expense (tax benefit) |
(40,636 | ) | (17,102 | ) | (27,063 | ) | (23,610 | ) | ||||||||
Income tax expense (benefit), net |
(1,938 | ) | 76 | 117 | 252 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (38,698 | ) | $ | (17,178 | ) | $ | (27,180 | ) | $ | (23,862 | ) | ||||
|
|
|
|
|
|
|
|
As of September 30, |
As of December 31, |
|||||||||||||||
Consolidated Balance Sheet |
2021 |
2020 |
2020 |
2019 |
||||||||||||
(in thousands) |
Unaudited |
Audited |
||||||||||||||
Cash |
$ | 24,239 | $ | 54,315 | $ | 52,713 | $ | 48,123 | ||||||||
Marketable securities |
75,650 | 3,527 | — | — | ||||||||||||
Total current assets |
105,670 | 60,268 | 55,913 | 49,919 | ||||||||||||
Total assets |
123,643 | 61,512 | 57,336 | 50,785 | ||||||||||||
Total current liabilities |
10,997 | 6,794 | 11,224 | 4,924 | ||||||||||||
Total Liabilities, Commitments and Contingencies |
219,199 | 114,933 | 120,363 | 88,219 | ||||||||||||
Total shareholders’ deficit |
$ | (95,556 | ) | $ | (53,421 | ) | $ | (63,027 | ) | $ | (37,434 | ) |
Nine Month Ended September 30, |
Year Ended December 31, |
|||||||||||||||
Consolidated Statement of Cash Flows |
2021 |
2020 |
2020 |
2019 |
||||||||||||
(in thousands) |
Unaudited |
Audited |
||||||||||||||
Net cash used in operating activities |
$ | (30,050 | ) | $ | (17,872 | ) | $ | (24,028 | ) | $ | (18,554 | ) | ||||
Net cash used in investing activities |
(92,062 | ) | (3,735 | ) | (185 | ) | (387 | ) | ||||||||
Net cash provided by financing activities |
93,638 | 27,799 | 28,803 | 9,352 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
$ | (28,474 | ) | $ | 6,192 | 4,590 | $ | (9,589 | ) | |||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Period over period change |
|||||||||||||||
(in thousands, except percentages) |
2020 |
2019 |
($) |
(%) |
||||||||||||
ARR |
$ | 5,659 | $ | 2,675 | 2,984 | 112 |
Nine-Months Ended September 30, |
Period over period change |
|||||||||||||||
(in thousands, except percentages) |
2021 |
2020 |
($) |
(%) |
||||||||||||
ARR |
$ | 13,646 | $ | 4,351 | 9,295 | 214 |
• | Enterprise sign-up for a month-to-month |
• | Government & Space |
• | Sensor Products one-off builds. These products are built for a specific customer and their needs as detailed within the purchase order. The Company uses existing standard inventory-based products with some modifications to create the customized build. Revenue is recognized at the point-in-time |
• | Consumers |
Year Ended December 31, |
Period over period change |
|||||||||||||||
(in thousands, except percentages) |
2020 |
2019 |
($) |
(%) |
||||||||||||
Revenue |
$ | 5,969 | $ | 2,927 | $ | 3,042 | 104 | % | ||||||||
Cost of revenue |
2,351 | 1,614 | 737 | 46 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
3,618 | 1,313 | 2,305 | 176 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
||||||||||||||||
Research and development |
11,775 | 11,925 | (150 | ) | (1 | ) | ||||||||||
Selling and marketing |
10,054 | 9,306 | 748 | 8 | ||||||||||||
General and administrative |
6,338 | 4,937 | 1,401 | 28 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
28,167 | 26,168 | 1,999 | 8 | ||||||||||||
Operating loss |
(24,549 | ) | (24,855 | ) | 306 | (1 | ) | |||||||||
Tranche rights and warrant remeasurement expense (income), net |
2,813 | (177 | ) | 2,990 | (1,689 | ) | ||||||||||
Financing expense (income), net |
(299 | ) | (1,068 | ) | 769 | (72 | ) | |||||||||
Loss before income tax expense (tax benefit) |
(27,063 | ) | (23,610 | ) | (3,453 | ) | 15 | |||||||||
Income tax expense (benefit), net |
117 | 252 | (135 | ) | (54 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (27,180 | ) | $ | (23,862 | ) | $ | (3,318 | ) | 14 | % | |||||
|
|
|
|
|
|
|
|
Nine-Months Ended September 30, |
Period over period change |
|||||||||||||||
(in thousands, except percentages) |
2021 |
2020 |
($) |
(%) |
||||||||||||
Revenue |
$ | 6,648 | $ | 3,959 | $ | 2,689 | 68 | % | ||||||||
Cost of revenue |
2,980 | 1,721 | 1,259 | 64 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
3,668 | 2,238 | 1,406 | 62 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
||||||||||||||||
Research and development |
18,793 | 7,601 | 11,192 | 147 | ||||||||||||
Selling and marketing |
13,279 | 7,274 | 6,005 | 83 | ||||||||||||
General and administrative |
8,170 | 5,123 | 3,047 | 59 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
40,242 | 19,998 | 20,244 | 101 | ||||||||||||
Operating loss |
(36,574 | ) | (17,760 | ) | (18,814 | ) | 106 | |||||||||
Tranche rights and warrant remeasurement expenses (income), net |
3,264 | (235 | ) | 3,499 | (1,489 | ) | ||||||||||
Financing expense (income), net |
798 | (423 | ) | 1,221 | (289 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income tax expense (tax benefit) |
(40,636 | ) | (17,102 | ) | (23,534 | ) | 138 | |||||||||
Income tax expense (benefit), net |
(1,938 | ) | 76 | (2,014 | ) | (2,650 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (38,698 | ) | $ | (17,178 | ) | $ | (21,520 | ) | 125 | % | |||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Period over Period Change |
|||||||||||||||
2020 |
2019 |
$ |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Net cash used in operating activities |
$ | (24,028 | ) | $ | (18,554 | ) | $ | (5,474 | ) | 30 | % | |||||
Net cash used in investing activities |
(185 | ) | (387 | ) | 202 | (52 | ) | |||||||||
Net cash provided by financing activities |
28,803 | 9,352 | 19,451 | 208 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
4,590 | $ | (9,589 | ) | $ | 14,179 | (148 | )% | ||||||||
|
|
|
|
|
|
|
|
Nine months Ended September 30, |
Period over Period Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
(in thousands) |
||||||||||||||||
Net cash used in operating activities |
$ | (30,050 | ) | $ | (17,872 | ) | $ | (12,178 | ) | 68 | % | |||||
Net cash used in investing activities |
(92,062 | ) | (3,735 | ) | (88,327 | ) | 2,365 | |||||||||
Net cash provided by financing activities |
93,638 | 27,799 | 65,839 | 237 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
(28,474 | ) | $ | 6,192 | $ | (34,666 | ) | 560 | % | |||||||
|
|
|
|
|
|
|
|
1. | Identification of the contract, or contracts, with a customer; |
2. | Identification of the performance obligations in the contract; |
3. | Determination of the transaction price; |
4. | Allocation of the transaction price to the performance obligations in the contract; and |
5. | Recognition of revenue when, or as, the performance obligations are satisfied. |
Year Ending December 31 |
Minimum Lease Commitment |
|||
(in thousands) |
||||
2021 |
$ | 1,167 | ||
2022 |
1,149 | |||
2023 |
1,118 | |||
2024 and thereafter |
1,706 | |||
|
|
|||
Total |
$ | 5,140 | ||
|
|
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the closing price of the Combined Entity’s common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Combined Entity sends the notice of redemption to the warrant holders. |
• | permit the Combined Entity’s board of directors to issue up to shares of preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change of control; |
• | provide that the authorized number of directors may be changed only by resolution of the Combined Entity’s board of directors; |
• | provide that, subject to the rights of any series of preferred stock to elect directors, directors may be removed only with cause, after the proposal to remove such director is received by the Combined Entity at least forty-five (45) days prior to any annual or special meeting at which the removal is |
proposed, by the holders of at least 66 2 ⁄3 % of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors; |
• | provide that all, subject to the rights, if any, of the holders of any series of preferred stock then outstanding to elect directors and fill vacancies on the Combined Entity’s board of directors relating thereto, all vacancies, including newly created directorships, may, except as otherwise required by law, be filled solely by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
• | provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice; |
• | provide that Special Meetings of the Combined Entity’s stockholders may be called solely by the Combined Entity’s board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; |
• | provide that the Combined Entity’s board of directors will be divided into three classes of directors, with the classes to be as nearly equal as possible, and with the directors serving three-year terms (see the section titled “ Management After the Business Combination |
• | not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose; and |
• | provide that the Amended Bylaws may be amended or repealed only by the affirmative vote of note less than two thirds (2/3) of the outstanding shares of capital stock entitled to vote on such amendment or repeal, voting together as a single class, if the Combined Entity’s board of directors do not recommend that stockholders approve such amendment or repeal. |
• | 1% of the total number of shares of the Combined Entity’s common stock then outstanding; or |
• | the average weekly reported trading volume of the Combined Entity’s common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC, which is expected to be filed promptly after completion of the Business Combination, reflecting its status as an entity that is not a shell company. |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
Authorized Capital Stock | ||
PTAC is currently authorized to issue 301,000,000 shares of capital stock, consisting of (a) 300,000,000 shares of common stock, including 240,000,000 shares of Class A Common Stock and 60,000,000 shares of Class B Common Stock and (b) 1,000,000 shares of preferred stock. | The Combined Entity will be authorized to issue shares of capital stock, consisting of (i) shares of common stock, and (ii) shares of preferred stock. | |
Rights of Preferred Stock | ||
The Board may fix for any series of preferred stock such voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, as may be stated in the resolutions of the Board’s providing for the issuance of such series and included in a certificate of designation filed pursuant to the DGCL. | The Combined Entity’s board of directors may fix for any series of preferred stock such voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, as may be stated in the resolutions of the Board’s providing for the issuance of such series and included in a certificate of designation filed pursuant to the DGCL. | |
Number of Directors | ||
The number of directors of PTAC, other than those who may be elected by the holders of one or more series of preferred stock voting separately by class or series, will be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the Board. | The number of directors of the Combined Entity will be fixed from time to time exclusively by the Combined Entity’s board of directors pursuant to a resolution adopted by a majority of the Combined Entity’s board of directors. | |
Classification of the Board of Directors | ||
Subject to the rights of the holders of one or more series of preferred stock of PTAC to elect one or more directors, the Board is classified into three classes of directors with staggered terms of office. | Subject to the rights of the holders of one or more series of preferred stock of the Combined Entity to elect one or more directors, the Combined Entity’s board of directors is classified into three classes of directors with staggered terms of office. | |
Election of Directors; Vacancies on the Board of Directors | ||
At PTAC’s annual meeting, stockholders elect directors to replace the class of directors whose term expires at that annual meeting, each of whom shall hold office for | At the Combined Entity’s annual meeting, stockholders elect directors to replace the class of directors whose term expires at that annual meeting, |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
a term of three years or until his or her successor is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. Subject to the rights of the holders of one or more series of preferred stock, if the number of directors is changed, any increase or decrease is apportioned among the classes to maintain an equal number of directors in each class as nearly as possible, and any additional director of any class elected to fill a vacancy will hold office for the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. The election of directors shall be determined by a plurality of the votes cast by the stockholders at an annual meeting of stockholders. |
each of whom shall hold office for a term of three years or until his or her successor is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. A majority of the board of directors shall have the right to fill any vacancies on of the Combined Entity’s board of directors, whether caused by increase in size of the Combined Entity’s board of directors or resignation or removal of a director, and the Combined Entity’s board of directors shall have the right to determine the class that any additional director will fill, and any additional director of any class elected to fill a vacancy will hold office for the remaining term of that class, but in no case will a decrease in the number of directors remove or shorten the term of any incumbent director. Subject to the rights of the holders of one or more series of preferred stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote on the election of directors. | |
Removal of Directors | ||
Subject to the rights of the holders of any series of preferred stock and the right of the holders of PTAC Class B Common Stock to elect and remove directors, any director or the entire board may be removed from office at any time, with or without cause, by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of the Class B Common Stock entitled to vote generally in the election of directors, voting together as a single class. | Subject to the rights of the holders of any series of preferred stock, any director or the entire board may be removed from office at any time, but only for cause and only by the affirmative vote of holders of at least 66 2 ⁄3 % of the voting power of all then outstanding shares of capital stock of the Combined Entity entitled to vote generally in the election of directors, voting together as a single class. | |
Voting | ||
Except as otherwise required by law or the Current Charter, holders of PTAC Class A Common Stock and PTAC Class B Common Stock exclusively possess all voting power with respect to PTAC. Except as otherwise required by law or the Current Charter, the holders of PTAC Common Stock shall be entitled to one vote for each such share on each matter properly submitted to PTAC stockholders on which the holders of PTAC Common Stock are entitled to vote. Except as otherwise required by law or the Current Charter, for so long as any shares of PTAC Class B Common Stock remain outstanding, PTAC may not, without first obtaining the prior vote or written consent of the holders of at least a majority of the then |
Holders of the common stock will be entitled to cast one vote per share. Except as otherwise required by applicable law, holders of the Combined Entity’s common stock will not be entitled to vote on any amendment to the Proposed Charter that relates solely to the terms of one or more outstanding series of the Combined Entity’s preferred stock if the holders of such affected series of the Combined Entity’s preferred stock are exclusively entitled to vote thereon pursuant to the Proposed Charter or applicable law. |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
outstanding shares of PTAC Class B Common Stock, voting separately as a single class, amend, alter or repeal any provision of the Current Charter, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the PTAC Class B Common Stock. | ||
Cumulative Voting | ||
Delaware law allows for cumulative voting only if provided for in the Current Charter; however, the Current Charter does not authorize cumulative voting. | Delaware law allows for cumulative voting only if provided for in the Proposed Charter; however, the Proposed Charter does not authorize cumulative voting. | |
Special Meeting of the Board of Directors | ||
Special meetings of the Board may be called by the Chairman of the Board or President and shall be called upon the written request of at least a majority of directors then in office or the sole director. | Special meetings of the Combined Entity’s board of directors may be called by the affirmative vote of a majority of the directors then in office, the Chairperson of the Combined Entity’s board of directors, if one is elected, or the Chief Executive Officer. | |
Stockholder Action by Written Consent | ||
Under the Current Charter, any action required or permitted to be taken by the stockholders of PTAC must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders, other than with respect to the PTAC Class B Common Stock with respect to which action may be taken by written consent, and other than what may otherwise be provided for pursuant to the Current Charter relating to the rights of the holders of any outstanding series of preferred stock of PTAC or PTAC Class B Common Stock. | Subject to the terms of any series of preferred stock, any action required or permitted to be taken by the stockholders of Combined Entity must be effected at an annual or special meeting of the stockholders and may not be effected by written consent. | |
Amendment to Certificate of Incorporation | ||
Under Delaware law, an amendment to a charter generally requires the approval of a company’s board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. Except as provided in the Current Charter, Article IX of the Current Charter relating to business combination requirements may not be amended prior to the consummation of the initial business combination unless approved by the affirmative vote of the holders of at least 65% of all then outstanding shares of Common Stock; and the powers, preferences or relative, participating, optional or other or special rights of the PTAC Class B Common Stock may only be amended with the approval of the holders of at least a majority of |
Any amendment to the Proposed Charter will require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment, provided that provisions in the Proposed Charter in Article VII (limitation on director liability) will require approval of the holders of at least 66 2 ⁄3 % of the Combined Entity’s then-outstanding shares of capital stock entitled to vote generally at an election of directors. |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
the then-outstanding shares of PTAC Class B Common Stock. | ||
Amendment of the Bylaws | ||
The Board is expressly authorized to adopt, amend, alter or repeal the Current Bylaws. The Current Bylaws may also be adopted, amended, altered or repealed by the PTAC stockholders representing a majority of the voting power of all of the then-outstanding shares of capital stock of PTAC entitled to vote generally in the election of directors, provided that the approval of at least 66.7% of PTAC’s then-outstanding shares of capital stock is required to amend Article VIII, which relates to indemnification matters. | Under the Proposed Charter, the Amended Bylaws can be amended or repealed by: (i) the board of the Combined Entity and (ii) an affirmative vote of stockholders holding 66 2 ⁄3 % of the voting power of then outstanding shares of capital stock, voting together as a single class, provided, if the board recommends that stockholders approve such amendment or repeal, an affirmative vote of stockholders holding only a majority of the voting power of then outstanding shares of capital stock, voting together as a single class, is required. | |
Quorum | ||
Board of Directors Stockholders |
Board of Directors. Stockholders. | |
Corporate Opportunities of Directors and Officers | ||
To the extent permitted by law, PTAC renounces any expectancy that any of the PTAC directors or officers, or any of their respective affiliates, will offer any corporate opportunity to which he or she may become aware to PTAC, except with respect to any of the directors or officers of PTAC with respect to a corporate opportunity that was offered to such person solely and exclusively in his or her capacity as a director or officer of PTAC and (i) such opportunity is one that PTAC is legally and contractually permitted to undertake and would otherwise be reasonable for PTAC to pursue and (ii) the director or officer is permitted to refer that opportunity to PTAC without violating any legal obligation. | The Proposed Charter and Amended Bylaws are silent with respect to corporate opportunities of directors and officers. | |
Special Stockholder Meetings | ||
The Current Bylaws provide that a special meeting of stockholders may be called by the Chairman of the Board, Chief Executive Officer of PTAC, or the Board pursuant to a resolution adopted by a majority of the Board. | Subject to the rights of any series of preferred stock, special meetings of the Combined Entity’s stockholders may be called solely by the Combined Entity’s board of directors pursuant to a resolution |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
adopted by a majority of the Combined Entity’s board of directors. | ||
Notice of Stockholder Meetings | ||
Written notice stating the place, if any, date and time of each meeting of PTAC stockholders, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) must be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, unless otherwise required by the DGCL. | Notice of each meeting of the Combined Entity’s stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the Combined Entity’s stockholders entitled to notice of the meeting. | |
Whenever notice is required to be given to any PTAC stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. | Without limiting the manner by which notice otherwise may be given to the Combined Entity’s stockholders, any notice to the Combined Entity’s stockholders given by Combined Entity shall be effective if given by electronic transmission in accordance with Section 232 of the DGCL. The notices of all meetings shall state the hour, date and place, if any, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. | |
Stockholder Proposals (Other than Nomination of Persons for Election as Directors) | ||
No business may be transacted at an annual meeting of PTAC stockholders, other than business that is either (i) specified in PTAC’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual meeting by any PTAC stockholder who is entitled to vote at the meeting, who complies with the notice procedures set forth in the Current Bylaws. The PTAC stockholder must (i) give timely notice thereof in proper written form to the Secretary of PTAC and (ii) the business must be a proper matter for stockholder action. To be timely, a PTAC stockholder’s notice must be received by the Secretary at the principal executive offices of PTAC not later than the close of business on the ninetieth (90th) day nor earlier than the opening of business on the one-hundred twentieth (120th) day before the anniversary date of the immediately preceding annual meeting; provided, |
No business may be conducted at an annual meeting of the Combined Entity’s stockholders, other than business that is either (i) specified in the Combined Entity’s notice of meeting delivered pursuant to the Bylaws, (ii) otherwise properly brought before the annual meeting by or at the direction of the board (or a committee thereof) or (iii) otherwise properly brought before the annual meeting by any stockholder of the Combined Entity who is entitled to vote at the meeting, who complies with the notice procedures set forth in Amended Bylaws and who is a stockholder of record at the time such notice is delivered to the Secretary of the Combined Entity. The Combined Entity stockholder must (i) give timely notice thereof in proper written form to the Secretary of the Combined Entity, (ii) provide any updates or supplements to such notice at the times and in the form required by the Amended Bylaws and (iii) act in accordance with the representations set forth in the solicitation statement delivered to the |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be delivered not earlier than the close of business on the 120th day before the meeting and not later than the 90th day before the meeting or the 10th day following public announcement of the date of the annual meeting, if later. The public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice. Additionally, the stockholder must provide information pursuant to the advance notice provisions in the Current Bylaws. | Combined Entity. To be timely, a stockholder’s notice must be received at the principal executive offices of the Combined Entity not less than ninety (90) or more than one-hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided however if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, the notice must be delivered not later than the ninetieth (90th ) day prior to such annual meeting or, if later, the tenth day following the day on which public disclosure of such meeting was first made. Additionally, the stockholder must provide information pursuant to the advance notice provisions in the Amended Bylaws. | |
Stockholder Nominations of Persons for Election as Directors | ||
Nominations of persons for election to the Board may be made (i) by or at the direction of the Board or (ii) by any stockholder of PTAC who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice required (as described below) and on the record date for the determination of stockholders entitled to vote at such meeting and who gives proper notice. To give timely notice, a stockholder’s notice must be given to the Secretary of PTAC at the principal executive offices of PTAC either (i) in the case of an annual meeting, not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day before the anniversary date of the immediately preceding annual meeting of stockholders (in most cases) and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which public announcement of the date of the special meeting is first made. |
Nominations of persons for election to the Combined Entity’s board of directors may be made by any stockholder of the Combined Entity who provides a timely notice (i.e. provides notice which must be received in writing by the secretary of the Combined Entity at the Combined Entity’s principal executive officer not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting (in most cases), is a stockholder of record on the date of giving such notice and on the record date for the determination of stockholders entitled to vote at such a meeting, and is entitled to vote at such meeting and on such election. | |
Limitation of Liability of Directors and Officers | ||
The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The Current Charter provides that no director will be personally liable, except to the extent an exemption from liability or limitation is not permitted under the DGCL. |
The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. The Proposed Charter provides that no director will be personally liable, except to the extent an exemption from liability or limitation is not permitted under the DGCL. |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
Indemnification of Directors and Officers | ||
The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity. The Current Charter provides that PTAC will indemnify each director and officer to the fullest extent permitted by applicable law. |
The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity. The Amended Bylaws provide that Combined Entity will indemnify each director and officer to the fullest extent permitted by applicable law. | |
Dividends | ||
Unless further restricted in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of either (i) surplus, or (ii) if no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (provided that the amount of capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of a corporation. The Current Charter provides that, subject to applicable law and the rights, if any, of outstanding shares of preferred stock, the holders of PTAC common stock will be entitled to receive dividends (payable in cash, property or capital stock of PTAC) when, as, and if declared by the Board from time to time out of any assets or funds of PTAC legally available for dividends. |
Unless further restricted in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of either (i) surplus, or (ii) if no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (provided that the amount of capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of a corporation. The Proposed Charter provides dividends may be declared only when and as declared by the board of directors of the Combined Entity or any authorized committee thereof out of any assets or funds of the Combined Entity legally available for dividends. | |
Liquidation | ||
Subject to applicable law and the rights, if any, of the holders of outstanding shares of preferred stock, the Current Charter provides that following the payment or provision for payment of the debts and other liabilities of PTAC in the event of an voluntary or involuntary liquidation, dissolution or winding up of PTAC, the holders of PTAC common stock shall be entitled to receive all the remaining assets of PTAC available for distribution to its stockholders, ratably in proportion to the number of shares of PTAC Class A Common Stock | Subject to applicable law and the preferential or other rights of any holders of preferred stock then outstanding, the Proposed Charter provides that upon the voluntary or involuntary liquidation, dissolution or winding up of the Combined Entity, the net assets of the Combined Entity shall be distributed pro rata to the holders of Combined Entity common stock. |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
(on an as converted basis with respect to the PTAC Class B Common Stock) held by them. | ||
Supermajority Voting Provisions | ||
The blank shell company provisions of the Current Charter (Article IX), provisions regarding business combinations with “interested stockholders” (i.e. a stockholder owning 15% or more of PTAC’s outstanding voting stock) (Article X) and provisions regarding indemnification (Article VIII) require the affirmative vote of a supermajority of the voting power of all outstanding shares of capital stock of PTAC. Article VIII of the Current Bylaws regarding indemnification require the affirmative vote of a supermajority of the voting power of all outstanding shares of capital stock of PTAC. | The affirmative vote of 66 2 ⁄3 % of the voting power of the shares of capital stock of Combined Entity that would then be entitled to vote in the election of directors at an annual meeting of stockholders will be required in order for the stockholders of Combined Entity to amend or real Article VII (limitation on directly liability) of the Proposed Charter and the Amended Bylaws. | |
Anti-Takeover Provisions and Other Stockholder Protections | ||
The anti-takeover provisions and other stockholder protections in the Current Charter include the staggered board, a prohibition on stockholder action by written consent other than as relates to Class B Common Stock, and blank check preferred stock. The Current Charter restricts PTAC from engaging in a “business combination” with an “interested stockholder” for three years following the time that the “interested stockholder” becomes such, subject to certain exceptions. |
The anti-takeover provisions and other stockholder protections included in the Proposed Charter include a staggered board, a prohibition on stockholder action by written consent and blank check preferred stock. The Combined Entity will be subject to Section 203 of the DGCL. | |
Preemptive Rights | ||
There are no preemptive rights relating to the capital stock of PTAC. | There are no preemptive rights relating to the capital stock of the Combined Entity. | |
Fiduciary Duties of Directors | ||
Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the Board or any committee designated by the Board are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the Board or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information |
PTAC (Pre-Business Combination) |
The Combined Entity (Post-Business Combination) | |
The Board may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the DGCL, the Current Charter and the Current Bylaws. |
protects directors from liability related to decisions made based on such records and other information. The board of directors of the Combined Entity may exercise all such powers and do all such acts and things as may be exercised or done by the Combined Entity, subject to the DGCL, the Current Charter and the Current Bylaws. | |
Inspection of Books and Records | ||
Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. | |
Choice of Forum | ||
The Current Charter generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to: (i) any derivative action or proceeding brought on behalf of PTAC, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of PTAC to PTAC or PTAC stockholders, (iii) any action asserting a claim against PTAC, its directors, officers, or employees arising pursuant to any provision of the DGCL or the Current Charter or Current Bylaws and (iv) any action asserting a claim against PTAC, its directors, officers or employees governed by the internal affairs doctrine. In addition, the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction over any action arising under the Securities Act. The exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act. | The Amended Bylaws generally designates Court of Chancery of the State of Delaware as the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of Combined Entity, (ii) any action asserting a claim of breach of a fiduciary duty owed by, or any other wrongdoing by, any director officer, employee or stockholder of Combined Entity, (iii) any action asserting a claim against Combined Entity arising pursuant to any provision of the DCGL, the Proposed Charter or the Amended Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of any provisions in the Proposed Charter or Amended Bylaws, (v) any action asserting a claim against the Combined Entity that is governed by the internal affairs doctrine and (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL. In addition, the federal district courts of the United States are the exclusive forum for the resolution of any action, suit or proceeding asserting a cause of action under the Securities Act. |
• | each person who is, or is expected to be, the beneficial owner of more than 5% of issued and outstanding shares of PTAC Common Stock or of the Combined Entity’s common stock; |
• | each of our current directors and executive officers; |
• | each person who will (or is expected to) become a director or executive officer of the Combined Entity following the Closing; and |
• | all directors and executive officers of PTAC as a group pre-Business Combination and all directors and executive officers of the Combined Entity post-Business Combination. |
Pre-Business Combination |
Successor Post-Business Combination |
|||||||||||||||||||||||||||||||
PTAC Class A Common Stock |
PTAC Class B Common Stock |
Assuming No Redemption |
Assuming 100% Redemption |
|||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(1) |
Number of Shares Beneficially Owned |
% of Outstanding Shares of PTAC Common Stock |
Number of Shares Beneficially Owned |
% of Outstanding Shares of PTAC Common Stock |
Number of Shares |
% |
Number of Shares |
% |
||||||||||||||||||||||||
Directors and Executive Officers of PTAC: |
||||||||||||||||||||||||||||||||
Christopher Longo |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Ciro M. DeFalco |
— | — | — | — | — | — | — | — |
Pre-Business Combination |
Successor Post-Business Combination |
|||||||||||||||||||||||||||||||
PTAC Class A Common Stock |
PTAC Class B Common Stock |
Assuming No Redemption |
Assuming Max Redemption |
|||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(1) |
Number of Shares Beneficially Owned |
% of Outstanding Shares of PTAC Common Stock |
Number of Shares Beneficially Owned |
% of Outstanding Shares of PTAC Common Stock |
Number of Shares |
% |
Number of Shares |
% |
||||||||||||||||||||||||
Adam Karkowsky |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
J. Eric Smith |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Bradley Tusk |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Nicolas D. Zerbib |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
All Directors and Executive Officers of PTAC as a Group (6 Individuals |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Directors and Executive Officers of Combined Entity After Consummation of the Business Combination: |
||||||||||||||||||||||||||||||||
Shimon Elkabetz |
— | — | — | — | % | % | ||||||||||||||||||||||||||
Rei Goffer |
— | — | — | — | % | % | ||||||||||||||||||||||||||
Itai Zlotnik |
— | — | — | — | % | % | ||||||||||||||||||||||||||
Stephen Gregorio |
— | — | — | — | % | % | ||||||||||||||||||||||||||
Leigha Kemmett |
— | — | — | — | % | % | ||||||||||||||||||||||||||
All Directors and Executive Officers of Combined Entity as a Group ( Individuals) |
||||||||||||||||||||||||||||||||
Five Percent Holders: |
||||||||||||||||||||||||||||||||
Pine Technology Sponsor LLC |
— | — | 8,625,000 | (2) |
100.0 | % | 11,375,000 | (3) |
9.4 | % | 11,375,000 | (3) |
11.7 | % | ||||||||||||||||||
Peel Acquisition Company II, LLC |
— | — | 8,625,000 | (2) |
100.0 | % | 11,375,000 | (3) |
9.4 | % | 11,375,000 | (3) |
11.7 | % | ||||||||||||||||||
Trident Pine Acquisition, L.P. |
— | — | 8,625,000 | (2) |
100.0 | % | 11,375,000 | (3) |
9.4 | % | 11,375,000 | (3) |
11.7 | % | ||||||||||||||||||
Saba Capital Management, L.P. and affiliates (4) |
1,981,121 | 5.7 | % | — | — | 1,981,121 | 1.6 | % | 1,981,121 | 2.0 | % | |||||||||||||||||||||
Magnetar Financial LLC and affiliates (5) |
1,767,075 | 5.1 | % | — | — | 1,767,075 | 1.5 | % | 1,767,075 | 1.8 | % |
* | Less than one percent. |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Pine Technology Acquisition Corp. 260 Lena Drive, Aurora, Ohio 44202. |
(2) | Represents PTAC Class B Common Stock held by the Sponsor, which holds the voting and investment power over such PTAC Class B Common Stock. Pine Technology Sponsor LLC is the record holder of the shares reported herein. Each of PTAC’s directors and officers have direct or indirect membership interests in Pine Technology Sponsor LLC. Peel Acquisition Company II, LLC and Trident Pine Acquisition, L.P. are the managing members of Pine Technology Sponsor LLC and, together, have voting and investment |
discretion with respect to the common stock held of record by Pine Technology Sponsor LLC. Barry D. Zyskind is the manager of Peel Acquisition Company II, LLC. Trident Pine GP, LLC is the general partner of Trident Pine Acquisition, L.P. Trident VII, L.P. and Trident VII Parallel Fund, L.P. (the “ Trident VII Partnerships Trident VII GP |
(3) | Includes 2,750,000 shares of PTAC Class A Common Stock purchased by Sponsor in the PIPE Investment. |
(4) | Based solely upon information contained in the Schedule 13G jointly filed with the SEC on November 26, 2021 by Saba Capital Management, L.P., Boaz R. Weinstein and Saba Capital Management GP, LLC. The address of the business office of each of the foregoing reporting persons is 405 Lexington Avenue, 58th Floor, New York, New York 10174. |
(5) | Based solely upon information contained in the Schedule 13G jointly filed with the SEC on January 28, 2022 by Magnetar Financial LLC, Magnetar Capital Partners LP, Supernova Management LLC and Alec N. Litowitz. The address of the business office of each of the foregoing reporting persons is 1603 Orrington Avenue, 13th Floor, Evanston, Illinois 60201. |
• | the amount involved exceeded or will exceed $120,000; and |
• | any of its directors, executive officers, or holders of more than 5% of its capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest, other than compensation and other arrangements that are described in the section titled “Executive Compensation of Tomorrow.io” or that were approved by its compensation committee. |
Name |
Shares |
Aggregate Purchase Price |
Date of Issuance | |||||||
Stonecourt HCM II Partners LP |
2,812,465 | $ | 17,634,999.29 | March 15, 2021 | ||||||
Stonecourt HCM II Partners LP |
4,154,061 | $ | 26,047,208.69 | April 12, 2021 | ||||||
Standard Weather Holdings LLC |
3,987,050 | $ | 24,999,999.62 | April 12, 2021 |
Name |
Shares |
Aggregate Purchase Price |
Date of Issuance | |||||||
Entities affiliated with Pitango Growth II Fund, L.P. |
2,544,271 | $ | 10,000,002.74 | July 24, 2020 | ||||||
Entities affiliated with Square Peg Global 2015 Trust |
254,427 | $ | 999,999.88 | July 24, 2020 | ||||||
Entities affiliated with Square Peg Global 2015 Trust |
2,798,698 | $ | 11,000,002.62 | August 31, 2020 | ||||||
Entities affiliated with Square Peg Global 2015 Trust |
3,053,125 | $ | 12,000,002.50 | April 15, 2021 | ||||||
Entities affiliated with Pitango Growth II Fund, L.P. |
2,544,271 | $ | 10,000,002.74 | July 23, 2021 |
Name |
Shares |
Aggregate Purchase Price |
Date of Issuance | |||||||
Entities affiliated with Square Peg Global 2015 Trust |
714,997 | $ | 2,800,000.00 | June 10, 2019 | ||||||
Entities affiliated with Square Peg Global 2015 Trust |
893,745 | $ | 3,499,994.79 | August 1, 2019 | ||||||
Entities affiliated with Square Peg Global 2015 Trust |
800,000 | $ | 3,132,880.00 | May 15, 2020 |
• | any person who is, or at any time during the applicable period was, one of the Combined Entity’s officers or one of the Combined Entity’s directors; |
• | any person who is known by the Combined Entity to be the beneficial owner of more than five percent (5%) of its voting stock; and |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | the related person’s interest in the transaction; |
• | the approximate dollar value of the amount involved in the transaction; |
• | the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss; |
• | whether the transaction was undertaken in the ordinary course of business of the Combined Entity; |
• | whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to the Combined Entity than terms that could have been reached with an unrelated third party; |
• | the purpose of, and the potential benefits to the Combined Entity of, the transaction; and |
• | any other information regarding the transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction. |
• | any person who is, or at any time during the applicable period was, one of Combined Entity’s officers or one of Combined Entity’s directors; |
• | any person who is known by Combined Entity to be the beneficial owner of more than five percent (5%) of its voting stock; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent (10%) or greater beneficial ownership interest. |
Page |
||||
Audited Financial Statements |
||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
Unaudited Condensed Financial Statements |
||||
F-18 | ||||
F-19 | ||||
F-20 | ||||
F-21 | ||||
F-22–F-38 | ||||
THE TOMORROW COMPANIES INC. AND ITS SUBSIDIARIES |
| |||
Unaudited Condensed Financial Statements |
||||
F-39 | ||||
F-40 | ||||
F-41 | ||||
F-42–F-43 | ||||
F-44–F-61 | ||||
Audited Financial Statements |
||||
F-63 | ||||
F-64 | ||||
F-65 | ||||
F-66 | ||||
F-67 | ||||
F-68 - F-90 |
Page |
||||
REMOTE SENSING SOLUTIONS, INC. |
| |||
Unaudited Condensed Financial Statements |
||||
F-91 | ||||
F-92 | ||||
F-96 | ||||
Audited Financial Statements |
||||
F-105-F-106 |
||||
F-107-F-108 |
||||
F-109 | ||||
F-110 | ||||
F-111-F-115 |
||||
F-116 | ||||
F-117 |
Assets: |
||||
Current Assets |
||||
Stock subscription receivable |
$ | |||
|
|
|||
Total Current Assets |
||||
Deferred offering costs |
||||
|
|
|||
Total Assets |
$ | |||
|
|
|||
Liabilities and Stockholder’s Equity |
||||
Accrued offering costs and expenses |
$ | |||
|
|
|||
Total Current Liabilities |
||||
|
|
|
|
|
Commitments and Contingencies (Note 6) |
||||
Stockholder’s Equity: |
||||
Preferred stock, $ |
||||
Class A common stock, $ |
||||
Class B common stock, $ (1) |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
|
|
|||
Total Stockholder’s Equity |
||||
|
|
|||
Total Liabilities and Stockholder’s Equity |
$ | |||
|
|
(1) | Includes up to |
Formation costs |
$ | |||
|
|
|||
Net loss |
$ | ( |
) | |
|
|
|||
Basic and diluted weighted average shares outstanding (1) |
||||
|
|
|||
Basic and diluted net loss per share |
$ | ( |
) | |
|
|
(1) | Excludes up to |
Class B Common Stock |
Additional Paid-In Capital |
Accumulated Equity |
Stockholder’s Equity |
|||||||||||||||||
Shares (1) |
Amount |
|||||||||||||||||||
Balance as of December 30, 2020 (inception) |
$ | $ | $ | $ | ||||||||||||||||
Class B common stock issued to Sponsor |
||||||||||||||||||||
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2020 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Includes up to |
Cash flows from operating activities: |
||||
Net loss |
$ | ( |
) | |
Changes in current assets and liabilities: |
||||
Accrued offering costs and expenses |
||||
|
|
|||
Net cash used from operating activities |
||||
|
|
|||
Net change in cash |
||||
Cash, beginning of the period |
||||
|
|
|||
Cash, end of the period |
$ | |||
|
|
|||
Supplemental disclosure of cash flow information: |
||||
Increase in stock subscription receivable for issuance of Class B ordinary shares |
$ | |||
|
|
|||
Accrued deferred offering costs |
$ | |||
|
|
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period, to each warrant holder; and |
• | if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
September 30, 2021 (Unaudited) |
December 31, 2020 (Audited) |
|||||||
Assets: |
||||||||
Current Assets: |
||||||||
Cash |
$ |
$ |
— |
|||||
Prepaid Expenses |
— |
|||||||
Share subscription receivable |
— |
|||||||
Total current asset s |
|
|
|
|
|
|
|
|
Deferred offering costs associated with IPO |
— |
|||||||
|
|
|
|
|||||
Prepaid expenses — Non-current |
— |
|||||||
Cash held in Trust Account |
— |
|||||||
|
|
|
|
|||||
Total Assets |
$ |
$ |
||||||
|
|
|
|
|||||
Liabilities and Stockholders’ (Deficit) Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ |
$ |
||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Warrant liabilities |
— |
|||||||
Deferred underwriters’ discount |
— |
|||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments |
||||||||
Class A Common Stock subject to possible redemption |
— |
|||||||
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
— |
|||||||
Accumulated deficit |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Total stockholders’ (deficit) equity |
( |
) |
||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ (Deficit) Equity |
$ |
$ |
||||||
|
|
|
|
Three months ended September 30, 2021 |
Nine months ended September 30, 2021 |
|||||||
Formation and operating costs |
$ | $ | ||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Other Income (Loss) |
||||||||
Interest income |
||||||||
Excess fair value over cash received for private placement warrants |
— | ( |
) | |||||
Change in fair value of warrant liabilities |
||||||||
Offering expenses related to warrant issuance |
— | ( |
) | |||||
|
|
|
|
|||||
Total other income |
||||||||
|
|
|
|
|||||
Net income |
$ |
$ |
||||||
|
|
|
|
|||||
Weighted average shares outstanding, Class A common stock subject to possible redemption |
||||||||
|
|
|
|
|||||
Basic and diluted net income per share |
$ | $ | ||||||
|
|
|
|
|||||
Weighted average shares outstanding, non-redeemable Class B common stock |
||||||||
|
|
|
|
|||||
Basic and diluted net income per share |
$ | $ | ||||||
|
|
|
|
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Retained Earnings (Accumulated Deficit) |
Total Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
$ | $ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Sale of Units in Initial Public Offering, net of underwriting discount and initial fair value of public warrants |
— | — | — | |||||||||||||||||||||||||
Class A common stock subject to possible redemption |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Net Loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of March 31, 2021, as restated |
( |
) |
( |
) | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Accretion for Class A shares subject to redemption |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of June 30, 2021, as restated |
( |
) |
( |
) | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
Accretion for Class A shares subject to redemption |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of September 30, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine September 30, 2021 |
||||
Cash Flows from Operating Activities: |
||||
Net income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
||||
Interest earned on trust account |
( |
) | ||
Change in fair value of warrant liabilities |
( |
) | ||
Excess of fair value over cash received for private placement warrants |
||||
Offering costs allocated to warrants |
||||
Changes in current assets and current liabilities: |
||||
Prepaid assets |
( |
) | ||
Accounts payable |
||||
|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
|||
Cash Flows from Investing Activities: |
||||
Investment of cash into trust account |
( |
) | ||
|
|
|||
Net cash used in investing activities |
( |
) | ||
|
|
|||
Cash Flows from Financing Activities: |
||||
Proceeds from Initial Public Offering, net of underwriting discount |
||||
Proceeds from issuance of Private Placement Warrants |
||||
Cash received for share receivable |
||||
Payments of offering costs |
( |
) | ||
|
|
|||
Net cash provided by financing activities |
||||
Net Change in Cash |
||||
Cash — Beginning |
||||
|
|
|||
Cash — Ending |
$ | |||
|
|
|||
Supplemental Disclosure of Non-cash Financing Activities: |
||||
Initial value of Class A common stock subject to possible redemption |
$ | |||
|
|
|||
Initial value of warrant liabilities |
$ | |||
|
|
|||
Accretion for Class A common stock subject to possible redemption |
$ | |||
|
|
|||
Deferred underwriting discount payable charged to additional paid-in capital |
$ | |||
|
|
As Previously Reported |
Adjustment |
As Restated (audited) |
Balance Sheet as of March 15, 2021 |
| |||||||||||
Common Stock subject to possible redemption ($) |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value |
$ |
$ |
( |
) | $ |
— | ||||||
Class B common stock, $0.0001 par value |
— | |||||||||||
Additional paid-in capital |
( |
) | — | |||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity (deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Number of shares subject to redemption |
||||||||||||
Financial Statements as of March 31, 2021 (per the Company’s quarterly report on Form 10-Q filed on May 24, 2021) |
| |||||||||||
|
|
|
As Previously Reported |
|
|
|
Adjustment |
|
|
|
As Restated ( un audited) |
|
Balance Sheet |
||||||||||||
Common Stock subject to possible redemption ($) |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value |
$ |
$ |
( |
) | $ |
— | ||||||
Class B common stock, $0.0001 par value |
— | |||||||||||
Additional paid-in capital |
( |
) | — | |||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity (deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Number of shares subject to redemption |
||||||||||||
Statement of Operations |
||||||||||||
Weighted average shares outstanding, Class A common stock subject to possible redemption |
||||||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income (loss) per share |
$ | — | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding, non-redeemable common stock |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income (loss) per share |
$ | ( |
) | $ | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Financial Statements as of June 30, 2021 (per the Company’s quarterly report on Form 10-Q filed on August 16, 2021) |
| |||||||||||
|
|
|
As Previously Reported |
|
|
|
Adjustment |
|
|
|
As Restated ( un audited) |
|
Balance Sheet |
||||||||||||
Common Stock subject to possible redemption ($) |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value |
$ |
$ |
( |
) | $ |
— | ||||||
Class B common stock, $0.0001 par value |
— | |||||||||||
Additional paid-in capital |
— | |||||||||||
Accumulated deficit |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity (deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Number of shares subject to redemption |
As Previously Reported |
Adjustment |
As Restated |
||||||||||
Statement of Operations |
||||||||||||
Three Months ended June 30, 2021 |
||||||||||||
Weighted average shares outstanding, Class A common stock subject to possible redemption |
||||||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income (loss) per share |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding, non-redeemable common stock |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income (loss) per share |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
|||||||
Six Months ended June 30, 2021 |
||||||||||||
Weighted average shares outstanding, Class A common stock subject to possible redemption |
||||||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income (loss) per share |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding, non-redeemable common stock |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net income (loss) per share |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Gross Proceeds |
$ | |||
Less: |
||||
Proceeds allocated to public warrants |
( |
) | ||
Issuance costs related to Class A common stock |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
|
|
|||
Contingently redeemable Class A common stock |
$ |
For the Three Months ended September 30, 2021 |
For the Nine Months ended September 30, 2021 |
|||||||
Common stock subject to possible redemption |
||||||||
Numerator: |
||||||||
Net income allocable to Class A common stock subject to possible redemption |
$ | $ | ||||||
Denominator: |
||||||||
Weighted Average Redeemable Class A common stock, Basic and Diluted |
||||||||
|
|
|
|
|||||
Basic and Diluted net income per share, Redeemable Class A common stock |
$ | $ | ||||||
|
|
|
|
|||||
Non-Redeemable Common shares |
||||||||
Numerator: |
||||||||
Net income allocable to Class B common stock not subject to redemption |
$ | $ | ||||||
Denominator: |
||||||||
Weighted Average Non-Redeemable Class B common stock, Basic and Diluted |
||||||||
|
|
|
|
|||||
Basic and diluted net income per share, Class B common stock |
$ | $ | ||||||
|
|
|
|
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder (the “30-day redemption period”); and |
• | if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
September 30, 2021 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Description |
||||||||||||||||
Assets: |
||||||||||||||||
U.S. Money Market Funds held in Trust Account |
$ | $ | $ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Warrant liabilities — public warrants |
$ | $ | $ |
$ |
||||||||||||
Warrant liabilities — private warrants |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ |
$ | ||||||||||||
|
|
|
|
|
|
|
|
At March 15, 2021 (Initial Measurement) |
At September 30, 2021 |
|||||||
Stock price |
$ | $ | ||||||
Strike price |
$ | $ | ||||||
Term (in years) |
||||||||
Volatility |
% | % | ||||||
Risk-free rate |
% | % | ||||||
Dividend yield |
% | % |
Warrant Liability |
||||
Fair value at December 31, 2020 |
$ | |||
Initial value of public and private warrant liabilities |
||||
Change in fair value |
( |
) | ||
|
|
|||
Fair Value at March 31, 2021 |
||||
Change in fair value |
( |
) | ||
Public warrants reclassified to level 1 |
( |
) | ||
|
|
|||
Fair Value at June 30, 2021 |
||||
Change in fair value |
( |
) | ||
|
|
|||
Fair Value at September 30, 2021 |
$ | |||
|
|
Public Warrants |
Private Placement Warrants |
Total Warrant Liabilities |
||||||||||
Fair value as of December 30, 2020 |
$ | $ | $ | |||||||||
Initial measurement on March 15, 2021 |
||||||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Fair value as of March 31, 2021 |
||||||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Fair value as of June 30, 2021 |
||||||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Fair value as of September 30, 2021 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
September 30, 2021 |
December 31, 2020 |
|||||||||
Note |
Unaudited |
|||||||||
ASSETS |
||||||||||
CURRENT ASSETS: |
||||||||||
Cash and cash equivalents |
$ | 24,239 | $ | 52,713 | ||||||
Marketable securities |
75,650 | — | ||||||||
Short-term bank deposit |
126 | 126 | ||||||||
Trade receivables, net of allowance for doubtful accounts of $353 and $198 as of September 30, 2021 (unaudited) and December 31, 2020, respectively |
3,256 | 2,413 | ||||||||
Prepaid expenses and other current assets |
659 | 661 | ||||||||
Inventory |
1,740 | — | ||||||||
|
|
|
|
|||||||
Total current assets |
105,670 | 55,913 | ||||||||
|
|
|
|
|||||||
NON-CURRENT ASSETS: |
||||||||||
Long-term restricted cash |
243 | 21 | ||||||||
Long-term marketable securities |
2,505 | — | ||||||||
Property and equipment, net |
6 | 2,151 | 266 | |||||||
Costs to obtain a contract |
1,118 | 830 | ||||||||
Other non-current assets |
389 | 306 | ||||||||
Intangible assets, net |
7,138 | — | ||||||||
Goodwill |
4,429 | — | ||||||||
|
|
|
|
|||||||
Total long-term assets |
17,973 | 1,423 | ||||||||
|
|
|
|
|||||||
Total assets |
$ | 123,643 | $ | 57,336 | ||||||
|
|
|
|
|||||||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT |
||||||||||
CURRENT LIABILITIES: |
||||||||||
Accounts payable |
$ | 1,666 | $ | 831 | ||||||
Deferred revenue |
2,695 | 1,990 | ||||||||
Other accounts payable and accrued expenses |
3,197 | 2,027 | ||||||||
Warrant liability |
3,439 | — | ||||||||
Preferred shares tranche rights liability |
— | 6,376 | ||||||||
|
|
|
|
|||||||
Total liabilities |
10,997 | 11,224 | ||||||||
|
|
|
|
|||||||
COMMITMENTS AND CONTINGENCIES: |
9 | |||||||||
Convertible Preferred shares of $0.0001 par value — Authorized: 65,091,079 and 49,713,007 shares as of September 30, 3021 (unaudited) and December 31, 2020, respectively; Issued and Outstanding: 60,810,406 and 43,691,148 shares as of September 30, 2021 (unaudited) and December 31, 2020, respectively; Aggregate liquidation preference of $207,785 and $114,514 shares as of September 30, 3021 (unaudited), and December 31, 2020, respectively |
208,202 | 109,139 | ||||||||
SHAREHOLDERS’ DEFICIT: |
8 | |||||||||
Common shares of $0.0001 par value – Authorized: 95,000,000 and 70,000,000 shares as of September 30, 2021 (unaudited) and December 31, 2020, respectively; Issued: 10,580,178 and 9,370,526 shares as of September 30, 2021 (unaudited) and December 31, 2020, respectively; Outstanding: 9,780,178 and 8,570,526 shares as of September 30, 2021 (unaudited) and December 31, 2020, respectively |
1 | 1 | ||||||||
Treasury shares at cost (800,000 shares at September 30, 2021 (unaudited) and December 31, 2020, respectively |
(1,175 | ) | (1,175 | ) | ||||||
Additional paid-in capital |
8,484 | 2,315 | ||||||||
Accumulated deficit |
(102,866 | ) | (64,168 | ) | ||||||
|
|
|
|
|||||||
Total shareholders’ deficit |
(95,556 | ) | (63,027 | ) | ||||||
|
|
|
|
|||||||
Total liabilities, Convertible Preferred shares and shareholders’ deficit |
$ | 123,643 | $ | 57,336 | ||||||
|
|
|
|
Note |
Nine months ended September 30, |
|||||||||
2021 |
2020 |
|||||||||
Unaudited |
||||||||||
Revenue |
5 | $ | 6,648 | $ | 3,959 | |||||
Cost of revenue |
2,980 | 1,721 | ||||||||
|
|
|
|
|||||||
Gross profit |
3,668 | 2,238 | ||||||||
|
|
|
|
|||||||
Operating expenses: |
||||||||||
Research and development |
18,793 | 7,601 | ||||||||
Sales and marketing |
13,279 | 7,274 | ||||||||
General and administrative |
8,170 | 5,123 | ||||||||
|
|
|
|
|||||||
Total operating expenses |
40,242 | 19,998 | ||||||||
|
|
|
|
|||||||
Operating loss |
(36,574 | ) | (17,760 | ) | ||||||
Tranche rights and warrant remeasurement expense (income), net |
3,264 | (235 | ) | |||||||
Financing expense (income), net |
798 | (423 | ) | |||||||
|
|
|
|
|||||||
Loss before income tax expense (tax benefit) |
(40,636 | ) | (17,102 | ) | ||||||
Income tax expense (benefit), net |
3 | (1,938 | ) | 76 | ||||||
|
|
|
|
|||||||
Net loss |
$ | (38,698 | ) | $ | (17,178 | ) | ||||
|
|
|
|
|||||||
Net loss per share attributable to Common shareholders: |
||||||||||
Basic and diluted net loss per Common share |
11 | $ | (4.02 | ) | $ | (1.87 | ) | |||
|
|
|
|
|||||||
Weighted average number of Common shares used in computing basic and diluted net loss per Common share |
9,630,241 | 9,161,611 | ||||||||
|
|
|
|
Convertible Preferred shares |
Common shares |
|||||||||||||||||||||||||||||||
Number |
Amount |
Number |
Amount |
Additional paid-in capital |
Treasury shares |
Accumulated deficit |
Total shareholders’ deficit |
|||||||||||||||||||||||||
Balance as of January 1, 2021 (audited) |
43,691,148 | $ | 109,139 | 9,370,526 | $ | 1 | $ | 2,315 | $ | (1,175 | ) | $ | (64,168 | ) | $ | (63,027 | ) | |||||||||||||||
Settlement of Series C Convertible Preferred shares tranche liability |
6,021,859 | 37,889 | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of series D Convertible Preferred shares, net of issuance costs of $84 |
11,097,399 | 61,174 | — | — | — | — | — | — | ||||||||||||||||||||||||
Capital contribution in connection with Preferred share tranche right amendment (Note 6) |
— | — | — | — | 307 | — | — | 307 | ||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | 5,393 | — | — | 5,393 | ||||||||||||||||||||||||
Exercise of Common share options and vested restricted Common shares granted to employees |
— | — | 1,209,652 | * | 469 | — | — | 469 | ||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (38,698 | ) | (38,698 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of September 30, 2021 (unaudited) |
60,810,406 | $ | 208,202 | 10,580,178 | $ | 1 | $ | 8,484 | $ | (1,175 | ) | $ | (102,866 | ) | $ | (95,556 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of January 1, 2020 (audited) |
36,103,221 | $ | 83,295 | 8,472,281 | $ | 1 | $ | (447 | ) | $ | — | $ | (36,988 | ) | $ | (37,434 | ) | |||||||||||||||
— | — | — | — | — | — | |||||||||||||||||||||||||||
Issuance of Series B-1 Convertible Preferred shares in connection with settlement of Preferred shares tranche liability |
1,566,068 | 5,334 | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of Series C convertible preferred shares, net of issuance costs of $90 and settlement of preferred shares tranche rights |
5,767,432 | 19,510 | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of preferred share tranche rights |
— | — | — | — | 743 | — | — | 743 | ||||||||||||||||||||||||
Share based compensation |
— | — | — | — | 1,360 | — | — | 1,360 | ||||||||||||||||||||||||
Buyback of shares from former founder |
— | — | — | — | — | (1,175 | ) | — | (1,175 | ) | ||||||||||||||||||||||
Exercise of Common share options |
— | — | 324,715 | * | 263 | — | — | 263 | ||||||||||||||||||||||||
Vesting of restricted Common shares |
— | — | 565,624 | * | — | — | — | — | ||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (17,178 | ) | (17,178 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance as of September 30, 2020 (unaudited) |
43,436,721 | $ | 108,139 | 9,362,620 | $ | 1 | $ | 1,919 | $ | (1,175 | ) | $ | (54,166 | ) | $ | (53,421 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Represents less than $1. |
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (38,698 | ) | $ | (17,178 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
653 | 95 | ||||||
Share-based compensation |
5,393 | 1,360 | ||||||
Non-cash tax benefit |
(2,071 | ) | — | |||||
Change in fair value of preferred shares tranche liability |
8,801 | (236 | ) | |||||
Change in fair value of warrant liability |
(5,537 | ) | — | |||||
Change in fair value of convertible notes |
767 | — | ||||||
Change in fair value of marketable securities |
(12 | ) | — | |||||
Changes in operating assets and liabilities: |
||||||||
Increase in trade receivables, net |
(335 | ) | (893 | ) | ||||
Increase in inventory |
(964 | ) | — | |||||
Decrease in prepaid expenses and other current assets |
24 | 264 | ||||||
Increase in costs to obtain a contract |
(288 | ) | (266 | ) | ||||
Increase (decrease) in accounts payable |
673 | (40 | ) | |||||
Increase in deferred revenue |
655 | 586 | ||||||
Increase (decrease) in other accounts payable and accrued expenses |
889 | (1,564 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities |
(30,050 | ) | (17,872 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Decrease in restricted cash |
— | 196 | ||||||
Acquisition of business, net of cash acquired |
(11,289 | ) | — | |||||
Decrease (increase) in long-term restricted cash |
(222 | ) | 100 | |||||
Purchase of marketable securities |
(78,143 | ) | (3,527 | ) | ||||
Purchase of property and equipment |
(1,558 | ) | (104 | ) | ||||
Purchase of non-marketable securities |
(850 | ) | (400 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(92,062 | ) | (3,735 | ) | ||||
|
|
|
|
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of series B-1 Convertible Preferred shares and Preferred shares tranche liability, net of issuance costs |
— | 6,134 | ||||||
Proceeds from settlement of series C Convertible Preferred shares tranche liability |
23,669 | 22,577 | ||||||
Proceeds from issuance of series D Convertible Preferred shares, Preferred shares tranche liability and warrant liabilities net, of issuance costs of $84 |
69,500 | 263 | ||||||
Proceeds from exercise of common share options |
469 | — | ||||||
Purchase of treasury shares |
— | (1,175 | ) | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
93,638 | 27,799 | ||||||
|
|
|
|
|||||
Increase (decrease) in in cash and cash equivalents |
(28,474 | ) | 6,192 | |||||
Cash and cash equivalents at the beginning of the period |
52,713 | 48,123 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at the at end of the period |
$ | 24,239 | $ | 54,315 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Cash received for interest |
$ | 479 | $ | 360 | ||||
|
|
|
|
|||||
Cash paid for income taxes |
$ | 57 | $ | 97 | ||||
|
|
|
|
|||||
Supplemental disclosures of non-cash investing and financing activities: |
||||||||
Capital contribution in connection with Preferred share tranche right amendment |
$ | 307 | $ | — | ||||
|
|
|
|
a. | The Tomorrow Companies Inc. (formerly ClimaCell Inc.) (the “Company”) was incorporated on November 12, 2015 as a Delaware corporation. Since its establishment, the Company provides real time weather forecasting software as a service to its global customers. |
b. | The Company has the following wholly owned subsidiaries: |
a. | Basis of presentation and consolidation: |
b. | Use of estimates: |
c. | Recently issued and recently adopted accounting principles: |
1. | In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2022 with early adoption permitted. This guidance must be applied on a prospective basis. The Company adopted the standard beginning January 1, 2021. The standard did not have a material impact on the interim consolidated financial statements. |
2. | 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) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance changes how entities account for convertible instruments and contracts in an entity’s own equity and simplifies the accounting for convertible instruments by removing certain separation models for convertible instruments. This guidance also modifies the guidance on diluted earnings per share calculations. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023 with early adoption permitted. The Company adopted the standard beginning January 1, 2021. The adoption did not have a material impact on the interim consolidated financial statements. |
3. | In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this ASU require acquiring entities to apply Topic 606 to recognize and measure |
contract assets and liabilities in a business combination. This update is intended to improve comparability after the business combination by providing consistent recognition and measurement of acquired revenue contracts and revenue contracts with customers not acquired in a business combination. ASU 2021-08 is effective for annual periods beginning after December 15, 2022 and interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied prospectively. The Company is currently evaluating the effect of this update on its consolidated financial statements. |
d. | Inventory: |
e. | Business combination: |
f. | Goodwill: |
g. | Concentrations of credit risk: |
h. | Marketable securities: |
i. | Costs to obtain a contract: |
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Beginning balance |
$ | 830 | $ | 335 | ||||
Additions |
625 | 395 | ||||||
Amortization |
(337 | ) | (129 | ) | ||||
|
|
|
|
|||||
Costs to obtain a contract |
$ | 1,118 | $ | 601 | ||||
|
|
|
|
j. | Deferred revenue and remaining performance obligations: |
k. | Convertible Preferred shares warrants: |
l. | Revenue recognition: |
m. | Property and equipment, net |
Amount |
||||
Unaudited |
||||
Intangible assets |
$ | 7,615 | ||
Goodwill |
4,429 | |||
Deferred tax liability |
(2,071 | ) | ||
Net assets acquired |
1,513 | |||
|
|
|||
Total purchase consideration |
$ | 11,486 | ||
|
|
Fair Value |
Weighted average estimated useful life (in years) |
|||||||
Unaudited |
||||||||
Core technology |
$ | 5,860 | 8 | |||||
Customer relationships |
1,237 | 6 | ||||||
Trade name |
518 | 9 | ||||||
|
|
|||||||
Total identifiable intangible assets |
$ | 7,615 | ||||||
|
|
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Pro forma total revenue |
$ | 1,594 | 1,983 | |||||
Pro forma net income (loss) |
(44 | ) | (81 | ) |
September 30, 2021 (unaudited) |
||||||||||||||||
Fair value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Financial assets: |
||||||||||||||||
Money market funds included in cash and cash equivalents |
$ | 6,812 | $ | 6,812 | $ | — | $ | — | ||||||||
Short-term marketable securities |
75,650 | — | 75,650 | — | ||||||||||||
Long -term marketable securities |
2,505 | — | 2,505 | — | ||||||||||||
Convertible notes |
389 | — | — | 389 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Warrants liability |
$ | 3,439 | $ | — | $ | — | $ | 3,439 |
December 31, 2020 (audited) |
||||||||||||||||
Fair value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Financial assets: |
||||||||||||||||
Money market funds included in cash and cash equivalents |
$ | 42,940 | $ | 42,940 | $ | — | $ | — | ||||||||
Convertible notes |
306 | — | — | 306 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Preferred shares tranche rights liability |
$ | 6,376 | $ | — | $ | — | $ | 6,376 |
December 31, 2020 |
March 21, 2021 |
April 15, 2021 |
July 21, 2021 |
|||||||||||||
Audited |
Unaudited |
|||||||||||||||
Expected fair value of Preferred share C price |
$ | 6.75 | $ | 5.35 | $ | 5.35 | $ | 7.50 | ||||||||
Probability to exercise |
40 | % | 100 | % | 100 | % | 100 | % | ||||||||
Time to liquidity (years) |
0.57 | — | — | — | ||||||||||||
Underlying asset volatility |
55 | % | — | — | — | |||||||||||
Discount rate |
0.09 | % | 0.01 | % | 0.02 | % | 0.04 | % |
March 15, 2021 |
April 12, 2021 |
|||||||
Unaudited |
||||||||
Expected fair value of Preferred share D price |
$ | 7.47 | $ | 7.18 | ||||
Probability to exercise |
45.0 | % | 100 | % | ||||
Time to liquidity (years) |
0.08 | 0.00 | ||||||
Underlying asset volatility |
51 | % | — | |||||
Discount rate |
0.02 | % | 0.02 | % |
March 21, 2021 |
July 23, 2021 |
|||||||
Unaudited |
||||||||
Spot price |
$ | 5.35 | $ | 7.50 | ||||
Forward price |
3.93 | 3.93 | ||||||
Time to liquidity (years) |
0.36 | — | ||||||
Risk free rate |
0.02 | % | 0.05 | % |
September 30, 2021 |
December 31, 2020 |
|||||||
Unaudited |
Audited |
|||||||
Discount rate |
30 | % | 30 | % | ||||
Risk free rate |
0.04 | % | 0.1 | % | ||||
Volatility |
85 | % | 89.2 | % |
September 30, 2021 | ||
Unaudited | ||
Discount rate |
25% | |
Risk free rate |
0.09%-0.63% | |
Volatility |
60% |
Investment in convertible notes (other assets) |
||||
Unaudited |
||||
Balance as of January 1, 2020 (audited) |
$ | — | ||
Investment in convertible notes |
299 | |||
Change in fair value |
7 | |||
|
|
|||
Balance as of December 31, 2020 (audited) |
306 | |||
Investment in convertible notes |
850 | |||
Change in fair value |
(767 | ) | ||
|
|
|||
Balance as of September 30, 2021 (unaudited) |
$ | 389 | ||
|
|
Preferred shares tranche rights liability |
||||
Unaudited |
||||
Balance as of January 1, 2020 (audited) |
$ | 439 | ||
Issuance of Preferred shares tranche rights |
898 | |||
Settlement of Preferred shares tranche rights |
2,226 | |||
Change in fair value |
2,813 | |||
|
|
|||
Balance as of December 31, 2020 (audited) |
6,376 | |||
Issuance of Preferred shares tranche rights |
802 | |||
Settlement of Preferred shares tranche rights |
(15,672 | ) | ||
Change in fair value |
8,801 | |||
Capital contribution in connection with Preferred share tranche right amendment |
(307 | ) | ||
|
|
|||
Balance as of September 30, 2021 (unaudited) |
$ | — | ||
|
|
Warrants liability |
||||
Unaudited |
||||
Balance as of January 1, 2021 (audited) |
$ | — | ||
Issuance of warrants |
8,976 | |||
Change in fair value |
(5,537 | ) | ||
|
|
|||
Balance as of September 30, 2021 (unaudited) |
$ | 3,439 | ||
|
|
September 30, 2021 |
December 31, 2020 |
|||||||
Unaudited |
Audited |
|||||||
Trade receivables (*) (net of allowance of $353 and $198 at September 30, 2021 (unaudited) and December 31, 2020, respectively) |
$ | 3,256 | $ | 2,413 | ||||
Deferred revenues |
$ | 2,695 | $ | 1,990 |
*) | Including unbilled receivables of $927 and $389 as of September 30, 2021(unaudited) and December 31, 2020, respectively. |
September 30, 2021 |
December 31, 2020 |
|||||||
Unaudited |
Audited |
|||||||
Radar equipment |
$ | 467 | $ | — | ||||
Computers and software |
610 | 390 | ||||||
Electronic equipment |
59 | 55 | ||||||
Leasehold improvements |
213 | 59 | ||||||
Office furniture and fixtures |
62 | 36 | ||||||
|
|
|
|
|||||
1411 | 540 | |||||||
Less — accumulated depreciation |
(561 | ) | (274 | ) | ||||
|
|
|
|
|||||
850 | 266 | |||||||
Construction in progress (satellites) |
1,301 | — | ||||||
|
|
|
|
|||||
Total Property and equipment, net |
$ | 2,151 | $ | 266 | ||||
|
|
|
|
September 30, 2021 (unaudited) |
||||||||||||||||||||
Shares authorized |
Original issue price |
Shares Issued and outstanding |
Carrying value |
Liquidation preference |
||||||||||||||||
Series Seed |
3,599,811 | $ | 0.3847 | 3,599,811 | $ | 1,443 | $ | 1,385 | ||||||||||||
Series A |
3,188,400 | $ | 1.0977 | 3,188,400 | 3,459 | 3,500 | ||||||||||||||
Series A-1 |
9,342,176 | $ | 1.7670 | 9,342,176 | 16,413 | 16,507 | ||||||||||||||
Series B |
16,576,600 | $ | 3.0163 | 16,576,600 | 49,867 | 50,000 | ||||||||||||||
Series B-1 |
4,962,302 | $ | 3.9161 | 4,962,302 | 17,447 | 19,432 | ||||||||||||||
Series C |
12,043,718 | $ | 3.9304 | 12,043,718 | 58,399 | 47,337 | ||||||||||||||
Series D |
15,378,072 | $ | 6.2703 | 11,097,399 | 61,174 | 69,584 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
65,091,079 | 60,810,406 | $ | 208,202 | $ | 207,785 | |||||||||||||||
|
|
|
|
|
|
|
|
December 31, 2020 (audited) |
||||||||||||||||||||
Shares authorized |
Original issue price |
Shares Issued and outstanding |
Carrying value |
Liquidation preference |
||||||||||||||||
Series Seed |
3,599,811 | $ | 0.3847 | 3,599,811 | $ | 1,443 | $ | 1,385 | ||||||||||||
Series A |
3,188,400 | $ | 1.0977 | 3,188,400 | 3,459 | 3,500 | ||||||||||||||
Series A-1 |
9,342,176 | $ | 1.7670 | 9,342,176 | 16,413 | 16,507 | ||||||||||||||
Series B |
16,576,600 | $ | 3.0163 | 16,576,600 | 49,867 | 50,000 | ||||||||||||||
Series B-1 |
4,962,302 | $ | 3.9161 | 4,962,302 | 17,447 | 19,432 | ||||||||||||||
Series C |
12,043,718 | $ | 3.9304 | 6,021,859 | 20,510 | 23,690 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
49,713,007 | 43,691,148 | $ | 109,139 | $ | 114,514 | |||||||||||||||
|
|
|
|
|
|
|
|
a. | Common shares: |
b. | Restricted shares: |
c. | Share option plan: |
Number of options |
Weighted average exercise price (per share) |
Weighted average remaining contractual life (years) |
Aggregate intrinsic value |
|||||||||||||
Unaudited |
||||||||||||||||
Outstanding at December 31, 2020 (audited) |
10,852,458 | $ | 0.82 | 8.75 | $ | 6,389 | ||||||||||
Granted |
3,756,908 | 3.88 | ||||||||||||||
Exercised |
496,413 | 0.95 | ||||||||||||||
Cancelled |
(676,068 | ) | 1.11 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at September 30, 2021 (unaudited) |
13,436,885 | 1.66 | 8.45 | $ | 25,967 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at September 30, 2021 (unaudited) |
4,841,862 | 0.74 | 7.58 | $ | 11,900 | |||||||||||
|
|
|
|
|
|
|
|
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Cost of revenues |
$ | 16 | $ | 5 | ||||
Research and development |
640 | 302 | ||||||
Sales and marketing |
776 | 482 | ||||||
General and administrative |
838 | 571 | ||||||
|
|
|
|
|||||
Total share-based compensation expense |
$ | 2,269 | $ | 1,360 | ||||
|
|
|
|
Amount of options |
Weighted average grant- date fair value |
|||||||
Unaudited |
||||||||
Unvested at January 1, 2021 (audited) |
— | $ | — | |||||
Granted |
1,834,044 | 4.31 | ||||||
Unvested |
1,120,805 | 4.31 |
As of September 30, 2021 |
||||
Unaudited |
||||
Q4 2021 |
$ | 357 | ||
2022 |
1,644 | |||
2023 |
1,669 | |||
2024 |
1,485 | |||
2025 and thereafter |
1,367 | |||
|
|
|||
Total lease payments |
$ | 6,522 | ||
|
|
As of September 30, 2021 |
||||
Unaudited |
||||
Q4 2021 |
$ | 186 | ||
2022 |
628 | |||
2023 |
642 | |||
2024 |
655 | |||
2025 and thereafter |
669 | |||
|
|
|||
Total sub-lease payments |
$ | 2,780 | ||
|
|
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Basic and diluted net loss per Common share computation: |
||||||||
Numerator: |
||||||||
Net loss attributable to Common shareholders |
$ | (38,698 | ) | $ | (17,178 | ) | ||
|
|
|
|
|||||
Denominator: |
||||||||
Weighted average Common shares outstanding |
9,630,241 | 9,161,611 | ||||||
|
|
|
|
|||||
Net loss per common share – basic and diluted |
$ | (4.02 | ) | $ | (1.87 | ) | ||
|
|
|
|
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
Convertible Preferred shares |
53,787,090 | 38,027,618 | ||||||
Outstanding share options |
13,011,702 | 8,890,910 | ||||||
Restricted shares |
— | 35,223 | ||||||
Warrants |
3,038,558 | — | ||||||
|
|
|
|
|||||
Total |
69,837,351 | 46,953,751 | ||||||
|
|
|
|
Nine months ended September 30, |
||||||||
2021 |
2020 |
|||||||
Unaudited |
||||||||
United States |
$ | 4,800 | $ | 3,141 | ||||
Rest of world |
$ | 1,848 | $ | 818 | ||||
|
|
|
|
|||||
Total |
6,648 | 3,959 |
Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Building A Tel-Aviv 6492102, Israel |
Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
As of December 31, |
||||||||||||
Note |
2020 |
2019 |
||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 52,713 | $ | 48,123 | ||||||||
Short-term bank deposits |
126 | 226 | ||||||||||
Trade receivables, net |
2,413 | 1,127 | ||||||||||
Prepaid expenses and other current assets |
661 | 443 | ||||||||||
|
|
|
|
|||||||||
Total current assets |
55,913 | 49,919 | ||||||||||
|
|
|
|
|||||||||
Non-current assets: |
||||||||||||
Long-term restricted cash |
21 | 261 | ||||||||||
Property and equipment, net |
5 | 266 | 270 | |||||||||
Costs to obtain a contract |
830 | 335 | ||||||||||
Other non-current assets |
10 | 306 | — | |||||||||
|
|
|
|
|||||||||
Total long-term assets |
1,423 | 866 | ||||||||||
|
|
|
|
|||||||||
Total assets |
$ | 57,336 | $ | 50,785 | ||||||||
|
|
|
|
|||||||||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 831 | $ | 268 | ||||||||
Deferred revenue |
1,990 | 1,497 | ||||||||||
Other accounts payable and accrued expenses |
6 | 2,027 | 2,720 | |||||||||
Preferred shares tranche rights liability |
3 | 6,376 | 439 | |||||||||
|
|
|
|
|||||||||
Total liabilities |
11,224 | 4,924 | ||||||||||
|
|
|
|
|||||||||
COMMITMENTS AND CONTINGENCIES |
9 | |||||||||||
Convertible Preferred shares of $0.0001 par value — Authorized: |
||||||||||||
49,713,007 and 37,669,289 shares at December 31, 2020 and 2019, respectively; Issued and Outstanding: 43,691,148 and 36,103,221 shares at December 31, 2020 and 2019, respectively; aggregate liquidation preference of $114,514 and $87,692 as of December 31, 2020 and 2019, respectively |
7 | 109,139 | 83,295 | |||||||||
SHAREHOLDERS’ DEFICIT |
8 | |||||||||||
Common shares of $0.0001 par value — Authorized: 70,000,000 and 57,915,330 shares as of December 31, 2020 and 2019, respectively; Issued: |
||||||||||||
9,370,526 and 8,472,281 shares at December 31, 2020 and 2019, respectively; Outstanding: 8,570,525 and 8,472,281 shares at December 31, 2020 and 2019, respectively |
1 | 1 | ||||||||||
Treasury shares at cost (800,000 and 0 Common shares as of December 31, 2020 and 2019, respectively) |
(1,175 | ) | — | |||||||||
Additional paid-in capital |
2,315 | (447 | ) | |||||||||
Accumulated deficit |
(64,168 | ) | (36,988 | ) | ||||||||
|
|
|
|
|||||||||
Total shareholders’ deficit |
(63,027 | ) | (37,434 | ) | ||||||||
|
|
|
|
|||||||||
Total liabilities, convertible preferred shares and shareholders’ deficit |
57,336 | 50,785 | ||||||||||
|
|
|
|
Year ended December 31, |
||||||||||||
Note |
2020 |
2019 |
||||||||||
Revenue |
4 | $ | 5,969 | $ | 2,927 | |||||||
Cost of revenue |
2,351 | 1,614 | ||||||||||
|
|
|
|
|||||||||
Gross profit |
3,618 | 1,313 | ||||||||||
Operating expenses: |
||||||||||||
Research and development |
11,775 | 11,925 | ||||||||||
Sales and marketing |
10,054 | 9,306 | ||||||||||
General and administrative |
6,338 | 4,937 | ||||||||||
|
|
|
|
|||||||||
Total operating expenses |
28,167 | 26,168 | ||||||||||
|
|
|
|
|||||||||
Operating loss |
(24,549 | ) | (24,855 | ) | ||||||||
Tranche rights remeasurement expense (income), net |
10 | 2,813 | (177 | ) | ||||||||
Financing income, net |
(299 | ) | (1,068 | ) | ||||||||
|
|
|
|
|||||||||
Loss before income taxes |
(27,063 | ) | (23,610 | ) | ||||||||
Income tax expense |
12 | 117 | 252 | |||||||||
|
|
|
|
|||||||||
Net loss |
$ | (27,180 | ) | $ | (23,862 | ) | ||||||
|
|
|
|
|||||||||
Net loss per share attributable to common shareholders: |
||||||||||||
Basic and diluted net loss per common share |
11 | $ | (2.95 | ) | $ | (3.01 | ) | |||||
|
|
|
|
|||||||||
Weighted average number of common shares used in computing basic and diluted net loss per common share |
9,212,841 | 7,939,992 | ||||||||||
|
|
|
|
Convertible Preferred Shares |
Common Shares |
Additional Paid-in Capital |
Total Shareholders’ Deficit |
|||||||||||||||||||||||||||||||||
Number Shares |
Amount |
Number Shares |
Amount |
Treasury Shares |
Accumulated deficit |
|||||||||||||||||||||||||||||||
Balance as of January 1, 2019 |
32,706,987 | $ | 71,182 | 7,434,970 | $ | 1 | $ | (463 | ) | $ | — | $ | (13,126 | ) | $ | (13,588 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Issuance of Series B-1 convertible preferred shares, net of issuance costs of $571 |
2,502,489 | 8,613 | — | — | — | — | — | |||||||||||||||||||||||||||||
Extinguishment of ordinary shares |
893,745 | 3,500 | (893,745 | ) | — | (3,500 | ) | — | — | (3,500 | ) | |||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | 3,393 | — | — | 3,393 | ||||||||||||||||||||||||||||
Exercise of common share options |
— | — | 234,187 | * | 123 | — | — | 123 | ||||||||||||||||||||||||||||
Vesting of restricted common shares |
— | — | 1,696,869 | * | — | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (23,862 | ) | (23,862 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of December 31, 2019 |
36,103,221 | $ | 83,295 | 8,472,281 | $ | 1 | $ | (447 | ) | $ | — | (36,988 | ) | (37,434 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Issuance of Series C convertible preferred shares, net of issuance costs of $90 and settlement of preferred shares tranche rights |
6,021,859 | 20,510 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Issuance of Series B-1 convertible preferred shares in connection with settlement of preferred shares tranche rights |
1,566,068 | 5,334 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Issuance of preferred share tranche rights |
— | — | — | — | 743 | — | — | 743 | ||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | 1,753 | — | — | 1,753 | ||||||||||||||||||||||||||||
Purchase of treasury shares |
— | — | — | — | — | (1,175 | ) | — | (1,175 | ) | ||||||||||||||||||||||||||
Exercise of common share options |
— | — | 332,621 | * | 266 | — | — | 266 | ||||||||||||||||||||||||||||
Vesting of restricted common shares |
— | — | 565,624 | * | — | — | — | — | ||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (27,180 | ) | (27,180 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of December 31, 2020 |
43,691,148 | $ | 109,139 | 9,370,526 | $ | 1 | $ | 2,315 | $ | (1,175 | ) | $ | (64,168 | ) | $ | (63,027 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Represents an amount less than 1 |
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net loss |
$ | (27,180 | ) | $ | (23,862 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
129 | 100 | ||||||
Share-based compensation |
1,753 | 3,393 | ||||||
Change in fair value of preferred shares tranche liability |
2,812 | (177 | ) | |||||
Change in fair value of convertible notes |
(7 | ) | — | |||||
Increase in trade receivables, net |
(1,286 | ) | (874 | ) | ||||
Increase in prepaid expenses and other current assets |
(117 | ) | (235 | ) | ||||
Increase in costs to obtain a contract |
(495 | ) | (335 | ) | ||||
Increase in accounts payable |
563 | 47 | ||||||
Increase in deferred revenue |
493 | 1,147 | ||||||
Increase (decrease) in other accounts payable and accrued expenses |
(693 | ) | 2,242 | |||||
|
|
|
|
|||||
Net cash used in operating activities |
(24,028 | ) | (18,554 | ) | ||||
|
|
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
Decrease (increase) in short-term deposits |
100 | (221 | ) | |||||
Decrease in long-term restricted cash |
240 | 25 | ||||||
Purchase of non-marketable securities |
(400 | ) | — | |||||
Purchase of property and equipment |
(125 | ) | (191 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(185 | ) | (387 | ) | ||||
|
|
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
Proceeds from issuance of Series B-1 convertible preferred shares and preferred shares tranche right, net of issuance costs |
6,134 | 9,229 | ||||||
Proceeds from issuance of Series C convertible preferred shares and preferred shares tranche right, net of issuance costs |
23,578 | — | ||||||
Proceeds from exercise of common share options |
266 | 123 | ||||||
Purchase of treasury shares |
(1,175 | ) | — | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
28,803 | 9,352 | ||||||
|
|
|
|
|||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
4,590 | (9,589 | ) | |||||
CASH AND CASH EQUIVALENTS, at beginning of year |
48,123 | 57,712 | ||||||
|
|
|
|
|||||
CASH AND CASH EQUIVALENTS, at end of year |
$ | 52,713 | $ | 48,123 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Cash received for interest |
$ | 304 | $ | 1,128 | ||||
Cash paid for income taxes |
$ | 189 | $ | — | ||||
Supplemental disclosures of non-cash investing and financing activities: |
||||||||
Issuance of preferred shares tranche rights |
$ | 743 | $ | — |
a. | The Tomorrow Companies Inc. (formerly ClimaCell Inc.) (the “Company”) was incorporated on November 12, 2015 as a Delaware corporation. Since its establishment, the Company provides real time weather forecasting software as a service to its global customers. |
b. | The Company has the following wholly owned subsidiaries: |
a. | Basis of Presentation and Consolidation |
b. | Functional Currency |
c. | Use of Estimates |
d. | Cash, Cash Equivalents, Short-Term Deposits and Restricted Cash |
e. | Trade Receivables, net |
f. | Concentrations of Credit Risk |
g. | Property and Equipment, Net |
Computers | 3 years | |
Electronic equipment | 3 years | |
Leasehold improvements | Over the shorter of the term of the related lease | |
or the life of the asset | ||
Office furniture and equipment | 3 years |
h. | Impairment of Long-Lived Assets |
i. | Investment in non-marketable securities |
j. | Fair Value of Financial Instruments |
Level 1- | Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at measurement date. | |
Level 2- | Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | |
Level 3- | Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
k. | Revenue Recognition |
1. | Identification of the contract, or contracts, with a customer; |
2. | Identification of the performance obligations in the contract; |
3. | Determination of the transaction price; |
4. | Allocation of the transaction price to the performance obligations in the contract; and |
5. | Recognition of revenue when, or as, the performance obligations are satisfied. |
l. | Costs to Obtain a Contract |
Costs to obtain a contract | December 31, |
|||||||
2020 |
2019 |
|||||||
Beginning balance |
$ | 335 | $ | — | ||||
Additions |
735 | 401 | ||||||
Amortization |
(240 | ) | (66 | ) | ||||
|
|
|
|
|||||
Costs to obtain a contract |
$ | 830 | $ | 335 | ||||
|
|
|
|
m. | Deferred Revenue and Remaining Performance Obligations |
n. | Operating Leases |
o. | Cost of Revenue |
p. | Research and Development |
q. | Sales and Marketing |
r. | General and Administrative |
s. | Convertible Preferred Shares Tranche Rights |
t. | Share-Based Compensation |
u. | Net Loss per Common Share Attributable to Common Shareholders |
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Convertible Preferred shares |
39,434,922 | 34,805,943 | ||||||
Outstanding share options |
10,576,794 | 5,829,448 | ||||||
Restricted shares |
26,345 | 966,983 | ||||||
|
|
|
|
|||||
Total |
50,038,061 | 41,602,374 |
v. | Income Taxes |
w. | Employee Benefit Plans |
x. | Recently Issued Accounting Standards, Adopted |
1. | In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). This new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, ASU 2014-09 provides guidance on accounting for certain revenue-related costs including, but not limited to, when to capitalize costs associated with obtaining and fulfilling a contract. The standard also requires certain new disclosures. On January 1, 2019, the Company adopted the standard using the modified retrospective method of adoption to those contracts which were not completed by then. The impact of adopting ASC 606 on the Company’s revenue was not material. |
Balance as reported at December 31, 2019 |
Adjustments due to Topic 606 |
Amounts under Topic 605 |
||||||||||
Deferred contract costs |
$ | 335 | $ | 335 | $ | — | ||||||
Accumulated deficit |
(36,988 | ) | (335 | ) | (37,323 | ) |
Balance as reported at December 31, 2019 |
Adjustments due to Topic 606 |
Amounts under Topic 605 |
||||||||||
Sales and marketing |
$ | 9,306 | $ | 335 | $ | 9,641 | ||||||
Net loss |
(23,862 | ) | (335 | ) | (24,197 | ) |
2. | In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (ASC Topic 230) —Restricted Cash (“ASU 2016-18”). ASU 2016-18 clarifies amendments in the update applicable to all entities that have restricted cash or restricted cash equivalents that are required to be presented in the statement of cash flows under ASC Topic 230. The core principle of the update requires a statement of |
cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period end-of-period 2016-18 also requires cash purchases and sales of items commonly considered to be cash equivalents generally as part of the entity’s cash management activities rather than part of its operating, investing, and financing activities, and details of those transactions need not be reported in a statement of cash flows. The statement of cash flows presents the information in a manner that reconciles beginning and ending totals of cash and cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted this ASU retrospectively on January 1, 2019. |
3. | In June 2018 the FASB issued ASU 2018-07 “Improvement to Nonemployee Share-based Payment Accounting” to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. The Company adopted ASU 2018-07 on January 1, 2019. The effect of the adoption for the year ended December 31, 2019 was immaterial. |
4. | In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (ASC 820). The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. ASU 2018- 13 became effective for the Company on January 1, 2020 and did not have a significant impact on the Company’s consolidated financial statements. |
y. | Recently Issued Accounting Standards, Not Yet Adopted |
1. | In February 2016, the FASB issued ASU No. 2016-02, Leases, which would require lessees to recognize all leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which defers the effective date of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The guidance will be effective for the Company beginning January 1, 2022, and interim periods in fiscal years beginning January 1, 2023. The Company is currently evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures. |
2. | In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance will be effective for the Company beginning January 1, 2023, and interim periods therein. Early adoption is permitted. The Company is currently evaluating the effect that ASU 2016-13 will have on its consolidated financial statements. |
As of December 31, 2019 |
||||||||||||||||
Fair Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
(in thousands) |
||||||||||||||||
Financial Assets: |
||||||||||||||||
Bank deposits included in cash and cash equivalents |
$ | 40,697 | $ | — | $ | 40,697 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial Liabilities: |
||||||||||||||||
Preferred shares tranche rights liability |
$ | 439 | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
As of December 31, 2020 |
||||||||||||||||
Fair Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
(in thousands) |
||||||||||||||||
Financial Assets: |
||||||||||||||||
Bank deposits included in cash and cash equivalents |
$ | 42,940 | $ | — | $ | 40,697 | $ | — | ||||||||
Investment in convertible notes (note 10) |
306 | — | — | 306 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial Liabilities: |
||||||||||||||||
Preferred shares tranche rights liability |
$ | 6,376 | $ | — | $ | — | $ | 6,376 | ||||||||
|
|
|
|
|
|
|
|
April 4, 2019 |
December 31, 2019 |
March 23, 2020 |
||||||||||
Expected future Preferred share B-1 price |
$ | 5.98 | $ | 5.51 | $ | 3.04 | ||||||
Probability to exercise |
40 | % | 47 | % | 100 | % | ||||||
Time to liquidity (years) |
3.13 | 2.39 | 1.24 | |||||||||
Underlying asset volatility |
51.65 | % | 35.89 | % | — | |||||||
Discount rate |
2.41 | % | 1.55 | % | 0.01 | % |
July 24, 2020 |
December 31, 2020 |
|||||||
Expected future Preferred share C price |
$ | 5.41 | $ | 6.75 | ||||
Probability to exercise |
39 | % | 40 | % | ||||
Time to liquidity (years) |
0.57 | 0.57 | ||||||
Underlying asset volatility |
47.68 | % | 55.09 | % | ||||
Discount rate |
0.16 | % | 0.09 | % |
April 1, 2020 |
May 15, 2020 |
|||||||
Spot price |
$ | 2.98 | $ | 2.92 | ||||
Forward price |
3.9161 | 3.9161 | ||||||
Time to liquidity (years) |
0.21 | 0 | ||||||
Risk free rate |
0.07 | % | 0 | % |
July 24, 2020 |
August 31, 2020 |
|||||||
Spot price |
$ | 3.36 | $ | 3.43 | ||||
Forward price |
3.9304 | 3.9304 | ||||||
Time to liquidity (years) |
0.1 | 0 | ||||||
Risk free rate |
0.1 | % | 0 | % |
September 25, 2020 |
December 31, 2020 |
|||||||
Discount rate |
30 | % | 30 | % | ||||
Risk free rate |
0.12 | % | 0.1 | % | ||||
Volatility |
96.2 | % | 89.2 | % |
Investment in Convertible Notes (other assets) |
||||
Balance as of December 31, 2019 |
$ | — | ||
Investment in convertible notes |
299 | |||
Change in fair value |
7 | |||
|
|
|||
Balance as of December 31, 2020 |
$ | 306 | ||
|
|
Preferred Shares Tranche Rights Liability |
||||
Balance as of January 1, 2019 |
— | |||
Issuance of preferred shares tranche rights |
$ | 616 | ||
Change in fair value |
(177 | ) | ||
|
|
|||
Balance as of December 31, 2019 |
$ | 439 | ||
|
|
|||
Issuance of preferred shares tranche rights |
898 | |||
Settlement of preferred shares tranche rights |
2,226 | |||
Change in fair value |
2,813 | |||
|
|
|||
Balance as of December 31, 2020 |
$ | 6,376 | ||
|
|
December 31, 2020 |
December 31, 2019 |
|||||||
$ | 2,024 | $ | 1,036 | |||||
Trade receivables, net (*) |
||||||||
Deferred revenues |
1,990 | 1,497 |
(*) | Including unbilled receivables of $389 and $91 as of December 31,2020 and 2019, respectively. |
December 31, |
||||||||
2020 |
2019 |
|||||||
Computers |
$ | 390 | $ | 319 | ||||
Electronic equipment |
55 | 55 | ||||||
Leasehold improvements |
59 | 7 | ||||||
Office furniture and equipment |
36 | 34 | ||||||
Less—accumulated depreciation |
(274 | ) | (145 | ) | ||||
|
|
|
|
|||||
Property and equipment, net |
$ | 266 | $ | 270 | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Employees and payroll accruals |
$ | 697 | $ | 1,619 | ||||
Government authorities |
317 | 161 | ||||||
Accrued expenses and other liabilities |
886 | 498 | ||||||
Tax payable |
127 | 442 | ||||||
|
|
|
|
|||||
$ | 2,027 | $ | 2,720 | |||||
|
|
|
|
As of December 31, 2020 |
||||||||||||||||||||
Shares Authorized |
Original Issue Price |
Shares Issued and Outstanding |
Carrying Value |
Liquidation Preference |
||||||||||||||||
Series Seed |
3,599,811 | $ | 0.3847 | 3,599,811 | $ | 1,443 | $ | 1,385 | ||||||||||||
Series A |
3,188,400 | 1.0977 | 3,188,400 | 3,459 | 3,500 | |||||||||||||||
Series A-1 |
9,342,176 | 1.7670 | 9,342,176 | 16,413 | 16,507 | |||||||||||||||
Series B |
16,576,600 | 3.0163 | 16,576,600 | 49,867 | 50,000 | |||||||||||||||
Series B-1 |
4,962,302 | 3.9161 | 4,962,302 | 17,447 | 19,432 | |||||||||||||||
Series C |
12,043,718 | 3.9304 | 6,021,859 | 20,510 | 23,690 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
49,713,007 | 43,691,148 | $ | 109,139 | $ | 114,514 |
As of December 31, 2019 |
||||||||||||||||||||
Shares Authorized |
Original Issue Price |
Shares Issued and Outstanding |
Carrying Value |
Liquidation Preference |
||||||||||||||||
Series Seed |
3,599,811 | $ | 0.3847 | 3,599,811 | $ | 1,443 | $ | 1,385 | ||||||||||||
Series A |
3,188,400 | 1.0977 | 3,188,400 | 3,459 | 3,500 | |||||||||||||||
Series A-1 |
9,342,176 | 1.7670 | 9,342,176 | 16,413 | 16,507 | |||||||||||||||
Series B |
16,576,600 | 3.0163 | 16,576,600 | 49,867 | 50,000 | |||||||||||||||
Series B-1 |
3,396,234 | 3.9161 | 3,396,234 | 12,113 | 13,300 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
36,103,221 | 36,103,221 | $ | 83,295 | $ | 84,692 |
a. | Common shares: |
b. | Restricted shares: |
Shares |
||||
Non-vested at December 31, 2019 |
565,632 | |||
Vested |
565,632 | |||
|
|
|||
Non-vested at December 31, 2020 |
— | |||
|
|
c. | Share option plan: |
Number of options |
Weighted average exercise price (per share) |
Weighted average remaining contractual life (years) |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding at January 1, 2020 |
6,390,970 | $ | 0.99 | 8.95 | $ | 3,087 | ||||||||||
Granted |
8,532,449 | 0.90 | ||||||||||||||
Exercised |
(332,621 | ) | 0.80 | |||||||||||||
Forfeited |
(3,738,340 | ) | 1.30 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2020 |
10,852,458 | 0.82 | 8.75 | 6,389 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Vested and expected to vest at December 31, 2020 |
10,851,208 | 0.82 | 8.75 | 6,388 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2020 |
2,926,315 | $ | 0.68 | 7.86 | $ | 2,155 | ||||||||||
|
|
|
|
|
|
|
|
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Cost of revenues |
$ | 8 | $ | 6 | ||||
Research and development |
436 | 384 | ||||||
Sales and marketing |
733 | 1,783 | ||||||
General and administrative |
576 | 1,220 | ||||||
|
|
|
|
|||||
Total share-based compensation expense |
$ | 1,753 | $ | 3,393 | ||||
|
|
|
|
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Risk-free interest rate |
0.39% - 1.5% |
1.5% - 2.6% | ||||||
Expected dividend yield |
— | — | ||||||
Expected volatility |
73% - 86% | 79%-82% |
||||||
Expected life |
6 years | 6 years | ||||||
Fair value of Common share |
$0.78 - 1.47 | $1.16 - 1.47 |
a. | Leases: |
2021 |
$ | 1,167 | ||
2022 |
1,149 | |||
2023 |
1,118 | |||
2024 and thereafter |
1,706 | |||
|
|
|||
Total lease payments |
$ | 5,140 | ||
|
|
b. | 2020 Legal Settlement: |
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Basic and diluted net loss per common share computation: |
||||||||
Numerator: |
||||||||
Net loss attributable to common shareholders |
$ | 27,180 | $ | 23,862 | ||||
|
|
|
|
|||||
Denominator: |
||||||||
Weighted average common shares outstanding |
9,212,841 | 7,939,992 | ||||||
|
|
|
|
|||||
Net loss per common share — basic and diluted |
$ | (2.95 | ) | $ | (3.01 | ) | ||
|
|
|
|
a. |
Taxes on income: |
b. | Loss before income taxes is comprised as follows: |
Year ended December 31 |
||||||||
2020 |
2019 |
|||||||
Domestic |
$ | (28,014 | ) | $ | (24,312 | ) | ||
Foreign |
951 | 702 | ||||||
|
|
|
|
|||||
$ | (27,063 | ) | $ | (23,610 | ) | |||
|
|
|
|
c. | Income taxes are comprised as follows: |
2020 |
U.S. |
Foreign |
Total |
|||||||||
Current |
$ | — | $ | 117 | $ | 117 | ||||||
Deferred |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Income tax expense |
$ | — | $ | 117 | $ | 117 | ||||||
|
|
|
|
|
|
2019 |
U.S. |
Foreign |
Total |
|||||||||
Current |
$ | 58 | $ | 194 | $ | 252 | ||||||
Deferred |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Income tax expense |
$ | 58 | $ | 194 | $ | 252 | ||||||
|
|
|
|
|
|
d. | A reconciliation of the differences between the effective tax rate and the federal statutory tax rate for the years ended December 31 is as follows: |
2020 |
2019 |
|||||||
Loss before income taxes |
$ | 27,063 | $ | 23,610 | ||||
Federal statutory income tax rate |
21.00 | % | 21.00 | % | ||||
|
|
|
|
|||||
Theoretical tax benefit |
(5,683 | ) | (4,958 | ) | ||||
|
|
|
|
|||||
State taxes, net of federal benefit |
(1,230 | ) | (1,436 | ) | ||||
Remeasurement of tranche rights liability |
591 | (37 | ) | |||||
Non-deductible expenses and other permanent differences |
526 | 315 | ||||||
Change in valuation allowance |
6,733 | 6,737 | ||||||
Research and development tax credit |
(650 | ) | (392 | ) | ||||
Tax expense at rate other than the U.S. statutory tax rate |
(25 | ) | 5 | |||||
Other |
(145 | ) | 18 | |||||
|
|
|
|
|||||
Income tax expense |
$ | 117 | $ | 252 | ||||
|
|
|
|
e. | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The approximate amount of the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows: |
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Net operating losses |
$ | 15,534 | $ | 9,182 | ||||
Research and development tax credit |
1,178 | 529 | ||||||
Other temporary differences |
379 | 647 | ||||||
Valuation allowance |
(17,091 | ) | (10,358 | ) | ||||
|
|
|
|
|||||
Total deferred income tax assets |
— | — | ||||||
|
|
|
|
As of December 31, |
||||||||
2020 |
2019 |
|||||||
Israel |
$ | 158 | $ | 165 | ||||
United States |
108 | 105 | ||||||
|
|
|
|
|||||
Total property and equipment, net |
$ | 266 | $ | 270 | ||||
|
|
|
|
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
United States |
$ | 4,653 | $ | 2,476 | ||||
Rest of world |
1,316 | 451 | ||||||
|
|
|
|
|||||
$ | 5,969 | $ | 2,927 | |||||
|
|
|
|
a. | Convertible Notes — See Note 10 |
b. | 2021 Business Acquisition |
c. | Preferred Share Financing |
2021 $ |
||||
Assets |
||||
Current Assets |
||||
Cash |
544,910 | |||
Accounts receivable |
139,497 | |||
Inventories |
745,536 | |||
Prepaid expenses |
20,922 | |||
|
|
|||
Total Current Assets |
1,450,865 | |||
Noncurrent Assets |
||||
Property and equipment |
||||
Machinery and equipment |
454,248 | |||
Leasehold improvements |
140,463 | |||
Furniture and fixtures |
21,136 | |||
Other depreciable and amortizable assets |
12,572 | |||
Accumulated depreciation and amortization |
(125,330 | ) | ||
|
|
|||
Total Property and equipment |
503,089 | |||
Goodwill and intangible assets, net |
16,848 | |||
|
|
|||
Total Noncurrent Assets |
519,937 | |||
|
|
|||
Total Assets |
1,970,802 | |||
|
|
|||
Liabilities & Stockholders’ Equity |
||||
Liabilities |
||||
Current Liabilities |
||||
Accounts payable |
161,166 | |||
Accrued expenses |
36,845 | |||
Accrued payroll and related benefits |
432,295 | |||
Current maturities of long-term debt |
127,268 | |||
Deferred revenue |
646,082 | |||
|
|
|||
Total Current Liabilities |
1,403,656 | |||
Noncurrent Liabilities |
||||
Long-term debt, net of current maturities |
300,332 | |||
|
|
|||
Total Noncurrent Liabilities |
300,332 | |||
|
|
|||
Total Liabilities |
1,703,988 | |||
|
|
|||
Stockholders’ Equity |
266,814 | |||
|
|
|||
Total Liabilities & Stockholders’ Equity |
1,970,802 | |||
|
|
2021 $ |
||||
Revenues |
951,542 | |||
Cost of Revenues |
||||
Cost of goods |
||||
Cost of goods, labor and benefits |
301,111 | |||
Cost of goods, other direct costs |
154,107 | |||
|
|
|||
Total Cost of goods |
455,218 | |||
|
|
|||
Total Cost of Revenues |
455,218 | |||
|
|
|||
Gross Profit (Loss) |
496,324 | |||
|
|
|||
Operating Expenses |
||||
Selling, general and administrative |
554,209 | |||
Research and development |
8,685 | |||
Other operating (income) expense |
||||
Taxes other than income taxes |
584 | |||
|
|
|||
Total Operating Expenses |
563,478 | |||
|
|
|||
Operating Income (Loss) |
(67,154 | ) | ||
Other Income (Expense) |
73,060 | |||
|
|
|||
Income (Loss) Before Provision (Benefit) for Income Taxes |
5,906 | |||
Income tax expense (benefit) |
225 | |||
|
|
|||
Net Income (Loss) |
5,681 | |||
|
|
Common Stock $ |
Additional Paid- In Capital $ |
Retained Earnings (Accumulated Deficit) $ |
Total Stockholders’ Equity $ |
|||||||||||||
Balance at December 31, 2020 |
279 | — | 21,918 | 22,197 | ||||||||||||
Net income (loss) |
— | — | 5,681 | 5,681 | ||||||||||||
Issuance of 671 shares of common stock to directors |
671 | 238,265 | — | 238,936 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2021 |
950 | 238,265 | 27,599 | 266,814 | ||||||||||||
|
|
|
|
|
|
|
|
2021 $ |
||||
Cash Flows |
||||
Cash Flows From Operating Activities |
||||
Net income (loss) |
5,681 | |||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) |
||||
Operating Activities |
||||
Depreciation and amortization |
25,086 | |||
(Increase) decrease in operating assets |
||||
Accounts receivable |
215,851 | |||
Inventories |
(122,224 | ) | ||
Prepaid expenses |
(8,730 | ) | ||
Increase (decrease) in operating liabilities |
||||
Accounts payable |
83,408 | |||
Accrued expenses |
(15,743 | ) | ||
Deferred revenue |
222,082 | |||
|
|
|||
Net Cash Provided by (Used in) Operating Activities |
405,411 | |||
|
|
|||
Cash Flows from Investing Activities |
||||
Purchase of property, plant, and equipment |
(78,804 | ) | ||
|
|
|||
Net Cash Provided by (Used in) Investing Activities |
(78,804 | ) | ||
|
|
|||
Cash Flows from Financing Activities |
||||
Repayment of line of credit |
(114,991 | ) | ||
PPP loan |
213,800 | |||
Repayment of related party debt |
(250,000 | ) | ||
Issuance of common stock |
238,936 | |||
|
|
|||
Net Cash Provided by (Used in) Financing Activities |
87,745 | |||
|
|
|||
Net Increase (Decrease) in Cash |
414,352 | |||
Cash, cash equivalents, and restricted cash at beginning of period |
130,558 | |||
|
|
|||
Cash, Cash Equivalents at End of Period |
544,910 | |||
|
|
|||
Supplemental Cash Flow Information |
||||
Cash Paid During the Year for |
||||
Interest |
869 | |||
Income taxes |
225 |
Software |
3 Years | |||
Equipment |
5 Years | |||
Furniture |
7 Years | |||
Leasehold improvements |
15 Years |
2021 | ||||
Note payable to SBA, note is unsecured, due in 24 monthly installments of $9,001 includes interest of 1% per annum beginning April 2021. The maturity date is April 2022. |
$ | 213,800 | ||
Note payable to SBA, note is unsecured, due in 60 monthly installments of $6,370 includes interest of 1% per annum beginning July 2021. The maturity date is July 2026. |
213,800 | |||
|
|
|||
427,600 | ||||
Less: Current Maturities |
(127,268 | ) | ||
|
|
|||
Long-term debt, net of current maturities |
$ | 300,332 | ||
|
|
Year ended: |
||||
2021 |
$ | 127,268 | ||
2022 |
149,553 | |||
2023 |
42,543 | |||
2024 |
42,970 | |||
2025 |
43,402 | |||
Thereafter |
21,864 | |||
|
|
|||
$ | 427,600 |
Year ended: |
||||
2021 |
$ | 93,404 | ||
2022 |
82,884 | |||
2023 |
84,754 | |||
2024 |
86,829 | |||
2025 |
56,180 | |||
Thereafter |
91,200 | |||
|
|
|||
$ | 495,251 |
2021 | ||||||||
At a point in time | Over time | |||||||
Sales — Products |
$ | 248,573 | — | |||||
Sales — R&D/Engineering |
637,896 | — | ||||||
Sales — Science |
65,073 | — |
Year ended: |
||||
2021 |
$ | 1,011 | ||
2022 |
1,011 | |||
2023 |
1,011 | |||
2024 |
1,011 | |||
2025 |
1,011 | |||
Thereafter |
12,045 | |||
|
|
|||
$ | 17,100 |
2021 $ |
||||
Selling, general and administrative |
||||
Salaries and wages, selling, general and administrative |
100,411 | |||
Employee benefits, selling, general and administrative |
29,763 | |||
Share based compensation |
238,265 | |||
Payroll taxes, selling, general and administrative |
36,959 | |||
Sales commissions and fees |
9 | |||
Advertising and promotion |
406 | |||
Utilities |
5,117 | |||
Rent |
34,259 | |||
Repairs and maintenance |
2,559 | |||
Legal and other professional fees and services |
4,800 | |||
Travel, meals and entertainment |
244 | |||
Insurance |
50,304 | |||
Office supplies |
9,214 | |||
Communications and information technology |
13,088 | |||
Depreciation, selling general and administrative |
24,833 | |||
Intangible amortization, selling general and administrative |
253 | |||
Other selling, general and administrative expense |
3,725 | |||
|
|
|||
Total Selling, General and Administrative Expense |
554,209 | |||
|
|
|
128 Union St, Suite 201 New Bedford, MA 02740 t: 508-997-5556 | f: 508-990-3918 www.jm.cpa | general@jm.cpa |
• | Exercise professional judgment and maintain professional skepticism throughout the audit. |
• | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
• | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Remote Sensing Solutions, Inc.’s internal control. Accordingly, no such opinion is expressed. |
• | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
• | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Remote Sensing Solutions, Inc.’s ability to continue as a going concern for a reasonable period of time. |
Current Assets |
||||
Cash and Cash Equivalents |
$ | 130,558 | ||
Accounts Receivable |
355,348 | |||
Prepaid Expenses |
12,192 | |||
Inventory |
623,312 | |||
|
|
|||
Total Current Assets |
1,121,410 | |||
|
|
|||
Property and Equipment |
||||
Leasehold Improvements and Fixtures |
140,463 | |||
Equipment |
409,152 | |||
Less: Accumulated Depreciation |
(100,496 | ) | ||
|
|
|||
Net Property and Equipment |
449,119 | |||
|
|
|||
Other Assets |
||||
Intangible Assets, Net |
17,100 | |||
|
|
|||
Total Assets |
$ | 1,587,629 | ||
|
|
Current Liabilities |
||||
Accounts Payable |
$ | 77,758 | ||
Accrued Expenses |
484,883 | |||
Deferred Revenue |
424,000 | |||
Related Party Notes |
250,000 | |||
Line of Credit |
114,991 | |||
Current Maturities of Long-Term Debt |
106,366 | |||
|
|
|||
Total Current Liabilities |
1,457,998 | |||
|
|
|||
Long-Term Liabilities |
||||
Long-Term Debt, Net of Current Maturities |
107,434 | |||
|
|
|||
Total Long-Term Liabilities |
107,434 | |||
|
|
|||
Total Liabilities |
1,565,432 | |||
Equity |
||||
Common Stock — No Par Value, 5,000 Authorized 1,579 Shares Issued and Outstanding |
279 | |||
Retained Earnings |
21,918 | |||
|
|
|||
Total Equity |
22,197 | |||
|
|
|||
Total Liabilities and Equity |
$ | 1,587,629 | ||
|
|
Revenues |
$ | 2,806,532 | ||
Cost of Revenues |
1,496,117 | |||
|
|
|||
Gross Profit |
1,310,415 | |||
General and Administrative Expenses |
1,303,135 | |||
|
|
|||
Income from Operations |
7,280 | |||
Other Income (Expense) |
||||
EIDL Grant |
10,000 | |||
Interest Expense |
(29,624 | ) | ||
Tax Expense |
(3,698 | ) | ||
|
|
|||
Total Other Income (Expense) |
(23,322 | ) | ||
|
|
|||
Net Income/(Loss) |
$ | (16,042 | ) | |
|
|
|||
Retained Earnings, Beginning of Year |
52,366 | |||
Distributions Paid |
(14,406 | ) | ||
|
|
|||
Retained Earnings, End of Year |
$ | 21,918 | ||
|
|
Cash Flow from Operating Activities |
||||
Net Income/(Loss) |
$ | (16,042 | ) | |
Adjustments To Reconcile Net Income to Net Cash Provided by Operations: |
||||
Depreciation and Amortization |
48,746 | |||
(Increase) Decrease in Operating Assets: |
||||
Accounts Receivable |
19,921 | |||
Prepaid Expenses |
(12,192 | ) | ||
Inventory |
(142,055 | ) | ||
Increase (Decrease) in Operating Liabilities: |
||||
Accounts Payable |
(141,493 | ) | ||
Accrued Expenses |
146,341 | |||
Deferred Revenue |
424,000 | |||
|
|
|||
Net Cash Provided by Operating Activities |
327,226 | |||
|
|
|||
Cash Flows from Investing Activities |
||||
Capital Expenditures |
(287,444 | ) | ||
|
|
|||
Net Cash (Used) by Investing Activities |
(287,444 | ) | ||
|
|
|||
Cash Flows Provided (Used) by Financing Activities |
||||
Repayments of Long-Term Debt |
(15,000 | ) | ||
Repayment of Line of Credit |
(135,000 | ) | ||
PPP Loan |
213,800 | |||
Distributions to Shareholders |
(14,406 | ) | ||
|
|
|||
Net Cash Provided by Financing Activities |
49,394 | |||
|
|
|||
Net Increase in Cash and Cash Equivalents |
89,176 | |||
Cash and Cash Equivalents, Beginning of Year |
41,382 | |||
|
|
|||
Cash and Cash Equivalents, End of Year |
$ | 130,558 | ||
|
|
|||
Supplemental Disclosures of Cash Flow Information: |
||||
Cash Paid During the Year for: |
||||
Interest |
$ | 29,624 | ||
|
|
|||
Income Taxes |
$ | 3,698 | ||
|
|
Equipment |
5 Years | |
Furniture |
7 Years | |
Leasehold improvements |
15 Years |
2020 | ||||
Note payable to shareholder, secured by company assets, due on demand, interest of 7% per annum beginning September 11, 2018. |
$ | 125,000 | ||
Note payable to shareholder, secured by company assets, due on demand, interest of 7% per annum beginning January 31, 2019. |
125,000 | |||
Note payable to SBA, note is unsecured, due in 24 monthly installments of $9,001 includes interest of 1% per annum beginning April 2021. The maturity date is April 2022. |
213,800 | |||
|
|
|||
463,800 | ||||
Less: Current Maturities |
(356,366 | ) | ||
|
|
|||
Long-term debt, net of current maturities |
$ | 107,434 | ||
|
|
Year ended December 31: |
||||
2021 |
$ | 356,366 | ||
2022 |
107,434 | |||
2023 |
— | |||
2024 |
— | |||
2025 |
— | |||
Thereafter |
— | |||
|
|
|||
$ | 463,800 |
Year ended December 31: |
||||
2021 |
$ | 93,404 | ||
2022 |
82,884 | |||
2023 |
84,754 | |||
2024 |
86,829 | |||
2025 |
56,180 | |||
Thereafter |
79,680 | |||
|
|
|||
$ | 483,731 |
2020 | ||||||||
At a point in time |
Over time | |||||||
Sales — Products |
$ | 802,910 | — | |||||
Sales — R&D/Engineering |
1,511,733 | — | ||||||
Sales — Science |
491,889 | — |
Labor |
$ | 951,496 | ||
Materials Costs |
309,435 | |||
Other |
235,186 | |||
|
|
|||
Total Costs of Revenues |
$ | 1,496,117 | ||
|
|
Payroll Expense |
$ | 637,875 | ||
Payroll Taxes |
99,382 | |||
Commissions |
20,200 | |||
Computer Expenses |
69,967 | |||
Depreciation and Amortization |
48,746 | |||
Facilities |
139,927 | |||
Fringe Benefits Other |
11,766 | |||
Insurance |
146,488 | |||
Other |
24,574 | |||
Retirement |
93,153 | |||
Sales and Marketing |
3,322 | |||
Supplies |
7,735 | |||
|
|
|||
Total General and Administrative Expenses |
$ | 1,303,135 | ||
|
|
Page |
||||||||
ARTICLE I DEFINITIONS |
A-2 | |||||||
1.1 |
Definitions | A-2 | ||||||
1.2 |
Construction | A-14 | ||||||
ARTICLE II MERGER |
A-15 | |||||||
2.1 |
Merger | A-15 | ||||||
2.2 |
Merger Effective Time | A-15 | ||||||
2.3 |
Effect of the Merger | A-15 | ||||||
2.4 |
U.S. Tax Treatment | A-15 | ||||||
2.5 |
Certificate of Incorporation and Bylaws | A-16 | ||||||
2.6 |
Closing; Effective Time | A-16 | ||||||
2.7 |
Post-Closing Board of Directors and Officers | A-16 | ||||||
2.8 |
Taking of Necessary Action; Further Action | A-16 | ||||||
2.9 |
No Further Ownership Rights in Company Securities | A-16 | ||||||
2.10 |
Appraisal Rights | A-17 | ||||||
ARTICLE III CONSIDERATION |
A-17 | |||||||
3.1 |
Conversion of Company Securities | A-17 | ||||||
3.2 |
No Fractional Shares | A-19 | ||||||
3.3 |
Withholding | A-19 | ||||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
A-19 | |||||||
4.1 |
Corporate Existence and Power | A-19 | ||||||
4.2 |
Authorization | A-19 | ||||||
4.3 |
Governmental Authorization | A-20 | ||||||
4.4 |
Non-Contravention |
A-20 | ||||||
4.5 |
Capitalization | A-21 | ||||||
4.6 |
Corporate Records | A-22 | ||||||
4.7 |
Subsidiaries | A-22 | ||||||
4.8 |
Consents | A-22 | ||||||
4.9 |
Financial Statements | A-23 | ||||||
4.10 |
Books and Records | A-23 | ||||||
4.11 |
Internal Accounting Controls | A-23 | ||||||
4.12 |
Absence of Certain Changes | A-24 | ||||||
4.13 |
Properties; Title to the Company’s Assets | A-24 | ||||||
4.14 |
Litigation | A-24 | ||||||
4.15 |
Contracts | A-24 | ||||||
4.16 |
Licenses and Permits | A-26 | ||||||
4.17 |
Compliance with Laws | A-26 | ||||||
4.18 |
Intellectual Property | A-27 | ||||||
4.19 |
Data Privacy | A-28 | ||||||
4.20 |
Employees; Employment Matters | A-29 | ||||||
4.21 |
Withholding | A-30 | ||||||
4.22 |
Employee Benefits | A-30 | ||||||
4.23 |
Real Property | A-31 | ||||||
4.24 |
Tax Matters | A-32 | ||||||
4.25 |
Environmental Laws | A-34 | ||||||
4.26 |
Finders’ Fees | A-34 | ||||||
4.27 |
Directors and Officers | A-34 | ||||||
4.28 |
Anti-Money Laundering Laws | A-34 | ||||||
4.29 |
Insurance | A-34 |
Page |
||||||||
4.30 |
Related Party Transactions | A-35 | ||||||
4.31 |
Customers and Suppliers | A-35 | ||||||
4.32 |
Government Contracts | A-35 | ||||||
4.33 |
Absence of Certain Business Practices | A-35 | ||||||
4.34 |
Specified Company Securityholders | A-36 | ||||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
A-36 | |||||||
5.1 |
Corporate Existence and Power | A-36 | ||||||
5.2 |
Corporate Authorization | A-36 | ||||||
5.3 |
Governmental Authorization | A-37 | ||||||
5.4 |
Non-Contravention |
A-37 | ||||||
5.5 |
Finders’ Fees | A-37 | ||||||
5.6 |
Issuance of Shares | A-37 | ||||||
5.7 |
Capitalization | A-37 | ||||||
5.8 |
Information Supplied | A-38 | ||||||
5.9 |
Trust Fund | A-38 | ||||||
5.10 |
Listing | A-39 | ||||||
5.11 |
Board Approval | A-39 | ||||||
5.12 |
Parent SEC Documents and Financial Statements | A-39 | ||||||
5.13 |
Business Activities | A-41 | ||||||
5.14 |
Absence of Certain Business Practices | A-41 | ||||||
5.15 |
Affiliate Transactions | A-42 | ||||||
5.16 |
Litigation | A-42 | ||||||
5.17 |
Expenses, Indebtedness and Other Liabilities | A-42 | ||||||
5.18 |
Tax Matters |
A-42 | ||||||
5.19 |
Investment Company Act; JOBS Act |
A-43 | ||||||
ARTICLE VI COVENANTS OF THE PARTIES PENDING CLOSING |
A-44 | |||||||
6.1 |
Conduct of the Business | A-44 | ||||||
6.2 |
Exclusivity | A-45 | ||||||
6.3 |
Access to Information | A-46 | ||||||
6.4 |
Notices of Certain Events | A-46 | ||||||
6.5 |
Cooperation with Form S-4/Proxy Statement; Other Filings |
A-47 | ||||||
6.6 |
Trust Account | A-49 | ||||||
6.7 |
Obligations of Merger Sub | A-49 | ||||||
6.8 |
Private Placement | A-49 | ||||||
6.9 |
Termination of Affiliate Transactions | A-50 | ||||||
6.10 |
CFIUS Filing | A-50 | ||||||
ARTICLE VII COVENANTS OF THE COMPANY |
A-50 | |||||||
7.1 |
Reporting; Compliance with Laws | A-50 | ||||||
7.2 |
Commercially Reasonable Efforts to Obtain Consents | A-51 | ||||||
7.3 |
Company’s Stockholders Approval | A-51 | ||||||
ARTICLE VIII COVENANTS OF ALL PARTIES HERETO |
A-51 | |||||||
8.1 |
Commercially Reasonable Efforts; Further Assurances; Governmental Consents | A-51 | ||||||
8.2 |
Confidentiality | A-52 | ||||||
8.3 |
Directors’ and Officers’ Indemnification and Liability Insurance | A-52 | ||||||
8.4 |
Nasdaq Listing | A-53 | ||||||
8.5 |
Certain Tax Matters | A-53 | ||||||
8.6 |
Equity Incentive Plan | A-53 |
Page |
||||||||
8.7 |
Closing Parent RSU Grant | A-54 | ||||||
8.8 |
Transaction Litigation | A-54 | ||||||
8.9 |
Amendment to Parent Bylaws. | A-54 | ||||||
ARTICLE IX CONDITIONS TO CLOSING |
A-54 | |||||||
9.1 |
Condition to the Obligations of the Parties | A-54 | ||||||
9.2 |
Conditions to Obligations of Parent and Merger Sub | A-55 | ||||||
9.3 |
Conditions to Obligations of the Company | A-56 | ||||||
ARTICLE X TERMINATION |
A-56 | |||||||
10.1 |
Termination Without Default | A-56 | ||||||
10.2 |
Termination Upon Default | A-57 | ||||||
10.3 |
Effect of Termination | A-57 | ||||||
ARTICLE XI MISCELLANEOUS |
A-58 | |||||||
11.1 |
Non-Survival of Representations, Warranties and Covenants |
A-58 | ||||||
11.2 |
Notices | A-58 | ||||||
11.3 |
Amendments; No Waivers; Remedies | A-59 | ||||||
11.4 |
Arm’s Length Bargaining; No Presumption Against Drafter | A-59 | ||||||
11.5 |
Publicity | A-59 | ||||||
11.6 |
Expenses | A-59 | ||||||
11.7 |
No Assignment or Delegation | A-59 | ||||||
11.8 |
Governing Law | A-59 | ||||||
11.9 |
Counterparts; Facsimile Signatures | A-60 | ||||||
11.10 |
Entire Agreement | A-60 | ||||||
11.11 |
Severability | A-60 | ||||||
11.12 |
Further Assurances | A-60 | ||||||
11.13 |
Third Party Beneficiaries | A-60 | ||||||
11.14 |
Waiver | A-60 | ||||||
11.15 |
Jurisdiction; Waiver of Jury Trial | A-61 | ||||||
11.16 |
Enforcement | A-61 | ||||||
11.17 |
Non-Recourse |
A-61 | ||||||
11.18 |
No Other Representations; No Reliance | A-61 |
Parent: | ||
PINE TECHNOLOGY ACQUISITION CORP. | ||
By: | /s/ Christopher Longo | |
Name: Christopher Longo | ||
Title: Chief Executive Officer | ||
Merger Sub: | ||
PINE TECHNOLOGY MERGER CORP. | ||
By: | /s/ Adam Karkowsky | |
Name: Adam Karkowsky | ||
Title: President | ||
Company: | ||
THE TOMORROW COMPANIES INC. | ||
By: | /s/ Shimon Elkabetz | |
Name: Shimon Elkabetz | ||
Title: Chief Executive Officer |
Pine Technology Acquisition Corp. | ||
By: | | |
Name: |
| |
Title: |
|
1. | reviewed a draft, dated December 5, 2021, of the Agreement; |
2. | reviewed certain publicly available business and financial information relating to Parent and the Company that we deemed to be relevant; |
3. | reviewed certain information relating to the historical, current and future operations, financial condition and prospects of the Company made available to us by the Company and Parent, including financial projections prepared by the management of the Company relating to the Company (the “Projections”); |
4. | spoken with certain members of the managements of Parent and the Company and certain of their respective representatives and advisors regarding the business, operations, financial condition and prospects of the Company, the Transaction and related matters; |
5. | compared the financial and operating performance of the Company with that of companies with publicly traded equity securities that we deemed to be relevant; and |
6. | conducted such other financial studies, analyses and inquiries and considered such other information and factors as we deemed appropriate. |
§ | The annexes, schedules, and certain exhibits to the Merger Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. PTAC hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the Commission upon request. |
# | To be filed by amendment. |
* | Filed herewith. |
** | Previously filed. |
† | Indicates a management contract or compensatory plan. |
+ | Certain portions of this exhibit (indicated by “####”) have been redacted pursuant to Regulation S-K, Item 601(a)(6). |
(a) | The undersigned registrant hereby undertakes as follows: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
i. | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
ii. | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
iii. | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(5) | That, for the purpose of determining any liability under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
i. | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
ii. | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
iii. | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
iv. | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | The undersigned registrant hereby undertakes as follows: That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(7) | The registrant hereby undertakes that every prospectus: (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide |
(8) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the undersigned pursuant to the foregoing provisions, or otherwise, the undersigned has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the undersigned of expenses incurred or paid by a director, officer or controlling person of the undersigned in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the undersigned will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(b) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(c) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
PINE TECHNOLOGY ACQUISITION CORP. | ||
By: | /s/ Christopher Longo | |
Christopher Longo | ||
Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Christopher Longo Christopher Longo |
Chief Executive Officer and Director (Principal Executive Officer) |
February 1, 2022 | ||
* Ciro M. DeFalco |
Chief Financial Officer (Principal Financial and Accounting Officer) |
February 1, 2022 | ||
* Adam Karkowsky |
Chairman |
February 1, 2022 | ||
* J. Eric Smith |
Director |
February 1, 2022 | ||
* Bradley Tusk |
Director |
February 1, 2022 | ||
* Nicolas D. Zerbib |
Director |
February 1, 2022 |
*By: | /s/ Christopher Longo | |
Christopher Longo | ||
Attorney-in-Fact |
Exhibit 8.1
[], 2022
9 Channel Center Street, 7th Floor
Boston, MA 02210
Ladies and Gentlemen:
We are United States tax counsel to The Tomorrow Companies Inc., a Delaware corporation (the Company), in connection with the preparation of the registration statement on Form S-4 (as amended or supplemented as of [], 2022, and together with the Proxy Statement/Prospectus filed therewith, the Registration Statement) (Registration No. 333-261709), under the Securities Act of 1933, as amended (the Securities Act) by SPAC (as defined below).
The Registration Statement is being filed in connection with the transactions (the Merger) contemplated by the Agreement and Plan of Merger, dated as of December 7, 2021 (the Merger Agreement), by and among the Company, Pine Technology Acquisition Corp., a Delaware corporation (SPAC) and Pine Technology Merger Corp., a Delaware corporation and wholly owned direct Subsidiary of SPAC. Capitalized terms not otherwise defined herein shall have the same meanings attributed to such terms in the Registration Statement.
You have requested our opinion concerning the discussions set forth in the sections entitled Certain Material U.S. Federal Income Tax Considerations of the Business Combination to Tomorrow.io Equityholders Tax Consequences if the Business Combination Qualifies as a Reorganization in the Registration Statement as they relate to the Merger (the Tax Disclosure). In providing this opinion, we have assumed (without any independent investigation or review thereof) that:
a. All original documents submitted to us (including signatures thereto) are authentic, all documents submitted to us as copies conform to the original documents, all such documents have been duly and validly executed and delivered where due execution and delivery are a prerequisite to the effectiveness thereof, and all parties to such documents had or will have, as applicable, the requisite corporate powers and authority to enter into such documents and to undertake and consummate the Business Combination;
b. All factual representations, warranties and statements made or agreed to by the parties to the Merger Agreement, the Sponsor Letter Agreement, the Subscription Agreements, and the other agreements referred to therein or otherwise relating to the Merger (collectively, the Agreements and, together with the Registration Statement, the Documents), and in the representation letters provided to us by SPAC and the Company are true, correct and complete as of the date hereof without regard to any qualification as to knowledge, belief, or otherwise;
c. The description of the Merger (and other statements set forth) in the Registration Statement is accurate, the Merger will be consummated in accordance with such description and with the Merger Agreement and the other Agreements, without any waiver or breach of any material provision thereof, and the Merger will be effective under applicable corporate law as described in the Merger Agreement and the other Agreements; and
d. The Documents represent the entire understanding of the parties with respect to the Merger, there are no other written or oral agreements regarding the Merger other than the Agreements and none of the material terms and conditions thereof have been or will be waived or modified.
This opinion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended (the Code), the U.S. Treasury Regulations promulgated thereunder, and the interpretation of the Code and such regulations by the courts and the U.S. Internal Revenue Service, in each case, as they are in effect and exist at the date of this opinion. It should be noted that statutes, regulations, judicial decisions and administrative interpretations are subject to change at any time and, in some circumstances, with retroactive effect. Any change that is made after the date hereof in any of the foregoing bases for our opinion, or any inaccuracy in the facts or assumptions on which we have relied in issuing our opinion, could adversely affect our conclusion. We assume no responsibility to inform you of any such change or inaccuracy that may occur or come to our attention. No opinion is expressed as to any transactions other than the Merger, or any matter other than those specifically covered by this opinion. In particular, this opinion is limited to the matters discussed in the Tax Disclosure, and does not address the U.S. federal income tax treatment of any shareholder subject to special rules under the Code or the Treasury Regulations, as further described in the Tax Disclosure.
The U.S. federal income tax consequences of the transactions described in the Registration Statement are complex and are subject to varying interpretations. Our opinion is not binding on the U.S. Internal Revenue Service or any court, and there is no assurance or guarantee that either will agree with our conclusions. Indeed, the U.S. Internal Revenue Service may challenge one or more of the conclusions contained herein and the U.S. Internal Revenue Service may take a position that is inconsistent with the views expressed herein. There is no assurance or guarantee that a court would, if presented with the issues addressed herein, reach the same or similar conclusions as we have reached.
Based upon and subject to the foregoing, we confirm that the statements set forth in the Registration Statement under the heading Certain Material U.S. Federal Income Tax Considerations of the Business Combination to Tomorrow.io Equityholders Tax Consequences if the Business Combination Qualifies as a Reorganization insofar as they address certain material U.S. federal income tax considerations for Tomorrow.io Holders who exchange their Tomorrow.io Stock for Class A Common Stock of the SPAC in the Merger and matters of U.S. federal income tax law and regulations or legal conclusions with respect thereto, and except to the extent stated otherwise therein, are our opinion, subject to the assumptions, qualifications and limitations stated herein and therein.
This opinion is furnished to you solely for use in connection with the Registration Statement. This opinion is based on facts and circumstances existing on the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours, |
Goodwin Procter LLP |
Exhibit 10.12
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (the Sublease or Sublease Agreement) is entered into on this 29th day of July 2021 (the Effective Date) by and between ENGIE HOLDINGS INC., a Delaware corporation (Sublandlord), having an address at 1360 Post Oak Blvd, Suite 400, Houston, TX 77056 and THE TOMORROW COMPANIES INC. (Subtenant), having an address of 25 Dorchester Ave, Rm 52150, Boston, MA 02205.
WHEREAS, Sublandlord entered into a Lease dated January 9, 2019, by and between Sublandlord and 9 Channel Center MT LLC (Landlord), a partially redacted copy of which is attached as Exhibit A hereto (Master Lease), under which Sublandlord leases the entire rentable area of the sixth (6th) floor and seventh (7th) floor being shown on Exhibit A of the Master Lease comprised of approximately 21,170 rentable square feet (hereinafter collectively called the Master Premises) at 9 Channel Center, Boston, Massachusetts (the Building) together with certain appurtenant rights.
WHEREAS, Sublandlord desires to sublease to Subtenant and Subtenant desires to sublease from Sublandlord the entire rentable area of the 7th floor portion of the Master Premises comprised of approximately 10,585 rentable square feet identified on Exhibit A of Master Lease hereto (the Subleased Premises) on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and the covenants and promises herein provided, the parties agree as follows:
1. Subleased Premises and Sublease Term. Sublandlord hereby subleases the Subleased Premises to Subtenant and Subtenant hereby subleases the Subleased Premises from Sublandlord. Subject to the terms and conditions of the Master Lease, Subtenant shall have the non-exclusive right to use the common areas and facilities of the Building as set forth in Section 2.2 of the Master Lease. Subtenant shall lease the Subleased Premises, upon and subject to the covenants, agreements, terms and conditions herein provided and in the Master Lease as more fully set forth herein, for an initial term commencing on the later to occur of (a) August 30, 2021 provided that if the planning and preparation pursuant to Section 2 below are in Subtenants determination complete prior to August 30, 2021, the initial term may start as early as August 23, 2021, and (b) the date that the Landlord grants its consent to this Sublease Agreement, but no later than August 30, 2021 (the Commencement Date) and expiring on December 29, 2025, (the Sublease Term). The provisions of the Master Lease are incorporated herein by reference; capitalized terms used but not defined herein shall have the meanings ascribed to them in the Master Lease. Through the Term of the Master Lease (through April 30, 2030) Subtenant shall have one (1) extension option for the Subleased Premises (Option). The Rent for the Option shall be ninety-five percent (95%) of the then-market gross rent.
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2. Base Rent. Beginning on December 31, 2021, but subject to adjustment depending on the Commencement Date (the Rent Commencement Date), subtenant covenants and agrees to pay monthly base rent to Sublandlord for the Sublease Term due and payable in advance on the first day of each month, as follows:
Period |
Annual/RSF | Annual | Monthly | |||||||||
December 30, 2021 December 29, 2022 |
$ | 43.00 | $ | 455,155.00 | $ | 37,929.58 | ||||||
December 30, 2022 December 29, 2023 |
$ | 44.00 | $ | 465,740.00 | $ | 38,811.67 | ||||||
December 30, 2023 December 29, 2024 |
$ | 45.00 | $ | 476,325.00 | $ | 39,693.75 | ||||||
December 30, 2024 December 29, 2025 |
$ | 46.00 | $ | 486,910.00 | $ | 40,575.83 |
Subject to prior notice to Sublandlord and solely during regular business hours, Sublandlord shall grant Subtenant reasonable access to the Subleased Premises for the purposes of planning and preparation to the Subleased Premises beginning on August 1, 2021 until the Commencement Date.
Payments shall be made by electronic funds transfer to Sublandlord in accordance with the account information set forth on Attachment 1 (as may be updated by Sublandlord from time to time as set forth therein).
Subtenant shall pay for all telephone and data communication charges incurred by Subtenant directly to the provider(s) of such services. Base Rent for the first month shall be paid upon the execution of this Sublease Agreement and be applied accordingly.
3. Sublease Additional Rent. Subtenant shall reimburse Sublandlord for Subtenants Pro Rata Share of the Operating Expenses payable by Sublandlord during the Sublease Term, pursuant to and calculated in accordance with Section 8.2 of the Master Lease, over Base Operating Expenses payable by Sublandlord for Calendar Year 2022. Subtenant shall reimburse Sublandlord for Subtenants Pro Rata Share of the Taxes payable by Sublandlord during the Sublease Term, pursuant to and calculated in accordance with Section 8.1 of the Master Lease, over the Base Tax Amount payable by Sublandlord for fiscal year 2022. For the avoidance of doubt, Subtenant shall not be required to make any payments on account of accrued Operating Expenses prior to January 1, 2023 or any payments on account of accrued Taxes prior to July 1, 2022. Such reimbursement amounts shall be paid to Sublandlord at the times and in the manner provided in such provisions of the Master Lease and Sublandlord shall promptly provide to Subtenant any notices or correspondence received from Master Landlord regarding Operating Expenses and Taxes under the Master Lease. As used herein, Subtenants Pro Rata Share shall mean fifty percent (50%) which represents the Subleased Premised over the total square footage leased by Sublandlord under the Master Lease.
4. Use. The Subleased Premises shall be primarily used for general office use and subject to Quiet Enjoyment each per the Master Lease.
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5. Incorporation of Master Lease.
a. Sublandlord represents and warrants to Subtenant that (i) the Master Lease is in full force and effect, (ii) the copy of the Master Lease attached hereto as Exhibit A is true, correct, and complete (other than the partial redactions), and (iii) to the best of Sublandlords knowledge, neither Sublandlord nor Landlord is in default thereunder and there are no facts or circumstances that could give rise to a default. Except with respect to Sublandlords obligation to pay Fixed Rent and Additional Rent due and owing under the Master Lease which provision is expressly excluded from this Sublease, all of the covenants, agreements, terms and conditions of the Master Lease relating to or applicable to the tenant under the Master Lease are incorporated herein and made a part hereof with respect to the Subleased Premises only with the same force and effect as if set forth at length herein, except to the extent the same are modified or amended by this Sublease, it being understood and agreed that said provisions shall fix the obligations of the Subtenant with the same effect as if the Subtenant were the tenant named in the Master Lease. Except as otherwise provided herein, Subtenant agrees that Sublandlord shall have all of the rights and remedies of the Landlord under the Master Lease relating to the Subleased Premises with respect to Subtenant as if such rights and remedies were fully set forth herein. To the extent there is a conflict between the provisions of the Master Lease which are hereby incorporated and the express provisions of this Sublease, the express provisions of this Sublease shall prevail to the extent Landlords rights under the Master Lease are not affected. Notwithstanding the foregoing, the following provisions of the Master Lease are excluded and not incorporated herein: Article VI; Sections 13.26, 13.27, 13.28 and 13.29.
b. Sublandlord shall not amend or modify the terms of the Master Lease in any manner during the Sublease Term which decreases Subtenants rights or benefits under this Sublease or increases Subtenants obligations, without Subtenants prior written consent. Sublandlord shall pay all rental due under the Master Lease on or before the date due and otherwise perform all obligations under the Master Lease that are not the obligations of Subtenant as occupant of the Subleased Premises under this Sublease. If Master Landlord shall default in the performance of its obligations under the Master Lease (including those rights accruing to the benefit of the Subtenant and the Subleased Premises), Sublandlord shall use commercially reasonable efforts promptly and timely and in consultation with Subtenant to cause Master Landlord to perform its obligations under the Master Lease and to enforce the terms thereof (Enforcement). Sublandlord shall not take any action or do or permit to be done on its behalf anything which (i) will result in a violation of or default under any of the terms, covenants, conditions, or provisions of the Master Lease or any other instrument to which this Sublease is subordinate, or (ii) will result in any additional cost or other liability to Subtenant unless paid for by Sublandlord.
6. Condition of Subleased Premises. Sublandlord will deliver the Subleased Premises vacant and free and clear of all Sublandlords furniture, fixtures, and equipment, except as provided in Section 29 below. Except for the foregoing, Subtenant has inspected the Subleased Premises and agrees to accept possession of the Subleased Premises in their present condition, as-is, without any representations or warranties (express, implied or otherwise) and without any obligation on the part of Sublandlord to make any alterations, decorations, installations or improvements. Subtenant may not make alterations and improvements to the Subleased Premises without the express written consent of the Sublandlord, such consent not to be unreasonably
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withheld, conditioned or delayed and, to the extent required under Master Lease, Landlord. At Sublandlords request, to be made at the time when Subtenant requests consent for any alteration or improvement, Subtenant shall remove any such alteration and improvement and restore the Subleased Premises (subject to ordinary wear and tear) upon the expiration or earlier termination of this Sublease Agreement solely if and to the extent required by Landlord under the Master Lease.
7. Adherence to Master Lease. Subtenant covenants and agrees (a) to perform and observe all of the agreements, covenants, terms and conditions of the Master Lease (except for the payment of Rent by Sublandlord (including both Fixed and Additional) under the Master Lease) with respect to the Subleased Premises (and the buildings and common areas, to the extent applicable) to the extent that the same are not modified or amended by this Sublease, and (b) that it shall not do or suffer or permit anything to be done which would constitute a default under the Master Lease with respect to the Subleased Premises, and (c) that notwithstanding any other provision of this Sublease to the contrary, any act or omission by Subtenant which constitutes a default under the Master Lease with respect to the Subleased Premises also constitutes a default hereunder. Subtenant agrees that in the event it enters into any sublease or license (or any other transaction allowing another entity to use the Subleased Premises for compensation) it shall abide by all the provisions of Master Lease, including but not limited to the sharing with the Landlord of rents received in excess of the rent paid under the Master Lease. Subject to Subtenants performance of its obligations hereunder, Sublandlord shall not default the Master Lease, or perform any act which would constitute a violation or default thereunder, or result in a forfeiture or termination of the Master Lease or render Sublandlord liable for damages, fines, or penalties payable to Master Landlord. Notwithstanding anything in this Sublease to the contrary, if the rent due under the Master Lease with respect to the Subleased Premises is abated in whole or in part during the Sublease Term pursuant to any applicable provision of the Master Lease relating to interruption, curtailment, fire, damage, hazard or otherwise, then all rents due under this Sublease shall abate for the same period and to the same extent as the rent for the Premises is abated pursuant to the Master Lease.
8. Default. If Subtenant (i) fails or neglects to make any payment of rent or any other sum owed by Subtenant within five (5) business days of written notice that such payment is past due (and such failure will not constitute a Default of Subtenant unless such failure to pay is not cured within seven (7) Business Days), or (ii) fails to perform any of Subtenants other covenants, agreements or obligations under this Sublease or the Master Lease (except to the extent arising from the error or omission from Sublandlord) and such default shall not be cured within twenty (20) days of written notice thereof, Sublandlord may immediately or at any time thereafter while such default remains uncured upon notice to Subtenant terminate this Sublease and take any and all actions permitted to be taken by the Landlord under the Master Lease in respect of a default by the tenant thereunder or any termination as a result thereof.
9. Indemnity. Subtenant shall indemnify, defend and hold harmless Sublandlord and Landlord from and against any and all claims, cost, expense or liability (including reasonable attorneys fees) asserted by or on behalf of any person and incurred on account of (i) Subtenants willful misconduct and negligent acts or omissions and the willful misconduct and negligent acts or omissions of its employees, agents, contractors or invitees on or about the Subleased Premises, or the Building, or (ii) on account of any breach or violation by Subtenant of this Sublease or the
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Master Lease, except to the extent such breach or violation arises from the act or omission of Sublandlord, or (iii) any accident, injury or damage to any person or property which occurs on or about the Subleased Premises, or (iv) Subtenants failure to comply with the requirements of any governmental authority. Notwithstanding the foregoing in no event shall this Section require Subtenant to indemnify or defend Sublandlord or Landlord against any claims, cost, expense or liability to the extent arising out of the negligence or willful misconduct of Sublandlord or Landlord (including their respective employees, agents, contractors or invitees).
Sublandlord shall indemnify and hold harmless Subtenant from and against any and all claims, cost, expense or liability (including reasonable attorneys fees) incurred (i) on account of any breach or violation by Sublandlord of this Sublease or the Master Lease or (iii) Sublandlords failure to comply with the requirements of any governmental authority.
The parties hereto hereby release and waive any right or claim against the other for loss of business, loss of profits, inconvenience, or for any other incidental or consequential damages. In no event shall the partners, principals, members, officers, stockholders, directors, employees or agents of either party be personally liable for the performance of such partys obligations under this Sublease.
10. Assignment. Except in the case of a Permitted Transferee, Subtenant shall not, by the sale of all or substantially all of its assets, operation of law or otherwise, assign, sell, mortgage, pledge or in any other manner transfer or encumber this Sublease or any interest therein, or sublet the Subleased Premises or any part or parts thereof, or grant any concession or license or otherwise permit occupancy of all or any part of the Subleased Premises by any person, without the prior written consent of Sublandlord, which consent shall not be unreasonably withheld, conditioned or delayed, and Landlords consent to the extent required under the Master Lease. Except in the case of a Permitted Transferee, neither the consent of transfer, concession, license or use, nor any references in this Sublease to assignees, subtenants, mortgagees, pledgees, transferees, concessionaires, licensees, or users, shall in any way be construed to relieve Subtenant of the requirement of obtaining the prior written consent of Sublandlord and Landlord to any further assignment, subletting or use or to the making of any assignment, subletting, mortgage, pledge, transfer, concession or license with respect to this Sublease or all or any part of the Subleased Premises. If Sublandlord consents to any assignment of this Sublease, the assignee shall execute and deliver to Sublandlord an agreement in form and substance reasonably satisfactory to Sublandlord whereby the assignee shall assume all of Subtenants obligations under this Sublease. Notwithstanding any assignment, subletting or transfer including, without limitation, any assignment, subletting, transfer or use permitted or consented to by Sublandlord, the original Subtenant named herein and any other person who at any time was Subtenant shall remain fully liable under this Sublease. In the event of any assignment or transfer of the leasehold estate under the Master Lease, the transferor or assignor, as the case may be, shall be and hereby is entirely relieved and freed of all obligations under this Sublease from the date of the transfer forward, provided that the transferee and assignee has assumed the transfer or assignors obligations as of the date of such transfer.
11. Authority. Subtenant represents and warrants that it has all requisite corporate power and authority to enter into this Sublease. Sublandlord represents and warrants that it has all requisite corporate power and authority to enter into this Sublease.
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12. Late Charges. Any payment not received within seven (7) days of the date it was due shall automatically be subject to a late payment fee in the amount of five percent (5%) of the amount overdue, which fee is a service charge intended to compensate Sublandlord for the additional administrative and other costs and expenses it incurs by reason of such late payment. Furthermore, any payment not received within fifteen (15) days of the date it was due shall accrue interest at an annual rate of twelve percent (12%). Notwithstanding the foregoing, as to the first such late payment in any calendar year, Subtenant shall not be required to pay such late charge unless Subtenant fails to pay the amount due within seven (7) days after Sublandlord gives Subtenant notice of such late payment.
13. Insurance. During the term of this Sublease Agreement, Subtenant shall maintain public liability and property damage insurance of the types and in the amounts required by the Master Lease, except that combined commercial general liability and umbrella insurance coverage shall be no less than $7 million in the aggregate. Subtenant shall name Sublandlord and Landlord as additional insureds on its commercial general liability insurance policy as outlined in the Master Lease and shall provide Sublandlord and Landlord with a Certificate of Insurance evidencing said coverage as well as Certificates of Insurance for all other insurance required under this Section prior to taking possession of the Subleased Premises.
14. Waiver of Subrogation. Insofar as, and to the extent that, this Section 14 may be effective without invalidating or making it impossible to secure insurance coverage obtainable from responsible insurance companies doing business in the locality in which the Subleased Premises are located (even though extra premium may result therefrom): To the fullest extent permitted by law, the parties hereto waive and release any and all rights of recovery against the other, and agree not to seek to recover from the other or to make any claim against the other, and in the case of Sublandlord, against all Subtenant Parties, and in the case of Subtenant, against all Sublandlord Parties, for any loss or damage incurred by the waiving/releasing party to the extent such loss or damage is insured under any property insurance policy required by this Sublease or which would have been so insured had the party carried the insurance it was required to carry hereunder. Subtenant shall obtain from its subtenants and other occupants of the Subleased Premises a similar waiver and release of claims against any or all of Subtenant or Sublandlord. Any subtenant or assignee of Subtenant shall have the benefit of Sublandlords waiver contained herein. In addition, the parties hereto (and in the case of Subtenant, its subtenants and other occupants of the Subleased Premises) shall procure an appropriate clause in, or endorsement on, any insurance policy required by this Sublease pursuant to which the insurance company waives subrogation. The insurance policies required by this Sublease shall contain no provision that would invalidate or restrict the parties waiver and release of the rights of recovery in this Section. The parties hereto covenant that no insurer shall hold any right of subrogation against the parties hereto by virtue of such insurance policy.
15. Sublandlord Parties and Subtenant Parties. The term Sublandlord Party or Sublandlord Parties shall mean Sublandlord, any affiliate of Sublandlord, and each of their respective direct or indirect partners, officers, shareholders, directors, members, trustees, beneficiaries, servants, employees, principals, contractors, licensees, agents or representatives. For the purposes of this Sublease, the term Subtenant Party or Subtenant Parties shall mean Subtenant, any affiliate of Subtenant, any permitted subtenant or any other permitted occupant of the Subleased Premises, and each of their respective direct or indirect partners, officers, shareholders, directors, members, trustees, beneficiaries, servants, employees, principals, contractors, licensees, agents, invitees or representatives.
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16. Services and Repairs. Subtenant shall be entitled to all those services and utilities which Landlord is required to provide under the Master Lease. It is understood that all work, services, insurance, ADA compliance, repairs, restorations, equipment and access which are required to be provided and made by Sublandlord hereunder or by Landlord under the Master Lease, will, in fact, be provided by the Landlord under the Master Lease, and Sublandlord shall have no obligation during the term of this Sublease Agreement to do any such work, to provide any such services, equipment or access, or to make any such repairs or restorations or otherwise perform any obligations or observe any conditions required to be observed or performed by Landlord under the Master Lease, and Subtenant agrees to look solely to the Landlord under the Master Lease for the performance and observance of the same. Sublandlord shall in no event be liable to Subtenant nor shall Subtenants obligations hereunder be impaired or the performance thereof excused because of any failure or delay on the part of the Landlord under the Master Lease in performing or observing the obligations of the Landlord under the Master Lease, provided, however, that in the event of such failure or delay by the Landlord under the Master Lease, Subtenant shall notify Sublandlord in writing, and Sublandlord shall promptly notify Landlord and shall use reasonable efforts to cause the Landlord under the Master Lease to promptly correct the delay or failure, provided that Sublandlord shall not incur any liability, including the expenditures of funds, with respect thereto, and nothing contained herein shall obligate Sublandlord to institute legal proceedings against Landlord.
17. Access. Subject to the terms and conditions of the Master Lease, Subtenant shall have access to the Subleased Premises twenty-four (24) hours per day, seven (7) days per week. Subtenant agrees to allow Sublandlord and its agents access to the entire Subleased Premises at any time, with reasonable advance notice, except in the event of emergency, accident, Force Majeure, or Landlord shut down whereupon no notice shall be required, to inspect Subtenants compliance with the terms of this Sublease. Sublandlord will use reasonable efforts to minimize disruption to Subtenants business in connection with any such access.
18. Surrender of Subleased Premises. Subtenant agrees that time shall be of the essence with respect to Subtenants obligation to surrender, subject to reasonable wear and tear, possession of the Subleased Premises to Sublandlord upon the termination of the term of this Sublease, and further agrees that in the event that Subtenant does not promptly surrender possession of the Subleased Premises to Sublandlord upon such termination, Subtenant shall pay Sublandlord the existing rent and any additional rent at the rate of 200% of the then current rent thereafter, prorated on a daily basis. Sublandlord, in addition to any other rights and remedies Sublandlord may have against Subtenant for such holding over, shall be entitled to bring summary proceedings against Subtenant, and Subtenant agrees to reimburse Sublandlord for Sublandlords out-of-pocket damages reasonably sustained by reason of such holding over including, without limitation, Sublandlords actual damages incurred under the Master Lease and reasonable attorneys fees and disbursements incurred in connection with the exercise by Sublandlord of its remedies against Subtenant.
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19. Notices. Any notice, approval, consent or election made pursuant to this Sublease or the Master Lease shall be in writing and shall be deemed duly delivered upon receipt (or the first date such delivery is attempted and refused) if delivered personally or if mailed by registered or certified mail, return receipt requested, or by a reputable nationally recognized overnight carrier, addressed:
if to Sublandlord: |
ENGIE Holdings Inc. 1360 Post Oak Blvd, Suite 400 Houston, TX 77056 Attn:
With a copy to: ENGIE Holdings Inc. Attn: Legal Counsel | |
if to Subtenant: |
prior to the Commencement Date:
Tomorrow.io 25 Dorchester Ave, Rm 52150 Boston, MA 02205 Attn: Chief Operating Officer | |
And after the Commencement Date to the address of the Subleased Premises herein, | ||
Attn: With a copy to:
Tomorrow.io 9 Channel Center Boston, MA Attn: Chief Operating Officer |
Either party may, by notice as aforesaid, direct that future notices be sent to a different address. Any notice given by an attorney of a party shall be deemed notice by such party. Each party to this Sublease shall send to the other party copies of any and all notices and other communications it shall send to and receive from Master Landlord relating to the Subleased Premises.
20. Security Deposit. Upon Subtenants execution of this Sublease Agreement, Subtenant will deliver to Sublandlord a security deposit, which will be in the form of cash in the amount of One Hundred Sixty-two Thousand, Three Hundred Three Dollars and Thirty-two Cents ($162,303.32) (as may be reduced as set forth below, the Security Deposit), to be held by Sublandlord without interest as security for the full and timely performance of Subtenants obligations hereunder. Notwithstanding anything to the contrary contained in this Sublease, and provided that (i) this Sublease is in full force and effect, and (ii) Subtenant shall not then be in default of this Sublease beyond any applicable notice or cure period, then
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(A) | upon the twelfth (12th) month of the Sublease Term, (the First Anniversary Security Deposit Reduction Date), Sublandlord shall release to Subtenant such amount as required to reduce the Security Deposit to One Hundred Twenty One Thousand Seven Hundred Twenty-Seven Dollars and Forty-nine Cents ($121,727.49) in the form of either a credit against Rent due or next becoming due, or a payment to Subtenant on the First Anniversary Security Deposit Reduction Date, at the election of Subtenant; and |
(B) | upon the twenty-fourth (24th) month of the Sublease Term (the Second Anniversary Security Deposit Reduction Date), Sublandlord shall release to Subtenant such amount as required to reduce the Security Deposit to Eighty-one Thousand One Hundred Fifty-one and Sixty-six Cents ($81,151.66) in the form of either a credit against Rent due or next becoming due, or a payment to Subtenant on the Second Anniversary Security Deposit Reduction Date, at the election of Subtenant. |
The Security Deposit may be co-mingled with other deposits of Sublandlord. Within thirty (30) days from the expiration or earlier termination of this Sublease, and the Subtenants surrender of the Subleased Premises in accordance with the terms of this Sublease, Sublandlord shall return the remaining amounts of the Security Deposit, or so much thereof as shall not have been applied (provided that the Security Deposit may only be applied following a default by Subtenant, as set forth in Section 10 above), to Subtenant. In the event Sublandlord applies any portion of the Security Deposit pursuant to this section, Subtenant shall immediately pay Sublandlord such amounts necessary to restore the Security Deposit to the required amount as set forth herein.
21. Entire Agreement. All prior understandings and agreements between the parties with respect to the subject matter hereof are merged within this Sublease. The covenants and agreements herein contained shall bind and inure to the benefit of Sublandlord, Subtenant, and their respective successors and assigns.
22. Consents and Approvals. Subtenant shall seek Sublandlords consent in any instance where the Landlords consent would have been required for the Sublandlord under the Master Lease (such as a modification to the Subleased Premises). Sublandlord shall use commercially reasonable and good faith efforts to acquire Landlord consent but shall have no responsibility or liability to Subtenant for any refusal by Landlord to grant such consent.
Termination of Master Lease. If the term of the Master Lease shall terminate prior to the expiration of this Sublease, this Sublease shall thereupon be terminated and, except as set forth herein or in the case of an error or omission by Sublandlord or by reason of a default by Sublandlord that is not attributable to a default by Subtenant hereunder, Sublandlord shall not be liable to Subtenant by reason thereof. Sublandlord shall refund to Subtenant any prepaid rent, prorated to the date of termination, and any security deposit held by Sublandlord. Sublandlord shall do nothing to cause the Master Lease to terminate prior to the scheduled termination of this Sublease, other than pursuant to Sublandlords rights, as tenant under the Master Lease, to terminate the Master Lease in the event of casualty or condemnation, and Sublandlord shall indemnify Subtenant for any damages sustained by Subtenant due to a breach of this obligation.
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1. Brokerage. Sublandlord and Subtenant each represents and warrants to the other that it has dealt with no broker or finder in connection with this transaction other than JLL and Newmark Knight Frank, and each party agrees to indemnify, defend and save the other harmless from any loss, cost or damages which such party may pay or incur, including reasonable attorneys fees and expenses, by reason of any claim for payment in the nature of a brokers commission or finders fee or other similar fee which may be made by reason of contact by such party with any such broker or finder other than the above named brokers or any breach of the foregoing representation and warranty. Sublandlord shall pay any commissions owed to JLL in connection with this Sublease Agreement pursuant to a separate agreement.
2. No Waiver. Sublandlords receipt and acceptance of Rent or additional rent, or Sublandlords acceptance of performance of any other obligation by Subtenant, with knowledge of Subtenants breach of any provision of this Sublease, shall not be deemed a waiver of such breach. No waiver by either party of any term, covenant or condition of this Sublease shall be deemed a waiver of any other term, covenant or condition hereof or of any subsequent breach by the breaching party of the same or any other term, covenant or condition.
3. Landlords Consent. This Sublease (and any transfer thereof) is contingent upon the receipt of Landlords written consent. Promptly following the full execution of this Sublease, Sublandlord shall diligently pursue Landlords consent. In the event Sublandlord has not obtained Landlords consent to this Sublease within thirty (30) days following the date hereof, Subtenant may, at any time thereafter prior to the receipt of Landlords consent, terminate this Sublease in which event this Sublease shall be void ab initio and shall have no further force or effect and Sublandlord shall promptly return the security deposit and any pre-paid rent to Subtenant.
4. Furniture. During the Sublease Term Subtenant shall have the right to use the furniture located in the Subleased Premises and listed on Exhibit B (the Furniture). Subtenant shall be responsible for the cost of any repair or replacements of the Furniture damaged or destroyed during the Sublease Term or otherwise not returned to Sublandlord at the end of the Sublease Term, reasonable wear and tear excepted. Subtenant agrees to accept the Furniture in as-is condition and agrees to return the same in such condition at the end of the Sublease Term, subject only to reasonable wear and tear. Subtenant shall indemnify, defend and hold harmless Sublandlord from all loss, claim, liability, damage or cost arising out of damage to person or property related to the use, condition or repair of the Furniture.
5. HVAC. HVAC shall be provided during Normal Building Operating Hours pursuant to the Master Lease. To the extent a charge is levied for after-hours HVAC, Subtenant shall pay Sublandlord for Subtenants after-hours use, without markup or increase of any kind, pursuant to the Master Lease.
6. Signage. At Subtenants sole cost and expense, Subtenant shall have building standard signage in the building lobby directory and entrance to the Subleased Premises, pursuant to the Master Lease, which signage shall contain Subtenants name and/or logo.
7. Parking. Subtenant shall not have any rights to any parking rights of Sublandlord pursuant to the Master Lease.
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8. Electricity. [Electricity consumption in the Sublease Premises shall be separately metered. During the Sublease Term Subtenant shall pay Sublandlord, or at Sublandlords direction, Landlord, within ten (10) days after invoicing, for electricity charges incurred within the Subleased Premises as measured by said meter or check meter.] [TO BE CONFIRMED]
9. Miscellaneous.
a. Except as otherwise expressly set forth herein, the covenants of Subtenant pursuant this Sublease are independent covenants and Subtenant shall have no right to withhold or abate any payment of Base Rent, Additional Rent or any other payment, or to set off any amount against Base Rent, Additional Rent or any other payment then due and payable, or to terminate this Sublease, because of any breach or alleged breach by Sublandlord or Landlord of this Sublease or because of the condition of the Sublease Premises, or because of any event of force majeure. Without limiting the foregoing, and to the extent permitted by law, Subtenant hereby waives any claim to withhold or abate Base Rent, Additional Rent or other payment hereunder or to terminate this Sublease (whether under common law theories of dependent covenants, impracticability, impossibility, or otherwise), in the event access to or use of the Sublease Premises is limited, restricted or suspended by reason of strikes, lockouts, unavailability of materials, failure of power, restrictive governmental laws, regulations or orders (including health related stay-at-home orders), pandemics (including the COVID-19 pandemic), epidemics, riots, insurrections, war or other reasons beyond Sublandlords control.
a. If either party shall commence an action or proceeding against the other to enforce an obligation under this Sublease and shall obtain a final non-appealable judgment in such action or proceeding after all appeals, the prevailing party shall be entitled to receive, in addition to any damages or other relief awarded, reasonable attorney fees and court costs.
b. This Sublease shall be governed by and interpreted under and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts.
c. No modification, change or amendment of this Sublease shall be binding upon either party unless such modification, change or amendment is in writing, duly authorized and signed by Sublandlord and Subtenant.
d. This Sublease shall be effective only when executed by Sublandlord and Subtenant and a fully executed counterpart of this Sublease has been delivered to each party.
e. At the end of the Sublease, Subtenant, at its sole cost and expense, shall be responsible for the installation, maintenance, repair, replacement and removal of any internet, phones, cabling, wiring installed by it.
{signature page follows}
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IN WITNESS WHEREOF, the parties hereto have caused this Sublease Agreement to be executed under seal by an officer duly authorized, as of the day and year first above written.
SUBLANDLORD: | ||
ENGIE Holdings Inc. | ||
By: | /s/ Paula Sacks | |
Name: Paula Sacks | ||
Its: Vice President | ||
SUBTENANT: | ||
The Tomorrow.io Companies Inc. | ||
By: | /s/ Leigha Kemmett | |
Name: Leigha Kemmett | ||
Its: Chief Operating Officer |
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Exhibit 10.13
COMMERCIAL LEASE
CLIMACELL, INC.
280 SUMMER STREET
BOSTON, MA 02210
SUBMISSION NOT AN OPTION
THE SUBMISSION OF THIS LEASE FOR EXAMINATION AND NEGOTIATION DOES NOT CONSTITUTE AN OFFER TO LEASE. A RESERVATION OF, OR OPTION FOR, THE LEASED PREMISES SHALL VEST NO RIGHT IN ANY PARTY. TENANT OR ANYONE CLAIMING UNDER OR THROUGH TENANT SHALL HAVE THE RIGHTS TO THE LEASED PREMISES AS SET FORTH HEREIN AND THIS LEASE BECOMES EFFECTIVE AS A LEASE ONLY AS A LEASE UPON EXECUTION, ACKNOWLEDGMENT AND DELIVERY THEREOF BY LANDLORD AND TENANT, REGARDLESS OF ANY WRITTEN OR VERBAL REPRESENTATION OF ANY AGENT, MANAGER, OR EMPLOYEE OF LANDLORD TO THE CONTRARY.
FROM THE OFFICE OF:
DOUGLAS L. JONES, ESQ.
29 CRAFTS STREET, SUITE 360
NEWTON, MA 02458
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COMMERCIAL LEASE
1. PARTIES 280 Holdings LLC, a Massachusetts limited liability company, as Landlord (Landlord), does hereby lease jointly and severally to ClimaCell, Inc, a Delaware corporation, authorized to do business in the Commonwealth of Massachusetts, as Tenant (the Tenant), with a current mailing address of 179 South Street, 2nd floor, Boston, MA 02111, and Tenant hereby leases from Landlord the leased premises as described below.
2. PREMISES Tenant hereby leases the following described premises: approximately 13,532 rentable square feet located on the eighth (8th) Floor of the building and the lot (the Lot) (collectively the Building) located at 280 Summer Street, Boston, Massachusetts 02210 (referred to as the leased premises, the premises, or the Premises), as more particularly described in Exhibit A attached hereto and made a part hereof, which square footage is an agreed upon number for all purposes, together with the right to use in common, with others entitled thereto, the hallways, stairways, lobbies, sidewalks, common facilities, and other public portions of the Building; elevators, necessary for access to said leased premises; and lavatories nearest thereto. Exhibit A shall also be the conceptual plan of the leased premises as more fully described in Exhibit B attached hereto and made a part hereof.
3. TERM The term of this lease shall be for Seven (7) years commencing on the date of delivery of the premises (the Commencement Date). The target Commencement Date is January 15, 2019. The Landlord shall deliver the premises to Tenant on the Commencement Date following substantial completion of Landlords work as shown on Exhibits A (a conceptual plan) and Exhibit B attached hereto and made a part hereof (Landlords Work). If Landlords Work is not substantially completed by the target Completion Date, Tenant shall be entitled to one (1.0) days abatement in rent for each one (1) day of delay in delivery of the premises after the target Completion Date except for delays in the availability of materials selected by Tenant. Provided that Landlords Work has been substantially completed by the Commencement Date, any punch-list items remaining shall be completed by Landlord as soon as commercially reasonable but no later than thirty (30) days of the Commencement Date. The Base Rent and Additional Rent (as defined below) shall commence on either the date of delivery of the premises to the Tenant, or upon the substantial completion of Landlords Work and the delivery of the premises by Landlord (the Rent Commencement Date), in accordance with a Rent Commencement Date letter written by Landlord to Tenant in the form of Exhibit F attached hereto and made a part hereof. Landlord shall use commercially reasonable efforts to complete the construction by January 15, 2019, subject to the terms and conditions of Exhibits A and B. If Landlord is unable to give possession of the Premises on the Commencement Date, then the Rent Commencement Date shall be delayed accordingly and Landlord shall have a right to extend the delivery date and Landlord shall have completed Landlords Work, and such failure in should not affect in any way the validity of this lease or the obligations of Tenant hereunder. Tenant shall have right of early access to the premises of fifteen (15) days in coordination with Landlord for the installation of its furniture, telephone and data systems subject at all times to Landlords construction of the premises as described in Exhibit B.
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3.1 Option for Additional Space.
(a) At any time after the end of the first anniversary date of this lease, when the lease of the current Tenant which is occupying the Offer Space, as described below, is scheduled to terminate, Tenant shall have a one-time right to request in writing (the Notice of Interest) to Landlord to lease to Tenant space that is contiguous to the Premises on the eighth (8th) floor of the Building (the Offer Space), provided, however, that such right is subordinate to existing tenants in the Building and all extension, expansion or option rights of such tenants of the Building (as of the date of this Lease).
(b) Upon receipt of such Notice of Interest, or upon Landlords election, Landlord shall, as soon as practicable, and prior to offering the Offer Space to any third parties, advise Tenant in writing (the Landlords Offer Notice) of the terms and conditions upon which Landlord is prepared to lease the Offer Space, which terms and conditions shall include, without limitation, (i) a fair market rent (to be determined by the provisions of Exhibit XYZ, as attached hereto and made a part hereof, if Landlord and Tenant cannot agree to the base rent proposed in Landlords Offer Notice), (b) the cost of any build-out, and (c) if after rental of the Offer Space, the Tenant will lease the entire eighth (8th) floor, the extension of the remaining term of this lease for an additional agreed-upon term to be coterminous with the lease of the Offer Space.
(c) Tenant shall notify Landlord in writing that it wishes to accept or reject the offer made in the Landlords Offer Notice within ten (10) days after the date of delivery of the Offer Notice.
(d) If the offer is rejected, Landlord shall have no further duty to offer the Offer Space to Tenant.
(e) If the Landlords Offer Notice is accepted, the parties shall enter into an amendment of this Lease within thirty (30) days of the acceptance by Tenant (i) to reflect the changes in Base Rent, Additional Rent, Tenant inducements, build-out plans, other charges, and additional square footage of the Offer Space to be added to the leased premises; and (ii) to negotiate the Base Rent for a new agreed-upon term for both the leased premises and the Offer Space. If the parties hereto cannot agree on the Base Rent for and extension term of this lease for the leased premises, then the provisions of Exhibit XYZ shall apply to resolve the new Base Rent solely for the leased premises, provided, however, that the Base Rent for the leased premises for the initial term of this lease shall never be less than the Base Rent as provided for the initial term of this lease. Tenants acceptance of the Offer Space shall not be effective until the parties hereto execute and deliver a lease amendment to this lease based on the terms and conditions stated herein and in the Landlords Offer Notice.
4. RENT The Tenant shall pay to the Landlord base rent (Base Rent) as defined below, additional rent (Additional Rent) as defined in this lease, and any other charges under this lease. Base Rent for the premises shall be payable as shown on the schedule below:
Period |
$ per RSF See psf below |
Rent per 12 month period |
Rent per month |
|||||||||
*1-15-19 to 6-15-19 (RSF 6,000) |
$ | 52.00 | $ | 312,000.00 | $ | 26,000.00 | ||||||
6-16-19 to 11-15-19 (RSF 10,000) |
$ | 52.00 | $ | 520,000.00 | $ | 43,333.33 | ||||||
11-16-19 to 1-15-20 (RSF 13,532) |
$ | 52.00 | $ | 703,664.00 | $ | 58,638.67 |
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1-16-20 to 1-15-21 (RSF 13,532 THROUGH THE TERM) |
$ | 53.00 | $ | 717,196.00 | $ | 59,766.33 | ||||||
1-16-21 to 1-15-22 |
$ | 54.00 | $ | 730,728.00 | $ | 60,894.00 | ||||||
1-16-22 to 1-15-23 |
$ | 55.00 | $ | 744,260.00 | $ | 62,021.67 | ||||||
1-16-23 to 1-15-24 |
$ | 56.00 | $ | 757,792.00 | 63,149.33 | |||||||
1-16-24 to 1-15-25 |
$ | 57.00 | $ | 771,324.00 | $ | 64,277.00 | ||||||
1-16-25 to 1-15-26 |
$ | 58.00 | $ | 784,856.00 | $ | 65,404.67 |
In the event that the Commencement Date does not occur on January 15, 2019, the dates for payment of Base Rent will be adjusted accordingly.
The Base Rent is payable in equal monthly installments, in advance, on the first day of every calendar month during the term hereof as it may be extended, provided that if the Term begins or ends on a day other than the first or last day of a calendar month, the installment of Rent payable on the first day of the Term, or the first day of the last calendar month of the Term shall be prorated for such first or last partial month on the basis of a 365 day year. Tenant will pay all rent (Base Rent, Additional Rent, as defined below, and any other charges incurred under this Lease) without set-off, deduction, counterclaim or demand to Landlord at its address set forth below, or at such other place as is designated in writing from time to time by Landlord, maintenance questions should be addressed to Park Property Management Group, LLC, 1963 Commonwealth Ave. #1, Brighton, MA 02135, (617) 789-3944, unless Tenant is notified otherwise in writing by Landlord; duplicate notifications concerning the lease should be addressed to Samuel H. Slater, 10 Tremont Street 5th Floor, Boston, MA 02108, (617) 557-1799. Rent and other payments should be sent to280 HOLDINGS LLC using one of the methods shown below:
| ACH INFORMATION |
Bank of America
100 Federal Street
Boston, MA 02110
Routing No. 011000138
Account No. 0046 4048 1001
Or
| WIRE TRANSFER |
Bank of America
Account Name: 280 HOLDINGS LLC
Routing No. 026009593
Account No. 0046 4048 1001
5. SECURITY DEPOSIT Upon the execution of this lease, the Tenant shall pay to the Landlord a security deposit in the initial amount of $234,554.68, which shall be held as a security for the Tenants performance as herein provided. On each of the last day of the twenty-fourth (24th) and thirtieth-sixth (36th) months anniversary from the Rent Commencement Date, the Landlord will refund to Tenant or credit against future Base Rent payments, at Tenants option upon written notice to Landlord, the amount of $58,638.00, provided that Tenant is not in default under this lease beyond any grace or cure periods. Landlord will refund the security deposit to the Tenant, within sixty (60) days of the end of this lease, without interest, subject to the Tenants satisfactory compliance with the conditions hereof. Landlord has no obligation to keep the security deposit separate and may commingle the security deposit with other funds of Landlord.
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6. RENT ADJUSTMENTS
A. TAX ESCALATION. If, in any tax fiscal year during the Term commencing with the tax fiscal year 2020 (which tax fiscal year 2020 commences on July 1, 2019 and expires on June 30, 2020), the Real Estate Taxes (as defined below) are in excess of the amount of the Real Estate Taxes or the tax fiscal year 2020 (which tax fiscal year 2019 commences on July 1, 2018 and expires on June 30, 2019)(such tax fiscal year 2019 shall be the Tax Base Year), Tenant will pay to Landlord, as Additional Rent hereunder, within thirty (30) days of Tenants receipt of Landlords written demand, monthly estimated payments of 1/12 of Tenants Tax Share (as defined below) of the amount of such excess (such Tenants Tax Share of such excess amount being, hereinafter, Tenants Tax Rent), which written demand shall include, with specificity, Landlords calculations of Tenants Tax Share and Tenants Tax Rent, as well as a copy of the invoice from the applicable municipal authorities of the bill(s) for the Real Estate Taxes applicable thereto as follows: For purposes hereof, Tenants Tax Share or Tenants Share currently is deemed for all purposes to be a fraction, the numerator of which is the total rentable square feet of the Premises of 13,532 and the denominator of which is the total rentable square feet of the Building of 130,000 rentable square feet as of the effective date of this lease, Tenants Tax Share is ten and 41/100 percent (10.41%) (and which shall not be modified during the initial term of this lease unless either (i) the rentable square footage of the Premises increases or decreases, or (ii) the rentable square footage of the Building increases or decreases, and only by amendment of this Lease). If the Landlord obtains an abatement of any such excess real estate tax, a proportionate share of such abatement, less one-third of the abatement obtained recovered in lieu of fees and costs incurred in obtaining the same, if any, shall be refunded to the Tenant. For the manner of billing and payment, see Section 6(C), below.
In addition, Tenant shall pay to Landlord, as Tenants Tax Share, specified in this Section of the amount of assessments, sales or use taxes imposed with respect to real estate taxes, rent, and other public charges which are in the nature of or similar to taxes (which are limited to any other charge by a federal, state, county, or local government, special district, improvement district, or other political subdivision taxes, all levies or impositions of every kind and nature in connection with the ownership, leasing and operation of the Building, whether foreseen or unforeseen, general, special, ordinary or extraordinary, including ad valorem taxes, transit taxes, use and occupancy taxes, taxes based on the receipt of rent, and value added taxes relating to the Building) which may be placed on the leased premises or the Building, levied, assessed, or imposed at any time by any governmental authority upon or against the Building and personalty or taxes in lieu thereof in any lease year or partial lease year. Notwithstanding the foregoing, none of Landlords gross receipts taxes, personal and corporate income taxes, inheritance and estate taxes, other business taxes and assessments, franchise, gift and transfer taxes, and all other real estate taxes relating to a period or payable outside the term of the Lease shall be included in determining Tenants Tax Share.
B. OPERATING COST ESCALATION.
If, in any calendar year during the Term commencing with the calendar year 2020, the Operating Costs (as defined below) are in excess of the amount of the Operating Costs for the calendar year 2019 (which calendar year 2019 shall be the Operating Cost Base Year), grossed up to reflect ninety-five percent (95%) occupancy, Tenant will pay to Landlord, as Additional Rent
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hereunder, within thirty (30) days of Tenants receipt of the Operating Cost Statement (as defined below), the monthly, estimated 1/12 of Tenants Share of the amount of such excess (such percentage of such excess amount being, hereinafter, Operating Cost Rent), which Operating Cost Statement shall include, with specificity, Landlords calculations of Tenants Share and Tenants Operating Cost Rent, as well as a reasonable breakdown of the Operating Costs applicable thereto.
Operating Costs shall include all reasonable costs and expenses of every kind and nature paid or incurred by the Landlord (including reasonable and appropriate reserves) in operating, managing, equipping, policing, lighting, repairing and maintaining the Building and the Lot, the parking areas, common areas, utilities and facilities serving the Building; air conditioning servicing the Building, landscaping, and snow removal; costs of all roof and other maintenance, repairs and replacements performed by the Landlord; costs of the installation, operating, maintenance, repair and replacement of any energy management system designed to reduce the energy consumption in the building; costs of the operation, maintenance, repair and replacement of any escalators or elevators; premiums for liability, property damage, fire, workers compensation, and other insurance carried by Landlord on any structures on the Lot; wages, unemployment taxes, social security taxes, and personal property taxes and assessments; fees for required licenses and permits; supplies and other equipment for the common areas; and reasonable administrative and management costs associated with the Building and the Lot; provided that (a) as to any improvement, repair or replacement included in operating costs having a useful life of greater than one year, the charge added to Operating Costs in any given year shall be the amortized cost thereof calculated on a straight-line basis over the useful life of such improvement, repair or replacement in accordance with generally accepted accounting principles), and (b) there shall be excluded from Operating Costs, all depreciation associated with the costs of the build-out of tenants, and the leasing commissions, attorneys fees and other inducements associated with the leasing of space to any and all tenants, and those items specifically excluded from Operating Costs as stated below:
1. all costs associated with the operation of the business of the entity which constitutes Landlord (as distinguished from the costs of Building operations) including, but not limited to, Landlords general corporate overhead and general administrative expenses;
2. costs incurred by Landlord in connection with the correction of defects in design and construction of the Building or Lot;
3. any costs of any services sold or provided to tenants or other occupants for which Landlord is entitled to be reimbursed by such tenants (whether or not actually reimbursed) or other occupants as an additional charge or rental over and above the basic rent charged to such tenants or other occupants (and escalations thereof);
4. expenses in connection with services or other benefits which are provided to another tenant or occupant and do not benefit Tenant;
5. any cost or expense related to removal, cleaning, abatement or remediation of hazardous material in or about the Building or Lot, including without limitation, hazardous substances in the ground water or soil not caused by Tenant or its employees or invitees;
6. advertising and promotional costs including tenant relation programs and events;
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7. Landlords gross receipts taxes, personal and corporate income taxes, inheritance and estate taxes, other business taxes and assessments, franchise, gift and transfer taxes, and all other real estate taxes relating to a period or payable outside the term of the Lease;
8. any fines, costs, penalties or interest resulting from the negligence, misconduct or omission of the Landlord or its agents, contractors, or employees;
9. any costs, fees, dues, contributions or similar expenses for political, charitable, industry association or similar organizations;
10. any rental and any associated costs, either actual or not, for the Landlords and/or Landlords management company and/or leasing office;
11. acquisition costs for sculptures, paintings, or other objects of art;
12. costs incurred in connection with upgrading the Building to comply with disability or life insurance requirements, or life safety codes, ordinances, statutes, or other laws in effect prior to the Commencement Date, including without limitation the Americans With Disabilities Act, including penalties or damages incurred as a result of non-compliance; and
13. costs for reserves of any kind.
C. TIME AND MANNER OF PAYMENT OF TAX AND OPERATING COST RENT.
If requested by Landlord, Tenant shall pay to Landlord monthly in the same manner as Base Rent is payable, Landlords reasonable estimate of Tenants Tax Share and Operating Cost Rent. Landlord, during the term, may furnish to Tenant a statement showing the amount of Tenants Tax Share and/or Operating Cost Rent estimated by Landlord for the next twelve (12) months, payable monthly by Tenant.
Within ninety (90) days after the end of each fiscal year or the anniversary date of the calendar year of the Lease, Landlord shall, in reasonable detail, set forth the computation of the Operating Cost Rent and/or Tenants Tax Share, if any, for the preceding billing period, stating any balance due to Landlord or overpayments made by Tenant (the Statement); provided, however, that the failure of Landlord to furnish a Statement within the specified time frame shall not affect Tenants obligation to pay Tenants Tax Share and/or Operating Cost Rent at such time as said statement is furnished. Upon receipt of Landlords notice, Tenant shall pay its Tenants Share (or Landlord shall credit to Tenant a refund, if applicable, as stated below) of the total adjustment of Tenants Tax Share and/or Operating Cost Rent. Any payment due from Tenant on account of such end of year annual statement shall be due within sixty (60) days of Tenants receipt of the Statement or Landlord shall give a credit for such Tenants Tax Share or Operating Cost Rent overpayments toward Tenants Tax Share or Operating Cost Rent due for the forthcoming year, or if at the end of the term, within ninety (90) days after the date of final bills received by Landlord. Time and period of billing, whether annual, semi-annual, or otherwise for Tenants Tax Share and/or Operating Cost Rent on account of such end of year annual statement shall be in the reasonable discretion of the Landlord and Tenant shall pay to Landlord the entire amount billed as stated above, except for monthly estimates, which will be paid monthly.
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Tenant shall have the right to review the Statement and the calculations upon which the Statement is based, exercisable within ninety (90) days following the delivery to Tenant of the Statement referred to herein and upon reasonable prior notice to Landlord, to inspect Landlords books and records relating to the Operating Cost Rent and Tenants Tax Share for the relevant period in question covered by such Statement. Only employees of Tenant, or Tenants designated certified public accountant or accounting firm (provided that such accountant or accounting firm is then responsible for Tenants general corporate accounting), may conduct any such inspection, which inspection shall occur at such place and time (during normal business hours) as Landlord may reasonably designate. Tenant shall pay for all reasonable expenses incurred by Landlord in connection with, and relating directly to, Tenants inspection of Landlords books and records, provided that if such audit discloses an overpayment by Tenant of more than six percent (6%) and in excess of $2,000.00, Landlord shall reimburse Tenant for its reasonable, hourly, third-party costs incurred in connection with the audit. In any event, Landlord shall credit Tenant the amount of any overpayment within sixty (60) days of notice to Landlord of such overpayment. Except to the extent required to comply with federal, state and municipal laws, ordinances, regulations or other governmental requirements, Tenant must keep all information it obtains in any inspection of Landlords records strictly confidential and may only use such information for the limited purpose this lease describes and for Tenants own account.
7. UTILITIES The Tenant shall pay all bills for electricity, lights, outlets and air conditioning that are furnished to the leased premises as Additional Rent, and Tenants use of such electricity shall be separately metered or submetered. Tenant shall pay for telephone, cable, internet, data and computer lines, and such other services to the leased premises. In addition, Tenant shall pay the electrical costs and expenses incurred by Landlord for ventilation and air conditioning service solely provided to the Premises, which will be billed by Landlord monthly based on usage of such electricity as measured by a submetering device that separately measures Tenants use of such electricity in the Premises and that currently is in use in the Premises known as the EMON system (or a reasonable replacement thereof) (the Emon Bill). The payments of the Emon Bill shall constitute Additional Rent. Further, the Landlord agrees to furnish reasonably hot and cold water to the leased premises; reasonable heat and air conditioning to the leased premises (notwithstanding the fact that the same are furnished through separately metered or submetered utilities or separate fuel tanks, as set forth above), and to the hallways, stairways, elevators, and lavatories and other common areas during normal business hours on regular business days (Monday Friday 8am 6pm; Saturday 9am 1pm, except legal holidays) during the heating and air conditioning seasons of each year; to furnish elevator service; and to light passageways, common areas and stairways during normal business hours, all subject to interruption due to any accident, to labor difficulties, to trouble in obtaining fuel, electricity, service, or supplies from the sources from which they are usually obtained for the Building, or to any cause beyond the Landlords reasonable control.
Tenant shall have access to the premises twenty-four (24) hours per day, seven (7) days per week, subject to maintenance, security and emergency measures required by Landlord. The Building is open to the public Monday-Friday, excepting holidays, 8:00 a.m.-6:00 p.m. At all other times, Tenants authorized principals and employees shall have key fob access to the Building. Guests of the Tenant who enter after business hours or on weekends contact Tenant directly for access. Landlord shall have no obligation to provide utilities or equipment, or pay for the cost of utilities and equipment, other than the utilities and equipment within the premises as of the commencement date of this lease. In the event Tenant requires additional utilities or equipment, the installation and maintenance thereof shall be the Tenants sole obligation, provided that such installation shall be subject to the written consent of the Landlord. The Building has a full-time building manager, 24-hour access by key fobs security cameras, and security alarms in selected areas.
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The Tenant shall comply with all reasonable and non-discriminatory rules and regulations promulgated by the Landlord from time to time. The current rules and regulations are attached hereto as Exhibit D and E.
8. USE OF LEASED PREMISES The Tenant shall use the leased premises only for the purpose of general office use and no other use or uses unless authorized by the Landlord in writing and in Landlords sole discretion.
9. COMPLIANCE WITH LAWS The Tenant acknowledges that no trade or occupation shall be conducted in the leased premises or use made thereof which will be unlawful, improper, noisy or offensive, or contrary to any law or any municipal by-law or ordinance in force in the city or town in which the premises are situated. Landlord represents that the use of general office purposes does not violate the foregoing prohibition so long as it is used as an office for general business operations. Without limiting the generality of the foregoing (a) the Tenant shall not bring or permit (with respect to those for whom Tenant is legally responsible, including clients of the Tenant or others claiming by, through or under Tenant) to be brought or kept in or on the leased premises or elsewhere on the Landlords property any hazardous, toxic, inflammable, combustible or explosive fluid, material, chemical or substance, including, without limitation, any item defined as hazardous pursuant to Chapter 21E of the Massachusetts General Laws, as amended; and (b) the Tenant shall be responsible for compliance with requirements imposed by the Americans with Disabilities Act with respect to Tenants particular use of the leased premises and any work performed by the Tenant therein. Notwithstanding the foregoing, Tenant may store and use typical office cleaning supplies, in customary quantities, in accordance with all laws.
9.1 Hazardous Substances. Except as otherwise provided for in this lease, Tenant agrees not to cause, permit or suffer any release or discharge onto or in the vicinity of the leased premises of any hazardous, toxic or radioactive material or substance, including without limitation oil (collectively, Hazardous Substances) regulated by any local, state or Federal law or regulation (for example, the Federal Comprehensive Environmental Response Compensation Liability Act of 1980, the Massachusetts Hazardous Waste Management Act and the Massachusetts Oil and Hazardous Material Release Prevention Act) now in existence or hereafter enacted (collectively, Hazardous Substance Laws) in violation of any such Hazardous Substance Laws. Tenant agrees, at Tenants sole cost and expense, to remove from the leased premises and the air and buildings adjacent to, and land and water under and adjacent to, the leased premises any Hazardous Substance which may be released thereon in violation of any such Hazardous Substance Laws by Tenants act, neglect or omission without regard to fault, provided such Hazardous Substances were introduced in the leased premises or the Building by Tenant, its employees, agents, invitees, subtenants, or occupants. In the event that Tenant receives from any federal, state or local governmental agency any notice of violation or alleged violation of any hazardous Substance Law for acts, neglect, or omission of Tenant or as otherwise provided for herein, Tenant agrees to forward to Landlord a copy of any such notice within five (5) business days of Tenants receipt thereof, and Tenant agrees to take all steps necessary to bring Tenants use of the Premises into compliance with such Hazardous Substance Law and any other applicable law or regulation. Notwithstanding the foregoing, Tenant may store and use typical office cleaning supplies, in customary quantities, in accordance with all laws.
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Tenant agrees to be solely responsible for and to indemnify Landlord, as Additional Rent, against any and all liability arising from the breach of any of Tenants covenants and agreements under this Section 9, including without implied limitation reasonable attorneys fees and costs incurred by Landlord in connection therewith, whenever such liability shall arise and for as long as Landlord remains so liable. Tenant shall be liable for any breach of Tenants obligations under this Section 9 without regard to fault. At Landlords request upon reasonable cause to believe there was release of hazardous materials by Tenant, Landlord shall cause the leased premises and the Building and land, air and water related thereto to be inspected by a qualified professional satisfactory to Landlord for the presence of any material or substance prohibited or regulated under any Hazardous Substance Law and to obtain and forward to Landlord the professionals written report setting forth the scope and results of such inspection, with costs to be paid by Tenant, and Tenant shall cooperate in the event any such inspection shall be required, giving proper access to the leased premises.
9.2.1 Landlord Hazardous Substances. Landlord shall protect, indemnify, defend, and hold harmless Tenant and its directors, officers, contractors, employees, agents, parents, subsidiaries, successors and assigns from and against any and all loss, damage, cost, expense, or liability (including reasonable attorneys fees and costs) directly or indirectly arising out of any Hazardous Material on, under or about the Premises, the Building or the Lot on which the same are located (or off-site on property owned or operated by Landlord that affects the Premises) except if and to the extent the same was caused by Tenant, its invitees, or those for whom Tenant is responsible or other tenants of the Building. This indemnity shall survive the termination of this Lease.
9.2 Fee Simple; Authority Landlord states that to its best knowledge and belief, and without independent investigation, that (a) the Building and the leased premises are in material compliance with all applicable zoning, land use and environmental laws and agreements and the requirements of all easement and encumbrance documents and Landlord agrees to keep the same in compliance throughout the Term; (b) the uses of the leased premises contemplated hereunder are permitted as of right at the leased premises; (c) Landlord holds fee simple title to the Building, subject to no mortgage other than one referenced in Section 14 below; (d) Landlord has full power and authority to enter into this Lease and has obtained all consents and taken all actions necessary in connection therewith; (e) no other party has any possessory right to the leased premises; and (f) provided that Tenant has complied with the provisions of Section 31 of this lease, Tenant has full power and authority to enter into this Lease and has obtained all consents and taken all actions necessary in connection therewith.
10. FIRE INSURANCE The Tenant shall not permit any use of the leased premises which will make voidable any insurance on the property of which the leased premises are a part, or on the contents of said property or regulation from time to time established by the New England Fire Insurance Rating Association, or any similar body succeeding to its powers. The Tenant shall on demand reimburse the Landlord, and all other Tenants, all extra insurance premiums caused by the Tenants particular use of the premises, as opposed to office use, generally.
11. MAINTENANCE The Tenant agrees to maintain the leased premises in as good condition as exists on delivery by Landlord, damage by fire and other casualty, and taking by eminent domain and reasonable wear and tear only excepted. Tenant acknowledges that the leased premises are now in good order and the glass whole, subject to completion of Landlords Work as defined in Exhibit B (provided that Landlord shall be responsible for repair or replacement of any external glass or windows, unless such replacement is due to the negligence or willful misconduct of Tenant). The Tenant shall not permit the leased premises to be overloaded, damaged, stripped, or defaced, nor suffer any waste.
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In accordance with the provisions of Section 6B, above, the Landlord agrees to maintain the structure, roof, foundation, beams, load-bearing and exterior walls of the building of which the leased premises are a part, and all mechanical systems and equipment serving the leased premises and the common areas, including, but not limited to the plumbing, electrical, elevator, emergency, heating and air conditioning, fire and life safety systems of the Building, and access to telecommunications systems services to the Building (which are provided solely by third party providers (the Systems) in good working order and condition or as they may be put in during the term of this lease, reasonable wear and tear, damage by fire and other casualty (subject to the provisions hereof), and reasonable wear and tear only excepted, provided that if such maintenance is required because of the actions or omissions of Tenant or those for whose conduct the Tenant is legally responsible, Landlord shall be entitled to indemnification from Tenant. Landlord, upon prior notice to Tenant, shall have a right to enter the leased premises to make repairs to the Building and its systems if needed so long as said entry and repairs are done in a manner that is as minimally disruptive to Tenants operation at the Premises as is possible, and, in the case of an emergency, immediately and without prior notice Tenant. Upon prior notice to Tenant, Landlord shall have the right to enter the premises to make repairs and to service pipes, conduits, wires in the Building or which affect such pipes, conduits, and wires in the space of other tenants which may only be accessed through the premises.
Landlord shall also provide: (i) cleaning and janitorial services to the leased premises (Monday-Friday, holidays excluded), provided the same are kept in order by Tenant, all in accordance with the cleaning standards set forth in Exhibit C attached hereto; and (ii) snow and ice removal services, including plowing all sidewalks and areas adjacent to the Building and Lot as needed.
12. ALTERATIONS/ADDITIONS The Tenant shall not make structural alterations or additions to the leased premises, but may make non-structural alterations provided the Landlord consents thereto in writing prior to commencement of such work, which consent shall not be unreasonably withheld or delayed. Alterations of a purely decorative nature, such as hanging paintings or other artwork, which do not require a building permit or impact the Buildings systems, façade or structural elements shall not require Landlords approval, but shall be subject to compliance with all other provisions of this Section 12. All such allowed alterations shall be at Tenants sole cost and expense and shall be in quality at least equal to the present construction. Tenant shall not permit any mechanics liens, or similar liens, to remain upon the leased premises for labor and material furnished to Tenant or claimed to have been furnished to Tenant in connection with work of any character performed or claimed to have been performed at the direction of Tenant and shall cause any such lien to be released of record forthwith without cost to Landlord. Any alterations or improvements made by the Tenant shall become the property of the Landlord at the termination of occupancy as provided herein (unless otherwise agreed to in writing by Landlord and Tenant), and Tenant shall not be responsible for the removal or restoration of any alterations made to the leased premises, provided that such alterations were completed by Landlord or with the Landlords written consent except as herein provided for.
13. ASSIGNMENT/SUBLEASING The Tenant shall not assign, sublet, sub-sublet, or license the whole or any part of the leased premises without Landlords prior written consent which shall not be unreasonably withheld or delayed; provided, however, that Landlord, except as provided for below in Section 13.3, shall have the right (a) to receive and approve (in Landlords reasonable discretion) reasonable business, financial, and/or credit information of any proposed assignee or subtenant, and (b) evidence that the proposed use is consistent with the permitted use of Tenant as defined in
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Section 8 of this lease, and (c) only at the then current market rents for similar rental space and of comparable term at comparable buildings in Boston all prior to granting of Landlords consent. Tenant shall not have the right to assign or sublet, or license the leased premises to another tenant in the Building unless Landlord is not able to provide such tenant with comparable size space in the Building or a prospective tenant currently in negotiations with the Landlord for space in the Building. Notwithstanding such consent as described above, Tenant shall remain liable to Landlord for the payment of all rent and for the full performance of the covenants and conditions of this lease unless otherwise agreed by Landlord in Landlords sole discretion. The granting of consent to an assignment, a subletting, or a license of the premises in one instance does not automatically grant the Tenant the right to assign or sublet the premises in another instance.
13.1 Excess Rent to Landlord In the event that Landlord shall give its consent to a proposed assignment or subletting of all or a portion of the leased premises, Landlord shall be paid by Tenant or its successors and assigns 50 percent of any excess Base Rent and/or Additional Rent charged in any assignment or subletting: over the Base Rent and/or Additional Rent payable hereunder (after deduction by Tenant of the following reasonable expenses incurred in connection with such assignment or subletting: brokerage fees and attorneys fees and construction expenses; provided, that Tenant shall be required to provide to Landlord an accounting of such expenses), with Tenant having the right to retain 50 percent; provided, however, Tenant shall remain fully liable for all obligations under the Lease. Tenant shall reimburse Landlord for its reasonable attorneys fees for review and approval at any assignment, sublease, or sub-sublease payable in advance to Landlord up to a maximum of $1,500 per request.
13.2 [intentionally deleted]
13.3 Permitted Assignment/Subleasing Notwithstanding anything to the contrary contained in this Lease, Tenant may, without Landlords prior written consent, but upon written notice to Landlord, including copies of all applicable documentation, assign or sublet all or any portion of the leased premises and Tenants interest in this Lease to: (i) a subsidiary, affiliate, parent or other entity to Tenant which controls, is controlled by, or is under common control with, Tenant; (ii) a successor entity to Tenant resulting from merger, consolidation, non-bankruptcy reorganization, or government action; or (iii) a purchaser of all or any significant portion of Tenants stock or assets; provided that such assignee, sublessee, or transferee has a net worth of at least equal to the Tenant as of the date of this lease. Control means ownership of at least fifty-one percent (51%) of the voting rights of such subsidiary, affiliate, parent or other entity.
14. SUBORDINATION This lease shall be subject and subordinate to any and all mortgages, deeds of trust and other instruments in the nature of a mortgage, now or at any time hereafter, and the Tenant shall, when requested, promptly execute and deliver such commercially reasonable written instruments as shall be necessary to show the subordination of this lease to said mortgages, deeds of trust or other such instruments in the nature of a mortgage, deeds of trust or other such instruments in the nature of a mortgage.
Tenant agrees to use reasonable efforts to provide the holder of the first mortgage (First Mortgagee) with a copy of any notice of default given to Landlord under this lease at the same time such notice of default is given to Landlord. In the event of any default by Landlord under this lease, First Mortgagee shall have the right to cure such default during the same time provided to the Landlord. Notwithstanding the foregoing, First Mortgagee shall have no obligation to cure any default under this lease. Tenant acknowledge that as of the date of this lease, First Mortgagee is
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Nationwide Life Insurance Company, One Nationwide Plaza, Columbus, Ohio 43215, Attention: Real Estate Investments 1-05-701. First Mortgagee, any transferee who acquires Landlords interest in the premises, the Building of this lease, by foreclosure, deed in lieu of foreclosure or otherwise, and the successors and assigns of such transferees shall not be liable for any acts, obligations or debts of the former Landlord(s) prior to the time such acquiring landlord acquired the premises or any prepaid rent, security deposit or other prepaid charges not actually received by such transferee.
Landlord agrees, within thirty (30) days of the Effective Date of this Lease, to request a subordination, non-disturbance and recognition agreement (SNDA) from the First Mortgagee on the First Mortgagees standard form recognizing the rights of Tenant under this Lease. Tenant understands and agrees that the First Mortgagee only gives SNDAs to tenants with over 15,000 rentable square feet. Tenant understands and agrees that the policy of the First Mortgagee with respect to an SNDA is not grant to it tenants of the Building with less than the rentable square footage identified above for duration of the term of Tenants lease.
15. SIGNAGE; LANDLORDS ACCESS On or about the Commencement Date, the Landlord shall provide, install and pay for Tenants name on the electronic building directory. The Tenant shall install at its sole cost and expense a sign for its business in common lobby on the lobby floor of the Building, after prior written approval by Landlord of Tenants proposed signage, which consent shall not be unreasonably withheld or delayed. At no time is a sign of the Tenant permitted on the exterior of the Building. The Landlord or agents of the Landlord may, at reasonable times and upon reasonable advance notice (except in the event of an emergency), enter to view the leased premises and may remove placards and signs not approved and affixed as herein provided, and make repairs and alterations as Landlord is permitted to do hereunder and (during the last twelve (12) months of the term) may show the leased premises to others so long as any said entry is done in a manner during normal business hours that is least disruptive to Tenants operations at the leased premises.
16. LANDLORDS DEFAULT. Landlord shall not be deemed to be in default hereunder unless its default shall continue for sixty (60) days, or such additional time as is reasonably required to correct its default, after written notice thereof has been given by Tenant to Landlord specifying the nature of the alleged default. The obligations of Landlord hereunder shall be binding upon Landlord and each succeeding owner of Landlords interest hereunder only during the period of such ownership and Landlord and each succeeding owner shall have no liability whatsoever except for their obligations during each such respective period (other than its obligation terminate any Letter of Credit or to return any security deposit held hereunder in accordance with the terms of this lease, or to transfer the remaining balance of any such security deposit to any successor Landlord). Tenant hereby agrees for itself and each succeeding holder of Tenants interest, or any portion thereof, hereunder, that, in accordance with Section 27 hereof, any judgment, decree or award, if any, obtained against Landlord, or any succeeding owner of Landlords interest, which is in any manner related to this Lease, the leased premises, or Tenants use or occupancy of the leased premises or the common areas, whether at law or in equity, shall be satisfied out of Landlords equity in the Building and lot to the extent then owned by Landlord, or such applicable insurance, or such succeeding owner, and further so agrees to look only to such assets and to no other assets of Landlord, or such succeeding owner, for satisfaction. In no event shall Landlord ever be liable to Tenant for any indirect or consequential damages or for lost profits of the Tenant for any reason whatsoever.
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17. CASUALTY INSURANCE Landlord shall keep the leased premises and the Building insured against loss or damage by fire and other hazards included within usual Special Form coverage, in such amounts and with such deductibles as Landlord deems appropriate insurance as follows: (a) commercial general liability in the amount of $1,000,000 per occurrence, and $2,000,000 aggregate, excess liability of $5,000,000, covering bodily injury, personal injury and property damage; and (b) Special Form insurance in a 100% full replacement cost.
17.1 Tenants Casualty Insurance Tenant shall keep all of Tenants fixtures, furniture, furnishings, equipment and stock in trade insured against loss or damage by fire and other hazards included so-called Special Form insurance, in an amount not less than one hundred percent (100%) of the full insurable replacement thereof, without deduction for depreciation, but in any event in an amount sufficient to prevent Tenant from becoming a co-insurer under the applicable policies.
17.2 Tenants Public Liability Insurance Tenant shall maintain public liability insurance (including, without limitation, contractual liability insurance) in an amount not less than One Million Dollars ($1,000,000.00) per occurrence for bodily injury, death and property damage occurring in, on or about the leased premises, combined single limit, and to submit and maintain copies of such certificates with the Landlord prior to the date of occupancy, access, or for commencement of Tenants work and annually thereafter. The aggregate coverage during the term of this Lease shall be not less than Two Million Dollars ($2,000,000.00). The insurers under all policies of Tenant shall be reasonably satisfactory to Landlord and such policies shall name as insured parties Landlord and Tenant and any party holding an interest to which this Lease may be subordinated pursuant to this lease, as their interests may appear, and shall provide at least twenty (20) days prior written notice to Landlord on lapse or cancellation.
17.3 Waiver of Subrogation Landlord and Tenant hereby release each other and each others officers, directors, members, managers, employees and agents, from liability or responsibility for any loss or damage to their respective property covered by valid and collectible all-risk insurance, or which would have been covered but for a partys failure to comply with the provisions of Sections 17, 17.1, 17.2, and 17.3, above. This release shall apply not only to liability and responsibility of the parties to each other, but also shall extend to liability and responsibility for any one claiming through or under the parties by way of subrogation or otherwise. This release shall apply even if the fire or other casualty shall have been caused by the fault or negligence of a party or anyone for whom a party may be responsible. However, this release shall apply only with respect to loss or damage actually recovered from an insurance company, or which would have been recovered but for a partys failure to comply with the provisions of Section 17, 17.1, 17.2, or 17.3 above. This release shall be applicable and in force and effect only with respect to loss or damage occurring during such time as the releasors policies shall contain a clause or endorsement to the effect that any such release shall not adversely affect or impair said policies or prejudice the right of the releasor to recover thereunder. Landlord and Tenant each hereby agree that their respective policies will include such a clause or endorsement to the extent each party can obtain such clause or endorsement at a commercially reasonable cost.
17.4 Indemnity and Liability Insurance Tenant shall save Landlord harmless and indemnified, to the extent permitted by law, from and against any and all claims, actions, loss, damages, liability and expense asserted in connection with loss of life, bodily injury, personal injury and/or damage to property arising out of or resulting from any occurrence in, upon or at the Premises or the occupancy or use of the Premises or any part thereof, or in, upon or at the Building or the Lot, or anywhere if caused wholly or in part by any act or omission of Tenant, its officers, agents, employees, subtenants, licensees, concessionaires, others occupying space in the Premises or any customers and those doing business with Tenant, exclusive of negligence or willful misconduct by Landlord, or its
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employees or agents. If Landlord shall be threatened with or made a party to any litigation commenced by or against Tenant or any of the aforementioned parties, or with respect to any matter described above, then Tenant shall protect and hold Landlord harmless and indemnified and shall defend Landlord with counsel reasonably acceptable to Landlord or, at Tenants option, shall instead advance all costs, expenses and reasonable attorneys fees incurred or paid by Landlord in connection with such litigation.
Landlord shall save Tenant harmless and indemnified, to the extent permitted by law, from and against any and all claims, actions, loss, damages, liability and expense asserted in connection with loss of life, bodily injury, personal injury and/or damage to property arising out of or resulting from any occurrence in, upon or at the Premises or the occupancy or use of the Premises or any part thereof, or in, upon or at the Building or the Lot, or anywhere if caused wholly or in part by any act or omission of Landlord, its officers, agents, employees, subtenants, licensees, concessionaires, others for whom Landlord is legally responsible, exclusive of negligence by or willful misconduct or Tenant, or its employees or agents. If Tenant shall be threatened with or made a party to any litigation commenced by or against Landlord or any of the aforementioned parties, or with respect to any matter described above, then Landlord shall protect and hold Tenant harmless and indemnified and shall defend Tenant with counsel reasonably acceptable to Tenant or, at Landlords option, shall advance all costs, expenses and reasonable attorneys fees incurred or paid by Tenant in connection with such litigation.
17.5 Non-Liability of Landlord Except as required by applicable law or any successor statute, or due to the negligence or willful misconduct of Landlord, Landlord shall not be responsible or liable to Tenant for any loss or damage caused by other Tenants of the Building and Lot, or by their visitors, guests, invitees, employees, agents, contractors, or any other persons occupying or visiting any portion of the Building and Lot. Except as required by applicable law or any successor statute or due to the negligence or willful misconduct of Landlord, neither Landlord, its agents, or employees shall be liable for any injury or damage to persons or property resulting from leaks of steam, gas, electricity, water, or any other substance from pipes, wires or other conduits, or from the bursting or stoppage thereof; or from leaks of water, snow, or rain from the plumbing, roof, other parts of the Building, or any other place; or for wetness or dampness caused for any reason whatsoever. Tenant acknowledges that it shall be Tenants responsibility to obtain insurance to protect it from any and all such hazards.
17.6 Theft Losses Except as required by applicable law or due to Landlords (or any of its agents or employees) negligence or willful misconduct, Landlord shall not be liable for any damage to, removal of, or loss of any property of Tenant occasioned by any theft, burglary, robbery, larceny, or vandalism of any kind (hereinafter called Theft). Tenant shall carry sufficient insurance for its own protection and for the protection of the leased premises and adjacent portions of the Building and lot in connection with damage or loss arising from any such Theft. Tenant shall repair at its own cost and expense any damage or loss caused to the leased premises as a result of any such Theft. A report of any such Theft to police or other proper authorities shall be deemed conclusive evidence that such an event occurred or an attempt was made.
17.7 Workers Compensation Tenant shall maintain workers compensation, disability, and other similar insurance covering all persons employed in connection with Tenants Work or by Tenant with respect to whom death or bodily injury claims could be asserted against Tenant or Landlord as may be required by applicable law.
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17.8 Certificates of Insurance Each policy of insurance which Tenant is required to maintain under the provisions of this Section 17 shall be with companies qualified to do business in the Commonwealth of Massachusetts and reasonably acceptable to Landlord, and shall name Landlord, and if Landlord so requests, Landlords mortgagee(s), as insured parties. Tenant shall deposit with Landlord certificates of such insurance on or prior to the Commencement Date or prior to access for Tenants work and thereafter new certificates not later than thirty (30) days prior to the expiration of the policies. The policies shall provide (and the certificates shall evidence) that they shall not expire, be cancelled, or be materially modified without at least thirty (30) days prior written notice to Landlord and, if Landlord so requests, to Landlords mortgagee(s).
18. FIRE, CASUALTY, EMINENT DOMAIN Should a substantial portion of the leased premises or of the property of which they are a part (but only if all leases similarly situated are also terminated), be substantially damaged by fire or other casualty, or be taken by eminent domain, the Landlord may elect to terminate this lease. When such fire, casualty, or taking renders the leased premises substantially unsuitable for their intended use, a just and proportionate abatement of rent shall be made. The Landlord may elect to terminate this lease as permitted above upon written notice to Tenant within forty-five (45) days of the casualty. The Tenant may elect to terminate this lease if: (a) The Landlord fails to give written notice within forty-five (45) days of intention to restore leased premises, or (b) The Landlord fails to restore the leased premises to a condition substantially suitable for their intended use within one hundred twenty (120) days of said fire, casualty or taking. The Landlord reserves, and the Tenant grants to the Landlord, all rights which the Tenant may have for damages or injury to the leased premises for any taking by eminent domain, except for damage to the Tenants fixtures, property, or equipment and moving expenses provided they do not reduce Landlords award.
Notwithstanding the foregoing, if the leased premises are substantially damaged by fire or other casualty, Base Rent and Additional Rent payable by Tenant shall abate proportionately for the period in which, by reason of such damage, having regard to the extent to which Tenant may be required to discontinue Tenants use of all or a portion of the leased premises, but such abatement or reduction shall end if and when Landlord shall have substantially restored the leased premises to the condition in which they were before such damage. If the leased premises are affected by any exercise of the power of eminent domain, Base Rent and Additional payable by Tenant shall be justly and equitably abated and reduced according to the nature and extent of the loss of use thereof suffered by Tenant and Tenant may pursue a claim for the lost value of its leasehold interest.
19. DEFAULT AND BANKRUPTCY; DAMAGES
Section 19.1 Any one of the following after notice and opportunity to cure as provided for below shall be deemed to be an Event of Default:
A. Failure on the part of the Tenant to make payment of rent or any other monetary amount due under this lease within five (5) business days after the Landlord has sent to the Tenant notice of such default.
B. With respect to a non-monetary default under this lease, failure of the Tenant to cure the same within thirty (30) days after the Landlord has sent to the Tenant notice of such default, or if such failure is of such a nature that Tenant cannot reasonably remedy the same within such thirty (30) day period, Tenant shall commence promptly to remedy the same and to prosecute such remedy to completion with diligence and continuity. The Tenant shall be obligated to commence forthwith and to complete as soon as possible the curing of such default; and if the Tenant fails so to do as provided herein, the same shall be deemed to be an Event of Default.
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C. Subject to subparagraph D below, the commencement of any of the following proceedings by one or more creditors of Tenant, with such proceeding not being dismissed within sixty (60) days after it has begun: (i) any material asset of the Tenant or the estate hereby created being taken, attached or levied upon on execution or by other process of law; (ii) the Tenant being judicially declared bankrupt or insolvent according to law; (iii) an involuntary assignment being made of the property of the Tenant for the benefit of creditors; (iv) a receiver, guardian, conservator, trustee in involuntary bankruptcy or other similar officer being appointed to take charge of all or any substantial part of the Tenants property by a court of competent jurisdiction; or (v) a petition being filed involuntarily against the Tenant under the Bankruptcy Code or any similar federal or state laws now or hereafter enacted.
D. The Tenant (i) filing a petition under, or otherwise availing itself of any provisions of, the Bankruptcy Code, (ii) making an assignment of some or all of the property of the Tenant for the benefit of creditors, (iii) instituting proceedings to have Tenant adjudicated as bankrupt or insolvent, (iv) commencing a reorganization, liquidation, rearrangement, adjustment, winding-up, dissolution, composition, liquidation or other relief, or requesting the appointment of a receiver or custodian of some or all of the property of the Tenant, in equity or under any federal or state law now or hereafter enacted relating to bankruptcy, insolvency, reorganization, compromise of debts or relief of debtors, (v) colluding in or taking any action in furtherance of the filing of an involuntary petition against Tenant under the Bankruptcy Code, the appointment of a receiver or trustee or the assignment of property of Tenant for the benefit of creditors, or (vi) consenting to or taking any action in furtherance of any of the foregoing.
Section 19.2 Should any Event of Default occur then, notwithstanding any license of any former breach of covenant or waiver of the benefit hereof or consent in a former instance, the Landlord lawfully may, in addition to any remedies available to the Landlord under applicable statutes or case law, or otherwise, immediately or at any time thereafter, and after applicable notice and demand, enter peaceably and in accordance with all applicable laws, into and upon the demised premises or any part thereof in the name of the whole and repossess the same as of the Landlords former estate, and expel the Tenant and those claiming through or under it and remove its or their effects without being deemed guilty of any manner of trespass, and without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant and/or the Landlord may send written notice to the Tenant terminating the term of this lease; and upon the first to occur of: (i) entry as aforesaid; or (ii) the fifth (5th) day following the sending of such notice of termination, the term of this lease shall terminate.
Section 19.3 The Tenant covenants and agrees, notwithstanding any termination of this lease as aforesaid or any entry or re-entry by the Landlord, whether by notice to quit, summary proceedings, termination, or otherwise, to pay and be liable for on the days originally fixed herein for the payment thereof amounts equal to the several installments of rent and other charges reserved as they would, under the terms of this lease, become due if this lease had not been terminated or if the Landlord had not entered or re-entered, as aforesaid, and whether the demised premises be relet or remain vacant, in whole or in part, or for a period less than the remainder of the term, and for the whole thereof; but in the event the demised premises be relet by the Landlord, the Tenant shall be entitled to a credit in the net amount of rent received by the Landlord in reletting, after deduction of all expenses incurred in reletting the demised premises (including, without limitation, remodeling costs, brokerage fees, attorneys fees and expenses, and the like), and in collecting the rent in connection therewith. It is specifically understood and agreed that the Landlord shall be entitled to take into account in connection with any reletting of the demised premises all relevant factors which would be taken into account by an experienced landlord in securing a replacement tenant for the demised premises, such as, but not limited to, matters of tenant mix, the type of operation proposed to be conducted by any such replacement tenant, and the financial responsibility of any such replacement tenant.
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Section 19.4. As an alternative, at the election of the Landlord, the Tenant will upon such termination pay to the Landlord, as damages, such a sum as at the time of such termination represents the amount of the excess, if any, of the then value of the total rent and other benefits which would have accrued to the Landlord under this lease for the remainder of the lease term if the lease terms had been fully complied with by the Tenant over and above the then cash rental value (in advance) of the premises for the balance of the term discounted to the net present value thereof at the time of calculation of a discount rate equal to five percent (5%) per annum.
Section 19.5. To induce the Landlord to enter into this lease, the Tenant hereby waives any right to trial by jury in any action, proceeding or counterclaim brought by the Landlord against the Tenant on any matter whatsoever arising out of or in any way connected with this lease, the relationship of the Landlord and the Tenant and the Tenants use and occupancy of the demised premises and/or any claim of injury or damage. In the event of default, Tenant shall be responsible to pay for the reasonable attorneys fees and expenses of Landlord.
20. PATRIOT ACT. As an inducement to Landlord to enter into this lease, Tenant hereby represents and warrants that: (i) Tenant is not, nor is it owned or controlled directly or indirectly by, any person, group, entity or nation named on any list issued by the Office of Foreign Assets Control of the United States Department of the Treasury (OFAC) pursuant to Executive Order 13224 or any similar list or any law, order, rule or regulation or any Executive Order of the President of the United States as a terrorist, Specially Designated National and Blocked Person or other banned or blocked person (any such person, group, entity or nation being hereinafter referred to as a Prohibited Person); (ii) Tenant is not (nor is it owned, controlled, directly or indirectly, by any person, group, entity or nation which is) acting directly or indirectly for or on behalf of any Prohibited Person; and (iii) from and after the effective date of the above-referenced Executive Order, Tenant (and any person, group, or entity which Tenant controls, directly or indirectly) has not conducted nor will conduct business nor has engaged nor will engage in any transaction or dealing with any Prohibited Person in violation of the U.S. Patriot Act or any OFAC rule or regulation, including without limitation any assignment of this lease or any subletting of all or any portion of the demised premises or the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person in violation of the U.S. Patriot Act or any OFAC rule or regulation. In connection with the foregoing, it is expressly understood and agreed that (x) any breach by Tenant of the foregoing representations and warranties shall be deemed an Event of Default by Tenant under Section 19 of this lease and shall be covered by the indemnity provisions of Section 17.4 above, and (y) the representations and warranties contained in this subsection shall be continuing in nature and shall survive the expiration or earlier termination of this lease.
21. NOTICE Any notice from either party hereunder to the other party relating to this lease shall be deemed duly served, if delivered by registered, by overnight mail delivery such as Federal Express, or certified mail, return receipt requested, postage prepaid, and addressed to such party hereunder at the address specified below, or such other address as may be designated from time to time by such party in writing and delivered to the other party in accordance with the terms hereof:
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Landlord: | Park Property Management Group, LLC 1963 Commonwealth Ave. #1 | |
Brighton, MA 02135 | ||
With a copy to: | Samuel H. Slater 10 Tremont Street 5th Floor Boston, MA 02108 | |
Tenant: | ClimaCell, Inc. 280 Summer Street, Boston MA 02210 | |
With a copy to: | Pearl Cohen Zedek Latzer Baratz LLC 50 Congress Street Boston, MA 02109 Attention: Oded Kadosh, Esq. |
Notices given under this Section 21 shall be deemed received on the earlier of (i) three (3) business days after sent or (ii) upon actual receipt (or the date attempted if said delivery is refused or rejected, if applicable). If a Notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
22. SURRENDER The Tenant shall at the expiration or other termination of this Lease, remove all of Tenants goods and effects from the leased premises, and all of Tenants tel/data cabling and specialty finishes specifically identified by Landlord in writing upon review of Tenants plans (including, without hereby limiting the generality of the foregoing, all signs and lettering affixed or painted by the Tenant, either inside or outside the leased premises, except for the signage in the Building directory provided by Landlord). Tenant shall deliver to the Landlord the leased premises and all keys, locks thereto, and other fixtures connected therewith and all alterations and additions made to or upon the leased premises (except as otherwise agreed at the time of construction or installation), in the condition required under Section 11 hereof, damage by fire or other casualty, reasonable wear and tear, and taking by eminent domain only excepted. In the event of the Tenants failure to remove any of Tenants property from the premises, Landlord is hereby authorized, without liability to Tenant for loss or damage thereto, and at the sole risk of Tenant, to remove and store any of the property at Tenants expense, or to retain same under Landlords control or to sell at public or private sale, without notice any or all of the property not so removed and to apply the net proceeds of such sale to the payment of any sum due hereunder, or to destroy such property. In the event that Tenant does not move from the leased premises at the end of the term (as may be extended), the Base Rent shall be the then existing Base Rent multiplied by 150% for the first thirty (30) days, then 200 percent, and Tenant shall be considered a Tenant at sufferance.
23. BROKERAGE The Brokers named herein, Brown & Wagner, LLC and Feudenheim Partners, warrant that they are duly licensed as such by the Commonwealth of Massachusetts, and to any amendments or modifications of such provisions to which they agree in writing. Landlord agrees to pay the above-named Brokers pursuant to the Brokers agreements with Landlord. The Tenant and Landlord each warrant and represent that it has dealt with no other broker entitled to claim a commission in connection with this transaction other than the Brokers named herein and shall indemnify the other from and against any such claim, including without limitation reasonable attorneys fees incurred by the other in connection therewith.
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24. CONDITION OF PREMISES Except as may be otherwise expressly set forth herein, the Tenant shall accept (and Landlord shall deliver) the leased premises broom-clean, free of all Tenants, occupants and personal property, but otherwise as is in their condition as of the commencement of the term of this lease, and the Landlord shall be obligated to perform no work whatsoever in order to prepare the leased premises for occupancy by the Tenant, except for the provisions stated in Exhibit B attached hereto and made a part hereof and any remaining punch list items.
25. FORCE MAJEURE Except in connection with the payment of rent or other sums payable hereunder by Tenant, in the event that the Landlord or Tenant is prevented or delayed from making any repairs or performing any other covenant hereunder by reason of any cause reasonably beyond the control of the Landlord or Tenant, as applicable, the Landlord or Tenant shall not be liable to the other therefore nor, except as expressly otherwise provided in case of casualty or taking as described above, shall the Tenant be entitled to any abatement or reduction of rent by reason thereof, nor shall the same give rise to a claim by the Tenant that such failure constitutes actual or constructive eviction from the leased premises or any part thereof.
26. LATE CHARGE If rent or any other sum payable hereunder remains outstanding for a period often (10) days after notice that such sums are due, the Tenant shall pay to the Landlord a late charge equal to one percent (1.0%) of the amount due for each month or portion thereof during which the arrearage continues irrespective of when notice of such nonpayment is given by Landlord.
27. LIABILITY OF OWNER No owner of the property of which the leased premises are a part shall be liable hereunder except for breaches of the Landlords obligations occurring during the period of such ownership. The obligations of the Landlord shall be binding upon the Landlords interest in said property but not upon other assets of the Landlord, and no individual partner, agent, trustee, stockholder, officer, manager, member, director, employee, attorney or beneficiary of the Landlord shall be personally liable for performance of the Landlords obligations hereunder. In no event shall Landlord ever be liable to Tenant for any indirect or consequential damages or for lost profits of Tenant for any reason whatsoever.
28. COVENANT OF QUIET ENJOYMENT; OTHER PROVISIONS. Provided Tenant observes and performs all material obligations, terms, covenants and conditions of this lease on its part to be observed and performed, Tenant shall peaceably and quietly have and enjoy possession and use of the leased premises and use of the common areas during the term hereof, without any encumbrance or hindrance by, from or through Landlord. The various rights and remedies contained in this lease and reserved to each of the parties shall not be exclusive of any other right or remedy of such party, but shall be construed as cumulative and shall be in addition to every other remedy now or hereafter existing at law, in equity, or by statute. No delay or omission or the right to exercise any power by either party shall be construed by the other party as a waiver of a subsequent breach of the same covenants, terms or conditions. Acceptance by Landlord of a lesser sum than the Rent then due shall be deemed to be an account of the earliest installment of such Rent, and endorsements or statements on checks or letters accompanying any check or payment as Rent shall not be deemed as accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlords right to recover the balance of such installment or pursue any other remedy provided in this Lease. The consent or approval of either party to or of any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act.
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1. | All amounts payable by Tenant to Landlord under any provision of this Lease, other than those of Base Rent shall be deemed to be additional rent, sometimes referred to as Additional Rent, for the use of the leased premises, and Landlord shall have the same remedies for the nonpayment of such amounts as for the nonpayment of other rents. |
2. | Where the words Landlord and Tenant are used in this Lease they shall include the terms Lessor and Lessee and shall apply to persons, both men and women, associations, partnerships and corporations, and in reading this Lease the necessary grammatical changes required to make the provisions hereof mean and apply to them shall be made in the same if written into the Lease. |
3. | The invalidity of one or more of the provisions of this Lease shall not affect the remaining portions of this Lease, and, if any one or more of the provisions of this Lease should be declared invalid by final order, decree or judgment of a court of competent jurisdiction, this Lease shall be construed as if such invalid provisions had not been included in this Lease. |
29. CONFIDENTIALITY. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Tenant and Landlord warrant and represent that it will not disclose any of the terms and conditions of this Lease except, if necessary, to such partys attorney, insurance company, lender, or agent, for purposes of preparation of taxes, in connection with a potential assignment or sublease, as may be required by a governmental or quasi-governmental body, or in the event the terms of this lease become generally known in the public domain through no fault of such party, or otherwise without the consent of the other party, which consent shall not be unreasonably withheld or delayed.
30. COUNTERPARTS. This Lease may be executed in any number of counterparts, and any one of such counterparts may be introduced in evidence or used for any purpose without production of the other counterparts
31. AUTHORITY. Tenant warrants and represents that it is organized under the laws of the State of Delaware and is qualified to do business in the Commonwealth of Massachusetts, that all of its Annual Reports have been filed with such state of organization and the Office of the Secretary of State of the Commonwealth of Massachusetts and is current and shall remain current during the term of this lease in such filings.
32. TELECOMMUNICATIONS. Tenant has investigated the premises and determined that the premises provide sufficient telecommunications capacity for its needs. Landlord shall not be obligated to provide additional telecommunications for Tenant and shall provide reasonable cooperation to permit Tenant to install additional telecommunications equipment in the leased premises required by Tenant in accordance with the provisions of Exhibit B.
33. MOVE IN/OUT REGULATIONS. Provided that Landlord shall have provided Tenant with copies of Landlords rules and regulations, Tenant shall comply with commercially reasonable rules of the Landlord regarding moving into and out of the Building and access by contractors, workmen, and delivery people and rules regarding location of smoking in designated areas outside of the Building as stated in Exhibits D and E attached hereto and made a part hereof.
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35. SUCCESSORS AND ASSIGNS. Except as otherwise provided in this lease, all of the covenants, conditions and provisions of this lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.
36. GOVERNING LAW; PRIOR AGREEMENTS. This lease shall be governed by and construed pursuant to the Laws of the Commonwealth of Massachusetts. This lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this lease. No prior agreement, understanding or representation pertaining to any such matter shall be effective for any purpose. No provision of this lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest.
37. PARKING. During the Term, commencing on the Commencement Date, Landlord shall provide in its sole discretion either two (2) single parking spaces or one (1) tandem space at the Building for the term of this Lease as it may be extended or renewed. Parking shall be by separate agreement between the property manager and Tenant. Parking is subject to reasonable regulation by property manager and all government regulations. In the event that this lease is subleased pursuant to Section 13, above, the parking agreements are not included with the lease without the prior consent of the Landlord. The initial monthly cost of parking for a single space is $295.00 per month and for a tandem space is $595.00 per month, and may be increased periodically after the first year of this lease upon written notice to Tenant. The parking area under the Building is not open to the public.
[Signature page follows below]
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IN WITNESS HEREOF, the said parties hereunto set their hands and seals this 23rd day of August, 2018.
TENANT: | ||||||||
LANDLORD: | ||||||||
CLIMACELL, INC. | ||||||||
280 HOLDINGS LLC | ||||||||
/s/ Shimon Elkabetz |
BY: | TREMONT ASSET | ||||||
By: | Shimon Elkabetz | MANAGEMENT LLC, | ||||||
Its: | CEO | ITS MANAGER | ||||||
/s/ Samuel H. Slater | ||||||||
By: | Samuel H. Slater, Manager |
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Exhibit 10.14
SUBLEASE AGREEMENT
This Sublease Agreement (the Sublease) is made as of October 26, 2020 (the Effective Date), by and between CLIMACELL, INC., a Delaware corporation (Sublandlord) and CLARION HEALTHCARE, LLC, a Massachusetts limited liability company (Subtenant), in the following factual context:
A. 280 HOLDINGS LLC, a Massachusetts limited liability company (Master Landlord) and Sublandlord are the parties to that certain Commercial Lease dated as of August 23, 2018 (the Master Lease). The Master Lease covers certain office space consisting in the aggregate of 13,532 rentable square feet of space (the Premises) in that certain building located at 280 Summer Street, Boston, Massachusetts (the Building), as more particularly described in the Master Lease.
B. Sublandlord desires to sublease to Subtenant and Subtenant desires to sublease from Sublandlord the Premises on the eighth (8th) floor of the Building and approximately as shown on the diagram attached as Exhibit A (the Subleased Space), on the terms and conditions set forth in this Sublease. The parties agree that the Subleased Space comprises the entirety of the 13,532 rentable square feet in the Premises, and that such figure is not subject to remeasurement or modification.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows:
1. Sublease
1.1 Grant. Sublandlord hereby subleases the Subleased Space to Subtenant and Subtenant hereby subleases the Subleased Space from Sublandlord on the terms and conditions set forth in this Sublease and the Master Lease. Except to the extent directly contradicted by the provisions of this Sublease, any capitalized terms not otherwise defined in this Sublease shall have the meanings ascribed thereto in the Master Lease.
1.2 Incorporation of Master Lease by Reference
(a) A true and partially redacted copy of the Master Lease is attached hereto as Exhibit B. Except to the extent such terms and provisions are inconsistent with or are specifically contrary to the express written provisions of this Sublease and except as provided in this Section 1.2, all of the terms, covenants and conditions of the Master Lease are by this reference incorporated herein and made a part of this Sublease with the same force and effect as if fully set forth herein, provided, however, that for purposes of such incorporation, (i) the term Lease as used in the Master Lease shall refer to this Sublease; (ii) the term Landlord (and other defined terms containing the term Landlord or any derivative thereof) as used in the Master Lease, and subject to the limitations of Sublandlords responsibilities to Subtenant under the Master Lease set forth in Section 5 below of this Sublease, shall refer to Sublandlord; (iii) the term Tenant (and other defined terms containing the term Tenant or any derivative thereof) as used in the Master Lease shall refer to Subtenant; (iv) the term Term as used in the Master Lease shall refer to the Term defined herein; (v) the term Premises, as used in the Master Lease shall refer to the Subleased Space; and (vi) the term Base Rent as used in the Master Lease shall refer to the Base Rent due under this Sublease. In the event of
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any inconsistency between the provisions set forth in this Sublease and the provisions of the Master Lease, as incorporated herein, the provisions of this Sublease shall control as between Sublandlord and Subtenant. Notwithstanding the foregoing, the following provisions of the Master Lease are expressly not incorporated into this Sublease: (1) the definitions of Term, Commencement Date, Rent Commencement Date, Security Deposit, Brokers, and any and all definitions or terms which are defined in or included in any of the Excluded Master Lease Provisions (as hereinafter defined) set forth in the Master Lease (except to the extent used or referred to in this Sublease), (2) Sections 3 and 3.1, the Base Rent amounts in Section 4, the payment address and ACH and wire transfer information in Section 4, Sections 5, 9.2, any interpretation of Section 14 that would require Subtenant to provide a mortgagee of Sublandlord with notice or would require Sublandlord to obtain an SNDA from such mortgagee, the terms of Sections 16 and 27 that would limit Sublandlords liability to its interest in the property and proceeds therefrom, and Exhibits B, F and XYZ; (3) such other terms of the Master Lease which are inapplicable, inconsistent with, or specifically modified by the terms of this Sublease (collectively, the Excluded Master Lease Provisions). Any reference to an allowance in the Master Lease is not incorporated herein. Subtenant shall be obligated to abide by those Move-In/Out & Large Deliveries Procedures and Smoking Policy of Master Landlord, included here as Exhibit D and made a part hereof. During the Term, Sublandlord shall not exercise the Option for Additional Space set forth in Section 3.1 of the Master Lease without Subtenants prior written consent (which may be withheld in Subtenants sole and absolute discretion). Any such exercise made without Subtenants prior written consent shall constitute an incurable default by Sublandlord, and Sublandlord shall be solely responsible for all costs arising out of any such exercise made without Subtenants prior written consent.
(b) Sublandlord shall have all of the same rights and remedies with respect to the Subleased Space as Master Landlord has with respect thereto under the Master Lease. This Sublease is expressly subject and subordinate to any mortgages or deeds of trust and all matters of record, ground leases and underlying leases to which the Master Lease is now or hereafter subject and subordinate pursuant to the Master Lease without the requirement of delivering any subordination, attornment and non-disturbance agreement or other agreements to Subtenant.
(c) With respect to any of Subtenants obligations to be performed under this Sublease, when the Master Lease grants Sublandlord a specific number of days to perform its corresponding obligation thereunder before the failure to perform constitutes an Event of Default, Subtenant shall perform such obligation not later than the date that is three (3) days prior to the date Sublandlord is obligated under the Master Lease to perform such obligation. In the event of any conflict between the provisions of the Master Lease and this Sublease, the Master Lease shall govern and control except to the extent directly contradicted by the provisions of this Sublease.
2. Term. The term of this Sublease (the Term) shall commence on the date (the Term Commencement Date) that is the later of (i) December 1, 2020, (ii) the date Sublandlord shall deliver the Subleased Space to Subtenant in broom clean condition and otherwise free of all tenants and occupants, with all of Sublandlords personal property removed therefrom (other than the Purchased Furniture described by Section 9 hereof), and (iii) the date Sublandlord receives a fully executed Master Landlords Consent to this Sublease. The Term shall expire at 11:59 p.m. EST on January 30, 2026 (the Termination Date), unless sooner
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terminated pursuant to any provision of the Master Lease or this Sublease. This Sublease shall immediately terminate as of the date the Master Lease is terminated, for any reason, prior to the Termination Date. Notwithstanding the foregoing or anything in this Sublease to the contrary, if the Term Commencement Date does not occur on or prior to February 15, 2021, Subtenant shall receive a credit against subtenants obligation to pay Rent hereunder, on a per diem basis, for each day between February 15, 2021 and the Term Commencement Date. In addition, if the Term Commencement Date does not occur on or before the Outside Termination Date (as hereinafter defined), then Subtenant shall have the right to terminate this Sublease, which shall be exercisable by written notice given thirty (30) days prior to the effective date of termination and delivered to Sublandlord at any time prior to the occurrence of the Term Commencement Date; provided that if the Term Commencement Date occurs prior to the end of such thirty (30) day period, Subtenants termination notice shall be deemed to be void and of no force or effect. For the purposes hereof, the Outside Termination Date shall be defined as March 15, 2021.
3. Rent
3.1 Base Rent.
(a) Commencing on the date (the Rent Commencement Date) that is two (2) months after the Term Commencement Date, Subtenant shall pay to Sublandlord, base rent (Base Rent) in the amount of Six Hundred Fifteen Thousand, Seven Hundred Six and 00/100 Dollars ($615,706.00) per annum, payable in equal monthly installments of Fifty-One Thousand, Three Hundred Eight and 83/100 Dollars ($51,308.83) per month, which Base Rent is $45.50 per rentable square foot in the Subleased Space. The Base Rent payable by Subtenant shall increase by $1.00 per rentable square foot per annum on each anniversary of the Rent Commencement Date during the Term.
(b) Base Rent and recurring payments of Additional Rent shall be payable in equal monthly installments, in advance, on the first day of each and every calendar month during the term of this Sublease. Payments of Base Rent shall be paid to Sublandlord at Sublandlords address set forth above or at such other place as Sublandlord shall from time to time designate, in immediately available funds, without notice, demand, deduction or offset, but subject to Sections 3.7 and 5.4(a) hereof. Base Rent and Additional Rent for any partial month shall be pro-rated on a daily basis. Notwithstanding anything herein to the contrary, Subtenant shall deliver the first monthly installment of Base Rent due hereunder to Sublandlord simultaneously with Subtenants execution and delivery of this Sublease.
3.2 Real Estate Taxes. From and after the Rent Commencement Date, Subtenant shall pay, as Additional Rent, Tenants Tax Share (as defined in the Master Lease) of the amount that Real Estate Taxes for each tax fiscal year after the Tax Base Year exceed the Real Estate Taxes for the Tax Base Year. Tenant shall pay Tenants Tax Share of such excess, as estimated by Sublandlord (based on written estimates received from Master Landlord), on a monthly basis, subject to annual reconciliation. As used herein, the Tax Base Year is tax fiscal year 2021 (July 1, 2020 to June 30, 2021); and
3.3 Operating Costs. From and after the Rent Commencement Date, Subtenant shall pay, as Additional Rent, Tenants Share (as defined in the Master Lease) of the amount that Operating Costs for each calendar year after the Operating Cost Base Year exceed the Operating Costs for the Operating Cost Base Year, as grossed up to reflect ninety-five percent (95%) occupancy. Tenant shall pay Tenants Share of such excess, as estimated by Landlord (based on written estimates received from Master Landlord), on a monthly basis, subject to annual reconciliation. As used herein, the Operating Cost Base Year is calendar year 2021.
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3.4 Calculations. Except as set forth herein to the contrary, Tenants Tax Share, Tenants Share, Real Estate Taxes and Operating Costs and Subtenants payments thereof shall be determined and calculated in accordance with Article 6 of the Master Lease. Such Additional Rent for Real Estate Taxes and Operating Costs and all other amounts payable by Subtenant under this Sublease are hereinafter referred to collectively as Additional Rent. Base Rent and Additional Rent may be referred to collectively as Rent.
3.5 Utilities. Commencing on the Term Commencement Date, and continuing throughout the remainder of the Term or such later date as Subtenant or anyone claiming by, through or under Subtenant remains in occupancy, Subtenant shall pay to Sublandlord, as Additional Rent, all amounts payable for utilities and other charges pursuant to Section 7 of the Master Lease within fourteen (14) days after delivery to Subtenant of an invoice therefor; provided, however, in the event the any utility is separately metered and the utility is provided directly to Subtenant from a service provider, Subtenant shall be responsible for the payment of any utility invoice directly to such provider rather than to Sublandlord.
3.6 Additional Charges. Subtenant shall also be responsible for its own telephone, facsimile transmitter, internet access, photocopier, and its other business expenses. In addition, if Subtenant shall procure any additional services from Master Landlord, including without limitation after-hours HVAC, or if additional rent or other sums are incurred for Subtenants sole benefit, including, without limitation, extra janitorial services, repairs and replacements to the Subleased Space caused or permitted by Subtenant, Subtenant shall make such payment to Sublandlord within thirty (30) days after Subtenants receipt of invoice. Notwithstanding the foregoing, Sublandlord shall be solely responsible for any fees or reimbursements payable to Master Landlord in connection with Subtenants request for Master Landlords consent to this Sublease. Any rent or other sums payable by Subtenant to Sublandlord under this Section 3.4 shall constitute and be due as Additional Rent.
3.7 Abatement of Rent Under Master Lease. Notwithstanding anything in this Sublease to the contrary, if the rent due under the Master Lease with respect to the Subleased Space is abated in whole or in part during the Term pursuant to any applicable provision of the Master Lease, then the Base Rent and Additional Rent due under this Sublease shall abate for the same period and to the same extent as the rent for the Premises is abated pursuant to the Master Lease.
4. Use. The Subleased Space shall be used for general office use and in accordance with the terms of the Master Lease. The Subleased Space shall not be used for any other purpose.
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5. Master Lease
5.1 Compliance. Except to the extent otherwise provided in this Sublease, Subtenant covenants and agrees to assume, perform and observe all the terms, covenants and conditions required to be performed by Sublandlord, as Tenant under the Master Lease, with respect to the Subleased Space during the Term and to the extent such Master Lease provisions are incorporated herein, except to the extent such terms, covenants and conditions conflict with the terms of this Sublease. Subtenant further agrees that Subtenants performance of all such obligations shall be performed by Subtenant for the benefit of Sublandlord as well as for the benefit of Master Landlord, and that, except as otherwise provided herein, Sublandlord shall have, with respect to Subtenant, this Sublease and the Subleased Space, all of the rights and benefits provided to Master Landlord by the Master Lease.
5.2 Subordination. Subtenant covenants and agrees that this Sublease is expressly made subject and subordinate in all respects to (i) the Master Lease and to all of its terms, covenants and conditions (including without limitation those provisions not incorporated herein by reference, as set forth in Section 1.2 above of this Sublease); and (ii) any and all matters to which the tenancy of Sublandlord, as tenant under the Master Lease, is or may be subordinate. Subtenant shall not do, or permit or suffer to be done, any act or omission by Subtenant, its agents, employees, contractors or invitees which is prohibited by the Master Lease, or which would constitute a violation or default thereunder, or result in a forfeiture or termination of the Master Lease or render Sublandlord liable for damages, fines, or penalties under the Master Lease. Subject to Subtenants performance of its obligations hereunder, Sublandlord shall not default the Master Lease, or perform any act which would constitute a violation or default thereunder, or result in a forfeiture or termination of the Master Lease or render Sublandlord liable for damages, fines, or penalties payable to Master Landlord. Should the Master Lease expire or terminate during the Sublease Term for any reason, this Sublease shall terminate on the date of such expiration or termination of the Master Lease, with the same force and effect as if such expiration or termination date had been specified in this Sublease as the Termination Date and Sublandlord shall have no liability to Subtenant in the event of any such expiration or termination unless the Master Lease is being terminated by Master Landlord solely by reason of a default by Sublandlord that is not in any way attributable to a default by Subtenant hereunder (a Sublandlord-Caused Master Lease Termination).
5.3 Benefits of Master Lease. As long as this Sublease is in full force and effect, Subtenant shall be entitled, with respect to the Subleased Space, to the benefit of Master Landlords obligations and agreements to furnish utilities and other services to the Subleased Space (and to the tenant thereof) and to repair and maintain the Building and all other obligations of Master Landlord under the Master Lease. Notwithstanding anything provided herein or the Master Lease to the contrary, including the incorporation into this Sublease of the relevant sections of the Master Lease, Subtenant acknowledges and agrees that Sublandlord shall not be obligated to furnish any services or utilities of any nature whatsoever or be responsible for the performance of any of Master Landlords covenants or obligations under the Master Lease, and shall not be liable in damages or otherwise for any negligence of Master Landlord or for any damage or injury suffered by Subtenant as a result of any act or failure to act by Master Landlord, or any default by Master Landlord in the performance of its obligations under the Master Lease. Sublandlord shall not be bound by and expressly does not make any of the indemnifications, representations or warranties, if any, made by Master Landlord under the Master Lease. If Master Landlord shall default in the performance of its obligations under the Master Lease, Sublandlord, upon receipt of written notice thereof from Subtenant, shall use commercially reasonable efforts promptly and timely and in consultation with Subtenant to cause Master Landlord to perform its obligations under the Master Lease and to enforce the terms thereof, provided such commercially reasonable efforts shall not require Sublandlord to expend any money or commence any litigation to cause Master Landlord to perform its obligations under the Master Lease.
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5.4 Liability of Sublandlord.
(a) Except for direct damages caused by a Sublandlord-Caused Master Lease Termination, Sublandlord shall not incur any liability whatsoever to Subtenant for any injury, inconvenience, incidental or consequential damages incurred or suffered by Subtenant as a result of the exercise by Master Landlord of any of the rights reserved to Master Landlord under the Master Lease, nor shall such exercise constitute a constructive eviction or a default by Sublandlord hereunder. Except as otherwise set forth herein, Subtenants obligations to pay Base Rent, Additional Rent and any other charges due under this Sublease shall not be reduced or abated in the event that Master Landlord fails to provide any service, to perform any maintenance or repairs, or to perform any other obligation of Master Landlord under the Master Lease, except if and only to the extent that Sublandlords obligation to pay Base Rent, Additional Rent and other charges under the Master Lease with respect to the Subleased Space is actually reduced or abated as a result of Master Landlords failure.
(b) Notwithstanding anything contained in this Sublease to the contrary, Sublandlord shall not be liable to Subtenant in connection with any matter arising from or relating to this Sublease for any consequential, punitive, special or indirect damages. Sublandlord shall be liable for any direct damages suffered by Subtenant as a direct result of a Sublandlord-Caused Master Lease Termination.
5.5 Approvals and Consents. In all provisions of the Master Lease requiring the approval or consent of, or notice to, Master Landlord, Subtenant shall be required to obtain the approval or consent of, or provide notice to, both Master Landlord and Sublandlord. If Sublandlord is obligated to be reasonable with respect to any approval or consent required under the terms of this Sublease, in addition to and without limitation of any reasons set forth in the Master Lease for which Sublandlord may withhold consent, Sublandlord shall not be deemed to be unreasonable in withholding such consent if Master Landlord withholds its consent thereto and Sublandlord shall have no liability to Subtenant for any loss, damage or injury in the event that Master Landlord withholds its consent. In the event Subtenant requires consent from Master Landlord, Sublandlord agrees to make commercially reasonable efforts to obtain the same, provided such commercially reasonable efforts shall not require Sublandlord to expend any money to third parties (including Master Landlord, unless Subtenant agrees to pay such amounts to Sublandlord in advance), or increase its obligations or decrease its rights under the Master Lease. If Subtenant desires to continue occupying the Subleased Space beyond the Termination Date pursuant to a direct lease with Master Landlord, Sublandlord agrees to not interfere with Subtenants efforts to negotiate and enter into such a direct lease.
5.6 Quiet Enjoyment. Sublandlord covenants that, subject to the terms and conditions of the Master Lease and this Sublease, so long as Subtenant is not in default beyond the expiration of any applicable cure period, Subtenant shall not be disturbed in the enjoyment of the Subleased Space by Sublandlord or by anyone claiming by, through or under Sublandlord.
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5.7 Copies of Notices. Whenever a notice is given or received pursuant to the Master Lease or SNDA executed by Sublandlord in connection therewith by or to Sublandlord or Subtenant which has relevance to the Subleased Space, Sublandlord and Subtenant each agree promptly to provide the other with a copy of such notice.
6. Signage and Telecommunications.
6.1 Signage. Subtenant, at Sublandlords sole cost and expense, shall be entitled to building standard signage, provided the same is in accordance with Master Landlords signage program and subject to Sublandlords and Master Landlords prior written consent, which consent of Sublandlord will not be unreasonably withheld. Sublandlord shall promptly submit to Master Landlord Subtenants request for signage in accordance with this Section 6.1. All signage shall comply with the terms of the Master Lease and with all federal, state and local rules, regulations, statutes, and ordinances at all times during the Term.
6.2 Telecommunications. Subtenant shall be responsible, at Subtenants sole cost and expense, for arranging for all telecommunications and data transmission services to the Subleased Space with the approved service providers for the Building. Subtenant shall, at Subtenants sole cost and expense, remove all wiring, cabling and other installations made by or on behalf of Subtenant in the Building on or before the expiration or earlier termination of the Term of this Sublease but shall have no obligation to perform or pay for the removal of any wiring, cabling or other installations that existed within the Subleased Space prior to the Term Commencement Date.
7. Security Deposit.
7.1 Amount. Upon execution of this Sublease by Subtenant, Subtenant shall deliver to Sublandlord readily available funds in the amount of $102,617.66 (the Security Deposit).
7.2 Use. If Subtenant defaults and/or fails to perform with respect to any provision of this Sublease in either case in excess of applicable notice and cure periods, Sublandlord may (but shall not be obligated to) use, apply, or retain all or any portion of the Security Deposit to: (a) pay any sum for which Subtenant is obligated; (b) compensate Sublandlord for any loss or damage which Sublandlord may suffer thereby including, without limitation, any future cost to repair damage to the Subleased Space or to clean the Subleased Space at the end of the Term; or (c) pay or reimburse Sublandlord for any other loss or damage caused by such default and/or failure. Any use, application, or retention of the Security Deposit shall not constitute a waiver by Sublandlord of its rights to enforce its other remedies under this Sublease, at law, or in equity.
7.3 Restoration. If any portion of the Security Deposit is so used or applied, Subtenant shall, within ten (10) Business Days after delivery of written demand from Sublandlord, restore the Security Deposit to its original amount. Subtenants failure to do so shall constitute a material breach of this Sublease, and in such event Sublandlord may elect, in addition to other remedies, to terminate this Sublease.
7.4 No Interest; Return. Sublandlord shall not be a trustee of the Security Deposit, and shall not be required to keep the Security Deposit separate from its other accounts. Sublandlord alone shall be entitled to any interest or earnings thereon and Sublandlord shall have the free use of same. If Subtenant fully and faithfully performs all of its obligations under this Sublease, then so much of the Security Deposit as remains shall be returned to Subtenant (without payment of interest or earnings thereon) within thirty (30) days after expiration of the Term or sooner termination of this Sublease.
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8. Delivery Condition of the Subleased Space.
8.1 AS IS. Subject only to Section 2 hereof, Sublandlord delivers the Subleased Space to Subtenant in its AS IS condition with all faults and without any obligation on the part of Sublandlord to modify, improve or otherwise prepare the Subleased Space for Subtenants occupancy or to pay any money to prepare the Subleased Space for Subtenants occupancy. Subtenant acknowledges that Sublandlord has made no warranty or representation, express or implied, as to the present or future condition of the Subleased Space or the fitness and availability of the Subleased Space for any particular use or any other matter relating to this Sublease by Sublandlord, Master Landlord, Sublandlords or Subtenants brokers or any other parties and Subtenant has relied upon its own examination of the Subleased Space in entering into this Sublease. By taking possession of the Subleased Space, Subtenant accepts the Subleased Space in its AS IS condition, subject to all applicable zoning, municipal, county, state and federal laws, ordinances, and regulations governing and regulating the use of the Subleased Space and any covenants or restrictions of record.
9. Furniture. On the Term Commencement Date, Sublandlord shall convey, assign and transfer for a purchase price of One Dollars ($1.00) the Sublandlord owned furniture in the Subleased Space and identified on Exhibit C (the Purchased Furniture), exclusive of (i) any IT/server related items and (ii) any items of furniture that Subtenant desires not to purchase as indicated by a notice to Sublandlord on or before November 1, 2020. Any furniture that Subtenant so notifies Sublandlord that Subtenant does not desire to purchase shall be removed from the Subleased Space by Sublandlord before the Term Commencement Date. The Purchased Furniture shall be transferred to Subtenant in its AS IS, where is, condition. Such Purchased Furniture shall be sold to Subtenant under separate Bill of Sale in the form and substance reasonably acceptable to Sublandlord and Subtenant. Subtenant shall be required remove the Purchased Furniture from the Subleased Space at the end of the Term or earlier expiration thereof.
10. Repairs; Alterations
10.1 Approval Required. Subtenant at its own cost shall keep the Subleased Space in good condition and repair and in accordance with the applicable terms of the Master Lease. Subtenant shall not perform or cause to be performed any interior or exterior improvements to the Subleased Space (Subtenant Alterations) without the prior written consent of Master Landlord (in accordance with the terms of the Master Lease) and Sublandlord, to be granted or withheld in Sublandlords reasonable discretion if approved by Master Landlord. Subtenant shall reimburse Master Landlord and Sublandlord for all costs they may incur in connection with reviewing any Subtenant Alterations, including, without limitation, Master Landlords and Sublandlords reasonable engineers, architects, attorneys and other consultants fees and costs.
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10.2 Sublandlord Conditions to Approval. If Master Landlord and Sublandlord do approve any Subtenant Alterations, then, in addition to all the requirements of the Master Lease, Sublandlord may impose as a condition to its consent such requirements as Sublandlord may deem reasonable and desirable, including without limitation the requirement that Subtenants contractors and subcontractors of all tiers be approved by Sublandlord and that Subtenant and/or Subtenants contractor(s) post a payment and/or completion bond to guarantee the performance of its construction obligations. Subtenant shall pay the full cost of designing and constructing any Subtenant Alterations and shall keep the Subleased Space and the Building free from any liens arising out of work performed, materials furnished or obligations incurred by or on behalf of Subtenant. Subtenant shall provide Master Landlord and Sublandlord with: (a) copies of all permits obtained by Subtenant in connection with performing the Subtenant Alterations, prior to commencing construction; and (b) meet all requirements provided for in the Master Lease or as may be provided by Master Landlord for construction rules and regulations. If any mechanics lien is filed against the Subleased Space, or the real property of which the Subleased Space is a part, for work claimed to have been furnished to Subtenant, within seven days after Subtenant receives written notice thereof (or Subtenants knowledge thereof, if earlier), Subtenant shall discharge such lien by the payment in full thereof or by posting a bond under applicable law. Subtenant and Sublandlord shall each indemnify, defend and hold harmless Master Landlord from and against any and all claims, loss, expenses and damages resulting from or arising out of any alterations, additions or improvements in the Subleased Space or the Building by or on behalf of Subtenant or related filing of any mechanics lien against the Subleased Space, or the real property of which the Subleased Space is a part (including, among other things, reasonable attorneys fees and costs).
10.3 Removal. Prior to expiration of the Term or earlier termination of this Sublease, if Sublandlord so directs in writing at the time of Sublandlords approval thereof, Subtenant shall remove all Subtenant Alterations and restore the Subleased Space to the same condition as of the Term Commencement Date, ordinary wear and tear excepted (this exception will not apply to any condition resulting from misuse or improper care or maintenance of the Subleased Space by Subtenant or its agents, employees, contractors or invitees). If Subtenant fails to remove the Subtenant Alterations and restore the Subleased Space, then Sublandlord shall have the right to do so, and charge Subtenant the actual costs therefor, plus a service charge of ten percent (10%) of the costs incurred by Sublandlord.
11. Assignment or Subleasing
11.1 Consent Required. Notwithstanding any provision of the Master Lease to the contrary, Subtenant shall have no right to assign this Sublease or further sublease the Subleased Space without the written consent of Sublandlord and Master Landlord (in accordance with the terms of the Master Lease), which consent may be granted or withheld in Sublandlords and Master Landlords sole discretion. Sublandlord shall have the rights set forth in Article 13 of the Master Lease with respect to any assignment or sublease of the Subleased Space.
11.2 Form of Document. Every assignment or sublease, if any, shall contain such terms and conditions as shall be reasonably requested by Sublandlords and Master Landlords attorneys, and recite that: (a) it is and shall be subject and subordinate to the provisions of this Sublease and the Master Lease; (b) the assignee or subtenant assumes Subtenants obligation hereunder; and (c) the termination of this Sublease shall, at Sublandlords sole election, constitute a termination of every such assignment or sublease.
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11.3 No Release of Subtenant. Regardless of Sublandlords and Master Landlords consent, no subletting or assignment shall release Subtenant of Subtenants obligation or alter the primary liability of Subtenant to pay the Rent and to perform all other obligations to be performed by Subtenant under this Sublease. The acceptance of Rent by Sublandlord from any other person shall not be deemed to be a waiver by Sublandlord of any provision of this Sublease. In the event of default by Subtenant or any successor or assignee which remains uncured after any applicable notice and cure periods, if any, Sublandlord may proceed directly against Subtenant without the necessity of exhausting remedies against such assignee, subtenant or successor.
11.4 Default. Notwithstanding anything herein to the contrary, an assignment which does not have Master Landlords and Sublandlords consent shall constitute a Default by Subtenant and in such event Sublandlord may elect, in addition to other remedies, to terminate this Sublease. If this Sublease is terminated, it shall not be treated as an asset of Subtenant.
12. Insurance. Subtenant, at its sole cost and expense, shall procure and maintain during the Term all insurance types and coverages required to be maintained by the Tenant under Article 17 of the Master Lease with respect to the Subleased Space. Sublandlord and Master Landlord shall be named as additional insureds on all such insurance policies. Subtenant hereby agrees that the property damage insurance carried by Subtenant hereunder shall provide for the waiver by the insurance carrier of any right of subrogation against Sublandlord and Master Landlord, and Subtenant further agrees that, with respect to any damage to property, the loss of which is covered by insurance carried by Subtenant or which would have been covered by the insurance coverages required to be carried by Subtenant under this Sublease, Subtenant releases Sublandlord and Master Landlord from any and all claims with respect to such loss to the extent of the insurance proceeds paid with respect thereto.
13. Indemnity. Subtenants indemnity obligations under the Master Lease which are incorporated by reference herein shall protect both Sublandlord and the other parties referenced in the Master Lease. Sublandlord shall indemnify, defend and hold Subtenant harmless from all claims, liabilities, losses and expenses, including reasonable attorneys fees and costs, resulting from a Sublandlord-Caused Master Lease Termination.
14. Default
14.1 Default Described. The occurrence of any of the following shall constitute a material breach of this Sublease and a Default by Subtenant: (a) failure to pay Rent or any other amount within three (3) Business Days after the date it is due (a monetary default); (b) all those items of default set forth in the Master Lease and required to be performed by Subtenant hereunder which remain uncured after the cure period provided in the Master Lease, less three (3) Business Days; and/or (c) Subtenants failure to perform timely and subject to any cure periods any other material provision of this Sublease or the Master Lease as incorporated herein. Notwithstanding the provisions of clause (a) above to the contrary, Sublandlord agrees that, with respect to the first instance per calendar year on which there is a monetary default, Sublandlord will provide Subtenant with a written notice that such payment was not received and such failure will not constitute a Default of Subtenant unless such failure to pay is not cured within three (3) Business Days after receipt of such notice from Sublandlord. Other than the first monetary default per calendar year, Sublandlord will not be required to provide Subtenant with a notice of nonpayment as to any other monetary default by Subtenant during that same calendar year before such monetary default will constitute a Default by Subtenant under this Sublease.
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14.2 Sublandlords Remedies. Sublandlord shall have, on account of any Default by Subtenant, all of the rights and remedies set forth in the Master Lease as if Sublandlord is Master Landlord. These remedies are not exclusive; they are cumulative and in addition to any remedies now or later allowed by law. Subtenant hereby expressly waives any and all rights of redemption to which it may be entitled by or under any present or future laws in the event Sublandlord or Master Landlord shall obtain a judgment for possession of the Subleased Space.
14.3 No Waiver. Sublandlord may accept Subtenants payments without waiving any rights under the Sublease, including rights under a previously served notice of default. No payment by Subtenant or receipt by Sublandlord of a lesser amount than any installment of Rent or other sums due shall be deemed as other than a payment on account of the amount due, nor shall any endorsement or statement on any check or accompanying any check or payment be deemed an accord and satisfaction; and Sublandlord may accept such check or payment without prejudice to Sublandlords right to recover the balance of such Rent or other sums, or pursue any other remedy provided in this Sublease, at law or in equity. If Sublandlord accepts payments after serving a notice of default, Sublandlord may nevertheless commence and pursue an action to enforce rights and remedies under the previously served notice of default without giving Subtenant any further notice or demand. Furthermore, Sublandlords acceptance of Rent from Subtenant when Subtenant is holding over without express written consent does not convert Subtenants tenancy from a tenancy at sufferance to a month-to-month tenancy. No waiver of any provision of this Sublease shall be implied by any failure of Sublandlord to enforce any remedy for the violation of that provision, even if that violation continues or is repeated. Any waiver by Sublandlord of any provision of this Sublease must be in writing. Such waiver shall affect only the provisions specified and only for the time and in the manner stated in the writing. No delay or omission in the exercise of any right or remedy by Sublandlord shall impair such right or remedy or be construed as a waiver thereof by Sublandlord. No act or conduct of Sublandlord, including, without limitation the acceptance of keys to the Subleased Space shall constitute acceptance or the surrender of the Subleased Space by Subtenant before the Termination Date. Only written notice from Sublandlord to Subtenant of acceptance shall constitute such acceptance or surrender of the Subleased Space. Sublandlords consent to or approval of any act by Subtenant which requires Sublandlords consent or approval shall not be deemed to waive or render unnecessary Sublandlords consent to or approval of any subsequent act by Subtenant.
14.4 Right to Cure. If Subtenant shall at any time during the Term fail to perform any of the obligations, conditions or covenants of this Sublease or the Master Lease within any applicable notice and cure period, Sublandlord shall have the right, but not the obligation, to immediately perform any such obligation, condition or covenant in order to protect Sublandlords leasehold interest. In the event Sublandlord suffers any cost or expense as a result of such performance, Subtenant shall reimburse Sublandlord for all such cost or expense, and any sum not paid within ten (10) days after Subtenant receives written demand for reimbursement shall bear interest at the interest rate set forth in Section 4.01 the Master Lease from the expiration of such ten (10) day period to the date of reimbursement by Subtenant.
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14.5 Sublandlord Default. For purposes of this Sublease, Sublandlord shall not be deemed in default hereunder unless and until Subtenant shall first deliver to Sublandlord thirty (30) days prior written notice, and Sublandlord shall fail to cure said default within such thirty (30) day period, or in the event Sublandlord shall reasonably require in excess of thirty (30) days to cure such default, shall fail to commence said cure with such thirty (30)) day period, and thereafter diligently to prosecute the same to completion.
15. Brokers. Sublandlord and Subtenant each represent and warrant to the other that it has had no dealings with any real estate brokers or agents in connection with this Sublease other than Lincoln Property Company and Freudenheim (the Brokers), and it knows of no real estate broker or agent who is entitled to a commission, finders fee or similar compensation in connection with this Sublease other than the Brokers, who shall be compensated by Sublandlord pursuant to separate agreement. Except for the Brokers, Sublandlord and Subtenant each shall defend, indemnify and hold the other harmless from and against all liabilities and expenses (including reasonable attorneys fees and costs) arising from any claims for a commission, finders fees or similar compensation based on the indemnitors dealings or contacts in connection with this Sublease.
16. Notices. All notices, demands, statements, designations, approvals or other communications (collectively, Notices) given or required to be given by either party to the other hereunder or by law shall be in writing and shall be: (a) sent by United States certified or registered mail, postage prepaid, return receipt requested (Mail); (b) transmitted by electronic mail (email), if such email is promptly (but no later than on the next following Business Day) followed by a Notice sent by one of the other methods permitted hereunder; (c) delivered by a nationally recognized overnight courier; or (d) delivered personally. Any Notice shall be sent, transmitted, or delivered, as the case may be, to Subtenant at the addresses set forth below, or to such other place as Subtenant may from time to time designate in a Notice to Sublandlord, or to Sublandlord at the addresses set forth below, or to such other places as Sublandlord may from time to time designate in a Notice to Subtenant. Any Notice will be deemed given: (i) five (5) days after the date it is posted if sent by Mail; (ii) the first (1st) Business Day after the date the email is transmitted, provided that if the email is received on a day other than a Business Day or after 5:00 p.m. local time at the destination, it shall be deemed delivered on the next following Business Day; (iii) the date the overnight courier delivery is made; or (iv) the date personal delivery is made, provided that if the personal delivery is effected on a day other than a Business Day or after 5:00 p.m. local time at the destination, it shall be deemed delivered on the next following Business Day. Any Notice given by an attorney on behalf of Sublandlord shall be considered as given by Sublandlord and shall be fully effective. Any Notice given by an attorney on behalf of Subtenant shall be considered as given by Subtenant and shall be fully effective. As of the date of this Sublease, any Notices to Sublandlord must be sent, transmitted, or delivered, as the case may be, to the following addresses:
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Prior to the Term Commencement Date:
CLIMACELL, INC. 280 Summer Street, 8th Floor Boston, Massachusetts 02210 E-Mail:
From and after the Term Commencement Date:
CLIMACELL, INC. Platinum Tower 21 HaArbaa St. 20th Floor Tel Aviv, Israel 6473921 E-Mail:
|
As of the date of this Sublease, any Notices to Subtenant must be sent, transmitted, or delivered, as the case may be, to the following addresses:
Prior to the Term Commencement Date:
CLARION HEALTHCARE, LLC 1 Financial Center, Suite 1610 Boston, MA 02111 E-Mail:
|
and following the Term Commencement Date:
At the Subleased Space, E-Mail: |
Each party to this Sublease shall send to the other party copies of any and all notices and other communications it shall send to and receive from Master Landlord relating to the Subleased Space. Either party may designate different addresses for notice to such party by delivery of written notification of such changes to the other party in accordance with the notice provisions of this Sublease.
17. Surrender. Subtenant shall keep the Subleased Space, and every part thereof, in good order and repair and Subtenant shall surrender the Subleased Space at the expiration or earlier termination of the Term of this Sublease in the same condition as when received, excepting only ordinary wear and tear (this exception will not apply to any condition resulting from misuse or improper care or maintenance of the Subleased Space by Subtenant or its agents, employees, contractors or invitees), damage or loss by casualty or condemnation and repairs for which Subtenant is not responsible under the terms of this Sublease. Subtenant shall remove all of the Subtenant Alterations designated by Sublandlord pursuant to Section 10.3 of this Sublease and restore the Subleased Space to the same condition as of the Term Commencement Date. If Subtenant fails to remove the Subtenant Alterations and restore the Subleased Space, then Sublandlord shall have the right to do so, and charge Subtenant the actual costs therefor, plus a service charge of ten percent (10%) of the costs incurred by Sublandlord.
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Notwithstanding anything to the contrary contained herein, but without requiring Subtenant to incur any out-of-pocket expense or vacate the Subleased Space or any portion thereof, Subtenant agrees to cooperate with Sublandlord in the event Sublandlord is obligated by Master Landlord to remove any Alterations or Cabling at the end of the Term or earlier termination thereof. Sublandlord represents to Subtenant that all alterations made to the Subleased Space in connection with the Master Lease prior to the Effective Date have either been completed by Landlord or made with Landlords written consent.
18. Master Landlords Consent. This Sublease is expressly conditioned upon Master Landlords written consent to this Sublease and the transfer of the right to either two (2) single parking spaces or one (1) tandem space at the Building, as provided in Section 37 of the Master Lease (the Master Landlords Consent).
19. Miscellaneous
19.1 Time of Essence. Time is of the essence with respect to the performance of every provision of this Sublease in which time of performance is a factor, including, without limitation, the giving of any Notice required to be given under this Sublease or by law, the time periods for giving any such Notice and for taking of any action with respect to any such Notice.
19.2 Partial Invalidity. If any term, provision or condition contained in this Sublease shall, to any extent, be invalid or unenforceable, the remainder of this Sublease, or the application of such term, provision or condition to persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Sublease shall be valid and enforceable to the fullest extent possible permitted by law; provided that, if a material provision is adjudged void or unenforceable, the parties shall negotiate, in good faith, an equitable adjustment to such other provisions of this Sublease as may be necessary or appropriate to effectuate as closely as possible the parties intent as evidenced by this Sublease.
19.3 Entire Agreement. There are no oral agreements between the parties hereto affecting this Sublease and this Sublease (including its exhibits, schedules, agreements and other documents referred to therein) constitutes the parties entire agreement with respect to the leasing of the Subleased Space and supersedes and cancels any and all previous negotiations, arrangements, letters of intent, agreements and understandings, if any, between the parties, and none thereof shall be used to interpret or construe this Sublease. The foregoing shall not affect the continued validity and effectiveness of any confidentiality or non-disclosure agreement between the parties. None of the terms, covenants, conditions or provisions of this Sublease may be modified, deleted or added to except in writing signed by the parties.
20. Authority. Each of Subtenant and Sublandlord represents and warrants that it is duly formed in Delaware or Massachusetts (as applicable), and is an existing entity qualified to do business in the Commonwealth of Massachusetts and that it has full right and authority to execute, deliver and perform this Sublease. Each party represents and warrants to the other party that neither its execution, delivery of performance of this Sublease shall cause it to be in violation of any agreement, instrument, contract, law, rule or regulation by which it is legally bound, and either party shall protect, defend, indemnify and hold the other party harmless against any claims, demands, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable attorneys fees and costs, arising from a breach of this representation and warranty by it.
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20.1 Attorneys Fees. In the event that either Sublandlord or Subtenant should bring suit for the possession of the Subleased Space, for the recovery of any sum due under this Sublease, or because of the breach of any provision of this Sublease or for any other relief against the other, then all costs and expenses, including reasonable attorneys fees, incurred by the prevailing party therein shall be paid by the other party. In any case where Subtenant requests permission from Sublandlord to assign, sublet, make alterations, or receive any other consent or obtain any waiver from or modification to the terms of this Sublease, Subtenant shall reimburse Sublandlord for Sublandlords reasonable attorneys fees incurred by Sublandlord in reviewing such request. References to a partys attorneys fees under this Sublease will include the reasonable fees of each partys in-house attorneys at their normal billing rates.
20.2 Governing Law; WAIVER OF TRIAL BY JURY. This Sublease shall be construed and enforced in accordance with the internal laws of the Commonwealth of Massachusetts. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, SUBLANDLORD AND SUBTENANT HEREBY BY CONSENT TO: (A) THE JURISDICTION OF ANY FEDERAL, STATE, COUNTY OR MUNICIPAL COURT SITTING IN THE COMMONWEALTH OF MASSACHUSETTS; (B) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY MASSACHUSETTS LAW; AND (C) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS SUBLEASE, THE RELATIONSHIP OF SUBLANDLORD AND SUBTENANT, SUBTENANTS USE OR OCCUPANCY OF THE SUBLEASED SPACE, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY.
20.3 Confidentiality. Subtenant and Sublandlord each acknowledges that the content of this Sublease and of the Master Lease and any related documents are confidential information and agrees that it shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than its and its affiliates employees, directors, officers and their financial, legal, and space planning consultants and its and its affiliates current and potential lenders and investors, all of whom shall be subject to this confidentiality provision, and as otherwise required by law.
20.4 Holding Over. Subtenant shall have no right to holdover. If Subtenant does not surrender and vacate the Subleased Space at the expiration of the Term or earlier termination of this Sublease, Subtenant shall be a tenant at sufferance and Rent shall be at the rate set forth in Article 22 of the Master Lease, plus, all other Additional Rent and other charges payable by Sublandlord under this Sublease for the entire Subleased Space during such period and (ii) the additional holdover charge (if any) that Sublandlord actually pays to Master Landlord in accordance with Section 22 of the Master Lease on account of Subtenants holdover. In connection with the foregoing, Sublandlord and Subtenant agree that the reasonable rental value of the Subleased Space following the Termination Date or earlier termination of the Sublease shall be the amounts set forth above. Sublandlord and Subtenant acknowledge and agree that, under the circumstances existing as of the Effective Date, it is impracticable and/or
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extremely difficult to ascertain the reasonable rental value of the Subleased Space and that the reasonable rental value established in this Section 20.4 is a reasonable estimate of the damage that Sublandlord would suffer as the result of Subtenants failure to timely surrender possession of the Subleased Space. The parties acknowledge that the liquidated damages established herein is not intended as a forfeiture or penalty. Notwithstanding the foregoing, and in addition to all other rights and remedies on the part of Sublandlord if Subtenant fails to surrender the Subleased Space upon the termination or expiration of this Sublease, in addition to any other liabilities to Sublandlord accruing therefrom, Subtenant shall indemnify, defend and hold Sublandlord and Master Landlord harmless from all claims, liabilities, losses and expenses, including reasonable attorneys fees and costs, resulting from such failure.
20.5 Successors and Assigns. Subject to the limitations set forth in Section 11, this Sublease shall be binding upon each of the parties and their respective successors and assigns.
20.6 Interpretation. Preparation of this Sublease has been a joint effort of the parties and the resulting document shall not be construed more severely against one of the parties than against the other.
20.7 Exhibits and Attachments. All Exhibits and attachments to this Sublease are a part hereof.
20.8 Counterparts. This Sublease may be executed in counterparts with the same effect as if both parties had executed the same document. Both counterparts shall be construed together and shall constitute a single lease. Pages may be transmitted by facsimile or electronically and each of will be deemed an original. The signature pages of counterpart copies may be assembled to form one instrument.
20.9 Limited Liability. In no event shall the partners, principals, members, officers, stockholders, directors, employees or agents of either party be personally liable for the performance of the such partys obligations under this Sublease.
20.10 Business Day. Any reference to the term Business Day in this Sublease mean any day other than a Saturday, a Sunday, or days when banks located in the Commonwealth of Massachusetts are closed for a legal holiday.
20.11 Memorandum of Record. Neither this Sublease, nor any memorandum hereof, shall be recorded.
[Signatures appear on the following page.]
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The parties have executed this Sublease as of the Effective Date.
Sublandlord: | CLIMACELL, INC., a Delaware corporation | |||||
By: | /s/ Shimon Elkabetz | |||||
Name & Title: Shimon Elkabetz, CEO | ||||||
Subtenant: | CLARION HEALTHCARE, LLC, a Massachusetts limited liability company | |||||
By: | /s/ Bart Lombardi | |||||
Name & Title: Bart Lombard, Managing Director & Founder |
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EXHIBIT A
DIAGRAM OF SUBLEASED SPACE
See Exhibit A to Master Lease
Exhibit B
MASTER LEASE
Exhibit C
FURNITURE SCHEDULE
Object |
Amount | |||
small desk |
17 | |||
large desk |
50 | |||
mesh desk chair |
44 | |||
leather & mesh desk chair |
1 | |||
grey conference room chair |
19 | |||
black executive conference room leather chairs (small) |
34 | |||
black executive conference room leather chairs (big) |
1 | |||
black leather conference room chair striped back |
32 | |||
black leather conference room chair round back |
12 | |||
coffee tables |
2 | |||
white boards (not mounted) |
2 | |||
white folding chairs |
12 | |||
white/blue kitchen chairs |
12 | |||
tall white kitchen chairs |
6 | |||
tall kitchen tables |
3 | |||
kitchen table (wood and orange top) |
4 | |||
small (round or square) conference room table |
7 | |||
large conference room tables |
3 | |||
tv on stands |
2 | |||
tv on walls |
2 | |||
mounted conference room TVs |
8 | |||
built in bookshelves |
1 | |||
filing cabinet |
4 | |||
couch |
3 | |||
bean bag lounge chairs |
2 | |||
rolling lounge |
2 | |||
nice chairs (grey, tan) |
6 | |||
partitions in relaxation room (connected) |
9 | |||
whiteboard on walls |
8 | |||
white storage units connected to walls |
5 | |||
coffee tables |
2 | |||
reception tables |
2 | |||
cubby storage in relaxation room |
1 | |||
storage in relxation room (silver rack) |
1 | |||
easel-style white board |
1 | |||
office plants |
16 |
dish rack |
1 | |||
microwave |
1 | |||
small round accent tables |
3 | |||
brown mini desk in conference room |
1 | |||
standing fan in conference room |
1 |
Exhibit D
MOVE-IN/OUT & LARGE DELIVERY PROCEDURES AND SMOKING POLICY
PARK PROPERTY MANAGEMENT GROUP LLC 1963 Commonwelth Avenue Suite1 Brighton MA 02135 P 617 789 3944 F 617 789 3962 SMOKING POLICY Smoking is prohibited within thirty (30) feet of the front entrance of 280 Summer Street, Under no circumstance will smoking be permitted in any unassigned area of the building. Effective Immediately, the only permitted smoking area will be located at the exterior of the the lower lobby, rear entry/exit of the building. Temporary non-smoking signs will be posted in the front of the building untill façade renovations are completed. During this time, and at all times thereafter, these areas will be monitored for compliance. We again thank you in advance for your cooperation. Please do not hesitate to contact our office at 617.789.3944 with any questions or concerns you may have.
PARK PROPERTY MANAGEMENT GROUP LLC 1963 Commonwealth Avenue. Suite 1 Brighton. MA 02135 P 617.789.3944 f: 617.789.3962 info@par0fng.com MOVE-IN/OUT &LARGE DELIVERIES PROCEDURES A written request fourteen (14) prior to anticipated move-in/out date must be provided to Park Property Management Group LLC (PPMG) via fax to 617.789.3962, or via email to info@parkpmg.com.Lessor will approve requested date and time within three (3) business days of receipt, provided that a move in or out time is available. In addition to move-in/out, any activity not related to moving in or moving out that may require interruption of entranceways, hallways, and/or elevator service, i.e. contractors performing work inside an office space, furniture delivery, etc, must be approved by PPMG fourteen (14) days in advance, and compliance with this form is required. Any activity not approved by PPMG will result in management denying access and/or delivery, as well as subjecting the Lessee to a fine imposed by Management No Lessee shall cause, or permit others to cause, any interruption in the normal service of the elevators. Any movement of furniture, freight or other personal property requires a reservation for use of the elevator and must be approved by PPMG no less than fourteen (14) days in advance. Any move by a Lessee having unique or special requirements must be approved in advance by management Lessees MUST notify management of large deliveries and MUST also be present to meet the delivery person(s). Upon written confirmation of said date, a non-refundable monitoring fee in the amount of $175.00 made payable to RETALS LLC must be submitted to the PPMG office at 1963 Commonwealth Avenue, Suite 1, Brighton, MA 02135, fourteen (14) days in advance by said Lessee in order to reserve the elevator for any moving activity. Upon completion of the move, the Lessee will be required to sign out with the monitor as stated below: The cost of a move monitor, assigned by PPMG to oversee the moving activity while on the 280 Summer Street premises, is $35.00 per hour: minimum of five (5) hours, additional hours will be billed in one (1) hour increments; i. You must sign out with the move monitor upon completion of the move, which will serve as confirmation of time for final billing as well as any damages to common areas as a result of move activity, if applicableSEE ATTACHED. Moving activity is allowred only during the following hours: MondayFriday 6:00pm - 11:00pm Saturday 9:00am4:00pm Sunday & Holiday 10:00am - 4:00pm NO MOVE IS TO COMMENCE UNLESS THE MONITOR IS PRESENT TO CHECK IN. Version 11/24714 Subject to revision
D-1 1 ACTIVE/73527519.4 ACTIVE/105300284.6 PARK PROPERTY MANAGEMENT GROUP LLC 1963 Commonwealth Avenue. Suite 1 Brighton. MA 02135 P 617.7B9.3944 f: 617.7B9.3962 info@par0mg.com If a move has not been completed by 11:00pm, Monday through Friday, the move can continue; however there will be an additional monitoring charge. Upon arrival, you must check-in with the assigned monitor prior to the commencement of the move. The monitor will install elevator pads, as well as post signs informing other occupants the elevator is being used for a move. Although we will do our best to have the elevator available for you at the arranged time, there may be delays due to time over-runs or breakdowns. Lessees MUST be present for movers. Lessees are responsible for seeing that their movers or deliverers remove all moving boxes, contents, etc, and related moving & personal materials. Moving boxes should not be left on site. These must be removed from the premises. THIS PROVISION OF THE MOVING POLICY WILL BE STRICTLY ENFORCED AND SUBJECT TO CHARGES. Lessees will be responsible for paying for the removal/disposal of any items left behind. Elevator dimensions: 7 W x 45 D x 8 3 H Door opening: 41 W x 95 H The Lessor and its Agents shall not be liable for resulting injury, loss or damage. Further, a Certificate of Insurance for the moving company must be provided seven [7] days prior to the scheduled move. NO MOVE OR DELIVERY MAY OCCUR WITHOUT LESSEE SENDING A CERTIFICATE OF INSURANCE TO PPMG WITH LIABILITY COVERAGE OF SI,000,000 AND WORKMENS COMPENSATION COVERAGE SEVEN (7) DAYS PRIOR TO THE MOVE OR DELIVERY. PPMG shall have the right to take all such reasonable measures as it may deem advisable for the security of the building and its occupants. Failure to abide by any of the aforementioned will result in a $500 fine plus damages, if any. I HAVE READ AND ACCEPT THE MOVE-IN/OUT &LARGE DELIVERIES PROCEDURES OUTLINED ABOVE SIGNATURE DATS Version 11/24714 Subject to revision
ACTIVE/105300284.6 PARK PROPERTY MANAGEMENT GROUP LLC 1963 Commonwealth Avenue. Suite 1 Brighton. MA 02135 P 617.789.3944 f: 617.789.3962 info@par0mg.com LESSEE CONTACT INFORMATION NAME: PHONE No.: INSURANCE Co.: MOVING COMPANY CONTACT INFORMATION NAME Co.: PHONE No.: INSURANCE Co.: MOVING INFORMATION DATE OF MOVE: MOVE START TIME: MOVE END TIME: DAMAGES: LESSEE DATE ASSIGNED MONITOR CATE Version 11/24714 Subject to revision ACTIVE/105300284.6
Exhibit 10.16
CLIMACELL INC.
January 18, 2017
Shimon Elkabetz
1 Western Avenue, 341
Boston, MA 02163
Dear Shimon Elkabetz:
On behalf of ClimaCell Inc., a Delaware corporation (the Company), I am pleased to offer you employment with the Company. The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer:
1. You will be employed to serve on a Full-Time basis as CEO, effective June 1, 2017. As CEO, you will be responsible for managing and directing the company, plus such other duties as may from time to time be assigned to you by the Company.
2. Your base salary will be $100,000 per year.
3. You may participate in any and all bonus and benefit programs that the Company establishes and makes available to its employees from time to time, provided you are eligible under (and subject to all provisions of) the plan documents governing those programs. The bonus and benefit programs made available by the Company, and the rules, terms and conditions for participation in such benefit plans, may be changed by the Company at any time without advance notice.
4. You may be eligible for a maximum of 3 weeks of vacation per calendar year to be taken at such times as may be approved by the Company. The number of vacation days for which you are eligible shall accrue at the rate of 5 days per month that you are employed during such calendar year.
5. You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing (or that purports to prevent) you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.
6. You agree to provide to the Company, within three days of your hire date, documentation of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986. You may need to obtain a work visa in order to be eligible to work in the United States. If that is the case, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.
7. This letter shall not be construed as an agreement, either expressed or implied, to employ you for any stated term, and shall in no way alter the Companys policy of employment at will, under which both you and the Company remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Although your job duties, title, compensation and benefits, as well as the Companys personnel policies and procedures, may change from time to time, the at-will nature of your employment may only be changed by a written agreement signed by you and the board of directors, which expressly states the intention to modify the at-will nature of your employment. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company.
8. As an employee of the Company, you will be required to comply with all Company policies and procedures. Violations of the Companys policies may lead to immediate termination of your employment. Further, the Companys premises, including all workspaces, furniture, documents, and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all internet and email) are subject to oversight and inspection by the Company at any time. Company employees should have no expectation of privacy with regard to any Company premises, materials, resources, or information.
9. This offer letter is your formal offer of employment and supersedes any and all prior or contemporaneous agreements, discussions and understandings, whether written or oral, relating to the subject matter of this letter or your employment with the Company. The resolution of any disputes under this letter will be governed by the laws of the Commonwealth of Massachusetts.
Very Truly Yours, | ||
ClimaCell Inc. | ||
By: | /s/ Eyal Shavit | |
Name: Eyal Shavit | ||
Title: Director |
The foregoing correctly sets forth the terms of my employment by ClimaCell Inc
Date: January 18, 2017 | /s Shimon Elkabetz | |||
Name: Shimon Elkabetz |
Exhibit 10.17
January 3, 2021
By email (Shimon@Tomorrow.io):
Shimon Elkabetz
Chief Executive Officer
The Tomorrow Companies Inc.
Shimon,
This will serve to amend that certain letter dated January 18, 2017 between you, on the one hand, and Eyal Shavit as director, and on behalf, of The Tomorrow Companies Inc. (f/k/a Climacell Inc.) (the Company or Tomorrow.io), on the other hand, memorializing your full-time employment with the Company. Specifically, effective as of January 1, 2022, you will be employed in parallel by Tomorrow.io and its Israeli subsidiary Tomorrow.io Ltd. Your compensation, as adjusted from time to time by the board of directors of Tomorrow.io (or any publicly-traded parent company), shall be apportioned between such entities.
Please sign below to acknowledge such arrangements.
Thank you, |
/s/ Philippe Schwartz |
Philippe Schwartz |
On behalf of the Board of Directors |
The Tomorrow Companies Inc. |
Acknowledged and agreed:
/s/ Shimon Elkabetz |
Shimon Elkabetz |
Take Control of Tomorrow, Today
Exhibit 10.18
CLIMACELL INC.
January 18, 2017
Rei Goffer
1 Longfellow Place Apt. 2422
Boston MA 02114
Dear Rei Goffer:
On behalf of ClimaCell Inc., a Delaware corporation (the Company), I am pleased to offer you employment with the Company. The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer:
1. You will be employed to serve on a Full-Time basis as CSO, effective September 1, 2016. As CSO, you will be responsible for directing the strategy of the company, plus such other duties as may from time to time be assigned to you by the Company.
2. Your base salary will be $100,000 per year.
3. You may participate in any and all bonus and benefit programs that the Company establishes and makes available to its employees from time to time, provided you are eligible under (and subject to all provisions of) the plan documents governing those programs. The bonus and benefit programs made available by the Company, . and the rules, terms and conditions for participation in such benefit plans, may be changed by the Company at any time without advance notice.
4. You may be eligible for a maximum of 3 weeks of vacation per calendar year to be taken at such times as may be approved by the Company. The number of vacation days for which you are eligible shall accrue at the rate of 5 days per month that you are employed during such calendar year.
5. You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing (or that purports to prevent) you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.
6. You agree to provide to the Company, within three days of your hire date, documentation of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986. You may need to obtain a work visa in order to be eligible to work in the United States. If that is the case, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.
7. This letter shall not be construed as an agreement, either expressed or implied, to employ you for any stated term, and shall in no way alter the Companys policy of employment at will, under which both you and the Company remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Although your job duties, title, compensation and benefits, as well as the Companys personnel policies and procedures, may change from time to time, the at-will nature of your employment may only be changed by a written agreement signed by you and the board of directors, which expressly states the intention to modify the at-will nature of your employment. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company.
8. As an employee of the Company, you will be required to comply with all Company policies and procedures. Violations of the Companys policies may lead to immediate termination of your employment. Further, the Companys premises, including all workspaces, furniture, documents, and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all internet and email) are subject to oversight and inspection by the Company at any time. Company employees should have no expectation of privacy with regard to any Company premises, materials, resources, or information.
9. This offer letter is your formal offer of employment and supersedes any and all prior or contemporaneous agreements, discussions and understandings, whether written or oral, relating to the subject matter of this letter or your employment with the Company. The resolution of any disputes under this letter will be governed by the laws of the Commonwealth of Massachusetts.
Very Truly Yours, | ||
ClimaCell Inc. | ||
By: | /s/ Eyal Shavit | |
Name: Eyal Shavit | ||
Title: Director |
The foregoing correctly sets forth the terms of my employment by ClimaCell Inc
Date: January 18, 2017 | /s/ Rei Goffer | |||
Name: Rei Goffer |
Exhibit 10.19
CLIMACELL INC.
January 18, 2017
Itai Zlotnik
12 Ellery St., Apt 602
Cambridge, MA, 02138
Dear Itai Zlotnik:
On behalf of ClimaCell Inc., a Delaware corporation (the Company), I am pleased to offer you employment with the Company. The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer:
1. You will be employed to serve on a Full-Time basis as CTO, effective June 1, 2017. As CTO, you will be responsible for directing the technological development of the company, plus such other duties as may from time to time be assigned to you by the Company.
2. Your base salary will be $100,000 per year.
3. You may participate in any and all bonus and benefit programs that the Company establishes and makes available to its employees from time to time, provided you are eligible under (and subject to all provisions of) the plan documents governing those programs. The bonus and benefit programs made available by the Company, . and the rules, terms and conditions for participation in such benefit plans, may be changed by the Company at any time without advance notice.
4. You may be eligible for a maximum of 3 weeks of vacation per calendar year to be taken at such times as may be approved by the Company. The number of vacation days for which you are eligible shall accrue at the rate of 5 days per month that you are employed during such calendar year.
5. You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing (or that purports to prevent) you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.
6. You agree to provide to the Company, within three days of your hire date, documentation of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986. You may need to obtain a work visa in order to be eligible to work in the United States. If that is the case, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.
7. This letter shall not be construed as an agreement, either expressed or implied, to employ you for any stated term, and shall in no way alter the Companys policy of employment at will, under which both you and the Company remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Although your job duties, title, compensation and benefits, as well as the Companys personnel policies and procedures, may change from time to time, the at-will nature of your employment may only be changed by a written agreement signed by you and the board of directors, which expressly states the intention to modify the at-will nature of your employment. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company.
8. As an employee of the Company, you will be required to comply with all Company policies and procedures. Violations of the Companys policies may lead to immediate termination of your employment. Further, the Companys premises, including all workspaces, furniture, documents, and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all internet and email) are subject to oversight and inspection by the Company at any time. Company employees should have no expectation of privacy with regard to any Company premises, materials, resources, or information.
9. This offer letter is your formal offer of employment and supersedes any and all prior or contemporaneous agreements, discussions and understandings, whether written or oral, relating to the subject matter of this letter or your employment with the Company. The resolution of any disputes under this letter will be governed by the laws of the Commonwealth of Massachusetts.
Very Truly Yours, | ||
ClimaCell Inc. | ||
By: | /s/ Eyal Shavit | |
Name: Eyal Shavit | ||
Title: Director |
The foregoing correctly sets forth the terms of my employment by ClimaCell Inc..
Date: January 18, 2017 | /s/ Itai Zlotnik | |||
Name: Itai Zlotnik |
Exhibit 10.20
The Tomorrow Companies Inc. OFFER LETTER
April 20, 2021
Stephen Gregorio
11 Donald Road
Burlington, MA 01803
Dear Stephen,
Welcome to Tomorrow.io! It is my pleasure to offer you full-time employment with The Tomorrow Companies Inc, a Delaware corporation (Tomorrow.io or the Company). The following sets forth the terms and conditions of our offer (this Agreement).
1. | Position. Your position at the Company will be CFO. You shall report to and be under the direction and control of Shimon Elkabetz, CEO, and shall have such responsibilities, duties and powers as may from time to time be prescribed by your supervisor and/or the Company. The Company may modify your duties from time to time in accordance with the Companys requirements. You are required to abide by all of the policies and procedures as set forth by the Company. Moreover, during your employment with Tomorrow.io, you will be expected to conduct your business activities at all times in accordance with the highest legal, ethical and professional standards. |
2. | Full-Time Attention. This is an offer for full time employment and, if accepted, you shall devote your best professional efforts, skills and energies and your full business time and attention to the performance of your duties and responsibilities under this Agreement. Except for discrete de minimis tasks associated with advising small start-up companies and serving on boards of directors, you shall devote one hundred percent (100%) of your business time, but not less than forty (40) hours per week, to your duties under this Agreement. You hereby confirm, as a condition to accepting and entering into this Agreement, that you are under no contractual or other legal obligations that would prohibit or restrict you from fully entering into this Agreement, performing your obligations hereunder, and complying with all terms of this Agreement, and that you have no current or potential conflict of interest relating to your employment with the Company and performance of your duties hereunder. |
3. | Start Date; Nature of Relationship. Subject to your acceptance of this offer and compliance with its provisions, your full-time employment with the Company will begin no later than May 24, 2021. Your employment will, at all times, remain at will employment. As such, either you or the Company may terminate your employment at any time for any reason or for no reason. No provision of this Agreement, and no actions by either you or Tomorrow.io shall be construed to create a promise of employment for any specific period of time. To ensure a smooth transition, we ask that you provide the Company with 30 days prior notice of voluntary termination. |
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4. | Your first 90 days of employment will be a probationary period. The Company will assess your performance during the period and, if you are still employed with the Company at the end of the period, the Company anticipates discussing your performance with you at that time. Note that your employment is at-will at all times, meaning that this probationary period is not a guarantee of employment for any length of time. |
5. | Compensation. Your compensation shall be as set forth in Exhibit A attached hereto, and shall be payable in accordance with the Companys regular payroll practices in effect from time to time (currently twice a month). The Company shall make any withholdings and/or which may be required by law or which you may authorize from time to time. The Company reserves the right to review the compensation and to adjust it from time to time in its sole discretion. This review is typically done annually, but may be done more or less frequently. |
6. | Benefits. During your employment, you will be eligible to participate in the employee benefit plans made generally available by the Company from time to time to its similarly-situated employees, subject to plan terms and generally applicable Company policies. These benefits may be modified or changed from time to time in the sole discretion of the Company, and the provisions of such benefits to you in no way changes or impacts your status as an at-will employee. |
7. | Unlimited PTO: The Company has adopted a policy where it does not limit the number of days you can take off in any given year. As such, you are entitled to take as much paid time off as you deem necessary subject to the Companys PTO policy in effect from time to time (which may be modified by the Company at any time in its sole and absolute discretion). The unlimited PTO shall include any and all of your personal days, vacation days and sick days and may be utilized by you so long as it does not negatively impact (i) the Company, (ii) your job performance or (iii) the responsibilities of your coworkers. While the Company offers its employees such a benefit, it is expected that you will not abuse this policy. You agree to provide the Company with sufficient notice of an absence, and in any event consistent with the Companys policy. It is important to note that under this policy, you will not be deemed to accrue any vacation/PTO days and you shall have no rights of any kind, in or to, any accrued but unused vacation/PTO days in connection with your termination from the Company for any reason. As is typical with vacation/PTO, the Company may in its discretion deny a request for vacation, grant a more limited amount of vacation then requested or require you to provide additional information related to a PTO request, subject to applicable law. |
8. | Effect of Termination. If you shall cease to be an employee of the Company, for any reason, you shall act as follows: (i) deliver and/or return to the Company all property of the Company in your possession or control, including, without limitation, cellular telephones, other telecommunications material, keys, modems, computers, identification badges or other equipment, company documents, CDs, letters, notes, reports, business cards and other papers in your possession and relating to your tenure with the Company; (ii) delete any information relating to the Company from your personal computer, phone and other devices; and (iii) provide reasonable assistance to the Company to ensure an orderly transition, including the handing over to the persons designated by the Company, any documents and all other matters that you dealt with. |
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9. | Severance and Release. |
9.1 | Without limiting or derogating from the foregoing, |
(a) | if your employment is terminated by the Company without Cause (as defined herein), then the Company will offer you Severance Benefits equal to six (6) months base salary and other benefits otherwise accruing during such period, paid on the first Company payroll date applicable to your position after the Release has become effective and irrevocable. All severance benefits are conditioned on your signing a full release of any and all claims against the Company in a release form acceptable to the Company (within the period specified in it by the Company, but in no event later than 60 days after the date of terminationthe Release) and your not revoking such release pursuant to any revocation rights afforded by applicable law (the Release Requirement). |
(b) | Notwithstanding the immediately preceding provision, if within the twelve (12) months following a Change in Control Transaction (as defined in the Companys 2016 Stock Incentive Plan (as amended, the Plan), your employment is terminated by the Company without Cause or you terminate your employment for Good Reason (as defined below), and in either case subject to the Release Requirement, then any unvested Options or other then-existing equity component of your compensation, in either case to the extent that such Options or other equity is subject to time-based vesting, shall vest effective as of the date the Release becomes effective and irrevocable, notwithstanding anything to the contrary in any applicable equity agreement or plan. To avoid doubt, to the extent this subsection (b) applies, it shall apply in lieu of (and not in addition to) the immediately preceding subsection (a)). |
9.2 | For purposes of this Section 9, |
(a) | the term Cause shall mean (a) any material breach by you of this Agreement or any other agreement to which you and the Company are both parties, (b) any act (other than retirement) or omission to act by you which may have a material and adverse effect on the Companys business or on your ability to perform services for the Company, including, without limitation, the commission of any crime (other than minor traffic violations), or (c) any material misconduct or material neglect of your duties in connection with the business or affairs of the Company. Without limiting the Companys grounds for termination for Cause in any other circumstance, your employment shall be deemed to have been terminated for Cause if the Company determines within thirty (30) days after the termination of employment (whether such termination was voluntary or involuntary) that termination for Cause was warranted; and |
(b) | the term Good Reason shall mean the occurrence of either of the following conditions with your prior consent (a) a material change in your title duties or responsibilities or (b) a relocation of your principal place of employment to a facility that results in a commute more than 50 miles from the geographic location at which you provide services to the Company, so long as (in either case, (a) or (b)) you provide at least 90 days notice to the Company following the initial occurrence of such event, and the Company fails to cure such event within 30 days thereafter. |
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10. | Employee NDA. Attached hereto as Exhibit B is a copy of Tomorrow.io Non-Disclosure, Non-Competition and Assignment of Intellectual Property Agreement (the Employee Undertaking). This offer is conditioned on your signing the Employee Undertaking and your continuing willingness thereafter to abide by its terms. You are required to sign the Employee Undertaking when you countersign this Agreement. For the sake of clarity, the terms and obligations as set forth in the Employee Undertaking are incorporated herein by reference and such terms and obligations shall survive (i) termination of your employment, regardless of whether such termination is with, or without, cause; and (ii) any change in the terms of your employment. |
11. | Proof of Right to Work. The Immigration Reform and Control Act require employers to verify the employment eligibility and identity of new employees. Prior to commencing employment with the Company, you shall provide the Company with Form I-9 accurately completed to evidence your eligibility for employment. Please bring the appropriate documents listed in the Form I-9 with you on the commencement date of your employment. The Company will not be able to employ you if you failed to comply with that requirement. The Company reserves the right to perform standard background checks on all employees consistent with applicable laws. |
12. | Release. In consideration for this offer of at-will employment and the compensation and benefits for which you are eligible pursuant to this offer, you hereby waive any claims, damages or liability that, as of the date you sign this letter, you have or ever had against the Company and all Company employees and agents, including without limitation claims under the Massachusetts Wage Act. |
13. | Miscellaneous. This Agreement, and Exhibits attached hereto, contain the entire understanding between you and the Company with regard to the subject matter contained herein, and supersedes all prior agreements, understandings, intents, promises or statements, whether oral or written, between you and the Company or any related party regarding the offered terms of employment. The terms of your employment shall be governed by the laws of the Commonwealth of Massachusetts. Any controversy or claim arising out of, or relating to, this Agreement or breach hereof shall be brought before courts having jurisdiction thereof. You acknowledge that the services you will render hereunder are unique and personal. Accordingly, you may not assign any of your rights or delegate any of your duties or obligations under this Agreement. The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon its successors and assigns. Should any provision of this Agreement or any portion thereof, be found invalid and unenforceable, the remaining provisions shall continue in full force and effect. Failure of either you or the Company to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way affect the validity of this |
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Agreement or any part hereof or the right of either you or the Company to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach. This Agreement may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall be binding when one or more counterparts have been signed by each of the parties and delivered to each of the parties. |
If the terms of this offer are acceptable to you, please sign this Agreement and the enclosed NDA, and return them to the Company by April 26, 2021. In accepting this offer, you give Tomorrow.io assurance that you have not relied on any agreements or representations, express or implied, with respect to your employment that are not set forth in expressly in this Agreement.
We are excited to offer you the opportunity to join Tomorrow.io, and we look forward to having you as a member of our team. We are confident that you will make an important contribution to our unique and exciting enterprise.
Sincerely,
The Tomorrow Companies Inc
By: | /s/ Shimon Elkabetz | |
Name: Shimon Elkabetz | ||
Title: CEO |
Accepted and agreed:
Stephen Gregorio |
Print Name |
/s/ Stephen Gregorio |
Signature |
4/21/2021 |
Date: |
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EXHIBIT A
Compensation
| Base Salary: $325,000 per year, subject to adjustment by the Company (the Salary Compensation). |
| Annual Discretionary Bonus: $160,000 (provided that such bonus shall be guaranteed on a pro-rata basis for the period of actual employment during 2021) |
| Stock Options: Subject to approval by the Companys Board of Directors, and pursuant to the terms and conditions of: (i) the Companys Stock Incentive Plan, (ii) the Notice of Stock Option Grant, and (iii) Stock Option Agreement (all subject to the approval of the Board of Directors) (collectively, the Equity Documents), the Company will grant to you an option to purchase 830,000 shares of the Companys Common Stock, which currently have a $0.0001 par value per share (the Option). The Option shall be subject to the Companys standard four-year vesting, such that 25% of the shares subject to the Option will vest and become vested shares on the first anniversary of the date of grant, and thereafter the shares shall continue to vest in 12 equal quarterly installments over the three-year period commencing on the first anniversary of the date of grant. Vesting shall cease immediately upon termination of employment for any reason. In the event of any conflict between this letter and the Equity Documents, the Equity Documents shall control. |
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Exhibit 10.21
CLIMACELL INC. OFFER LETTER
January 13, 2019
Leigha Kemmet
MA
Dear Leigha,
Welcome to ClimaCell! It is my pleasure to offer you full-time employment with ClimaCell, Inc., a Delaware corporation (ClimaCell or the Company). The following sets forth the terms and conditions of our offer (this Agreement).
1. | Position. Your position at the Company will be SVP Operations. You shall report to and be under the direction and control of Shimon Elkabetz, CEO, and shall have such responsibilities, duties and powers as may from time to time be prescribed by your supervisor and/or the Company. The Company may modify your duties from time to time in accordance with the Companys requirements. You are required to abide by all of the policies and procedures as set forth by the Company. Moreover, during your employment with ClimaCell, you will be expected to conduct your business activities at all times in accordance with the highest legal, ethical and professional standards. |
2. | Full-Time Attention. This is an offer for full time employment and, if accepted, you shall devote your best professional efforts, skills and energies and your full business time and attention to the performance of your duties and responsibilities under this Agreement. You shall devote one hundred percent (100%) of your business time, but not less than forty (40) hours per week, to your duties under this Agreement. You hereby confirm, as a condition to accepting and entering into this Agreement, that you are under no contractual or other legal obligations that would prohibit or restrict you from fully entering into this Agreement, performing your obligations hereunder, and complying with all terms of this Agreement, and that you have no current or potential conflict of interest relating to your employment with the Company and performance of your duties hereunder. |
3. | Start Date; Nature of Relationship. Subject to your acceptance of this offer and compliance with its provisions, your full-time employment with the Company will begin on March 2, 2020. Your employment will, at all times, remain at will employment. As such, either you or the Company may terminate your employment at any time for any reason or for no reason. No provision of this Agreement, and no actions by either you or ClimaCell, shall be construed to create a promise of employment for any specific period of time. To ensure a smooth transition, we ask that you provide the Company with 30 days prior notice of voluntary termination. |
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4. | Compensation. Your compensation shall be as set forth in Exhibit A attached hereto, and shall be payable in accordance with the Companys regular payroll practices in effect from time to time (currently twice a month). The Company shall make any withholdings and/or which may be required by law or which you may authorize from time to time. The Company reserves the right to review the compensation and to adjust it from time to time in its sole discretion. This review is typically done annually, but may be done more or less frequently. |
5. | Benefits. During your employment, you will be eligible to participate in the employee benefit plans made generally available by the Company from time to time to its similarly-situated employees, subject to plan terms and generally applicable Company policies. These benefits may be modified or changed from time to time in the sole discretion of the Company, and the provisions of such benefits to you in no way changes or impacts your status as an at-will employee. |
6. | Unlimited PTO: The Company has adopted a policy where it does not limit the number of days you can take off in any given year. As such, you are entitled to take as much paid time off as you deem necessary subject to the Companys PTO policy in effect from time to time (which may be modified by the Company at any time in its sole and absolute discretion). The unlimited PTO shall include any and all of your personal days, vacation days and sick days and may be utilized by you so long as it does not negatively impact (i) the Company, (ii) your job performance or (iii) the responsibilities of your coworkers. While the Company offers its employees such a benefit, it is expected that you will not abuse this policy. You agree to provide the Company with sufficient notice of an absence, and in any event consistent with the Companys policy. It is important to note that under this policy, you will not be deemed to accrue any vacation/PTO days and you shall have no rights of any kind, in or to, any accrued but unused vacation/PTO days in connection with your termination from the Company for any reason. As is typical with vacation/PTO, the Company may in its discretion deny a request for vacation, grant a more limited amount of vacation then requested or require you to provide additional information related to a PTO request, subject to applicable law. |
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7. | Effect of Termination. If you shall cease to be an employee of the Company, for any reason, you shall act as follows: (i) deliver and/or return to the Company all property of the Company in your possession or control including, without limitation, cellular telephones, other telecommunications material, keys, modems, computers, identification badges or other equipment, company documents, CDs, letters, notes, reports, business cards and other papers in your possession and relating to your tenure with the Company; (ii) delete any information relating to the Company from your personal computer, phone and other devices; and (iii) provide reasonable assistance to the Company to ensure an orderly transition, including the handing over to the persons designated by the Company, any documents and all other matters that you dealt with. |
8. | Severance and Release. |
8.1 | Without limiting or derogating from the foregoing, if your employment is terminated by the Company without Cause (as defined herein), then the Company will offer you severance benefits equal to two (2) weeks base salary, paid on the first Company payroll date applicable to your position after the Release has become effective and irrevocable. All severance benefits are conditioned on your signing a full release of any and all claims against the Company in a release form acceptable to the Company (within the period specified in it by the Company, but in no event later than 60 days after the date of terminationthe Release) and your not revoking such release pursuant to any revocation rights afforded by applicable law. |
8.2 | For purposes of this Section 8, the term Cause shall mean (a) any material breach by you of this Agreement or any other agreement to which you and the Company are both parties, (b) any act (other than retirement) or omission to act by you which may have a material and adverse effect on the Companys business or on your ability to perform services for the Company, including, without limitation, the commission of any crime (other than minor traffic violations), or (c) any material misconduct or material neglect of your duties in connection with the business or affairs of the Company. Without limiting the Companys grounds for termination for Cause in any other circumstance, your employment shall be deemed to have been terminated for Cause if the Company determines within thirty (30) days after the termination of employment (whether such termination was voluntary or involuntary) that termination for Cause was warranted. |
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9. | Employee NDA. Attached hereto as Exhibit B is a copy of ClimaCells Non-Disclosure, Non-Competition and Assignment of Intellectual Property Agreement (the Employee Undertaking ). This offer is conditioned on your signing the Employee Undertaking and your continuing willingness thereafter to abide by its terms. You are required to sign the Employee Undertaking when you countersign this Agreement. For the sake of clarity, the terms and obligations as set forth in the Employee Undertaking are incorporated herein by reference and such terms and obligations shall survive (i) termination of your employment, regardless of whether such termination is with, or without, cause; and (ii) any change in the terms of your employment. |
10. | Proof of Right to Work. The Immigration Reform and Control Act require employers to verify the employment eligibility and identity of new employees. Prior to commencing employment with the Company, you shall provide the Company with Form I-9 accurately completed to evidence your eligibility for employment. Please bring the appropriate documents listed in the Form I-9 with you on the commencement date of your employment. The Company will not be able to employ you if you failed to comply with that requirement. The Company reserves the right to perform standard background checks on all employees consistent with applicable laws. |
11. | Release. In consideration for this offer of at-will employment and the compensation and benefits for which you are eligible pursuant to this offer, you hereby waive any claims, damages or liability that, as of the date you sign this letter, you have or ever had against the Company and all Company employees and agents, including without limitation claims under the Massachusetts Wage Act. |
12. | Miscellaneous. This Agreement, and Exhibits attached hereto, contain the entire understanding between you and the Company with regard to the subject matter contained herein, and supersedes all prior agreements, understandings, intents, promises or statements, whether oral or written, between you and the Company or any related party regarding the offered terms of employment. The terms of your employment shall be governed by the laws of the Commonwealth of Massachusetts. Any controversy or claim arising out of, or relating to, this Agreement or breach hereof shall be brought before courts having jurisdiction thereof. You acknowledge that the services you will render hereunder are unique and personal. Accordingly, you may not assign any of your rights or delegate any of your duties or obligations under this Agreement. The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon its successors and assigns. Should any provision of this Agreement or any portion thereof, be found invalid and unenforceable, the remaining provisions shall continue in full force and effect. Failure of either you or the Company to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way affect the validity of this Agreement or any part hereof or the right of either you or the Company to enforce each and every such provision. No waiver of any breach |
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of this Agreement shall be held to constitute a waiver of any other or subsequent breach. This Agreement may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall be binding when one or more counterparts have been signed by each of the parties and delivered to each of the parties. |
If the terms of this offer are acceptable to you, please sign this Agreement and the enclosed NDA, and return them to the Company by January 15th, 2020. In accepting this offer, you give ClimaCell assurance that you have not relied on any agreements or representations, express or implied, with respect to your employment that are not set forth in expressly in this Agreement.
We are excited to offer you the opportunity to join ClimaCell, and we look forward to having you as a member of our team. We are confident that you will make an important contribution to our unique and exciting enterprise.
Sincerely,
ClimaCell, Inc.
By: /s/ Shimon Elkabetz
Name: Shimon Elkabetz
Title: CEO
Accepted and agreed:
Leigha Kemmett
Print Name
/s/ Leigha Kemmett
Signature
1/13/2019
Date
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EXHIBIT A
Compensation
| Base Salary: $250,000 per year, subject to adjustment by the Company (the Salary Compensation). |
| Annual Bonus: Up to $50,000, based on meeting goals set by direct supervisor. |
| Stock Options: Subject to approval by the Companys Board of Directors, and pursuant to the terms and conditions of: (i) the Companys Stock Incentive Plan, (ii) the Notice of Stock Option Grant, and (iii) Stock Option Agreement (all subject to the approval of the Board of Directors) (collectively, the Equity Documents), the Company will grant to you an option to purchase 267,870 shares of the Companys Common Stock, $0.0001 par value per share (the Option). The Option shall be subject to the Companys standard four-year vesting, such that 25% of the shares subject to the Option will vest and become vested shares on the first anniversary of the date of grant, and thereafter the shares shall continue to vest in 12 equal quarterly installments over the three-year period commencing on the first anniversary of the date of grant. Vesting shall cease immediately upon termination of employment for any reason. In the event of any conflict between this letter and the Equity Documents, the Equity Documents shall control. |
| Relocation Expense: $5,000. |
The reimbursement of relocation expenses will be as follows: $2,500 will be earned and payable after 2 months of employment and another $2,500 after 4 months of employment. All expenses must be reasonable and substantiated with relevant receipts (such as moving costs, airfare, etc.).
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Exhibit 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS CONSENT
We consent to the inclusion in this Amendment No. 1 to the Registration Statement of Pine Technology Acquisition Corp. on Form S-4 of our report dated January 19, 2021, which includes an explanatory paragraph as to the Companys ability to continue as a going concern with respect to our audit of the financial statements of Pine Technology Acquisition Corp. as of December 31, 2020 and for the period from December 30, 2020 (inception) through December 31, 2020, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading Experts in such Prospectus.
/s/ Marcum LLP
Marcum LLP
New York, NY
February 1, 2022
1
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption Experts and to the use of our report dated July 1, 2021, in Amendment No. 1 to the Registration Statement on Form S-4 and the related prospectus of Pine Technology Acquisition Corp., with respect to the consolidated financial statements of The Tomorrow Companies Inc.
February 1, 2022 | /s/ Kost Forer Gabbay & Kasierer | |||||
Tel-Aviv, Israel | A Member of Ernst & Young Global |
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption Experts and to the use of our report dated May 17, 2021, in Amendment No. 1 to the Registration Statement on Form S-4 and the related prospectus of Pine Technology Acquisition Corp., with respect to the consolidated financial statements of Remote Sensing Solutions, Inc., as of and for the year ended December 31, 2020.
/s/ Christie Marotta | ||||
February 1, 2022 |
Name: |
Christie Marotta | ||
Accounting Firm: |
Jardim & Marotta LLC |