S-4/A 1 d447259ds4a.htm S-4/A S-4/A
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As filed with the Securities and Exchange Commission on July 6, 2021

Registration No. 333-256575

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 1

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Vivid Seats Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   7990   86-3355184
(State of Incorporation)   (Primary Standard Industrial
Classification Code Number)
  (IRS Employer
Identification No.)

111 N. Canal Street

Suite 800

Chicago, Illinois 60606

(312) 291-9966

(Address, including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

 

Mr. Stanley Chia

Chief Executive Officer

111 N. Canal Street

Suite 800

Chicago, Illinois 60606

(312) 291-9966

(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)

 

 

With copies to:

 

Cathy A. Birkeland

Patrick H. Shannon

Shagufa R. Hossain

Bradley C. Faris

Justin G. Hamill

Latham & Watkins LLP

330 N. Wabash Avenue, Suite

2800

Chicago, IL 60611

(312) 876-7700

 

Christian O. Nagler

Wayne E. Williams

Aslam A. Rawoof

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

(212) 446-4800

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box.  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐


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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934 (“Exchange Act”).

 

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

 

Title of each class of

securities to be registered

  Amount
to be
registered(1)
  Proposed
maximum
offering price
per security
    Proposed
maximum
aggregate
offering price
    Amount of
registration fee
 

Class A Common Stock(3)(4)

  54,448,433   $ 9.97 (2)    $ 542,850,877.01     $ 59,225.03  

Warrants(5)

  18,132,810   $ 1.67 (6)    $ 30,281,792.70     $ 3,303.74  

Class A Common Stock(4)(7)

  18,132,810   $ 11.50 (8)    $ 208,527,315.00     $ 22,750.33  

Total

              $ 781,659,989.71     $ 85,279.10 (9) 

 

 

 

 

 

(1)

All securities being registered will be issued by Vivid Seats Inc., a newly incorporated Delaware corporation (“Vivid Seats PubCo”).

(2)

Estimated solely for the purpose of calculating the registration fee and calculated in accordance with Rule 457(f)(1) and Rule 457(c) of the Securities Act of 1933, as amended (the “Securities Act”), based on the average of the high and low prices of the Class A ordinary shares of Horizon Acquisition Corporation, a Cayman Islands exempted company (“Horizon”), to be merged with and into Vivid Seats PubCo upon consummation of the business combination, on The New York Stock Exchange (the “NYSE”) on May 24, 2021 of $9.97 per ordinary share.

(3)

The number of shares of Class A common stock of Vivid Seats PubCo, par value $0.0001 per share (the “Vivid Seats Class A common stock”), being registered includes (i) up to 54,398,433 shares of Horizon Class A ordinary shares that were sold pursuant to Horizon’s Registration Statement on Form S-1 (File No. 333-240313) as part of the units in Horizon’s initial public offering (the “public shares”), which will convert into shares of Vivid Seats Class A common stock pursuant to the Merger in connection with the business combination described in the proxy statement/prospectus/consent solicitation statement forming part of this registration statement and (ii) 50,000 shares of Vivid Seats Class A common stock to be issued to Horizon Sponsor, LLC, a Delaware limited liability company (“Sponsor”) in connection with the Exchange (as defined below).

(4)

Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions.

(5)

The number of warrants being registered includes 18,132,810 warrants to acquire Horizon Class A ordinary shares that were sold as part of the units in Horizon’s initial public offering. All such Horizon warrants will convert into 18,132,810 warrants to acquire shares of Vivid Seats Class A common stock (the “Vivid Seats Public IPO Warrants”) pursuant to the Merger in connection with the business combination described in the proxy statement/prospectus/consent solicitation statement forming part of this registration statement.

(6)

Estimated solely for the purpose of calculating the registration fee and calculated in accordance with Rule 457(f)(1) and Rule 457(c) of the Securities Act, based on the average of the high and low prices of the Horizon IPO Public Warrants on the NYSE on May 20, 2021 of $1.67 per warrant.

(7)

Reflects the shares of Vivid Seats Class A common stock that may be issued upon exercise of the warrants.

(8)

Calculated pursuant to Rule 457(g) under the Securities Act, based on the exercise price of the warrants.

(9)

A filing fee of $85,279.10 has already been paid.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus/consent solicitation statement is not complete and may be changed. These securities may not be issued until the registration statement filed with the U.S. Securities and Exchange Commission is effective. The preliminary proxy statement/prospectus/consent solicitation statement is not an offer to sell these securities and does not constitute the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY — SUBJECT TO COMPLETION, DATED JULY 6, 2021

LOGO

PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

OF HORIZON ACQUISITION CORPORATION

PROSPECTUS FOR

54,448,433 SHARES OF CLASS A COMMON STOCK

18,132,810 WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK AND

18,132,810 SHARES OF CLASS A COMMON STOCK UNDERLYING WARRANTS

OF VIVID SEATS INC.

The board of directors of Horizon Acquisition Corporation, a Cayman Islands exempted company (“Horizon”), has unanimously approved the transaction agreement, dated as of April 21, 2021 (as may be amended from time to time, the “Transaction Agreement”), by and among Horizon, Horizon Sponsor, LLC, a Delaware limited liability company (“Sponsor”), Hoya Topco, LLC, a Delaware limited liability company (“Hoya Topco”), Hoya Intermediate, LLC, a Delaware limited liability company (“Hoya Intermediate”) and Vivid Seats Inc., a Delaware corporation (“Vivid Seats PubCo”), attached to this proxy statement/prospectus/consent solicitation statement as Annex A, pursuant to which, among other transactions, Horizon will merge with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Transaction Agreement, the “business combination”) resulting in the reorganization of the combined post-business combination company into an umbrella partnership C corporation (or “Up-C”) structure.

Immediately following the Merger and in accordance with the Transaction Agreement and the other ancillary agreements contemplated thereby, a series of transactions will occur whereby (i) certain third-party investors (including Sponsor or an affiliate thereof) will purchase an aggregate of 22,500,000 shares of Class A common stock of Vivid Seats PubCo, par value $0.0001 per share (“Vivid Seats Class A common stock”) for an aggregate purchase price of $225.0 million (the “PIPE Subscription”), (ii) Vivid Seats PubCo will purchase all of the issued and outstanding capital stock of each of CM6B Vivid Equity, Inc., CM6C Vivid Equity, Inc., CM7B VS Equity, LLC and CM7C VS Equity, LLC (collectively, the “Crescent Blockers”, and the outstanding capital stock of the Crescent Blockers, the “Crescent Blocker Shares”) from Crescent Mezzanine Partners VIB, L.P., Crescent Mezzanine Partners VIC, L.P., NPS/Crescent Strategic Partnership II, LP and Crescent Mezzanine Partners VIIB, L.P. (collectively, the “Blocker Sellers”, and such purchase, the “Blocker Purchase”) in exchange for cash (the “Blocker Purchase Price”), in an amount equal to (A) an aggregate of $107,573.05, plus interest accruing from June 30, 2017 to the date of closing of the Merger compounding semi-annually on June 30 and December 31 of each year, minus (B) the aggregate amount of estimated tax liabilities of the Blocker Sellers for the period ending on the closing date of the Merger (such tax liabilities, the “Blocker Tax Liabilities”), (iii) Vivid Seats PubCo will contribute cash to Hoya Intermediate in an amount equal to (A) all available cash of Vivid Seats PubCo following the Merger and the PIPE Subscription, minus (B) the Blocker Purchase Price, minus (C) the Blocker Tax Liabilities in exchange for Common Units of Hoya Intermediate (“Intermediate Common Units”) and warrants to purchase Intermediate Common Units (together, the “Intermediate Contribution and Issuance”), (iv) Hoya Intermediate will redeem 100% of the Intermediate Common Units held by Crescent Mezzanine Partners VI, L.P., Crescent Mezzanine Partners VII, L.P., Crescent Mezzanine Partners VII (LTL), L.P. and CBDC Universal Equity, Inc. (collectively, the “Redeemed Crescent Parties”) in exchange for cash (the “Crescent Redemption”), (v) Hoya Topco will subscribe for 118,200,000 newly issued Class B common stock of Vivid Seats PubCo, par value $0.0001 per share (“Vivid Seats Class B common stock”) and 6,000,000 warrants to purchase Vivid Seats Class B common stock (together, “Class B Issuance”) and (vi) Hoya Intermediate will contribute cash to Hoya Midco, LLC, a Delaware limited liability company (“Hoya Midco”). Immediately prior to the business combination, Hoya Intermediate expects to effectively redeem its Senior Preferred Units (as defined herein), resulting in a cash payment of $225.1 million. Upon the closing of the business combination, Vivid Seats expects to apply $488.9 million of the business combination and PIPE Subscription proceeds towards debt repayments resulting in the full repayment of its May 2020 First Lien Loan (as defined herein) and a partial repayment of its June 2017 First Lien Loan (as defined herein). As a result of the business combination, assuming no redemptions of Horizon Class A ordinary shares in connection with the business combination, Hoya Topco will hold approximately 60.6% of the issued and outstanding Intermediate Common Units and Vivid Seats PubCo will hold approximately 39.4% of the Intermediate Common Units. Following the consummation of the business combination, Vivid Seats PubCo’s assets will consist of its direct and indirect interests in Hoya Intermediate.

As described in this proxy statement/prospectus/consent solicitation statement, Horizon’s shareholders are being asked to consider and vote upon (among other things) the business combination and the other proposals set forth herein.

Horizon’s Class A ordinary shares, Horizon’s warrants and Horizon’s units are currently traded on The New York Stock Exchange (“NYSE”) under the ticker symbols “HZAC,” “HZAC WS” and “HZAC.U,” respectively. Vivid Seats PubCo will apply for listing, to be effective at the Closing (as defined herein), of its shares of Class A common stock and warrants on The Nasdaq Capital Market (“Nasdaq”) under the symbols “SEAT” and “SEAT WS,” respectively. Vivid Seats PubCo will not have units traded following the Closing.

It is anticipated that, upon completion of the business combination and assuming no redemptions of Horizon Class A ordinary shares in connection with the business combination, Vivid Seats PubCo’s ownership will be as follows: (1) Horizon’s public shareholders will own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (2) the PIPE Investors (as defined herein), excluding Sponsor and certain affiliates of the Sponsor, will own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (3) Sponsor, together with certain of its affiliates, will own (i) approximately 17.7% (assuming no exercise of Vivid Seats PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by Sponsor), of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); and (4) Hoya Topco will own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class B common stock). The board of managers of Hoya Topco is controlled by the designees of GTCR Fund XI/B LP and GTCR Fund XI/C LP (together with GTCR Co-Invest XLLP, GTCR Golder Rauner, L.L.C., GTCR Golder Rauner II, L.L.C., GTCR Management XI LLC and GTCR LLC, our “Private Equity Owner”) and their affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats PubCo Board of Directors pursuant to the Stockholders’ Agreement to be entered into by and among Vivid Seats PubCo, Sponsor and Hoya Topco at the consummation of the business combination. As a result of the voting power controlled by Hoya Topco, following the business combination, Vivid Seats PubCo will qualify as a “controlled company” within the meaning of applicable Nasdaq (as defined herein) listing rules.

Each of Horizon and Vivid Seats PubCo is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to comply with certain reduced public company reporting requirements.

This proxy statement/prospectus/consent solicitation statement provides you with detailed information about the business combination and other matters to be considered at the extraordinary general meeting of Horizon’s shareholders. Horizon and Vivid Seats PubCo encourage you to carefully read this entire document. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 32.

These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus/consent solicitation statement is dated                 , 2021 and is first being mailed to Horizon shareholders on or about                 , 2021.


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Dear Shareholders of Horizon:

You are cordially invited to attend the extraordinary general meeting of shareholders of Horizon Acquisition Corporation (“Horizon”). At the extraordinary general meeting, Horizon shareholders will be asked to consider and vote on proposals to:

 

  (1)

(a) approve and adopt the Transaction Agreement, dated as of April 21, 2021 (as the same may be amended, the “Transaction Agreement”), by and among Horizon, Sponsor, Hoya Topco, Hoya Intermediate and Vivid Seats PubCo, and (b) approve the other transactions contemplated by the Transaction Agreement (the “business combination” and such proposal, the “Business Combination Proposal”) in accordance with applicable law and exchange rules and regulations;

 

  (2)

approve, as a special resolution, the Plan of Merger annexed to the Transaction Agreement and attached to this proxy statement/prospectus/consent solicitation statement as Annex K and to authorize the merger (the “Merger”) of Horizon with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation (the “Merger Proposal”);

 

  (3)

approve certain material differences between the Horizon amended and restated memorandum and articles of association and the certificate of incorporation of Vivid Seats PubCo and the bylaws of Vivid Seats PubCo that will be the certificate of incorporation and bylaws of Vivid Seats PubCo following the Merger (the “Organizational Documents Proposals”);

 

  (4)

approve, for purposes of complying with NYSE Listing Rule 312.03, the issuance of shares of Vivid Seats PubCo in connection with the business combination and the PIPE Subscription (the “NYSE Proposal”); and

 

  (5)

approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal, the “Proposals”).

Each of the Proposals is more fully described in the accompanying proxy statement/prospectus/consent solicitation statement, which each Horizon shareholder is encouraged to review carefully.

Horizon Class A ordinary shares, par value $0.0001 per share (“Horizon Class A ordinary shares”) and the Horizon IPO Public Warrants, which are exercisable for Horizon Class A ordinary shares under certain circumstances, are currently listed on the NYSE under the symbols “HZAC” and “HZAC WS,” respectively. Certain Horizon Class A ordinary shares and warrants currently trade as units consisting of one Horizon Class A ordinary share and one-third of one Horizon IPO Public Warrant, and are listed on the NYSE under the symbol “HZAC.U.” Vivid Seats PubCo will apply for listing, to be effective at the time of the business combination, of its Vivid Seats Class A common stock and warrants on Nasdaq under the symbols “SEAT” and “SEAT WS,” respectively. Vivid Seats PubCo will not have units traded following consummation of the business combination. It is a condition of the consummation of the business combination that Vivid Seats Class A common stock is approved for listing on Nasdaq, but there can be no assurance such listing condition will be met. If such listing condition is not met, the business combination will not be consummated unless the listing condition set forth in the Transaction Agreement is waived by the parties.

Pursuant to Horizon’s amended and restated memorandum and articles of association, Horizon is providing the holders of Horizon Class A ordinary shares originally sold as part of the units issued in its initial public offering, which closed on August 25, 2020 (the “IPO” and such holders, the “public shareholders”), with the opportunity to redeem, upon the Closing, Horizon Class A ordinary 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 (the “Trust Account”) that holds the proceeds (including interest but net of franchise and income taxes payable) from the IPO and a concurrent private placement of units to Sponsor. For illustrative purposes,


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based on the fair value of marketable securities held in the Trust Account as of December 31, 2020 of approximately $544 million, the estimated per share redemption price would have been approximately $10.00, subject to adjustment for taxes payable from interest earned. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding Horizon Class A ordinary shares sold in the IPO. Holders of Horizon’s outstanding warrants sold in the IPO, which are exercisable for Horizon Class A ordinary shares under certain circumstances, do not have redemption rights in connection with the business combination. Sponsor has agreed to waive its redemption rights in connection with the Closing with respect to any Horizon equity securities it may hold. Currently, Sponsor owns approximately 28.7% of outstanding Horizon Class A ordinary shares and all Horizon Class B ordinary shares, including all of the founder shares. In connection with the Exchange, the Sponsor will tender all of its Horizon Class B ordinary shares in exchange for 50,000 Horizon Class A ordinary shares and Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein). Sponsor has agreed to vote its Horizon Class A ordinary shares and Horizon Class B ordinary shares in favor of each of the Proposals.

Horizon is providing this proxy statement/prospectus/consent solicitation statement and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and any adjournments or postponements of the extraordinary general meeting. Your vote is very important. Whether or not you plan to attend the extraordinary general meeting in person, please submit your proxy card without delay.

Horizon and Vivid Seats PubCo encourage you to read this proxy statement/prospectus/consent solicitation statement carefully. In particular, you should review the matters discussed under the caption “Risk Factors” beginning on page 32 of this proxy statement/prospectus/consent solicitation statement.

Horizon’s board of directors recommends that Horizon shareholders vote FOR each of the Proposals. When you consider the recommendation of Horizon’s board of directors in favor of each of the Proposals, you should keep in mind that certain of Horizon’s directors and officers have interests in the business combination that may conflict with your interests as a shareholder. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

Approval of the Business Combination Proposal, the Organizational Documents Proposals, the NYSE Proposal and the Adjournment Proposal will require an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Abstentions and broker non-votes will have no effect on any of the NYSE Proposal and the Adjournment Proposal.

Approval of the Merger Proposal will require a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority at least two-thirds of Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Abstentions and broker non-votes will have no effect on the Merger Proposal.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the Proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and, if a quorum is present, will have no effect on the Merger Proposal, the NYSE Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST each of the Business Combination Proposal and the Organizational Documents Proposals. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.


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

Thank you for your consideration of these matters.

 

Sincerely,

 

Todd L. Boehly

Chief Executive Officer, Chief

Financial Officer and Director

Horizon Acquisition Corporation

Whether or not you plan to attend the extraordinary general meeting of Horizon shareholders, please submit your proxy by completing, signing, dating and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the extraordinary general meeting of Horizon shareholders and vote in person, you must obtain a proxy from your broker or bank.

Neither the Securities and Exchange Commission nor any state securities commission has passed upon the adequacy or accuracy of this proxy statement/prospectus/consent solicitation statement. Any representation to the contrary is criminal offense.


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Horizon Acquisition Corporation

600 Steamboat Road, Suite 200

Greenwich, CT 06830

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS OF HORIZON ACQUISITION CORPORATION

To Be Held On                , 2021

To the Shareholders of Horizon Acquisition Corporation:

NOTICE IS HEREBY GIVEN that the extraordinary general meeting of shareholders of Horizon Acquisition Corporation (“Horizon”) will be held at                  a.m., local time, on                 , 2021, at                  for the following purposes:

 

  1.

Proposal No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to (a) approve and adopt the Transaction Agreement, dated as of April 21, 2021 (as the same may be amended, the “Transaction Agreement”), by and among Horizon, Sponsor, Hoya Topco, Hoya Intermediate and Vivid Seats PubCo, and (b) approve and the other transactions contemplated by the Transaction Agreement (the “business combination” and such proposal, the “Business Combination Proposal”).

 

  2.

Proposal No. 2 — The Merger Proposal — To consider and vote upon a proposal (the “Merger Proposal”) to approve, as a special resolution, the Plan of Merger annexed to the Transaction Agreement and attached to this proxy statement/prospectus/consent solicitation statement as Annex K and to authorize the merger (the “Merger”) of Horizon with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation.

 

  3.

The Organizational Documents Proposals — To consider and vote upon the following three separate proposals (collectively, the “Organizational Documents Proposals”) to approve the following material differences between Horizon amended and restated memorandum and articles of association and the certificate of incorporation of Vivid Seats PubCo (the “Vivid Seats PubCo Amended and Restated Charter”) and the bylaws of Vivid Seats PubCo (the “Vivid Seats PubCo Amended and Restated Bylaws”) that will be the certificate of incorporation and bylaws of Vivid Seats PubCo following the Merger:

 

  i.

Proposal No. 3 — Organizational Documents Proposal A — To authorize the change in the authorized capital stock of Horizon from 400,000,000 Horizon Class A ordinary shares, par value $0.0001 per share (the “Horizon Class A ordinary shares”), 40,000,000 shares of Horizon Class B ordinary shares, par value $0.0001 per share (the “Horizon Class B ordinary shares”), and 1,000,000 preference shares, par value $0.0001 per share, to 500,000,000 shares of Class A common stock, par value $0.0001 per share, of Vivid Seats PubCo (the “Vivid Seats Class A common stock”), 250,000,000 shares of Class B common stock, par value $0.0001 per share, of Vivid Seats PubCo (the “Vivid Seats Class B common stock”) and 50,000,000 shares of preferred stock, par value $0.0001 per share, of Vivid Seats PubCo.

 

  ii.

Proposal No. 4 — Organizational Documents Proposal B — To authorize that certain provisions of the Vivid Seats PubCo Amended and Restated Charter and certain provisions of the Vivid Seats PubCo Amended and Restated Bylaws, in each case, will be subject to the Stockholders’ Agreement (as defined herein).

 

  iii.

Proposal No. 5 — Organizational Documents Proposal C — To authorize that the Vivid Seats PubCo Amended and Restated Charter will grant an explicit waiver regarding corporate opportunities to certain “exempted persons” (including Sponsor and Hoya Topco and their respective affiliates, members, directors, officers and/or employees, including any of the foregoing who will serve as directors or officers of Vivid Seats PubCo);


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  iv.

Proposal No. 6 — Organizational Documents Proposal D — To authorize that the Vivid Seats PubCo Amended and Restated Charter and Vivid Seats PubCo Amended and Restated Bylaws will adopt Delaware as the exclusive forum for certain stockholder litigation;

 

  v.

Proposal No. 7 — Organizational Documents Proposal E — To authorize all other changes in connection with the replacement of Horizon’s amended and restated memorandum and articles of association with the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws as part of the Merger (copies of which are attached to this proxy statement/prospectus/consent solicitation statement as Annex C and Annex D, respectively), including (a) changing the corporate name from “Horizon Acquisition Corporation” to “Vivid Seats Inc.,” (b) electing not to be governed by Section 203 of the DGCL and (c) removing certain provisions related to Horizon’s status as a blank check company that will no longer be applicable upon consummation of the business combination, all of which Horizon’s board of directors believes is necessary to adequately address the needs of Vivid Seats PubCo after the business combination.

 

  4.

Proposal No. 8 — The NYSE Proposal — To consider and vote upon a proposal to approve, for purposes of complying with NYSE Listing Rule 312.03, the issuance of shares of Vivid Seats PubCo in connection with the business combination and the PIPE Subscription (the “NYSE Proposal”).

 

  5.

Proposal No. 9 — The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal, the “Proposals”).

Only holders of record of Horizon Class A ordinary shares and Horizon Class B ordinary shares at the close of business on                , 2021 are entitled to notice of the extraordinary general meeting and to vote at the extraordinary general meeting and any adjournments or postponements thereof.

Pursuant to Horizon’s amended and restated memorandum and articles of association, Horizon is providing the holders of Horizon Class A ordinary shares originally sold as part of the units issued in its initial public offering, which closed on August 25, 2020 (the “IPO” and such holders, the “public shareholders”), with the opportunity to redeem, upon the Closing, Horizon Class A ordinary 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 (the “Trust Account”) that holds the proceeds (including interest but net of franchise and income taxes payable) from the IPO and a concurrent private placement of units to Horizon Sponsor, LLC, a Delaware limited liability company (“Sponsor”). For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of December 31, 2020 of approximately $544 million, the estimated per share redemption price would have been approximately $10.00. Public shareholders may elect to cause the redemption of their shares even if they vote for the Business Combination Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding Horizon Class A ordinary shares sold in the IPO. Holders of Horizon IPO Public Warrants, which are exercisable for Horizon’s Class A ordinary shares under certain circumstances, do not have redemption rights in connection with the business combination. Sponsor has agreed to waive its redemption rights in connection with the Closing with respect to any Horizon equity securities it may hold. Currently, Sponsor owns approximately 28.7% of outstanding Horizon Class A ordinary shares and all Horizon Class B ordinary shares, including all of the founder shares. Sponsor has agreed to vote its Horizon Class A ordinary shares and Horizon Class B ordinary shares in favor of each of the Proposals.

The Closing is conditioned on the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal at the extraordinary general meeting. The Organizational Documents Proposals are conditioned on the approval of the Business Combination Proposal, the


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Merger Proposal and the NYSE Proposal. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in the accompanying proxy statement/prospectus/consent solicitation statement.

Your attention is directed to the proxy statement/prospectus/consent solicitation statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed business combination and each of the Proposals. You are encouraged to read this proxy statement/prospectus/consent solicitation statement carefully. If you have any questions or need assistance voting your shares, please call Horizon’s proxy solicitor,                    , at                (banks and brokers call collect at                ).

            , 2021

By Order of the Board of Directors

 

Todd L. Boehly

Chief Executive Officer, Chief Financial Officer

and Director

Horizon Acquisition Corporation

Important Notice Regarding the Availability of Proxy Materials for the Extraordinary General Meeting of Shareholders to be held on                 , 2021: This notice of meeting and the related proxy statement/prospectus/consent solicitation statement will be available at                  .


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NOTICE OF SOLICITATION OF WRITTEN CONSENTS OF

THE HOLDERS OF HORIZON IPO PUBLIC WARRANTS AND HORIZON IPO PRIVATE PLACEMENT WARRANTS

On August 25, 2020, Horizon consummated the IPO of 50,000,000 units (the “Horizon Units”), each consisting of one Horizon Class A ordinary share and one-third of one Horizon IPO Public Warrant, each whole Horizon IPO Public Warrant entitling the holder thereof to purchase one Horizon Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment. The Horizon Units were sold at an offering price of $10.00 per unit, generating gross proceeds of $500,000,000. Concurrently, the Sponsor also purchased 5,933,333 Horizon IPO Private Placement Warrants for $8,900,000. On August 26, 2020, Horizon issued an additional 4,398,433 Horizon Units pursuant to the exercise by the underwriters of a portion of their over-allotment option in connection with the IPO, with each such unit priced at $10.00 per unit, generating total gross proceeds of $43,984,330. Concurrently, the Sponsor also purchased an additional 586,458 Horizon IPO Private Placement Warrants for $879,687. Of the proceeds received from the consummation of the IPO, the private placement purchases by the Sponsor and the sale of the Horizon Units in connection with the exercise of the over-allotment option, $543,984,330 (or $10.00 per Horizon Unit sold in the public offering) was deposited in Horizon’s trust account.

In connection with the IPO, Horizon entered into a warrant agreement, dated August 25, 2020 (the “Warrant Agreement”), with Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agent”), which sets forth, among other things, the expiration and exercise price of and procedure for exercising the Horizon IPO Public Warrants and the Horizon IPO Private Placement Warrants (together, the “Horizon IPO Warrants”); certain adjustment features of the terms of exercise; provisions relating to redemption and cashless exercise of the Horizon IPO Warrants; certain registration rights of the holders of Horizon IPO Warrants; provision for amendments to the Warrant Agreement; and indemnification of the Warrant Agent by Horizon under the Warrant Agreement.

On October 9, 2020, Horizon announced that the holders of the Horizon Units may elect to separately trade the Horizon Class A ordinary shares and Horizon IPO Public Warrants included in the Horizon Units commencing on October 12, 2020. Any Horizon Units not separated continue to trade on the New York Stock Exchange (“NYSE”) under the symbol “HZAC.U”. Any underlying Horizon Class A ordinary shares and Horizon IPO Public Warrants that are separated trade or will trade on the NYSE under the symbols “HZAC” and “HZAC WS,” respectively. No fractional warrants have been or will be issued upon separation of the Horizon Units and only whole warrants trade or will trade.

On April 12, 2021, the Staff of the U.S. Securities and Exchange Commission (the “Staff”) issued the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies” (“SPACs” and such statement, the “SEC Statement”), which clarified guidance for all SPAC-related companies regarding the accounting and reporting for their warrants. Following review of the SEC Statement, Horizon reevaluated the accounting treatment of the Horizon IPO Warrants as equity, and concluded that, based on the SEC Statement, the Horizon IPO Warrants should be, and should previously have been, classified as a liability measured at fair value, with non-cash fair value adjustments recorded in earnings at each reporting period. Accordingly, Horizon filed restated financial statements as of and for the period from June 12, 2020 through December 31, 2020 in Amendment No. 1 to its Annual Report on Form 10-K/A on May 10, 2021 and financial statements as of and for the period from January 1, 2021 through March 31, 2021 in its Quarterly Report on Form 10-Q on May 24, 2021.

On April 21, 2021, Horizon, Sponsor, Hoya Topco, Hoya Intermediate and Vivid Seats PubCo entered into the Transaction Agreement, and upon the terms and subject to the conditions of the Transaction Agreement, and in accordance with the Delaware General Corporation Law and the Cayman Islands Companies Act, Horizon will merge with and into Vivid Seats PubCo, the separate corporate existence of Horizon will cease and Vivid Seats PubCo will be the surviving corporation of the Merger. At the effective time of the Merger (the “Effective Time”), by virtue of the Merger, each Horizon Class A ordinary share will be automatically cancelled and converted into the right to receive one share of Vivid Seats Class A common stock. At the Effective Time, each warrant to purchase shares of Horizon common stock, including each Horizon IPO Warrant, issued and outstanding immediately prior to the Effective Time will automatically become a warrant to purchase shares of Vivid Seats Class A common stock.


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The accompanying proxy statement/prospectus/consent solicitation statement is being delivered to you on behalf of the Horizon board of directors to request that holders of Horizon IPO Warrants, including holders of Horizon Units that have not separated the Horizon IPO Public Warrants included therein, execute and return written consents to adopt the proposed amendment and restatement of the Warrant Agreement described in the accompanying proxy statement/prospectus/consent solicitation statement (the “Warrant Amendment”), to which you should give your careful attention. The Warrant Amendment, if adopted and as of the time of such adoption, would amend and restate the Horizon IPO Warrants, as contemplated by the Transaction Agreement, to implement certain changes that are intended to result in the Horizon IPO Warrants being accounted for as equity within the balance sheet of Horizon, instead of as a liability measured at fair value with non-cash fair value adjustments recorded in earnings at each reporting period. The accounting treatment of the amended and restated warrant terms is currently under evaluation. Specifically, as described further in the accompanying proxy statement/prospectus/consent solicitation statement and as set forth in the proposed form of the Warrant Amendment attached thereto as Annex M, the Warrant Amendment proposes to, among other things: (i) amend the rights specific to the Horizon IPO Private Placement Warrants such that (A) the rights specific to such warrants are retained by the holder thereof regardless of such holder’s identity, (B) such warrants are no longer subject to redemption by Horizon at any price and (C) such rights are no longer generally exercisable on a “cashless basis”; (ii) eliminate Horizon’s ability to redeem any Horizon IPO Public Warrants unless the Horizon Class A ordinary shares are trading at a price equal to or in excess of $18.00 per share; and (iii) remove certain language related to the treatment of Horizon IPO Warrants in the event of a tender offer for the shares underlying such warrants.

Pursuant to the terms of the Warrant Agreement, the proposed Warrant Amendment requires the vote or written consent of holders of at least 65% of the outstanding Horizon IPO Public Warrants and, solely with respect to the amendment to the terms of the Horizon IPO Private Placement Warrants or any provision of the Warrant Agreement with respect to the Horizon IPO Private Placement Warrants set forth in the Warrant Amendment, 65% of the outstanding Horizon IPO Private Placement Warrants. The Sponsor, an affiliate of Horizon, currently holds 5,166,666 Horizon IPO Public Warrants and all of the Horizon IPO Private Placement Warrants and has agreed in the Transaction Agreement to use commercially reasonable efforts to revise the terms of the Horizon IPO Warrants such that the Horizon IPO Warrants be treated as equity under the rules and guidelines of the SEC at and after the closing of the Transactions, including using commercially reasonable efforts to obtain any the warrantholder approvals if necessary to accomplish the foregoing. If requisite consents are obtained from holders of the Horizon IPO Warrants by the Consent Solicitation End Date, the Warrant Amendment will be effected by an amendment in the form of Annex M attached to the accompanying proxy statement/prospectus/consent solicitation statement, which is to be executed by Horizon and the Warrant Agent promptly following the Consent Solicitation End Date. Effectiveness of the Warrant Amendment is not conditioned upon consummation of the business combination.

Neither Horizon nor any of Horizon’s management or Horizon’s board of directors is making any recommendation as to whether holders of warrants should consent to the Warrant Amendment in this consent solicitation. Each holder of a Horizon IPO Warrant must make its own decision as to whether to exchange some or all of its warrants and, as applicable, consent to the Warrant Amendment.

This consent solicitation is made solely upon the terms and conditions in this proxy statement/prospectus/consent solicitation statement and in the related written consent (as it may be supplemented and amended from time to time, the “Written Consent”). This consent solicitation will be open until 11:59 p.m., Eastern Daylight Time, on                 , 2021, or such later time and date to which we may extend (the “Consent Solicitation End Date”).


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You may elect to provide your consent with respect to some or all of your Horizon IPO Warrants. If you elect to provide your consent, please follow the instructions in this proxy statement/prospectus/consent solicitation statement and the related documents, including the Written Consent. If you elect to provide your consent, you may withdraw your consent at any time before the Consent Solicitation End Date by following the instructions in this proxy statement/prospectus/consent solicitation statement.

 

By Order of the Board of Directors of Horizon
 

 

Todd L. Boehly
Chief Executive Officer, Chief Financial Officer and
Director Horizon Acquisition Corporation


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TABLE OF CONTENTS

 

     Page  

ADDITIONAL INFORMATION

     iii  

TRADEMARKS

     iii  

MARKET, INDUSTRY AND OTHER DATA

     iii  

CERTAIN DEFINED TERMS

     iii  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     ix  

SUMMARY TERM SHEET

     xi  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR HORIZON SHAREHOLDERS

     xix  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION STATEMENT

     1  

SELECTED HISTORICAL FINANCIAL INFORMATION OF HORIZON

     22  

SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION OF VIVID SEATS

     24  

MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

     30  

RISK FACTORS

     32  

EXTRAORDINARY GENERAL MEETING OF HORIZON SHAREHOLDERS

     72  

PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL

     77  

PROPOSAL NO. 2 — MERGER PROPOSAL

     137  

ORGANIZATIONAL DOCUMENTS PROPOSALS

     138  

PROPOSAL NO. 3 — ORGANIZATIONAL DOCUMENTS PROPOSAL A — APPROVAL OF CHANGE TO AUTHORIZED CAPITAL STOCK, AS SET FORTH IN THE PROPOSED ORGANIZATIONAL DOCUMENTS

     141  

PROPOSAL NO. 4 — ORGANIZATIONAL DOCUMENTS PROPOSAL B — APPROVAL OF PROPOSAL REGARDING CERTAIN PROVISIONS OF THE VIVID SEATS PUBCO ORGANIZATIONAL DOCUMENTS BEING SUBJECT TO THE STOCKHOLDERS’ AGREEMENT

     143  

PROPOSAL NO. 5 — ORGANIZATIONAL DOCUMENTS PROPOSAL C — APPROVAL OF PROPOSAL REGARDING THE VIVID SEATS PUBCO AMENDED AND RESTATED CHARTER GRANTING AN EXPLICIT WAIVER REGARDING CORPORATE OPPORTUNITIES TO CERTAIN “EXEMPTED PERSONS”

     145  

PROPOSAL NO. 6 — ORGANIZATIONAL DOCUMENTS PROPOSAL D — APPROVAL OF PROPOSAL REGARDING THE VIVID SEATS PUBCO ORGANIZATIONAL DOCUMENTS ADOPTING DELAWARE EXCLUSIVE FORUM PROVISIONS

     147  

PROPOSAL NO. 7 — ORGANIZATIONAL DOCUMENTS PROPOSAL E — APPROVAL OF OTHER CHANGES IN CONNECTION WITH THE VIVID SEATS PUBCO ORGANIZATIONAL DOCUMENTS

     149  

PROPOSAL NO. 8 — THE NYSE PROPOSAL

     152  

PROPOSAL NO. 9 — THE ADJOURNMENT PROPOSAL

     153  

HORIZON’S SOLICITATION OF WRITTEN CONSENTS

     154  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     164  

OTHER INFORMATION RELATED TO HORIZON

     180  

 

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     Page  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HORIZON

     191  

BUSINESS OF VIVID SEATS

     196  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VIVID SEATS

     210  

DESCRIPTION OF CERTAIN INDEBTEDNESS

     234  

DESCRIPTION OF VIVID SEATS PUBCO SECURITIES

     239  

SECURITIES ACT RESTRICTIONS ON RESALE OF COMMON STOCK

     252  

BENEFICIAL OWNERSHIP OF SECURITIES

     253  

OFFICERS AND DIRECTORS OF VIVID SEATS PUBCO UPON CONSUMMATION OF THE BUSINESS COMBINATION

     256  

EXECUTIVE COMPENSATION

     261  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     268  

COMPARISON OF CORPORATE GOVERNANCE AND STOCKHOLDERS’ RIGHTS

     272  

NO APPRAISAL RIGHTS

     283  

STOCKHOLDER PROPOSALS AND NOMINATIONS

     283  

SHAREHOLDER COMMUNICATIONS

     283  

HOUSEHOLDING INFORMATION

     284  

LEGAL MATTERS

     284  

EXPERTS

     284  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     285  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEX A: TRANSACTION AGREEMENT

     A-1  

ANNEX B: CURRENT CERTIFICATE OF INCORPORATION OF VIVID SEATS PUBCO

     B-1  

ANNEX C: FORM OF PROPOSED AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF VIVID SEATS PUBCO

     C-1  

ANNEX D: FORM OF AMENDED AND RESTATED BYLAWS OF VIVID SEATS PUBCO

     D-1  

ANNEX E: FORM OF STOCKHOLDERS’ AGREEMENT

     E-1  

ANNEX F: FORM OF TAX RECEIVABLE AGREEMENT

     F-1  

ANNEX G: FORM OF 2021 INCENTIVE AWARD PLAN

     G-1  

ANNEX H: FORM OF 2021 EMPLOYEE STOCK PURCHASE PLAN

     H-1  

ANNEX I: FORM OF SUBSCRIPTION AGREEMENT

     I-1  

ANNEX J: FORM OF SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF HOYA INTERMEDIATE

     J-1  

ANNEX K: FORM OF PLAN OF MERGER

     K-1  

ANNEX L: FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     L-1  

ANNEX M: FORM OF AMENDED AND RESTATED WARRANT AGREEMENT

     M-1  

PART II: INFORMATION NOT REQUIRED IN PROSPECTUS

    
II-1
 

 

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ADDITIONAL INFORMATION

If you have questions about the business combination or the extraordinary general meeting, or if you need to obtain copies of the enclosed proxy statement/prospectus/consent solicitation statement, proxy card or other documents incorporated by reference in the proxy statement/prospectus/consent solicitation statement, you may contact Horizon’s proxy solicitor listed below. You will not be charged for any of the documents you request.

Telephone: (800) 662-5200

(banks and brokers call collect at (203) 658-9400)

Email: HZAC.info@investor.morrowsodali.com

In order for you to receive timely delivery of the documents in advance of the extraordinary general meeting to be held on                 , 2021, you must request the information no later than five business days prior to the date of the extraordinary general meeting, by                 , 2021.

This proxy statement/prospectus/consent solicitation statement incorporates important business and financial information that is not included in or delivered with the document. For a more detailed description of the information incorporated by reference in the enclosed proxy statement/prospectus/consent solicitation statement and how you may obtain it, see the section entitled “Where You Can Find Additional Information.”

TRADEMARKS

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

Notwithstanding references thereto in this proxy statement/prospectus/consent solicitation statement, the website of Vivid Seats is not part of and is not incorporated in the proxy statement/prospectus/consent solicitation statement, and you should not consider information found on Vivid Seats’ website to be part of this proxy statement/prospectus/consent solicitation statement.

MARKET, INDUSTRY AND OTHER DATA

This proxy statement/prospectus/consent solicitation statement includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms or other independent sources and our own estimates based on our management’s knowledge of and experience in the market sectors in which we compete.

Certain monetary amounts, percentages and other figures included in this proxy statement/prospectus/consent solicitation statement have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

CERTAIN DEFINED TERMS

Unless the context otherwise requires, references in this proxy statement/prospectus/consent solicitation statement to:

 

   

“2021 ESPP” are to the Vivid Seats Inc. 2021 Employee Stock Purchase Plan;

 

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“2021 Plan” are to the Vivid Seats Inc. 2021 Incentive Award Plan;

 

   

“Agreement End Date” are to October 21, 2021;

 

   

“Available Horizon Cash” are to the cash available in the Trust Account;

 

   

“Blocker Corporations” are to the Blocker Corporations as defined in the Tax Receivable Agreement;

 

   

“Blocker Purchase” are to the purchase by Vivid Seats PubCo of all the issued and outstanding capital stock of each of the Crescent Blockers and the outstanding capital stock of the Blocker Sellers in exchange for the Blocker Purchase Price;

 

   

“Blocker Purchase Price” are to cash in an amount equal to (a) an aggregate of $107,573.05 plus interest accruing from June 30, 2017 to the date of the closing of the Merger, compounding semi-annually on June 30 and December 31 of each year, minus (b) the aggregate amount of the Blocker Tax Liabilities;

 

   

“Blocker Sellers” are to Crescent Mezzanine Partners VIB, L.P., Crescent Mezzanine Partners VIC, L.P., NPS/Crescent Strategic Partnership II, LP and Crescent Mezzanine Partners VIIB, L.P.;

 

   

“Blocker Tax Liabilities” are to the estimated tax liabilities of the Blocker Sellers for the period ending on the closing date of the Merger;

 

   

“business combination” are to the transactions contemplated by the Transaction Agreement, including, (a) the Merger, (b) the Class A Redemption, (c) the Blocker Purchase, (d) the Crescent Redemption, (e) the Intermediate Contribution and Issuance and (f) the Class B Issuance;

 

   

“CICA” is to the Companies Act (As Revised) of the Cayman Islands;

 

   

“Class A Redemption” are to the redemption by Hoya Topco of 100% of the outstanding Class A Units of Hoya Topco held by the Redeemed Crescent Parties in exchange for Common Units of Hoya Intermediate;

 

   

“Class B Issuance” are to the issuance at the Closing by Vivid Seats PubCo to Hoya Topco of 118,200,000 shares of Vivid Seats Class B common stock and warrants to purchase 6,000,000 shares of Vivid Seats Class B common stock at the Closing;

 

   

“Closing” are to the consummation of the business combination;

 

   

“Closing Date” are to the date the Closing takes place;

 

   

“Code” are to the U.S. Internal Revenue Code of 1986, as amended;

 

   

“consent solicitation” are to the solicitation of consents from the holders of Horizon IPO Warrants to the Warrant Amendment;

 

   

“Consent Solicitation End Date” are to 11:59 p.m., Eastern Daylight Time, on                 , 2021, or such later time and date to which Horizon may extend the consent solicitation;

 

   

“Crescent Blockers” are to CM6B Vivid Equity, Inc., CM6C Vivid Equity, Inc., CM7B VS Equity, LLC and CM7C VS Equity, LLC;

 

   

“Crescent Holders” are to the Crescent Blockers and the Redeemed Crescent Parties;

 

   

“DGCL” are to the General Corporation Law of the State of Delaware;

 

   

“Effective Time” are to the time at which the Merger becomes effective pursuant to the Transaction Agreement;

 

   

“Existing Warrant Agreement” are to that certain Warrant Agreement, dated as of August 20, 2020, between Continental Stock Transfer & Trust Company and Horizon;

 

   

“Form of New Warrant Agreement” are to that certain warrant agreement to be entered into by and among Vivid Seats PubCo and Continental Stock Transfer & Trust Company;

 

   

“founder shares” are to Horizon Class B ordinary shares initially purchased by Sponsor in a private placement prior to the IPO, and the Horizon Class A ordinary shares issued upon the conversion thereof;

 

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“Horizon $10.00 Exercise Warrants” are to warrants for Horizon Class A ordinary shares with an exercise price of $10.00, to be issued in connection with the Exchange;

 

   

“Horizon $15.00 Exercise Warrants” are to warrants for Horizon Class A ordinary shares with an exercise price of $15.00, to be issued in connection with the Exchange;

 

   

“Horizon Class A ordinary shares” are to Horizon’s Class A ordinary shares, par value $0.0001 per share;

 

   

“Horizon Class B ordinary shares” are to Horizon’s Class B ordinary shares, par value $0.0001 per share;

 

   

“Horizon Equityholders” are to Sponsor and any investment vehicles or funds managed or controlled, directly or indirectly, by any of Sponsor’s affiliates;

 

   

“Horizon IPO Private Placement Warrants” are to the warrants sold by Horizon as part of the private placement in connection with the IPO;

 

   

“Horizon IPO Public Warrants” are to the warrants sold by Horizon as part of the units in the IPO;

 

   

“Horizon ordinary shares” are to Horizon Class A ordinary shares and Horizon Class B ordinary shares, collectively;

 

   

“Horizon Share Redemption” are to the election of an eligible (as determined in accordance with Horizon’s governing documents) holder of shares of Horizon ordinary shares to redeem all or a portion of the shares of Horizon ordinary shares held by such holder at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Horizon ordinary shares, which redemption will completely extinguish public shareholders’ rights as shareholders of Horizon (including the right to receive further liquidation distributions, if any), in connection with the Proposals;

 

   

“Horizon Share Redemption Amount” are to the aggregate amount payable with respect to all Horizon Share Redemptions;

 

   

“Horizon Shareholder Approval” are to the approval of the Proposals, in the case of the Business Combination Proposal, the Organizational Documents Proposals, the NYSE Proposal and the Adjournment Proposal, by an affirmative vote of the holders of at least a majority of the outstanding shares of Horizon ordinary shares entitled to vote and actually cast thereon (as determined in accordance with Horizon’s governing documents) at a Horizon Shareholders’ Meeting duly called by Horizon’s board of directors and held for such purpose or, in the case of the Merger Proposal, by an affirmative vote of the holders of a majority of at least two-thirds of the outstanding shares of Horizon ordinary shares entitled to vote and actually cast thereon (as determined in accordance with Horizon’s governing documents) at a Horizon Shareholders’ Meeting duly called by Horizon’s board of directors and held for such purpose;

 

   

“Horizon Shareholders’ Meeting” are to a meeting of Horizon’s shareholders convened and held in accordance with Horizon’s governing documents and Section 710 of the NYSE Listing Rules;

 

   

“Horizon Warrants” are to the Horizon IPO Public Warrants, Horizon IPO Private Placement Warrants, the Horizon $10.00 Exercise Warrants and the Horizon $15.00 Exercise Warrants;

 

   

“Hoya Intermediate Warrants” are warrants issued by Hoya Intermediate to Vivid Seats PubCo and Hoya Topco;

 

   

“Intermediate Common Units” means Common Units of Hoya Intermediate;

 

   

“Intermediate Contribution and Issuance” means the contribution by Vivid Seats PubCo of cash to Hoya Intermediate in exchange for Intermediate Common Units and warrants to purchase Intermediate Common Units;

 

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“Intermediate Merger” are to the merger of a newly formed subsidiary of Hoya Topco with and into Hoya Intermediate, pursuant to which, among other things, Hoya Intermediate will recapitalize its existing common units, preferred units and senior preferred units;

 

   

“IPO” are to Horizon’s initial public offering of units, the base offering of which closed on August 25, 2020;

 

   

“Lock-up Period” are to the period beginning on the Closing Date and ending on the date that is twelve (12) months following the Closing Date;

 

   

“lock-up shares” are to (a) with respect to Sponsor, the shares of Vivid Seats PubCo common stock and warrants exercisable for shares of Vivid Seats PubCo common stock held by Sponsor and its affiliates (other than any such shares acquired in connection with the PIPE Subscription) and (b) with respect to Hoya Topco, any Vivid Seats PubCo common stock and any warrants exercisable for shares of Vivid Seats PubCo common stock held by Hoya Topco and its affiliates;

 

   

“Marketplace GOV” are to the total transactional amount of Marketplace segment orders placed on the Vivid Seats platform in a period, inclusive of fees, exclusive of taxes, and net of event cancellations that occurred during that period;

 

   

“Merger” are to the merging of Horizon with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will be the surviving entity;

 

   

“Minimum Available Horizon Cash Amount” is $380.0 million;

 

   

“Nasdaq” are to The Nasdaq Capital Market;

 

   

“NAV” are to net asset value;

 

   

“PIPE Investors” are to the qualified institutional buyers and accredited investors, including Sponsor or its affiliates, that have agreed to purchase shares of Vivid Seats Class A common stock in the PIPE Subscription;

 

   

“PIPE Subscription” are to the issuance and sale of shares of Vivid Seats Class A common stock to the PIPE Investors in a private placement that will close concurrently with the Closing;

 

   

“Private Equity Owner” are to, collectively, GTCR Fund XI/B LP, GTCR Fund XI/C LP, GTCR Co-Invest XI LP, GTCR Golder Rauner, L.L.C., GTCR Golder Rauner II, L.L.C., GTCR Management XI LLC and GTCR LLC;

 

   

“private placement units” are to the units of Horizon issued to Sponsor in a private placement simultaneously with the closing of the IPO;

 

   

“public shareholders” are to the holders of Horizon’s public shares;

 

   

“public shares” are to Horizon Class A ordinary shares sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open market);

 

   

“Registration Rights Agreement” are to that certain Amended and Restated Registration Rights Agreement to be entered into by and among Vivid Seats PubCo, Sponsor, Hoya Topco and the other holders party thereto;

 

   

“Reorganization Transaction” are to a Reorganization Transaction as defined in the Tax Receivable Agreement;

 

   

“Sponsor” are to Horizon Sponsor, LLC, a Delaware limited liability company;

 

   

“Sponsor Agreement” are to that certain Sponsor Agreement, dated as of April 21, 2021, by and among Eldridge Industries, LLC, Sponsor, Horizon and Hoya Topco;

 

   

“Stockholders’ Agreement” are to that certain Stockholders’ Agreement to be entered into by and among Vivid Seats PubCo, Sponsor and Hoya Topco;

 

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“Tax Receivable Agreement” are to that certain Tax Receivable Agreement to be entered into by and among Vivid Seats PubCo, Hoya Intermediate, the TRA Holder Representative, Hoya Topco and the other TRA Holders;

 

   

“Topco Equityholders” are to (a) Hoya Topco or (b) after the distribution (in the aggregate pursuant to one or more distributions) by Hoya Topco of more than 50% of the voting shares of Vivid Seats PubCo held by Hoya Topco on the Closing Date, (i) GTCR Fund XI/B LP, GTCR Fund XI/C LP, GTCR Co-Invest XI LP, GTCR Golder Rauner, L.L.C., GTCR Golder Rauner II, L.L.C., GTCR Management XI LLC and/or GTCR LLC and (ii) any investment vehicles or funds managed or controlled, directly or indirectly, by or otherwise affiliated with the foregoing entities;

 

   

“Total Marketplace orders” are to the volume of Marketplace segment orders placed on the Vivid Seats platform during a period, net of event cancellations occurring during the period;

 

   

“Total Resale orders” are to the volume of Resale segment orders sold by the Vivid Seats’ resale team in a period, net of event cancellations that occurred during that period;

 

   

“TRA Holder Representative” are to GTCR Management XI, LLC;

 

   

“TRA Holders” are to the TRA Holders as defined in the Tax Receivable Agreement;

 

   

“Transactions” means the PIPE Subscription and the business combination;

 

   

“Transaction Agreement” are to the Transaction Agreement, dated as of April 21, 2021, by and among Horizon, Sponsor, Hoya Topco, Hoya Intermediate and Vivid Seats PubCo;

 

   

“Trust Account” are to the trust account for the benefit of Horizon, certain of its public shareholders and the underwriter of the IPO;

 

   

“Trust Agreement” are to that certain Investment Management Trust Agreement, dated as of August 25, 2020, between Horizon and Continental Stock Transfer & Trust Company, as trustee;

 

   

“Trust Amount” are to the amount of cash available in the Trust Account as of the Closing, after deducting the amount required to satisfy Horizon’s obligations to its shareholders (if any) that exercise their redemption rights;

 

   

“units” are to Horizon’s units sold in the IPO, each of which consists of one Horizon Class A ordinary share and one third of one Horizon Public IPO Warrant;

 

   

“Vivid Seats” are to, prior to the consummation of the business combination, Hoya Intermediate and its consolidated subsidiaries and, following the consummation of the business combination, to Vivid Seats PubCo and its consolidated subsidiaries;

 

   

“Vivid Seats Class A common stock” are to Vivid Seats PubCo’s Class A common stock, par value $0.0001 per share;

 

   

“Vivid Seats Class B common stock” are to Vivid Seats PubCo’s Class B common stock, par value $0.0001;

 

   

“Vivid Seats Companies” are to Hoya Intermediate and its subsidiaries;

 

   

“Vivid Seats PubCo” are to Vivid Seats Inc., a Delaware corporation;

 

   

“Vivid Seats PubCo $10.00 Exercise Warrants” are to warrants for Vivid Seats Class A common stock with an exercise price of $10.00, to be issued in exchange for the Horizon $10.00 Exercise Warrants, with terms consistent with the Form of New Warrant Agreement to be entered into in connection with the business combination;

 

   

“Vivid Seats PubCo $15.00 Exercise Warrants” are to warrants for Vivid Seats Class A common stock with an exercise price of $10.00, to be issued in exchange for the Horizon $15.00 Exercise Warrants, with terms consistent with the Form of New Warrant Agreement to be entered into in connection with the business combination;

 

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“Vivid Seats PubCo Amended and Restated Bylaws” are to the amended and restated bylaws of Vivid Seats PubCo that will be in effect immediately prior to the Effective Time;

 

   

“Vivid Seats PubCo Amended and Restated Charter” are to the amended and restated certificate of incorporation of Vivid Seats PubCo that will be in effect immediately prior to the Effective Time;

 

   

“Vivid Seats PubCo Class B Warrants” are to warrants for Vivid Seats Class B common stock, to be exercisable upon the exercise of Hoya Intermediate Warrants held by Hoya Topco;

 

   

“Vivid Seats PubCo common stock” are to the Vivid Seats Class A common stock and the Vivid Seats Class B common stock, collectively;

 

   

“Vivid Seats PubCo Warrants” are to the warrants for Vivid Seats Class A common stock and Vivid Seats Class B common stock;

 

   

“Vivid Seats Private Placement IPO Warrants” are to warrants for Vivid Seats Class A common stock, with terms identical to the Horizon IPO Private Placement Warrants;

 

   

“Vivid Seats Public IPO Warrants” are to warrants for Vivid Seats Class A common stock, with terms identical to Horizon IPO Public Warrants; and

 

   

“Warrant Amendment” are to the proposed amendment and restatement of the Warrant Agreement in the form attached hereto as Annex M.

Unless otherwise specified, the voting and economic interests of Horizon shareholders set forth in this proxy statement/prospectus/consent solicitation statement assume that (i) no public shareholders elect to have their public shares redeemed; (ii) there are no other issuances of equity interests of Horizon, and (iii) the Vivid Seats PubCo Warrants remain outstanding immediately following the Closing.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus/consent solicitation statement may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements regarding Horizon or its management team’s — or Vivid Seats or its management team’s — expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus/consent solicitation statement may include, for example, statements about:

 

   

Horizon’s or Vivid Seats’ ability to consummate the business combination or, if Horizon does not complete the business combination, any other initial business combination;

 

   

the benefits of the business combination;

 

   

any other satisfaction or waiver (if applicable) of the conditions to the business combination, including, among other things: the satisfaction or waiver of certain customary closing conditions, including, among others, the existence of no material adverse effect at Horizon or Vivid Seats and receipt of certain stockholder approvals contemplated by this proxy statement/prospectus/consent solicitation statement;

 

   

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Transaction Agreement;

 

   

the ability to obtain the listing of Vivid Seats PubCo’s Class A common stock and warrants on Nasdaq following the business combination;

 

   

Horizon’s and Vivid Seats PubCo’s public securities’ potential liquidity and trading;

 

   

the ability of Horizon and Vivid Seats to consummate the PIPE Subscription or raise financing in the future;

 

   

the ability to obtain equity treatment for the Horizon IPO Warrants based on the proposed Warrant Amendment;

 

   

members of Horizon’s management team allocating their time to other businesses and potentially having conflicts of interest with Horizon’s business or in approving the business combination;

 

   

the use of proceeds not held in the Trust Account or available to Horizon from interest income on the Trust Account balance;

 

   

the future financial performance of Vivid Seats following the business combination;

 

   

Vivid Seats’ success in retaining or recruiting, or changes required in, its officers, key employees or directors following the business combination;

 

   

Vivid Seats’ ability to pay dividends on the Vivid Seats Class A common stock following the business combination, on the terms currently contemplated or at all;

 

   

factors relating to the business, operations and financial performance of Vivid Seats, including, but not limited to:

 

   

the impact of the COVID-19 pandemic on Vivid Seats’ business and the industries in which it operates;

 

   

the ability of Vivid Seats to compete in the ticketing industry;

 

   

the ability of Vivid Seats to maintain relationships with buyers, sellers and distribution partners;

 

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the ability of Vivid Seats to continue to improve its platform and maintain and enhance its brand;

 

   

the impact of extraordinary events or adverse economic conditions on discretionary consumer and corporate spending or on the supply and demand of live events;

 

   

the ability of Vivid Seats to comply with domestic regulatory regimes;

 

   

the ability of Vivid Seats to successfully defend against litigation;

 

   

the ability of Vivid Seats to maintain the integrity of its information systems and infrastructure, and to mitigate possible cyber security risks;

 

   

the ability of Vivid Seats to generate sufficient cash flows or raise additional capital necessary to fund its operations; and

 

   

other factors detailed under the section entitled “Risk Factors.”

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the views of Horizon or Vivid Seats as of any subsequent date, and neither Horizon nor Vivid Seats undertakes any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement/prospectus/consent solicitation statement. As a result of a number of known and unknown risks and uncertainties, actual results or performance of Horizon or Vivid Seats may be materially different from those expressed or implied by these forward-looking statements.

 

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SUMMARY TERM SHEET

This Summary Term Sheet, together with the sections entitled “Questions and Answers About the Proposals for Horizon Shareholders” and “Summary of the Proxy Statement/Prospectus/Consent Solicitation Statement,” summarizes certain information contained in this proxy statement/prospectus/consent solicitation statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus/consent solicitation statement, including the attached annexes, for a more complete understanding of the matters to be considered at the extraordinary general meeting of Horizon shareholders.

 

   

Horizon Acquisition Corporation, a Cayman Islands exempted company (“Horizon”), is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (an “initial business combination”).

 

   

There are currently (a) 54,398,433 Horizon Class A ordinary shares issued and outstanding, of which 15,500,000 Horizon Class A ordinary shares are held by the Sponsor, (b) 13,599,608 Horizon Class B ordinary shares issued and outstanding, all of which are held by Sponsor and (c) 1,000,000 preference shares of par value $0.0001 each, of which no shares are issued and outstanding. In addition, there are currently 24,652,580 warrants of Horizon outstanding, consisting of 18,132,811 Horizon IPO Public Warrants originally issued in the IPO, of which 5,166,666 Horizon IPO Public Warrants are held by Sponsor, and 6,519,791 Horizon IPO Private Placement Warrants issued to Sponsor concurrently with the IPO in the private placement. Each whole warrant entitles the holder to purchase one whole share of Horizon Class A ordinary shares for $11.50 per share. The warrants will become exercisable on the later of the date that is (i) thirty (30) days after the Closing and (ii) twelve (12) months after the closing of the IPO. Additionally, the warrants will expire five years after the Closing or earlier upon redemption or liquidation. The Horizon IPO Public Warrants and Horizon IPO Private Placement Warrants will be exchanged for the Vivid Seats Public IPO Warrants and Vivid Seats Private Placement IPO Warrants with substantially similar terms upon consummation of the Transactions. Once the Vivid Seats Public IPO Warrants and Vivid Seats Private Placement IPO Warrants become exercisable, Vivid Seats PubCo may redeem them, in whole and not in part, (A) for cash at a price of $0.01 per warrant, if the last reported sale price of Vivid Seats Class A common stock for any twenty (20) trading days equals or exceeds $18.00 per share within a thirty (30) trading-day period ending on the third trading day prior to the date on which Vivid Seats PubCo sends the notice of redemption to the warrant holders or (B) for Vivid Seats Class A common stock at a price of $0.10 per warrant, if the last reported sale price of Vivid Seats Class A common stock for any twenty (20) trading days equals or exceeds $18.00 per share within a thirty (30) trading-day period ending on the third trading day prior to the date on which Vivid Seats PubCo sends the notice of redemption to the warrant holders.

 

   

Pursuant to the Exchange Agreement, dated as of April 21, 2021, by and between Horizon and Sponsor (the “Exchange Agreement”), and effective at least one day prior to the Merger, Sponsor will irrevocably tender to Horizon all of its Horizon Class B ordinary shares for cancellation in exchange for (i) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise price of $10.00 per share (the “Horizon $10.00 Exercise Warrants”), (ii) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise of $15.00 per share (the “Horizon $15.00 Exercise Warrants”) and (iii) 50,000 shares of Horizon Class A ordinary shares, as more particularly set forth therein (collectively, the “Exchange”). The Horizon $10.00 Exercise Warrants and the Horizon $15.00 Exercise Warrants shall be issued to Sponsor on terms set forth in the Form of New Warrant Agreement, including that, the Horizon $10.00 Exercise Warrants and the Horizon $15.00 Exercise Warrants (i) will have an exercise price of $10.00 per share and $15.00 per share, respectively, (ii) will each have a term of ten (10) years, (iii) will not be redeemable by Horizon or, upon conversion to Vivid Seats PubCo Warrants, Vivid Seats PubCo, and (iv) will be fully transferrable, except for any contractual restrictions on transfer set forth in the Stockholders’ Agreement and the Sponsor Agreement. For more information about Horizon, see the sections entitled “Other Information Related to Horizon” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Horizon.”

 

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Vivid Seats is a leading full-service ticketing marketplace enabling fans and event seekers to purchase tickets to sports, concerts, theater and other live events. For more information regarding Vivid Seats, see the section entitled “Business of Vivid Seats.”

 

   

On April 21, 2021, Horizon entered into the Transaction Agreement, pursuant to which: (a) at least one day prior to the Merger, Sponsor and Horizon will effect the Exchange, (b) prior to the Merger, Hoya Topco and Vivid Seats will effect the Pre-Closing Restructuring (as defined in the Transaction Agreement), which will include (i) the redemption by Hoya Topco of 100% of the outstanding Class A Units of Hoya Topco (the “Class A Redemption”) held by the Crescent Holders in exchange for common units of Hoya Intermediate and (ii) the formation of a new subsidiary of Hoya Topco, which will merge with and into Hoya Intermediate (the “Intermediate Merger”), pursuant to which, among other things, Hoya Intermediate will recapitalize its existing common units, preferred units and senior preferred units such that each existing common unit will be converted into a certain number of new Intermediate Common Units (and, in the case of common units held by Hoya Topco, 118,200,000 Intermediate Common Units and Hoya Intermediate Warrants consisting of (i) warrants to purchase 3,000,000 Intermediate Common Units at an exercise price of $10.00 per share and (ii) warrants to purchase 3,000,000 Intermediate Common Units at an exercise price of $15.00 per share), each existing preferred unit will be converted into a Class I Unit of Hoya Topco and each existing senior preferred unit will be cancelled and cease to exist, (c) Horizon will merge with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving entity in the Merger, (d) the Amended and Restated Limited Liability Agreement of Hoya Intermediate, dated as of June 30, 2017, as amended, will be amended and restated in the form attached to this proxy statement/prospectus as Annex J (the “Second A&R LLCA”), (e) Vivid Seats PubCo will purchase the Crescent Blockers in the Blocker Purchase, (f) Vivid Seats PubCo and Hoya Intermediate will consummate the Intermediate Contribution and Issuance, which contribution includes Vivid Seats PubCo’s contribution of cash to Hoya Intermediate in an amount equal to (A) all available cash of Vivid Seats PubCo following the Merger and the PIPE Subscription, minus (B) the Blocker Purchase Price, minus (C) the Blocker Tax Liabilities, (g) Hoya Intermediate will redeem the Intermediate Common Units held by the Redeemed Crescent Parties in the Crescent Redemption, (h) Vivid Seats PubCo will issue 118,200,000 shares of Vivid Seats Class B common stock and 6,000,000 warrants to purchase Vivid Seats Class B common stock to Hoya Topco in the Class B Issuance and (i) Hoya Intermediate will contribute a portion of the funds received from Vivid Seats PubCo to Hoya Midco. Immediately prior to the business combination, Hoya Intermediate expects to effectively redeem its Senior Preferred Units, resulting in a cash payment of $225.1 million. Upon the Closing, Vivid Seats expects to apply $488.9 million of the business combination and PIPE Subscription proceeds towards debt repayments resulting in the full repayment of its May 2020 First Lien Loan and a partial repayment of its June 2017 First Lien Loan.

 

   

In connection with the execution of the Transaction Agreement, Horizon entered into the following agreements:

 

   

PIPE Subscription Agreements.    Horizon and Vivid Seats PubCo entered into the subscription agreements (the “Subscription Agreements”) with the PIPE Investors, pursuant to which the PIPE Investors have agreed to subscribe for and purchase, an aggregate of 22,500,000 shares of Vivid Seats Class A common stock, in a private placement for a purchase price of $10.00 per share, for aggregate gross proceeds of $225.0 million; provided, however, such subscription is subject to increase due to Sponsor Backstop Commitment (as defined below). Eldridge Industries, LLC, an affiliate of Sponsor, has agreed to purchase 19,000,000 shares of Vivid Seats Class A Common Stock in a private placement for a purchase price of $10.00 per share in the PIPE Subscription. The Subscription Agreements provide that Vivid Seats PubCo will grant the investors in the PIPE Subscription certain customary registration rights. Vivid Seats PubCo will, within 30 days after the consummation of the business combination, file with the Securities and Exchange Commission (the “SEC”) a registration statement registering the resale of such shares of Vivid Seats Class A Common Stock and will use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof. The closing of the PIPE Subscription is contingent upon, among other things, the substantially concurrent consummation of the business combination. For more information about the Subscription Agreements, see the

 

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section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — PIPE Subscription Agreements.”

 

   

Sponsor Agreement.    Horizon entered into a sponsor agreement with Eldridge Industries, LLC, Sponsor and Hoya Topco (the “Sponsor Agreement”), pursuant to which Sponsor agreed to vote in favor of the Proposals, in each case, subject to the terms and conditions contemplated by the Sponsor Agreement. Sponsor also agreed to (a) waive certain anti-dilution protections it may be entitled to under Horizon’s organizational documents or otherwise, (b) certain transfer restrictions on the Horizon ordinary shares and Horizon Warrants beneficially owned by Sponsor and its affiliates, (c) not to solicit any business combination other than the business combination with Hoya Topco, in each case, subject to limited exceptions as contemplated thereby and (d) increase the amount of its subscription of shares of Vivid Seats Class A common stock by the amount the available cash held by Vivid Seats PubCo at the closing of the business combination is less than approximately $769 million (the “Sponsor Backstop Commitment”), in consideration for a fee of approximately $11.7 million. For more information about the Sponsor Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Sponsor Agreement.

 

   

In connection with the Closing, Vivid Seats PubCo will enter into, among others, the following agreements:

 

   

Vivid Seats PubCo Amended and Restated Charter.    Pursuant to the terms of the Transaction Agreement, the Vivid Seats PubCo Amended and Restated Charter will be the certificate of incorporation of Vivid Seats PubCo following the Closing, which will, among other things, provide for three classes of stock, the Vivid Seats Class A common stock, which will be issued to Sponsor, the PIPE Investors and the other public shareholders of Vivid Seats PubCo in connection with the Closing, the Vivid Seats Class B common stock, which will be issued to Hoya Topco in connection with the Class B Issuance and preferred stock, none of which will be outstanding immediately following the Closing. For more information about the Vivid Seats PubCo Amended and Restated Charter, see section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Vivid Seats PubCo Amended and Restated Charter.”

 

   

Second A&R LLCA.     At the Closing, Hoya Intermediate, Vivid Seats PubCo and Hoya Topco will enter into the Second A&R LLCA, which will set forth, among other things, the rights and obligations of the members and board of managers of Hoya Intermediate. For more information about the Second A&R LLCA, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Second A&R LLCA.”

 

   

Registration Rights Agreement.    At the Closing, Vivid Seats PubCo, Sponsor and Hoya Topco will amend and restate the Registration and Shareholder Rights Agreement, dated as of August 25, 2020, by and between Horizon and the Sponsor. Pursuant to the Registration Rights Agreement, Vivid Seats PubCo will agree to file a registration statement for a shelf registration on Form S-1 or Form S-3 within 30 days following Closing and Sponsor and Hoya Topco will be granted certain customary registration rights with respect to the securities of Vivid Seats PubCo. For more information about the Registration Rights Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Registration Rights Agreement.”

 

   

Stockholders’ Agreement.    The Transaction Agreement contemplates that, at the Closing, Vivid Seats PubCo will enter into a Stockholders’ Agreement with Sponsor and Hoya Topco, pursuant to which, among other things, the board of directors of Vivid Seats PubCo (the “Vivid Seats Board”) will consist of nine (9) directors, comprised of (i) the chief executive officer of Vivid Seats PubCo, (ii) five (5) directors designated by the Topco Equityholders (as defined herein) and (iii) three (3) directors designated by the Horizon Equityholders (as defined herein). Additionally, the Stockholders’ Agreement contains certain restrictions on transfer with respect to lock-up shares held by Sponsor and Hoya Topco, including a twelve (12) month lock-up of such shares in

 

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each case, subject to limited exceptions as contemplated thereby (including that Sponsor and Hoya Topco may each transfer: (a) fifty percent (50%) of their lock-up shares on the date that is six (6) months following the Closing Date and (b) the remaining lock-up shares on any date, at least six (6) months after the Closing, on which (i) the price per lock-up share exceeds $15.00 per share for twenty (20) trading days within a thirty (30) day trading period and (ii) the average daily trading volume exceeds one (1) million shares of Vivid Seats PubCo common stock during such thirty (30) trading day period). The Stockholders’ Agreement also contains certain provisions intended to maintain, following the consummation of the business combination, Vivid Seats PubCo’s qualification as a “controlled company” within the meaning of Nasdaq Listing Rule 5615(c)(1). For more information about the Stockholders’ Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Stockholders’ Agreement.”

 

   

Tax Receivable Agreement.    The Transaction Agreement contemplates that, at the Closing, Vivid Seats PubCo will enter into a Tax Receivable Agreement with Hoya Intermediate, the TRA Holder Representative, Hoya Topco and the other TRA Holders. Pursuant to the Tax Receivable Agreement, Vivid Seats PubCo will generally be required to pay Hoya Topco and the other TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that Vivid Seats PubCo (and applicable consolidated, unitary, or combined subsidiaries thereof, if any and collectively the “Tax Group”) realizes, or is deemed to realize, as a result of certain tax attributes (the “Tax Attributes”), including:

 

   

existing tax basis in certain assets of Hoya Intermediate and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service;

 

   

tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by Vivid Seats PubCo under the Tax Receivable Agreement) acquired by Vivid Seats PubCo from a TRA Holder pursuant to the terms of the Second A&R LLCA;

 

   

certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired directly or indirectly by Vivid Seats PubCo pursuant to a Reorganization Transaction;

 

   

certain tax benefits realized by Vivid Seats PubCo as a result of certain U.S. federal income tax allocations of taxable income or gain away from Vivid Seats PubCo and to other members of Hoya Intermediate and deductions or losses to Vivid Seats PubCo and away from other members of Hoya Intermediate, in each case, as a result of the business combination; and

 

   

tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement.

For more information about the Tax Receivable Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Tax Receivable Agreement.”

 

   

Unless waived by the parties to the Transaction Agreement, the Closing is subject to a number of conditions set forth in the Transaction Agreement, including, among others, receipt of the requisite stockholder approval of the Transaction Agreement, Plan of Merger and the Merger and the other Proposals as contemplated by this proxy statement/prospectus/consent solicitation statement. For more information about the closing conditions to the business combination, see the section entitled “Proposal No. 1— The Business Combination Proposal — The Transaction Agreement — Conditions to the Closing of the Business Combination.”

 

   

The Transaction Agreement may be terminated at any time prior to the Closing upon agreement by Hoya Topco and Horizon, or by Hoya Topco or Horizon, acting alone, in specified circumstances. For

 

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more information about the termination rights under the Transaction Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Termination.”

 

   

The proposed business combination involve numerous risks. For more information about these risks, please read “Risk Factors.”

 

   

Under Horizon’s amended and restated memorandum and articles of association, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with Horizon’s amended and restated memorandum and articles of association. As of December 31, 2020, this would have amounted to approximately $10.00 per share. If a holder exercises its redemption rights, then such holder will be exchanging its Horizon Class A ordinary shares for cash and will no longer own shares of Horizon. 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 our transfer agent in accordance with the procedures described herein. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the Horizon Class A ordinary shares included in the units sold in the IPO, which we refer to as the “15% threshold.” Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. Each redemption of Horizon Class A ordinary shares by Horizon’s public shareholders will decrease the amount in the Trust Account, which holds approximately $544 million as of December 31, 2020. In no event will Horizon redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001. See the section entitled “Extraordinary General Meeting of Horizon Shareholders — Redemption Rights.”

 

   

It is anticipated that, upon completion of the business combination and assuming no redemptions of shares of Horizon Class A ordinary shares in connection with the business combination, Vivid Seats PubCo’s ownership will be as follows: (a) Horizon’s public shareholders will own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (b) the PIPE Investors (as defined herein), excluding Sponsor and certain affiliates of the Sponsor, will own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (c) Sponsor, together with certain of its affiliates, will own (i) approximately 17.7% (assuming no exercise of Vivid Seats PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by Sponsor), of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); and (d) Hoya Topco will own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class B common stock). The board of managers of Hoya Topco is controlled by our Private Equity Owner and its affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo’s shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats Board pursuant to the Stockholders’ Agreement. In turn, Vivid Seats PubCo will hold approximately 39.4% of the Intermediate Common Units and Hoya Topco will hold approximately 60.6% of the Intermediate Common Units, which interests will be controlled by the Private Equity Owner for so long as it controls Hoya Topco. These levels of ownership interest assume that no shares are elected to be redeemed in connection with the business combination. The PIPE Investors have agreed to purchase in the aggregate 22,500,000 shares of Vivid Seats Class A common stock, for approximately $225.0 million of gross proceeds, in the PIPE Subscription. In this proxy statement/prospectus/consent solicitation statement, Horizon assumes that approximately $769.0 million of the gross proceeds from the PIPE Subscription and funds held in the Trust Account will be used to fund (i) the business combination, (ii) the partial repayment of our Term Loan Facilities to a net debt amount (consisting of long-term debt, less cash and cash equivalents) of approximately $132.1 million under both the no redemption scenario and maximum redemption scenario, and (iii) the payment of certain transaction

 

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expenses. The ownership percentage with respect to Vivid Seats PubCo does not take into account (A) warrants to purchase Horizon Class A ordinary shares that will be converted into Vivid Seats PubCo Warrants immediately following the business combination or other Vivid Seats PubCo Warrants issued in connection with the business combination or (B) the issuance of any shares upon completion of the business combination under the 2021 Plan. If the actual facts are different from these assumptions, the above levels of ownership interest will be different.

 

   

It is anticipated that, upon completion of the business combination, (a) Horizon’s public shareholders will own 12,966,144 Vivid Seats Public IPO Warrants and (b) Sponsor will own 5,166,666 Vivid Seats Public IPO Warrants (and does not include the Horizon $10.00 Exercise Warrants, the Horizon $15.00 Exercise Warrants and the Vivid Seats Private Placement IPO Warrants). Pursuant to the Exchange Agreement, Sponsor will receive (i) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise price of $10.00 per share (the “Horizon $10.00 Exercise Warrants”), (ii) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise of $15.00 per share (the “Horizon $15.00 Exercise Warrants”) and (iii) 50,000 shares of Horizon Class A ordinary shares, as more particularly set forth therein. Horizon’s public shareholders and warrant holders will receive no monetary consideration in connection with the completion of the business combination. At the Effective Time, by virtue of the Merger and without any action on the part of any holder of Horizon ordinary shares or warrant of Horizon, (i) each Horizon ordinary share that is issued and outstanding immediately prior to the Effective Time (other than any Horizon ordinary shares held in the treasury of Horizon) will be cancelled and converted into one share of Vivid Seats Class A common stock and (ii) each Horizon Warrant that is issued and outstanding immediately prior to the Effective Time will be converted into a corresponding Vivid Seats PubCo Warrant exercisable for one share of Vivid Seats Class A common stock at an exercise price set forth in the applicable warrant agreement. Based on an assumed value of a share of Vivid Seats Class A common stock of $10.00 and assuming no redemptions of Horizon Class A ordinary shares in connection with the business combination, the aggregate value of consideration holders of Horizon ordinary shares will receive for their shares pursuant to the business combination is approximately $389 million. Holders of Horizon’s Warrants will receive Vivid Seats PubCo Warrants that will have an exercise price of $11.50 per share; however, depending on the price of Vivid Seats Class A common stock following the business combination, such warrants may have no value and may expire worthless or otherwise be redeemed in accordance with their terms.

 

   

Horizon’s board of directors considered various factors in determining whether to approve the Transaction Agreement and the business combination. For more information about Horizon’s decision-making process, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

   

In addition to voting on the proposal to approve and adopt the Transaction Agreement and the business combination (the “Business Combination Proposal”) at the extraordinary general meeting, Horizon’s shareholders will also be asked to vote on:

 

   

a proposal (the “Merger Proposal”) to approve, as a special resolution, the Plan of Merger annexed to the Transaction Agreement and attached to this proxy statement/prospectus/consent solicitation statement as Annex K and to authorize the merger (the “Merger”) of Horizon with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation (the “Surviving Corporation”);

 

   

the following three separate proposals (collectively, the “Organizational Documents Proposals”) to approve the following material differences between Horizon’s amended and restated memorandum and articles of association and the amended and restated certificate of incorporation of Vivid Seats PubCo (the “Vivid Seats PubCo Amended and Restated Charter”) and the amended and restated bylaws of Vivid Seats PubCo (the “Vivid Seats PubCo Amended and Restated

 

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Bylaws”) that will be the certificate of incorporation and bylaws of Vivid Seats PubCo following the Merger:

 

   

a proposal to authorize the change in the authorized capital stock of Horizon from 400,000,000 Horizon Class A ordinary shares, par value $0.0001 per share (the “Horizon Class A ordinary shares”), 40,000,000 shares of Horizon Class B ordinary shares, par value $0.0001 per share (the “Horizon Class B ordinary shares”), and 1,000,000 preference shares, par value $0.0001 per share, to 500,000,000 shares of Class A common stock, par value $0.0001 per share, of Vivid Seats PubCo (the “Vivid Seats Class A common stock”), 250,000,000 shares of Class B common stock, par value $0.0001 per share, of Vivid Seats PubCo (the “Vivid Seats Class B common stock”) and 50,000,000 shares of preferred stock, par value $0.0001 per share, of Vivid Seats PubCo;

 

   

a proposal to authorize that certain provisions of the Vivid Seats PubCo Amended and Restated Charter and certain provisions of the Vivid Seats PubCo Amended and Restated Bylaws, in each case, will be subject to the Stockholders’ Agreement; and

 

   

a proposal to authorize that the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws will grant an explicit waiver regarding corporate opportunities to certain “exempted persons” (including Sponsor and Hoya Topco and their respective affiliates, members, directors, officers and/or employees, including any of the foregoing who will serve as directors or officers of Vivid Seats PubCo);

 

   

a proposal to authorize that the Vivid Seats PubCo Amended and Restated Charter will adopt Delaware as the exclusive forum for certain stockholder litigation;

 

   

a proposal to authorize all other changes in connection with the replacement of Horizon’s amended and restated memorandum and articles of association with the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws as part of the Merger (copies of which are attached to this proxy statement/prospectus/consent solicitation statement as Annex C and Annex D, respectively), including (a) changing the corporate name from “Horizon Acquisition Corporation” to “Vivid Seats Inc.,” (b) electing not to be governed by Section 203 of the DGCL and (c) removing certain provisions related to Horizon’s status as a blank check company that will no longer be applicable upon consummation of the business combination, all of which Horizon’s board of directors believes is necessary to adequately address the needs of Vivid Seats PubCo after the business combination;

 

   

a proposal to approve, for purposes of complying with NYSE Listing Rule 312.03, the issuance of shares of Vivid Seats PubCo in connection with the business combination and the PIPE Subscription (the “NYSE Proposal”); and

 

   

a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal, the “Proposals”).

For more information, see the sections entitled “Proposal No. 2 — the Merger Proposal,” “Proposal No. 3 — Organizational Documents Proposal A,” “Proposal No. 4 — Organizational Documents Proposal B,” “Proposal No. 5 — Organizational Documents Proposal C,” “Proposal No. 6 — Organizational Documents Proposal D,” “Proposal No. 7 — Organizational Documents Proposal E,” “Proposal No. 8 — The NYSE Proposal” and “Proposal No. 9 — The Adjournment Proposal.”

 

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In addition to the proposals to be considered by Horizon’s shareholders, the holders of Horizon IPO Warrants, including holders of Horizon Units that have not separated the Horizon IPO Public Warrants included therein, are being asked to consider the proposed amendment and restatement of the Warrant Agreement described in this proxy statement/prospectus/consent solicitation statement, to which you should give your careful attention. If you elect to provide your consent to the Warrant Amendment, holders are required to complete, sign and return a Written Consent (or request that their broker or nominee consent on their behalf) with respect to the Warrant Amendment. The Warrant Amendment, if adopted and as of the time of such adoption, would amend and restate the Horizon IPO Warrants, as contemplated by the Transaction Agreement, to implement certain changes that are intended to result in the Horizon IPO Warrants being accounted for as equity within the balance sheet of Horizon, instead of as a liability measured at fair value with non-cash fair value adjustments recorded in earnings at each reporting period. The accounting treatment of the amended and restated warrant terms is currently under evaluation. For more information, see the section entitled “Horizon’s Solicitation of Written Consents”.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR HORIZON SHAREHOLDERS

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting of shareholders of Horizon Acquisition Corporation (“Horizon”), including the proposed business combination. The following questions and answers also briefly address some commonly asked questions about the consent under consideration by the holders of Horizon IPO Warrants with respect to a proposed amendment and restatement of the Warrant Agreement. The following questions and answers do not include all the information that is important to Horizon shareholders and holders of Horizon IPO Warrants. Horizon shareholders and holders of Horizon IPO Warrants are encouraged to read carefully this entire proxy statement/prospectus/consent solicitation statement, including the annexes and other documents referred to herein.

 

Q:

Why am I receiving this proxy statement/prospectus/consent solicitation statement?

 

A:

Horizon shareholders are being asked to consider and vote upon, among other things, a proposal to (a) approve and adopt the Transaction Agreement, pursuant to which, among other transactions, Horizon will merge with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will be the surviving corporation, and (b) approve such Merger and the other transactions contemplated by the Transaction Agreement (the “Business Combination Proposal”).

A copy of the Transaction Agreement is attached to this proxy statement/prospectus/consent solicitation statement as Annex A. This proxy statement/prospectus/consent solicitation statement and its annexes contain important information about the proposed business combination and the other matters to be acted upon at the extraordinary general meeting. You should read this proxy statement/prospectus/consent solicitation statement and its annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus/consent solicitation statement and its annexes.

In addition, the holders of Horizon IPO Warrants are being asked to consider the proposed amendment and restatement of the Warrant Agreement in the form of the Warrant Amendment, which is attached to this proxy statement/prospectus/consent solicitation statement as Annex M. If you elect to provide your consent to the Warrant Amendment, holders are required to complete, sign and return a Written Consent (or request that their broker or nominee consent on their behalf) with respect to the Warrant Amendment. For additional detail regarding the Warrant Amendment and the Written Consent, please see the section entitled “Horizon’s Solicitation of Written Consents.”

 

Q:

What is being voted on at the extraordinary general meeting?

 

A:

Below are the proposals on which Horizon shareholders will vote at the extraordinary general meeting.

 

  1.

Proposal No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to (a) approve and adopt the Transaction Agreement pursuant to which, among other transactions, Horizon will merge with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation, and (b) approve the business combination.

 

  2.

Proposal No. 2 — The Merger Proposal — To consider and vote upon a proposal to approve, as a special resolution, the Plan of Merger annexed to the Transaction Agreement and attached to this proxy statement/prospectus/consent solicitation statement as Annex K and to authorize the merger of Horizon with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation.

 

  3.

The Organizational Documents Proposals — To consider and vote upon the following three separate proposals to approve the following material differences between Horizon amended and restated

 

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  memorandum and articles of association and the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws that will be the certificate of incorporation and bylaws of Vivid Seats PubCo following the Merger:

 

  i.

Proposal No. 3 — Organizational Documents Proposal A — To authorize the change in the authorized capital stock of Horizon from 400,000,000 Horizon Class A ordinary shares, 40,000,000 shares of Horizon Class B ordinary shares, and 1,000,000 preference shares, par value $0.0001 per share, to 500,000,000 shares of Vivid Seats Class A common stock, 250,000,000 shares of Vivid Seats Class B common stock and 50,000,000 shares of preferred stock, par value $0.0001 per share, of Vivid Seats PubCo.

 

  ii.

Proposal No. 4 — Organizational Documents Proposal B — To authorize that certain provisions of the Vivid Seats PubCo Amended and Restated Charter and certain provisions of the Vivid Seats PubCo Amended and Restated Bylaws, in each case, will be subject to the Stockholders’ Agreement.

 

  iii.

Proposal No. 5 — Organizational Documents Proposal C — To authorize that the Vivid Seats PubCo Amended and Restated Charter will grant an explicit waiver regarding corporate opportunities to certain “exempted persons” (including Sponsor and Hoya Topco and their respective affiliates, members, directors, officers and/or employees, including any of the foregoing who will serve as directors or officers of Vivid Seats PubCo);

 

  iv.

Proposal No. 6 — Organizational Documents Proposal D — To authorize that the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats Amended and Restated Bylaws will adopt Delaware as the exclusive forum for certain stockholder litigation;

 

  v.

Proposal No. 7 — Organizational Documents Proposal E — To authorize all other changes in connection with the replacement of Horizon’s amended and restated memorandum and articles of association with the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws as part of the Merger (copies of which are attached to this proxy statement/prospectus/consent solicitation statement as Annex C and Annex D, respectively), including (a) changing the corporate name from “Horizon Acquisition Corporation” to “Vivid Seats Inc.,” (b) electing not to be governed by Section 203 of the DGCL and (c) removing certain provisions related to Horizon’s status as a blank check company that will no longer be applicable upon consummation of the business combination, all of which Horizon’s board of directors believes is necessary to adequately address the needs of Vivid Seats PubCo after the business combination.

 

  2.

Proposal No. 8 — The NYSE Proposal — To consider and vote upon a proposal to approve, for purposes of complying with NYSE Listing Rule 312.03, the issuance of shares of Vivid Seats PubCo in connection with the business combination and the PIPE Subscription (the “NYSE Proposal”); and

 

  3.

Proposal No. 9 — The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal.

 

Q:

What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A:

Horizon’s public shareholders may vote in favor of the business combination and still exercise their redemption rights. Accordingly, the business combination may be consummated even though the funds available from the Trust Account and the number of public shareholders are reduced as a result of

 

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  redemptions by public shareholders. The Transaction Agreement provides that the cash proceeds from the Trust Account and PIPE Subscription (collectively, the “Transaction Proceeds”) must be at least $768,984,330.00. In the event that redemptions of Horizon Class A ordinary shares reduce the Transaction Proceeds to an amount below $768,984,330.00, Sponsor shall increase its commitment to the PIPE Subscription by a corresponding amount (the “Sponsor Backstop Commitment”). In the event that redemptions of Horizon Class A ordinary shares reduce the Transaction Proceeds to an amount below $380.0 million prior to consideration of the Sponsor Backstop Commitment, Sponsor is entitled to arrange for the purchase of additional shares of Horizon ordinary shares from third party investors at a price of $10.00 per share with prior written consent of Hoya Topco. Accordingly, even if all public shareholders entitled to redemption elect to have their shares redeemed, the business combination may still occur.

Given that Sponsor has agreed to the Sponsor Backstop Commitment on a dollar-for-dollar basis, the pro forma total number of outstanding shares of Vivid Seats PubCo will remain the same in any redemption scenario. However, there will be a difference in the special dividend to be paid on the Closing Date. In the event that all of Horizon’s public shareholders choose to exercise their redemption rights, the dividend is expected to be approximately $1.1290 per share, all of which will be paid to Sponsor as the only non-redeeming shareholder. In the event that 50% of Horizon’s public shareholders, excluding Sponsor, choose to exercise their redemption rights, the dividend is expected to be approximately $0.5007 per share. In the event that no Horizon public shareholders choose to exercise their redemption rights, the dividend is expected to be approximately $0.3217 per share.

Based on recent trading prices, the value of the Horizon $10.00 Exercise Warrants and the Horizon $15.00 Exercise Warrants are quantified based on the following table:

Warrant Valuation (Black Scholes Model)

 

Tenor
Years

   Strike
Price
     Discount      Vol      Value      Units held
by Sponsor
     Total Value  
10    $ 10.00        1.448%        27.191%        3.82        17,000,000      $ 64,910,334  
10    $ 15.00        1.448%        27.191%        2.5        17,000,000      $ 42,441,505  

Additionally, given that Sponsor has agreed to the Sponsor Backstop Commitment, (i) there is no risk of dilution on the total outstanding shares, so the value of the Horizon $10.00 Exercise Warrants or the Horizon $15.00 Exercise Warrants will remain the same and (ii) the underwriting fees remain constant and are not adjusted based on redemptions.

In addition, in no event will we redeem public shares in an amount that would cause Horizon’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. It is anticipated that, upon completion of the business combination and assuming no redemptions of shares of Horizon Class A ordinary shares in connection with the business combination, Vivid Seats PubCo’s ownership will be as follows: (1) Horizon public shareholders will own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (2) the PIPE Investors (as defined herein), excluding Sponsor and certain affiliates of Sponsor, will own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (3) Sponsor, together with certain of its affiliates, will own (i) approximately 17.7% (assuming no exercise of Vivid Seats PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by Sponsor), of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); and (4) Hoya Topco will own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class B common stock). As a result of the voting power controlled by Hoya Topco, following the business combination, Vivid Seats PubCo will qualify as a “controlled company” within the meaning of applicable Nasdaq listing rules. The board of managers of Hoya Topco is controlled by our Private Equity Owner and its affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo’s

 

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shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats Board pursuant to the Stockholders’ Agreement.

 

Q:

Are the proposals conditioned on one another?

 

A:

Yes. The Closing is conditioned on the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal at the extraordinary general meeting. The Organizational Documents Proposals are conditioned on the approval of the Business Combination Proposal, the Merger Proposal and the NYSE Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus/consent solicitation statement.

 

Q:

Why is Horizon providing shareholders with the opportunity to vote on the business combination?

 

A:

Under Horizon’s amended and restated memorandum and articles of association, Horizon must provide all holders of Horizon Class A ordinary shares with the opportunity to redeem their public shares upon the consummation of an initial business combination either in conjunction with a tender offer or in conjunction with a shareholder vote. For business and other reasons, Horizon has elected to provide its shareholders with the opportunity to have their public shares redeemed in connection with a shareholder vote rather than a tender offer. Therefore, Horizon is seeking to obtain the approval of its shareholders of the Business Combination Proposal in order to allow its public shareholders to effectuate redemptions of their public shares in connection with the Closing. The approval of Horizon’s shareholders of the Business Combination Proposal is also a condition to closing in the Transaction Agreement. Holders of Horizon’s warrants are not entitled to vote on the business combination. Under Horizon’s amended and restated memorandum and articles of association, Horizon’s warrants do not have redemption rights in connection with the business combination.

 

Q:

What will happen in the business combination?

 

A:

On April 21, 2021, Horizon, Sponsor, Vivid Seats PubCo, Hoya Topco and Hoya Intermediate entered into the Transaction Agreement, pursuant to which: (a) at least one day prior to the Merger, Sponsor and Horizon will effect the Exchange, (b) prior to the Merger, Hoya Topco and Vivid Seats will effect the Pre-Closing Restructuring (as defined in the Transaction Agreement), which will include the Class A Redemption and the Intermediate Merger, (c) Horizon will merge with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving entity in the Merger, (d) the Second A&R LLCA will become effective, (e) Vivid Seats PubCo will purchase the Crescent Blockers in the Blocker Purchase, (f) Vivid Seats PubCo and Hoya Intermediate will consummate the Intermediate Contribution and Issuance, which contribution includes Vivid Seats PubCo’s contribution of cash in an amount equal to (A) all available cash of Vivid Seats PubCo following the Merger and the PIPE Subscription, minus (B) the Blocker Purchase Price, minus (C) the Blocker Tax Liabilities, (g) Hoya Intermediate will redeem the Intermediate Common Units held by the Redeemed Crescent Parties in the Crescent Redemption, (h) Vivid Seats PubCo will issue 118,200,000 shares of Vivid Seats Class B common stock and 6,000,000 warrants to purchase Vivid Seats Class B common stock to Hoya Topco in the Class B Issuance, and (i) Hoya Intermediate will contribute a portion of the funds received from Vivid Seats PubCo. Immediately prior to the business combination, Hoya Intermediate expects to effectively redeem its Senior Preferred Units, resulting in a cash payment of $225.1 million. Upon the Closing, Vivid Seats expects to apply $488.9 million of the business combination and PIPE Subscription proceeds towards debt repayments resulting in the full repayment of its May 2020 First Lien Loan and a partial repayment of its June 2017 First Lien Loan.

A copy of the Transaction Agreement is attached to this proxy statement/prospectus/consent solicitation statement as Annex A. For more information about the Transaction Agreement and the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal.”

 

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Q:

What factors did Horizon’s board of directors consider in connection with its decision to recommend voting in favor of the business combination?

 

A:

Horizon’s board of directors considered a number of factors pertaining to the business combination as generally supporting its decision to enter into the Transaction Agreement and the transactions contemplated thereby, including, but not limited to, the following:

 

   

Strong Historical Financial Performance and Economic Model. Hoya Intermediate and Vivid Seats PubCo historically demonstrated strong financial performance and results of operations. Horizon’s board of directors took into account Vivid Seats’ historically strong Adjusted EBITDA margins and Adjusted EBITDA to free cash flow conversion rates, coupled with low capital expenditures and negative working capital;

 

   

Favorable Prospects for Future Growth and Financial Performance. Horizon’s board of directors considered current information and forecast projections from Horizon and Vivid Seats PubCo’s management regarding (i) Hoya Intermediate and Vivid Seats PubCo’s business, prospects, financial condition, operations, technology, products, services, management, competitive position, and strategic business goals and objectives, (ii) general economic, industry, regulatory and financial market conditions and (iii) opportunities and competitive factors within Hoya Intermediate and Vivid Seats PubCo’s industry; Among other factors, Horizon’s board of directors reviewed Vivid Seats PubCo’s management forecasted financials and key financial metrics underlying such projections, as well as Vivid Seats PubCo’s projected revenue year over year growth rate percentage over the period from 2022 (projected) through 2023 (projected), as well as enterprise value as a multiple of Adjusted EBITDA and as a multiple of revenue for estimated calendar year 2022 and estimated calendar year 2023. Based on its review, Horizon’s board of directors concluded that the estimated values for Vivid Seats PubCo represented attractive valuation relative to such estimated values of comparable companies. For further information, see “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination — Comparable Company Analysis” and “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination — Certain Forecasted Financial Information for Vivid Seats PubCo.” Horizon’s board of directors also considered general market conditions and Vivid Seats PubCo’s competitive position. There is a significant and growing market opportunity serving the sports and entertainment markets and Vivid Seats PubCo is well-positioned for both significant immediate growth in post-pandemic recovery and above-market long-term growth. For further information, see “The Business of Vivid Seats — Our Industry Opportunity” and “The Business of Vivid Seats —Our Strength”;

 

   

Differentiated Technology Platform. Vivid Seats PubCo’s best-in-class proprietary search algorithms focuses customer experience on event discovery and conversion and creates unique engine for generating new customers. The platform also presents what Horizon believes to be a leading enterprise resource planning (ERP) system for the seller community;

 

   

Compelling Valuation. The implied enterprise value in connection with the business combination is approximately $2.0 billion, which Horizon’s board of directors believes represents an attractive valuation relative to selected comparable companies;

 

   

World Class Management Team. Hoya Intermediate and Vivid Seats PubCo’s experienced management team, led by Stanley Chia, Hoya Intermediate and Vivid Seats PubCo’s Chief Executive Officer, brings veteran leadership with highly relevant experience;

 

   

Potential for Future Accretive M&A. We believe that Hoya Intermediate and Vivid Seats PubCo are positioned as an attractive M&A platform opportunity as it continues to expand its offerings and geographic reach; and

 

   

Likelihood of Closing the Business Combination. The belief of the Horizon board of directors that an acquisition by Horizon has a reasonable likelihood of closing without potential issues under applicable antitrust and competition laws, or potential issues from any regulatory authorities.

 

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Q:

What conditions must be satisfied to complete the business combination?

 

A:

There are a number of closing conditions in the Transaction Agreement, including the approval by Horizon’s shareholders of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Transaction Agreement — Conditions to the Closing of the Business Combination.”

 

Q:

How will Vivid Seats PubCo be managed and governed following the business combination?

 

A:

The business and affairs of Vivid Seats PubCo will be managed under the direction of its board of directors. Following the Closing, the Vivid Seats Board will include nine (9) directors, one (1) of which will be the

  chief executive officer of Vivid Seats PubCo, five (5) of which will be designated by Hoya Topco (one (1) of which will be independent) and three (3) of which will be designated by Sponsor (two (2) of which will be independent). Subject to the terms of the Stockholders’ Agreement and the Vivid Seats PubCo Amended and Restated Charter, the number of directors will be fixed by the Vivid Seats Board. Please see the section entitled “Officers and Directors of Vivid Seats PubCo Upon Consummation of the Business Combination” for the names, ages and positions of each of the individuals who will serve as directors and officers of Vivid Seats PubCo following the business combination.

 

Q:

How will Hoya Intermediate be managed and governed following the business combination?

 

A:

The business and affairs of Hoya Intermediate will be managed under the direction of its board of managers. The Hoya Intermediate board of managers will initially consist of two individuals, one of which will be designated by Vivid Seats PubCo and one of which will be designated by Hoya Topco. For each matter presented to the board of managers of Hoya Intermediate, the Vivid Seats PubCo designee will be entitled to two (2) votes and the Hoya Topco designee will be entitled to one (1) vote. Immediately following the Closing, Vivid Seats PubCo’s Private Equity Owner will be able to designate the majority of the directors of the Vivid Seats Board and generally have control over the business and affairs of Vivid Seats PubCo. For more information regarding Vivid Seats PubCo’s Private Equity Owner’s controlling interest in Vivid Seats PubCo, see the section entitled “Risk Factors — Risks Related to Organizational Structure After the Business Combination — Vivid Seats PubCo’s Private Equity Owner will control us, and its interests may conflict with ours or yours in the future.”

 

Q:

Will Horizon obtain new financing in connection with the business combination?

 

A:

Horizon entered into the Subscription Agreements with the PIPE Investors, pursuant to which, subject to the consummation of the business combination, the PIPE Investors have agreed to purchase an aggregate of 22,500,000 shares of Vivid Seats Class A common stock, in a private placement for a purchase price of $10.00 per share, for aggregate gross proceeds of $225.0 million; provided, however, that such subscription is subject to increase due to the Sponsor Backstop Commitment. The closings under the Subscription Agreements will occur after the Effective Time and substantially concurrently with the closing of the business combination. For more information about the Subscription Agreements, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — PIPE Subscription Agreements.”

 

Q:

What equity stake will current Horizon shareholders, the PIPE Investors, the holders of the founder shares and Hoya Topco hold in Vivid Seats PubCo following the consummation of the business combination?

 

A:

It is anticipated that, upon completion of the business combination and assuming no redemptions of Horizon Class A ordinary shares in connection with the business combination, Vivid Seats PubCo’s ownership will

 

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  be as follows: (1) Horizon public shareholders will own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (2) the PIPE Investors, (as defined herein), excluding Sponsor and certain affiliates of the Sponsor, will own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (3) Sponsor, together with certain of its affiliates, will own (i) approximately 17.7% (assuming no exercise of Vivid Seats PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by Sponsor), of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); and (4) Hoya Topco will own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class B common stock). As a result of the voting power controlled by Hoya Topco, following the business combination, Vivid Seats PubCo will qualify as a “controlled company” within the meaning of Nasdaq rules. The board of managers of Hoya Topco is controlled by our Private Equity Owner and its affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo’s shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats Board pursuant to the Stockholders’ Agreement. In turn, Vivid Seats PubCo will indirectly hold approximately 39.4% of the Intermediate Common Units and Hoya Topco will hold approximately 60.6% of the Intermediate Common Units, which interests will be controlled by the Private Equity Owner for so long as it controls Hoya Topco. In addition, Vivid Seats PubCo will hold 58,652,601 Hoya Intermediate Warrants, exercisable upon the exercise of Vivid Seats PubCo Warrants. These levels of ownership interest assume that no shares are elected to be redeemed in connection with the business combination. The PIPE Investors have agreed to purchase an aggregate of 22,500,000 shares of Vivid Seats Class A common stock, in a private placement for a purchase price of $10.00 per share, for aggregate gross proceeds of $225.0 million in the PIPE Subscription. In this proxy statement/prospectus/consent solicitation statement, Horizon assumes that approximately $769.0 million of the gross proceeds from the PIPE Subscription and funds held in the Trust Account will be used to fund (i) the business combination, (ii) the partial repayment of our Term Loan Facilities to a net debt amount (consisting of long-term debt, less cash and cash equivalents) of approximately $132.1 million under both the no redemption scenario and maximum redemption scenario, and (iii) the payment of certain transaction expenses. The ownership percentage with respect to Vivid Seats PubCo does not take into account (A) warrants to purchase Horizon Class A ordinary shares that will be converted into Vivid Seats PubCo Warrants immediately following the business combination or other Vivid Seats PubCo Warrants issued in connection with the business combination or (B) the issuance of any shares upon completion of the business combination under the 2021 Plan. If the actual facts are different from these assumptions, the above levels of ownership interest will be different.

Please see the section entitled “Summary of the Proxy Statement/Prospectus/Consent Solicitation Statement — Impact of the Business Combination on Vivid Seats PubCo’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

Q:

What are the material differences between Horizon’s amended and restated memorandum and articles of association and the Vivid Seats PubCo Amended and Restated Bylaws and Vivid Seats PubCo Amended and Restated Charter, which will be the organizational documents of Vivid Seats PubCo following the Merger as set forth in the Organizational Documents Proposals?

 

A:

Horizon is asking its shareholders to approve the following material differences between Horizon’s amended and restated memorandum and articles of association and the Vivid Seats PubCo Amended and Restated Bylaws and Vivid Seats PubCo Amended and Restated Charter, which will be the certificate of incorporation and bylaws of Vivid Seats PubCo following the Merger: (1) an amendment to authorize the change in the authorized capital stock of Horizon from 400,000,000 Horizon Class A ordinary shares, 40,000,000 shares of

 

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  Horizon Class B ordinary shares, and 1,000,000 preference shares, par value $0.0001 per share, to 500,000,000 shares of Vivid Seats Class A common stock, 250,000,000 shares of Vivid Seats Class B common stock and 50,000,000 shares of preferred stock, par value $0.0001 per share, of Vivid Seats PubCo; (2) an amendment to authorize that certain provisions of the Vivid Seats PubCo Amended and Restated Charter and certain provisions of the Vivid Seats PubCo Amended and Restated Bylaws, in each case, will be subject to the Stockholders’ Agreement; (3) an amendment to authorize that the Vivid Seats PubCo Amended and Restated Charter will grant an explicit waiver regarding corporate opportunities to certain “exempted persons” (including Sponsor and Hoya Topco and their respective affiliates, members, directors, officers and/or employees, including any of the foregoing who will serve as directors or officers of Vivid Seats PubCo); (4) an amendment to authorize that the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws will adopt Delaware as the exclusive forum for certain stockholder litigation; and (5) an amendment to authorize all other changes in connection with the replacement of Horizon’s amended and restated memorandum and articles of association with the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws as part of the Merger (copies of which are attached to this proxy statement/prospectus/consent solicitation statement as Annex C and Annex D, respectively), including (a) changing the corporate name from “Horizon Acquisition Corporation” to “Vivid Seats Inc.,” (b) electing not to be governed by Section 203 of the DGCL and (c) removing certain provisions related to Horizon’s status as a blank check company that will no longer be applicable upon consummation of the business combination, all of which Horizon’s board of directors believes is necessary to adequately address the needs of Vivid Seats PubCo after the business combination.

See the sections entitled “Proposal No. 3 — Organizational Documents Proposal A,” “Proposal No. 4 — Organizational Documents Proposal B,” Proposal No. 5 — Organizational Documents Proposal C,” “Proposal No. 6 — Organizational Proposal D and “Proposal No. 7 — Organizational Documents Proposal E” for additional information.

 

Q:

Why is Horizon proposing the NYSE Proposal?

 

A:

Horizon is proposing the NYSE Proposal in order to comply with NYSE listing rules, which require shareholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, if the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable for common stock. In connection with the business combination, Horizon is seeking shareholder approval for the issuance of (subject to customary terms and conditions, including the Closing) of Vivid Seats Class A common stock and Vivid Seats Class B common stock in connection with the business combination and the PIPE Subscription. Because the number of securities that Vivid Seats PubCo will issue in connection with the business combination is equal to 20% or more of Horizon’s outstanding voting power and outstanding common stock, it is required to obtain shareholder approval of such issuances pursuant to NYSE listing rules. Shareholder approval of the NYSE Proposal is also a condition to closing in the Transaction Agreement. See the section entitled “Proposal No. 8 — The NYSE Proposal” for additional information.

 

Q:

What happens if I sell my Horizon Class A ordinary shares before the extraordinary general meeting?

 

A:

The record date for the extraordinary general meeting is earlier than the date that the business combination is expected to be completed. If you transfer your Horizon Class A ordinary shares after the record date, but before the extraordinary general meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the extraordinary general meeting. However, you will not be able to seek redemption of your Horizon Class A ordinary shares because you will no longer be able to deliver them for cancellation upon the Closing in accordance with the provisions described herein. If you transfer your Horizon Class A ordinary shares prior to the record date, you will have no right to vote those shares at the extraordinary general meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

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Q:

What vote is required to approve the Proposals presented at the extraordinary general meeting?

 

A:

Approval of the Business Combination Proposal, the Organizational Documents Proposals and the NYSE Proposal and the Adjournment Proposal requires the approval of an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the votes cast by the then outstanding Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Abstentions and broker non-votes will have no effect on the Business Combination Proposal, the Organizational Documents Proposals and the NYSE Proposal or the Adjournment Proposal.

Sponsor and Horizon’s directors and officers hold an aggregate of 37.8% of the total issued Horizon ordinary shares. Assuming that all shareholders who are entitled to do so attend the extraordinary general meeting and vote, the affirmative vote of 8,295,762 of the public shares, in addition to the affirmative vote of Sponsor and Horizon’s directors and officers, would be required to approve each of the Business Combination Proposal, the Organizational Documents Proposals, the NYSE Proposal and the Adjournment Proposal.

Approval of the Merger Proposal requires the approval of a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of not less than two-thirds of the votes cast by the then outstanding Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Abstentions and broker non-votes will have no effect on the Merger Proposal.

Sponsor and Horizon’s directors and officers hold an aggregate of 37.8% of the total issued Horizon ordinary shares. Assuming that all shareholders who are entitled to do so attend the extraordinary general meeting and vote, the affirmative vote of 19,628,768 of the public shares, in addition to the affirmative vote of Sponsor and Horizon’s directors and officers, would be required to approve the Merger Proposal.

 

Q:

May Sponsor or Horizon’s directors, officers, or advisors or their respective affiliates purchase shares in connection with the business combination?

 

A:

In connection with the shareholder vote to approve the proposed business combination, Sponsor and Horizon’s directors, officers and advisors and their respective affiliates may privately negotiate transactions to purchase shares from shareholders 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. As of March 31, 2021, Sponsor and Horizon’s directors, officers and advisors and certain of their respective affiliates hold approximately 28.7% Horizon Class A ordinary shares and 100% of Horizon Class B ordinary shares. None of Sponsor or Horizon’s 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. Such a purchase would include a contractual acknowledgement that such shareholder, although still the record holder of Horizon’s shares, 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 shareholder to vote such shares in a manner directed by the purchaser. In the event that Sponsor or Horizon’s directors, officers or advisors or their respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per share pro rata portion of the Trust Account.

 

Q:

How many votes do I have at the extraordinary general meeting?

 

A:

Horizon’s shareholders are entitled to one vote at the extraordinary general meeting for each Horizon Class A ordinary share or Horizon Class B ordinary share held of record as of             , 2021, the record date for the extraordinary general meeting. As of the close of business on the record date, there were a combined              outstanding Horizon Class A ordinary shares and Horizon Class B ordinary shares.

 

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Q:

What constitutes a quorum at the extraordinary general meeting?

 

A:

A quorum of Horizon shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding Horizon ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. As of the record date for the extraordinary general meeting,                Horizon ordinary shares would be required to achieve a quorum.

 

Q:

How will Sponsor and Horizon’s directors and officers vote?

 

A:

In connection with the IPO, Horizon entered into an agreement with Sponsor and each of Horizon’s directors and officers, pursuant to which each agreed to vote any Horizon Class A ordinary shares and Horizon Class B ordinary shares owned by them in favor of the Business Combination Proposal. Currently, Sponsor and Horizon’s directors and officers own approximately 28.7% of Horizon’s issued and outstanding Horizon Class A ordinary shares and 100% of Horizon Class B ordinary shares, in the aggregate, including all of the founder shares.

 

Q:

What interests do the current officers and directors have in the business combination?

 

A:

In considering the recommendation of Horizon’s board of directors to vote in favor of the business combination, shareholders should be aware that, aside from their interests as shareholders, Sponsor and certain of Horizon’s directors and officers have interests in the business combination that are different from, or in addition to, those of other shareholders generally. Horizon’s directors were aware of and considered these interests, among other matters, in evaluating the business combination, and in recommending to shareholders that they approve the business combination. Shareholders should take these interests into account in deciding whether to approve the business combination. These interests include, among other things:

 

   

the fact that Sponsor has agreed not to redeem any Class A ordinary shares held by it in connection with a shareholder vote to approve a proposed initial transaction;

 

   

the fact that Sponsor paid an aggregate of $155 million for 15,500,000 Horizon Class A ordinary shares (after giving effect to forfeitures in connection with the underwriters’ overallotment option being reduced or not exercised) (none of which were transferred to Horizon’s independent directors and none of which were transferred to Horizon’s strategic advisors) and such securities may have a higher value at the time of the business combination, estimated at approximately $155 million based on the closing price of $10.00 per public share on the NYSE on June 28, 2021;

 

   

the fact that Sponsor paid an aggregate of $25,000 for 13,599,608 Horizon Class B ordinary shares (after giving effect to forfeitures in connection with the underwriters’ overallotment option being reduced or not exercised) (the “Sponsor Shares”) (none of which were transferred to Horizon’s independent directors and none of which were transferred to Horizon’s strategic advisors) and such securities may have a higher value at the time of the business combination, estimated at approximately $136 million based on the closing price of $10.00 per public share on the NYSE on June 28, 2021;

 

   

the fact that Sponsor paid an aggregate of $9.78 million for the 6,519,791 Horizon IPO Private Placement Warrants currently owned by Sponsor, and such warrants will expire worthless if a transaction is not consummated by August 25, 2022; the warrants held by Sponsor had an aggregate market value of approximately $11,605,228 based upon the closing price of $1.78 per warrant on the NYSE on June 28, 2021;

 

   

the fact that Sponsor and Horizon’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Sponsor Shares held by them if Horizon fails to complete an initial transaction by August 25, 2022;

 

   

the fact that the Registration Rights Agreement will be entered into by Horizon;

 

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the fact that, at the option of Sponsor, any amounts outstanding under any loan made by Sponsor or any of its affiliates to Horizon in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Vivid Seats Class A common stock in connection with the consummation of the business combination;

 

   

the right of Sponsor to hold shares of Vivid Seats Class A common stock, as well as Vivid Seats PubCo Warrants, following the business combination, subject to certain lock-up periods;

 

   

the continued indemnification of Horizon’s existing directors and officers and the continuation of Horizon’s directors’ and officers’ liability insurance after the business combination (i.e., a “tail policy”);

 

   

the fact that Sponsor and Horizon’s officers and directors will not be reimbursed for any out-of-pocket expenses (estimated at $0 as of June 28, 2021) if an initial transaction is not consummated by August 25, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event Horizon is unable to complete an initial transaction by August 25, 2022, Sponsor has agreed to indemnify Horizon to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Horizon has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Horizon, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that Horizon may be entitled to distribute or pay over funds held by Horizon outside the Trust Account to Sponsor or any of its affiliates prior to the Closing;

 

   

the fact that Hoya Intermediate shall pay Sponsor $11.7 million in cash at Closing in consideration for the Sponsor Backstop Commitment;

 

   

the fact that Sponsor can earn a positive return on its investment even if other Horizon shareholders experience a negative return given the potential option value for the warrants; and

 

   

the fact that Sponsor will enter into the Exchange Agreement, pursuant to which all Horizon Class B ordinary shares will be exchanged for (i) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise price of $10.00 per share (the “Horizon $10.00 Exercise Warrants”), (ii) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise of $15.00 per share (the “Horizon $15.00 Exercise Warrants”) and (iii) 50,000 shares of Horizon Class A ordinary shares, as more particularly set forth in the Exchange Agreement.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

Under Horizon’s amended and restated memorandum and articles of association, if the Business Combination Proposal is not approved and Horizon does not otherwise consummate an alternative business combination by August 25, 2022, unless further extended, Horizon will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to Horizon’s public shareholders.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you may elect to have your public shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two (2) business days prior to the Closing, including interest not previously released to Horizon to pay its franchise and income taxes, by (b) the total number of Horizon Class A ordinary shares included as part of the units sold in the IPO and which remain outstanding; provided that Horizon will not redeem any public shares to the extent that such redemption would result in Horizon having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities

 

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  Exchange Act of 1934, as amended (the “Exchange Act”)) of less than $5,000,001. A shareholder holding both Horizon’s public shares and Horizon IPO Public Warrants may redeem its public shares but retain the Horizon IPO Public Warrants, which if the business combination closes, will become warrants of Vivid Seats PubCo. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the public shares (the “15% threshold”). Unlike some other blank check companies, other than the net tangible asset requirement and the 15% threshold described above, Horizon has no specified maximum redemption threshold and there is no other limit on the amount of public shares that you can redeem. Holders of outstanding Horizon IPO Public Warrants do not have redemption rights in connection with the business combination. Sponsor and Horizon’s directors and officers have agreed to waive their redemption rights with respect to any shares of Horizon’s ordinary shares they may hold in connection with the Closing. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of December 31, 2020 of approximately $544 million, the estimated per share redemption price would have been approximately $10.00. Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of franchise and income taxes payable) in connection with the liquidation of the Trust Account or if Horizon subsequently completes a different business combination on or prior to August 25, 2022, as may be further extended.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your Horizon Class A ordinary shares for or against or abstain from voting on the Business Combination Proposal or any other proposal described in this proxy statement/prospectus/consent solicitation statement. As a result, the business combination can be approved by shareholders who will redeem their shares and no longer remain shareholders.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must (i) if you hold your Horizon Class A ordinary shares through units, elect to separate your units into the underlying public shares and Horizon IPO Public Warrants prior to exercising your redemption rights with respect to the public shares and (ii) prior to 5:00 p.m., Eastern Daylight time, on                , 2021 (two (2) business days before the extraordinary general meeting), tender your shares physically or electronically and submit a request in writing that Horizon redeem your public shares for cash to Continental Stock Transfer & Trust Company, Horizon’s transfer agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street Plaza, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to his, her or its shares or, if part of such a group, the group’s shares, in excess of the 15% threshold. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. Shareholders 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 Horizon’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent.

 

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However, Horizon does not have any control over this process and it may take longer than two weeks. Shareholders 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.

Holders of outstanding units of Horizon must separate the underlying public shares and Horizon IPO Public Warrants prior to exercising redemption rights with respect to the public shares. If you hold units registered in your own name, you must deliver the certificate for such units to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and Horizon IPO Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the units.

If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using the Depository Trust Company’s (the “DTC”) deposit withdrawal at custodian (“DWAC”) system, a withdrawal of the relevant units and a deposit of an equal number of public shares and Horizon IPO Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with Horizon’s consent, until the vote is taken with respect to the business combination. If you tendered your shares for redemption to the transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent return the shares (physically or electronically). You may make such request by contacting Horizon’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

We expect that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations — U.S. Holders”) that exercises its redemption rights to receive cash from the trust account in exchange for its public shares will generally be treated as selling such public shares resulting in the recognition of capital gain or loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of public shares that such U.S. Holder owns or is deemed to own (including through the ownership of Horizon IPO Public Warrants) prior to and following the redemption. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.”

Additionally, because the Merger will occur prior to the redemption by any public shareholder, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367(b) of the Code and the tax rules relating to PFICs. The tax consequences of the exercise of redemption rights, including pursuant to Section 367(b) of the Code and the PFIC rules, are discussed more fully below under “U.S. Federal Income Tax Considerations — U.S. Holders.” All holders of Horizon’s public shares considering exercising their redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws.

 

Q:

What are the U.S. federal income tax consequences of the Merger?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations,” the Merger should constitute a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the U.S. Internal Revenue Code

 

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  of 1986, as amended (the “Code”). However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) of the Code to the facts and circumstances relating to Horizon, this result is not entirely clear. In the case of a transaction, such as the Merger, that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations — U.S. Holders” below) will be subject to Section 367(b) of the Code and, as a result of the Merger:

 

   

a U.S. Holder that holds public shares that have a fair market value of less than $50,000 on the date of the Merger generally will not recognize any gain or loss and will not be required to include any part of Horizon’s earnings in income;

 

   

a U.S. Holder that holds public shares that have a fair market value of $50,000 or more and that, on the date of the Merger, owns (actually and constructively) less than 10% of the total combined voting power of all classes of Horizon’s stock entitled to vote and less than 10% of the total value of all classes of Horizon’s stock generally will recognize gain (but not loss) on the exchange of public shares for shares of Class A common stock pursuant to the Merger. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its public shares provided certain other requirements are satisfied; and

 

   

a U.S. Holder that holds public shares having a fair market value of $50,000 or more and that, on the date of the Merger, owns (actually or constructively) 10% or more of the total combined voting power of all classes of Horizon’s stock entitled to vote or 10% or more of the total value of all classes of Horizon’s stock generally will be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its public shares provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (commonly referred to as the participation exemption).

Horizon does not expect to have significant cumulative earnings and profits through the date of the Merger.

Horizon believes that it is likely classified as a PFIC. If Horizon is a PFIC, a U.S. Holder of public shares may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its public shares or Horizon IPO Public Warrants pursuant to the Merger under the “passive foreign investment company” (“PFIC”) rules of the Code equal to the excess, if any, of the fair market value of the Vivid Seats Class A common stock or Vivid Seats PubCo warrants received in the Merger over the U.S. Holder’s adjusted tax basis in the corresponding public shares or Horizon IPO Public Warrants surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Merger, see the discussion in the section entitled “U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations.”

Additionally, the Merger may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations — Non-U.S. Holders”) to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such non-U.S. Holder’s shares of Vivid Seats Class A common stock after the Merger.

The tax consequences of the Merger are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor on the tax consequences to them of the Merger, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Merger, see “U.S. Federal Income Tax Considerations.”

 

Q:

What are the U.S. federal income tax consequences of the adoption of the Warrant Amendment?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations,” we intend to treat the adoption of the Warrant Amendment as a deemed exchange, solely for income tax purposes, of Horizon IPO Public

 

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  Warrants for “new” warrants that qualifies as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. However, due to the absence of direct guidance on the application of Section 368(a)(1)(E) of the Code to the facts and circumstances relating to Horizon, this result is not entirely clear. For a more complete discussion of the U.S. federal income tax considerations of the adoption of the Warrant Amendment, see “U.S. Federal Income Tax Considerations.”

 

Q:

If I am a warrant holder, can I exercise redemption rights with respect to my warrants?

 

A:

No. The holders of Horizon’s warrants have no redemption rights with respect to such warrants.

 

Q:

Do I have appraisal rights if I object to the proposed business combination?

 

A:

Under Section 239 of the CICA, the holders of Horizon public shares will not have appraisal or dissenter rights in connection with the business combination, including in connection with the Merger. Holders of public shares should consult their Cayman Islands legal counsel regarding their rights under the CICA.

 

Q:

What happens to the funds deposited in the Trust Account after the Closing?

 

A:

If the Business Combination Proposal is approved, Horizon intends to use a portion of the funds held in the Trust Account to pay (i) a portion of Horizon’s aggregate costs, fees and expenses in connection with the consummation of the business combination, (ii) tax obligations and advisory fees and (iii) for any redemptions of public shares. The remaining balance in the Trust Account will be used for: (i) together with proceeds received from the PIPE Subscription, the repayment of a portion of outstanding debt (held at a subsidiary of Vivid Seats PubCo) and (ii) general corporate purposes. See the section entitled “Proposal No. 1 — The Business Combination Proposal” for additional information.

 

Q:

What happens if the business combination is not consummated or is terminated?

 

A:

There are certain circumstances under which the Transaction Agreement may be terminated. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Transaction Agreement — Termination” for additional information regarding the parties’ specific termination rights. In accordance with Horizon’s existing amended and restated memorandum and articles of association, if an initial business combination is not consummated by August 25, 2022, unless extended, Horizon will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Horizon’s remaining shareholders and board of directors, liquidate and dissolve, subject, in each case, to Horizon’s obligations under Cayman Islands law to provide for claims of creditors and the other requirements of applicable law.

Horizon expects that the amount of any distribution its public shareholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the business combination, subject in each case to Horizon’s obligations under the Cayman Islands law to provide for claims of creditors and other requirements of applicable law. Holders of the founder shares have waived any right to any liquidating distributions with respect to those shares.

In the event of liquidation, there will be no distribution with respect to Horizon’s outstanding warrants. Accordingly, the warrants will expire worthless.

 

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Q:

When is the business combination expected to be consummated?

 

A:

It is currently anticipated that the business combination will be consummated promptly following the extraordinary general meeting of Horizon shareholders to be held on             , 2021; provided that all the requisite shareholder approvals are obtained and other conditions to the Closing have been satisfied or waived. For a description of the conditions for the completion of the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Transaction Agreement — Conditions to the Closing of the Business Combination.”

 

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/consent solicitation statement, including “Risk Factors” and the annexes, and to consider how the business combination will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus/consent solicitation statement 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 Horizon Class A ordinary shares or Horizon Class B ordinary shares on             , 2021, the record date for the extraordinary general meeting of Horizon shareholders, you may vote with respect to the proposals in person at the extraordinary general meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a proxy from your broker, bank or nominee.

 

Q:

What will happen if I abstain from voting or fail to vote at the extraordinary general meeting?

 

A:

At the extraordinary general meeting, Horizon will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote or an abstention will have no effect on the Proposals.

 

Q:

What will happen if I sign and submit my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by Horizon without an indication of how the shareholder intends to vote on a proposal will be voted “FOR” each proposal presented to the shareholders.

 

Q:

If I am not going to attend the extraordinary general meeting in person, should I submit my proxy card instead?

 

A:

Yes. Whether you plan to attend the extraordinary general meeting or not, please read the enclosed proxy statement/prospectus/consent solicitation statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. 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.

 

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  Horizon believes the proposals presented to the shareholders 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 broker to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have submitted my executed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to Horizon’s secretary at the address listed below so that it is received by Horizon’s secretary prior to the extraordinary general meeting or attend the extraordinary general meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to Horizon’s secretary, which must be received prior to the extraordinary general meeting.

 

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:

How can I return my Written Consent to the Warrant Amendment?

 

A:

If you were a holder of record of Horizon IPO Warrants on                 , 2021, the record date for the consent solicitation, and you wish to give your consent to the Warrant Amendment, you must complete, sign, date and return the Written Consent in the postage-paid envelope provided. If you hold your Horizon IPO Warrants in “street name,” which means your Horizon IPO Warrants are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that Written Consents related to the Horizon IPO Warrants you beneficially own are properly counted. In this regard, you must provide the record holder of your Horizon IPO Warrants with instructions on whether to provide your consent to the Warrant Amendment with respect to your warrants. If approved, the Warrant Amendment would amend and restate the Horizon IPO Warrants, as contemplated by the Transaction Agreement, to implement certain changes that are intended to result in the Horizon IPO Warrants being accounted for as equity within the balance sheet of Horizon, instead of as a liability measured at fair value with non-cash fair value adjustments recorded in earnings at each reporting period. The accounting treatment of the amended and restated warrant terms is currently under evaluation.

 

Q:

What is the deadline for returning my Writen Consent?

 

A:

The consent solicitation will expire on the Consent Solicitation End Date, which is 11:59 p.m., Eastern Daylight Time, on                 , 2021, or such later time and date to which Horizon may extend the consent solicitation. The Written Consent must be received by Horizon by the Consent Solicitation End Date, as described in this proxy statement/prospectus/consent solicitation statement. If the Consent Solicitation End Date is extended, we will make a public announcement of such extension by no later than 9:00 a.m., Eastern Daylight Time, on the next business day following the Consent Solicitation End Date as in effect immediately prior to such extension.

 

Q:

What happens if I sell my Horizon IPO Warrants prior to the Consent Solicitation End Date?

 

A:

The record date for the consent solicitation is                 , 2021. If you transfer your Horizon IPO Warrants after the record date, unless the transferee obtains from you a proxy to deliver a consent as to those

 

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  warrants, you will retain your right to submit your written consent. If you transfer your Horizon IPO Warrants prior to the record date, you will have no right to participate in the consent solicitation.

 

Q:

What happens to the business combination if the Warrant Amendment is not approved?

 

A:

The success or failure of the consent solicitation and the adoption of the Warrant Amendment will have no effect on the completion of the business combination or the Proposals. Adoption of the Warrant Amendment is not a condition to the business combination or the Proposals.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or if you need additional copies of the proxy statement/prospectus/consent solicitation statement or the enclosed proxy card you should contact Horizon’s Secretary at             .

You may also contact Horizon’s proxy solicitor at:

Telephone: (800) 663-5200

(banks and brokers call collect at (203) 658-9400)

Email: HZAC.info@investor.morrowsodali.com

To obtain timely delivery, Horizon’s shareholders must request the materials no later than five (5) business days prior to the extraordinary general meeting.

You may also obtain additional information about Horizon from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find Additional Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to Horizon’s transfer agent at least two business days prior to the extraordinary general meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street Plaza, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

Horizon will pay the cost of soliciting proxies for the extraordinary general meeting. Horizon has engaged              (the “Solicitation Agent”), to assist in the solicitation of proxies for the extraordinary general meeting. Horizon has agreed to pay the Solicitation Agent a fee of $                , plus disbursements. Horizon will reimburse the Solicitation Agent for reasonable out-of-pocket expenses and will indemnify the Solicitation Agent and its affiliates against certain claims, liabilities, losses, damages and expenses. Horizon will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Horizon Class A ordinary shares and Horizon Class B ordinary shares their expenses in forwarding soliciting materials to beneficial owners of Horizon Class A ordinary shares and Horizon Class B ordinary shares and in obtaining voting instructions from those owners. Horizon’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS/CONSENT SOLICITATION STATEMENT

This summary highlights selected information from this proxy statement/prospectus/consent solicitation statement and does not contain all of the information that is important to you. To better understand the business combination and the proposals to be considered at the extraordinary general meeting, you should read this entire proxy statement/prospectus/consent solicitation statement carefully, including the annexes. See also the section entitled “Where You Can Find Additional Information.”

Parties to the Business Combination

Horizon Acquisition Corporation

Horizon is a blank check company incorporated on June 12, 2020 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We reviewed a number of opportunities to enter into a business combination with an operating business, and we entered into the Transaction Agreement on April 21, 2021. We intend to finance the business combination through a combination of (i) cash held in the Trust Account net of redemptions and deferred underwriting discounts and (ii) gross proceeds of the PIPE Subscription.

Horizon seeks to capitalize on the multiple decades of combined investment experience of Todd Boehly, our Chairman, Chief Executive Officer and Chief Financial Officer, and the members of Horizon’s board of directors. Mr. Boehly is the co-founder, Chairman and Chief Executive Officer of Eldridge Industries (“Eldridge”), a holding company with a unique network of businesses across finance, technology, real estate and entertainment.

Founded in 2015 and headquartered in Greenwich, CT, with additional offices in New York, London and Beverly Hills, Eldridge and its affiliated companies employed more than 2,500 people globally as of December 31, 2019. Eldridge owns and operates companies as well as utilizes its network and insights to make minority investments in businesses with attractive growth potential. Mr. Boehly has spent his career seeking to identify growth opportunities and create value. Under his leadership, Eldridge has achieved strong success across multiple financial services and consumer-oriented businesses through a consistent focus on aligning people, capital and technology, managing in excess of $40 billion in assets as of December 31, 2020.

On August 25, 2020, Horizon completed its initial public offering of 50,000,000 units, plus an additional 4,398,433 units subsequently issued upon full exercise of the underwriters’ overallotment option, at a price of $10.00 per unit generating gross proceeds of $543,984,330 before underwriting discounts and expenses. Each unit consisted of one Horizon Class A ordinary share and one-third of one Horizon IPO Public Warrant. Each whole Horizon IPO Public Warrant entitles the holder thereof to purchase one Horizon Class A ordinary share at an exercise price of $11.50 per share, subject to certain adjustments. Simultaneous with the closing of its initial public offering, Horizon completed the private placement of 5,933,333 Horizon IPO Private Placement Warrants, plus an additional 586,458 Horizon IPO Private Placement Warrants subsequently issued upon full exercise of the underwriters’ overallotment option, at a price of $1.50 per private placement warrant, generating aggregate total proceeds of $9.8 million. The Horizon IPO Private Placement Warrants sold in the private placement are substantially identical to the Horizon IPO Public Warrant forming a part of the warrants sold in the initial public offering, except that (i) subject to certain limited exceptions, they are subject to transfer restrictions until 30 days following the consummation of Horizon’s initial business combination, (ii) subject to certain limitations, if held by Sponsor or its permitted transferees, they are not redeemable, and (iii) if held by Sponsor or its permitted transferees, they may be exercised on a cashless basis and have certain registration rights.


 

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Following the closing of the initial public offering, a total of $543,984,330 from the net proceeds from the sale of units in the initial public offering and the sale of the Horizon IPO Private Placement Warrants was placed in the Trust Account. The Trust Account may be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations. As of December 31, 2020, funds in the Trust Account totaled approximately $544,002,795. These funds will remain in the Trust Account, except for the withdrawal of interest to pay income taxes, if any, until the earliest of (i) the completion of Horizon’s initial business combination or (ii) the redemption of all of the public shares if Horizon is unable to complete a business combination by August 25, 2022 (unless such date is extended in accordance with the Existing Organizational Documents (as defined herein)), subject to applicable law.

Horizon Class A ordinary shares and Horizon IPO Public Warrants, which are exercisable for Horizon Class A ordinary shares under certain circumstances, are currently listed on the NYSE under the symbols “HZAC” and “HZAC WS,” respectively.

For more information about Horizon, see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Horizon” and “Other Information Related to Horizon.”

Vivid Seats

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Vivid Seats prior to the Closing, which will be the business of Vivid Seats PubCo and its subsidiaries following the Closing.

Our Company

Vivid Seats is a leading marketplace that allows fans of live events to connect seamlessly with third-party ticket sellers through our technology platform that spans the ecosystem. We believe Vivid Seats is a leading marketplace based on a combination of (1) third party estimates of the overall market size, including estimates provided in a 2017 report prepared for Vivid Seats by a third party consulting firm, (2) publicly available information including our competitors’ filings with the SEC and (3) internal company information from our Skybox platform that provides insights into volumes across marketplaces representing a meaningful portion of the overall secondary ticketing market.

Our mission is to connect buyers and sellers, empowering fans to Experience It Live. We believe live events deliver some of life’s most exciting moments and our platform provides customers (both on the buy and sell side) with an easy-to-use, trusted marketplace experience that ensures fans can attend live events and create memories that last a lifetime. During the years ended December 31, 2019 and 2020 we generated $469 million and $35 million of revenues, respectively, and $2,280 million and $347 million of Marketplace gross order value (“Marketplace GOV”).

We operate a technology platform which provides the infrastructure supporting our marketplace that helps buyers easily purchase tickets from third-party ticket sellers and discover and attend live events while enabling third-party sellers to seamlessly manage their end-to-end operations. We unite millions of buyers with thousands of sellers. We have mutually beneficial partnerships with a number of content rights holders, media partners, product and service partners and distribution partners.

Our platform is built on years of customer transactional and engagement data that provides us with deep insights into how to best connect buyers with the experiences they seek. We understand the feeling of


 

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anticipation as the lights go down, the excitement of come-from-behind wins, and the passion for guitar solos, and we work diligently to enable fans to experience as many of these moments as possible. In 2019, we connected over five million buyers to over 200,000 unique events. Our marketplace connects fans who cheer on their home-town sports team, rock out to their favorite band or attend acclaimed theater productions with ticket sellers that choose to list a wide variety of their inventory on our platform.

Private Equity Owner

We have a valuable relationship with our Private Equity Owner, which consists of certain investment funds affiliated with GTCR. Founded in 1980, GTCR is a leading growth-oriented private equity firm focused on investing in growth companies in the Healthcare, Financial Services & Technology, Technology, Media & Telecommunications and Growth Business Services industries. The Chicago-based firm pioneered The Leaders Strategy—finding and partnering with management leaders in core domains to identify, acquire and build market-leading companies through transformational acquisitions and organic growth. Since its inception, our Private Equity Owner has invested more than $20.0 billion in over 250 companies. Our Private Equity Owner purchased its controlling interest in Vivid Seats on June 30, 2017.

Company Information

Vivid Seats PubCo was incorporated in Delaware on March 29, 2021 as a wholly owned subsidiary of Hoya Intermediate for the purpose of completing the business combination.

The headquarters for the Vivid Seats business is located at 111 N. Canal Street, Suite 800, Chicago, Illinois 60606. The Vivid Seats PubCo telephone number is (312) 291-9966 and its website is www.vividseats.com. The information on or available through any of such website is not deemed incorporated in this proxy statement/prospectus/consent solicitation statement and does not form part of this proxy statement/prospectus/consent solicitation statement.

The Business Combination

On April 21, 2021, Horizon, Sponsor, Vivid Seats PubCo, Hoya Topco and Hoya Intermediate entered into the Transaction Agreement, pursuant to which: (a) at least one (1) day prior to the Merger, and in accordance with the Exchange Agreement, Sponsor and Horizon will effect the Exchange, (b) prior to the Merger, Hoya Topco and Vivid Seats will effect the Pre-Closing Restructuring (as defined in the Transaction Agreement), which will include the Class A Redemption and the Intermediate Merger; (c) at the Effective Time, Horizon will merge with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving entity in the Merger, and by virtue of the Merger, (i) each Horizon ordinary share will be converted into a share of Vivid Seats Class A common stock, (ii) each Horizon Warrant will be converted into a corresponding Vivid Seats PubCo Warrant and (iii) the certificate of incorporation and bylaws of Vivid Seats PubCo in effect immediately prior to the Effective Time will be amended and restated to the Vivid Seats PubCo Amended and Restated Charter and Vivid Seats PubCo Amended and Restated Bylaws; (d) at the Closing, the Second A&R LLCA will become effective; (e) at the Closing and immediately following the effectiveness of the Second A&R LLCA, Vivid Seats PubCo will purchase the Crescent Blockers from the Blocker Sellers in the Blocker Purchase; (f) at the Closing and immediately following the effectiveness of the Second A&R LLCA, Hoya Intermediate will issue to Vivid Seats PubCo Intermediate Common Units and warrants to purchase Intermediate Common Units in the Intermediate Contribution and Issuance, which contribution includes Vivid Seats PubCo’s contribution of cash in an amount equal to (A) all available cash of Vivid Seats PubCo following the Merger and the PIPE Subscription, minus (B) the Blocker Purchase Price, minus (C) the Blocker Tax Liabilities; (g) at the Closing and immediately following the effectiveness of the Second A&R LLCA, Hoya Intermediate will redeem all of the Intermediate Common Units held by the


 

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Redeemed Crescent Parties in the Crescent Redemption; (h) at the Closing and immediately following the effectiveness of the Second A&R LLCA, Vivid Seats PubCo will issue 118,200,000 shares of Vivid Seats Class B common stock and 6,000,000 warrants to purchase Vivid Seats Class B common stock to Hoya Topco in the Class B Issuance; and (i) Hoya Intermediate will contribute a portion of the funds received from Vivid Seats PubCo to Hoya Midco. Immediately prior to the business combination, Hoya Intermediate expects to effectively redeem its Senior Preferred Units, resulting in a cash payment of $225.1 million. Upon the Closing, Vivid Seats expects to apply $488.9 million of the business combination and PIPE Subscription proceeds towards debt repayments resulting in the full repayment of its May 2020 First Lien Loan and a partial repayment of its June 2017 First Lien Loan.

For more information about the Transaction Agreement and the business combination and other transactions contemplated thereby, see the section entitled “Proposal No. 1 — The Business Combination Proposal.”

Conditions to the Closing

Conditions to Obligations of Horizon, Hoya Topco, Hoya Intermediate and Vivid Seats PubCo to Consummate the Business Combination. The obligations of Horizon, Hoya Topco, Hoya Intermediate and Vivid Seats PubCo to consummate the business combination are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by all of such parties:

 

   

The Horizon Shareholder Approval will have been obtained;

 

   

No order, injunction, judgment, law or similar determination by a court or other governmental authority will be pending that prohibits or otherwise prevents the business combination;

 

   

The registration statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn;

 

   

The Pre-Closing Restructuring shall have been consummated prior to the Closing; and

 

   

The shares of Vivid Seats Class A common stock to be issued in connection with the business combination shall have been approved for listing on Nasdaq and such approval shall not be subject to any conditions or any plan of compliance to which Vivid Seats PubCo would be subject after the Closing.

Conditions to Obligations of Horizon to Consummate the Business Combination.    The obligations of Horizon to consummate the business combination are subject to the satisfaction at or prior to the Closing of the following conditions, any one or more of which may be waived in writing by Horizon:

 

   

Certain fundamental representations and warranties of the Vivid Seats Companies related to organization, due authorization, absence of changes and brokers’ fees contained in the Transaction Agreement shall be true and correct in all material respects as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date;

 

   

The representations and warranties of the Vivid Seats Companies related to capitalization contained in the Transaction Agreement shall be true and correct in all respects other than de minimis inaccuracies of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date;

 

   

Each of the other representations and warranties of the Vivid Seats Companies contained in the Transaction Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or another similar materiality qualification set forth therein) as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date, except for, in each case, inaccuracies or omissions that individually or in the aggregate, have not had, and would not reasonably be expected to have a Company Material Adverse Effect (as defined in the Transaction Agreement);


 

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Each of the covenants of Hoya Topco and the Vivid Seats Companies contained in the Transaction Agreement shall have been performed as of or prior to the Closing; and

 

   

There shall not have occurred a Company Material Adverse Effect.

Conditions to Obligations of Hoya Topco, Hoya Intermediate and Vivid Seats PubCo to Consummate the Business Combination.    The obligations of Hoya Topco, Hoya Intermediate and Vivid Seats PubCo to consummate the business combination are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by Hoya Topco, Hoya Intermediate and Vivid Seats PubCo:

 

   

Certain fundamental representations and warranties of Horizon related to organization, due authorization, the Trust Account, absence of changes and brokers’ fees contained in the Transaction Agreement shall be true and correct in all material respects as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date;

 

   

The representations and warranties of Horizon related to capitalization contained in the Transaction Agreement shall be true and correct in all respects other than de minimis inaccuracies of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date;

 

   

Each of the other representations and warranties of Horizon contained in the Transaction Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Horizon Material Adverse Effect” or another similar materiality qualification set forth therein) as of the Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date, except for, in each case, inaccuracies or omissions that individually or in the aggregate, have not had, and would not reasonably be expected to have a Horizon Material Adverse Effect (as defined in the Transaction Agreement);

 

   

Each of the covenants of Horizon contained in the Transaction Agreement shall have been performed as of or prior to the Closing; and

 

   

The Available Horizon Cash will be no less than the Minimum Available Horizon Cash Amount immediately prior to the Closing (after deducting the amount required to satisfy the Horizon Share Redemption Amount and excluding transaction expenses of Vivid Seats and Horizon).

Regulatory Matters

The business combination are not subject to any additional federal or state regulatory requirement or approval, except for the filings with the Registrar of Companies of the Cayman Islands and the State of Delaware, in each case, that are necessary to effectuate the business combination.

Related Agreements

Vivid Seats PubCo Amended and Restated Charter.

Pursuant to the terms of the Transaction Agreement, the Vivid Seats PubCo Amended and Restated Charter will be the certificate of incorporation of Vivid Seats PubCo following the Closing, which will, among other things, provide for three classes of stock, the Vivid Seats Class A common stock, which will be issued to Sponsor, the PIPE Investors and Horizon’s public shareholders in connection with the Closing, the Vivid Seats Class B common stock which will be issued to Hoya Topco in connection with the Closing, and preferred stock, none of which will be issued in connection with the Closing. For more information about the amendments to Vivid Seats PubCo’s certificate of incorporation, see section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Vivid Seats PubCo Amended and Restated Charter.”


 

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Second A&R LLCA of Hoya Intermediate.

Following the Closing, Vivid Seats PubCo will operate its business through Hoya Intermediate and its subsidiaries. At the Closing, Vivid Seats PubCo and Hoya Topco will enter into the Second A&R LLCA of Hoya Intermediate, which will set forth, among other things, the rights and obligations of the board of managers and members of Hoya Intermediate. For more information about the Second A&R LLCA of Hoya Intermediate, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Second A&R LLCA of Hoya Intermediate.”

Crescent Purchase Agreement.

Hoya Topco, Hoya Intermediate, Vivid Seats PubCo, Horizon, the Blocker Sellers, the Redeemed Crescent Parties, the Crescent Blockers and Crescent Capital Group LP entered into the Purchase, Sale and Redemption Agreement on April 21, 2021, (the “Crescent Purchase Agreement”), pursuant to which the parties thereto agree to, among other things, effect the Class A Redemption, the Intermediate Merger, the Blocker Purchase and the Crescent Redemption. For more information about the Crescent Purchase Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Crescent Purchase Agreement.”

Registration Rights Agreement.

At the Closing, Vivid Seats PubCo, Sponsor and Hoya Topco will amend and restate the Registration and Shareholder Rights Agreement, dated as of August 25, 2020, by and between Horizon and Sponsor. Pursuant to the Registration Rights Agreement, Vivid Seats PubCo will agree to file a registration statement for a shelf registration on Form S-1 or Form S-3 within 30 days following Closing and Sponsor and Hoya Topco will be granted certain customary registration rights with respect to the securities of Vivid Seats PubCo. For more information about the Registration Rights Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Registration Rights Agreement.”

Stockholders’ Agreement.

At the Closing, Vivid Seats PubCo will enter into the Stockholders’ Agreement with Sponsor and Hoya Topco, pursuant to which, among other things, Hoya Topco and its affiliates will be granted the right to designate five (5) directors for election to the board of directors of the Vivid Seats Board (one (1) of which will be independent) and Sponsor and its affiliates will be granted the right to designate three (3) directors for election to the Vivid Seats Board (two (2) of which will be independent) (and the parties thereto will vote in favor of such designees). Additionally, the Stockholders’ Agreement contains certain restrictions on transfer with respect to lock-up shares held by Sponsor and Hoya Topco, including a twelve (12) month lock-up of such shares in each case, subject to limited exceptions as contemplated thereby (including that Sponsor and Hoya Topco may each transfer: (a) fifty percent (50%) of their lock-up shares on the date that is six (6) months following the Closing Date and (b) the remaining lock-up shares on any date, at least six (6) months after the Closing, on which (i) the price per lock-up share exceeds $15.00 per share for twenty (20) trading days within a thirty (30) day trading period and (ii) the average daily trading volume exceeds one (1) million shares of Vivid Seats PubCo common stock during such thirty (30) trading day period). The Stockholders’ Agreement also contains certain provisions intended to maintain, following the consummation of the business combination, Vivid Seats PubCo’s qualification as a “controlled company” within the meaning of Nasdaq Listing Rule 5615(c)(1).

For more information about the Stockholders’ Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Stockholders’ Agreement.”


 

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Tax Receivable Agreement.

At the Closing, Vivid Seats PubCo, Hoya Intermediate, the TRA Holder Representative, Hoya Topco and the other TRA Holders will enter into the Tax Receivable Agreement, a form of which is attached hereto as Annex F. Pursuant to the Tax Receivable Agreement, Vivid Seats PubCo will generally be required to pay Hoya Topco and the other TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Tax Group (i.e. Vivid Seats PubCo and applicable consolidated, unitary or combined subsidiaries thereof) realizes, or is deemed to realize, as a result of certain Tax Attributes (as defined herein), which include:

 

   

existing tax basis in certain assets of Hoya Intermediate and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service;

 

   

tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by Vivid Seats PubCo under the Tax Receivable Agreement) acquired by Vivid Seats PubCo from a TRA Holder pursuant to the terms of the Second A&R LLCA;

 

   

certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired directly or indirectly by Vivid Seats PubCo pursuant to a Reorganization Transaction;

 

   

certain tax benefits realized by Vivid Seats PubCo as a result of certain U.S. federal income tax allocations of taxable income or gain away from Vivid Seats PubCo and to other members of Hoya Intermediate and deductions or losses to Vivid Seats PubCo and away from other members of Hoya Intermediate, in each case, as a result of the business combination; and

 

   

tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement.

For more information about the Tax Receivable Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Tax Receivable Agreement.”

PIPE Subscription Agreements.

Horizon and Vivid Seats PubCo entered into the subscription agreements (the “Subscription Agreements”) with the PIPE Investors, pursuant to which the PIPE Investors have agreed to subscribe for and purchase, an aggregate of 22,500,000 shares of Vivid Seats Class A common stock, in a private placement for a purchase price of $10.00 per share, for aggregate gross proceeds of $225.0 million; provided, however, such subscription is subject to increase due to the Sponsor Backstop Commitment. Eldridge Industries, LLC, an affiliate of the Sponsor, has agreed to purchase 19,000,000 shares of Vivid Seats Class A Common Stock in a private placement for a purchase price of $10.00 per share in the PIPE Subscription. The Subscription Agreements provide that Vivid Seats PubCo will grant the investors in the PIPE Subscription certain customary registration rights. Vivid Seats PubCo will, within 30 days after the consummation of the business combination, file with the SEC a registration statement registering the resale of such shares of Vivid Seats Class A common stock and will use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof. The closing of the PIPE Subscription is contingent upon, among other things, the substantially concurrent consummation of the business combination.

For more information about the Subscription Agreements, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — PIPE Subscription Agreements.”

Sponsor Agreement.

Horizon has entered into a sponsor agreement with Sponsor and Hoya Topco (the “Sponsor Agreement”), pursuant to which Sponsor agreed to vote in favor of the Proposals, in each case, subject to the terms and


 

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conditions contemplated by the Sponsor Agreement. Sponsor also agreed to (a) waive certain anti-dilution protections it may be entitled to under Horizon’s organizational documents or otherwise, (b) certain transfer restrictions on the Horizon ordinary shares and Horizon Warrants beneficially owned by Sponsor and its affiliates, (c) not to solicit any business combination other than the business combination with Hoya Topco, in each case, subject to limited exceptions as contemplated thereby and (d) provide the Sponsor Backstop Commitment, in consideration for a fee of approximately $11.7 million.

For more information about the Sponsor Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Sponsor Agreement.”

Other Agreements.

For more information about other agreements to be entered into by Horizon and its affiliates at the Closing, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements.”

Interests of Certain Persons in the Business Combination

Horizon – Interests of Certain Persons

In considering the recommendation of Horizon’s board of directors to vote in favor of the business combination, shareholders should be aware that, aside from their interests as shareholders, Sponsor and certain of Horizon’s directors and officers have interests in the business combination that are different from, or in addition to, those of other shareholders generally. Horizon’s directors were aware of and considered these interests, among other matters, in evaluating the business combination, and in recommending to shareholders that they approve the business combination. Shareholders should take these interests into account in deciding whether to approve the business combination. These interests include, among other things:

 

   

the fact that Sponsor has agreed not to redeem any Horizon Class A ordinary shares held by it in connection with a shareholder vote to approve a proposed initial transaction;

 

   

the fact that Sponsor paid an aggregate of $155 million for 15,500,000 Horizon Class A ordinary shares (after giving effect to forfeitures in connection with the underwriters’ overallotment option being reduced or not exercised) (none of which were transferred to Horizon’s independent directors and none of which were transferred to Horizon’s strategic advisors) and such securities may have a higher value at the time of the business combination, estimated at approximately $155 million based on the closing price of $10.00 per public share on the NYSE on June 28, 2021;

 

   

the fact that Sponsor paid an aggregate of $25,000 for 13,599,608 Horizon Class B ordinary shares (after giving effect to forfeitures in connection with the underwriters’ overallotment option being reduced or not exercised) (the “Sponsor Shares”) (none of which were transferred to Horizon’s independent directors and none of which were transferred to Horizon’s strategic advisors) and such securities may have a higher value at the time of the business combination, estimated at $136 million based on the closing price of $10.00 per public share on the NYSE on June 8, 2021;

 

   

the fact that Sponsor paid an aggregate of $9.78 million for the 6,519,791 Horizon IPO Private Placement Warrants currently owned by Sponsor, and such warrants will expire worthless if a transaction is not consummated by August 25, 2022; the warrants held by Sponsor had an aggregate market value of approximately $11,605,228 based upon the closing price of $1.78 per warrant on the NYSE on June 28, 2021;

 

   

the fact that Sponsor and Horizon’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Sponsor Shares held by them if Horizon fails to complete an initial transaction by August 25, 2022;


 

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the fact that the Registration Rights Agreement will be entered into by Horizon;

 

   

the fact that, at the option of Sponsor, any amounts outstanding under any loan made by Sponsor or any of its affiliates to Horizon in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Vivid Seats Class A common stock in connection with the consummation of the business combination;

 

   

the right of Sponsor to hold shares of Vivid Seats PubCo Class A common stock, as well as Vivid Seats PubCo Warrants, following the business combination, subject to certain lock-up periods;

 

   

the continued indemnification of Horizon’s existing directors and officers and the continuation of Horizon’s directors’ and officers’ liability insurance after the business combination (i.e., a “tail policy”);

 

   

the fact that Sponsor and Horizon’s officers and directors will not be reimbursed for any out-of-pocket expenses (estimated at $0 as of June 28, 2021) if an initial transaction is not consummated by August 25, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event Horizon is unable to complete an initial transaction by August 25, 2022, Sponsor has agreed to indemnify Horizon to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Horizon has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Horizon, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that Horizon may be entitled to distribute or pay over funds held by Horizon outside the Trust Account to Sponsor or any of its affiliates prior to the Closing;

 

   

the fact that Hoya Intermediate shall pay Sponsor $11.7 million in cash at Closing in consideration for the Sponsor Backstop Commitment;

 

   

the fact that Sponsor can earn a positive return on its investment even if other Horizon shareholders experience a negative return give the potential option value for the new warrants; and

 

   

the fact that Sponsor will enter into the Exchange Agreement, pursuant to which all Horizon Class B ordinary shares will be exchanged for (i) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise price of $10.00 per share (the “Horizon $10.00 Exercise Warrants”), (ii) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise of $15.00 per share (the “Horizon $15.00 Exercise Warrants”) and (iii) 50,000 shares of Horizon Class A ordinary shares, as more particularly set forth in the Exchange Agreement.

Hoya Intermediate – Interests of Certain Persons

Hoya Intermediate is a manager-managed limited liability company, with Hoya Topco serving as the sole manager, and as such does not have any directors. Its officers are Stanley Chia, its chief executive officer and president, and Lawrence Fey, its chief financial officer. Hoya Intermediate’s officers have certain interests in the business combination that are described in this proxy statement/prospectus/consent solicitation statement, including, among other things: ownership interests in Hoya Topco as described in the section entitled “Beneficial Ownership of Securities” and executive compensation as described in the section entitled “Executive Compensation.” Following the Transactions, the business affairs of Hoya Intermediate will be controlled by a board of managers. The Hoya Intermediate board of managers will initially consist of two individuals, one of which will be designated by Vivid Seats PubCo and one of which will be designated by Hoya Topco.


 

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Reasons for the Approval of the Business Combination

After careful consideration, the Horizon board of directors recommends that Horizon shareholders vote “FOR” each Proposal being submitted to a vote of the Horizon shareholders at the Horizon extraordinary general meeting.

For a more complete description of Horizon’s board of directors’ reasons for the approval of the business combination and their recommendation, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Redemption Rights

Under Horizon’s amended and restated memorandum and articles of association, holders of Horizon Class A ordinary shares may elect to have their shares redeemed for cash at the applicable redemption price per share, payable in cash, equal to the aggregate amount on deposit in the Trust Account as of two business days prior to the Closing, including interest (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the total number of Horizon Class A ordinary shares included as part of the units sold in the IPO and which remain outstanding, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); provided that Horizon will not redeem any public shares to the extent that such redemption would result in Horizon having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. As of December 31, 2020, this would have amounted to approximately $10.00 per share. Under Horizon’s amended and restated memorandum and articles of association, in connection with an initial business combination, a public shareholder, together with any affiliate or any other person with whom such stockholder is acting in concert of as a “group” (as defined under Section 13(d)(3) of the Exchange Act), is restricted from seeking redemption rights with respect to more than 15% of the public shares.

If a holder exercises its redemption rights, then such holder will be exchanging its Horizon Class A ordinary shares for cash and will no longer own Horizon Class A ordinary shares and will not participate in the future growth of Horizon, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and tenders its shares (either physically or electronically) to Horizon’s transfer agent in accordance with the procedures described herein. See the section entitled “Extraordinary General Meeting of Horizon Shareholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash. A shareholder holding both Horizon’s public shares and Horizon IPO Public Warrants may redeem its public shares but retain the Horizon IPO Public Warrants, which if the business combination closes, will become warrants of Vivid Seats PubCo.

Impact of the Business Combination on Vivid Seats PubCo’s Public Float

It is anticipated that, upon completion of the business combination and assuming no redemptions of Horizon Class A ordinary shares in connection with the business combination, Vivid Seats PubCo’s ownership will be as follows: (1) Horizon public shareholders will own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (2) the PIPE Investors (as defined herein), excluding Sponsor and certain affiliates of Sponsor, will own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (3) Sponsor, together with certain of its affiliates, will own (i) approximately 17.7% (assuming no exercise of Vivid Seats PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by


 

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Sponsor), of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); and (4) Hoya Topco will own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class B common stock). As a result of the voting power controlled by Hoya Topco, following the business combination, Vivid Seats PubCo will qualify as a “controlled company” within the meanings of applicable Nasdaq listing rules. The board of managers of Hoya Topco is controlled by our Private Equity Owner and its affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo’s shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats Board pursuant to the Stockholders’ Agreement. These levels of ownership interest assume that no shares are elected to be redeemed in connection with the business combination. The PIPE Investors have agreed to purchase an aggregate of 22,500,000 shares of Vivid Seats Class A common stock, in a private placement for a purchase price of $10.00 per share, for aggregate gross proceeds of $225.0 million in the PIPE Subscription. In this proxy statement/prospectus/consent solicitation statement, we assume that approximately $769.0 million of the gross proceeds from the PIPE Subscription and funds held in the Trust Account will be used to fund (i) the business combination, (ii) the partial repayment of our Term Loan Facilities to a net debt amount (consisting of long-term debt, less cash and cash equivalents) of approximately $132.1 million under both the no redemption scenario and maximum redemption scenario, and (iii) the payment of certain transaction expenses. The ownership percentage with respect to Vivid Seats PubCo (a) does not take into account (1) Vivid Seats PubCo Warrants outstanding following the business combination or (2) the issuance of any shares upon completion of the business combination under the 2021 Plan, but (b) does include founder shares, which will automatically convert into shares of Vivid Seats Class A common stock on a one-for-one basis upon the consummation of the business combination (such shares of Vivid Seats Class A common stock will be subject to transfer restrictions). If the actual facts are different from these assumptions, the above levels of ownership interest will be different.


 

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Organizational Structure

The following diagram represents the simplified structure of Horizon and Vivid Seats prior to the consummation of the business combination.

 

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The following diagram, which is subject to change based upon any redemptions by current Horizon shareholders of public shares in connection with the business combination, illustrates the expected ownership structure of Vivid Seats PubCo immediately following the Closing.

 

 

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(1)

Sponsor, together with certain of its affiliates, will own, in the case of a no redemptions scenario, (i) approximately 17.7% (assuming no exercise of Vivid Seat PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by Sponsor) of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock). In the case of a maximum redemption scenario of Horizon Class A ordinary shares, Sponsor, together with the owners of founder shares, would own approximately 37.6% of Vivid Seats PubCo’s outstanding common stock following the Closing. All such common stock shall be in the form of Vivid Seats Class A common stock.

(2)

The PIPE Investors (excluding Sponsor and certain of its affiliates) are expected to own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock following the Closing, assuming no redemptions of Horizon Class A ordinary shares. All such common stock shall be in the form of Vivid Seats Class A common stock.

(3)

Public Shareholders include the public shareholders of Horizon prior to consummation of the business combination. Such shareholders are expected to own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock following the Closing, assuming no redemptions of Horizon Class A ordinary shares. All such common stock shall be in the form of Vivid Seats Class A common stock.


 

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(4)

Private Equity Owner and its affiliates beneficially control Hoya Topco, although they do not own 100% of the outstanding equity interests of Hoya Topco.

(5)

Hoya Topco is expected to own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock following the Closing, assuming no redemptions of Horizon Class A ordinary shares. All such common stock shall be in the form of Vivid Seats Class B common stock. By virtue of its ownership of all outstanding Vivid Seats Class B common stock, Hoya Topco will control Vivid Seats PubCo’s business policies and affairs and will control any action requiring the general approval of its stockholders. The board of managers of Hoya Topco is controlled by our Private Equity Owner and its affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo’s shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats Board pursuant to the Stockholders’ Agreement. In addition, Hoya Topco will own approximately 60.6% of the outstanding Intermediate Common Units, which interests will be controlled by the Private Equity Owner for so long as it control Hoyal Topco. The business affairs of Hoya Intermediate will be controlled by a board of managers. The Hoya Intermediate board of managers will initially consist of two individuals, one of which will be designated by Vivid Seats PubCo and one of which will be designated by Hoya Topco. For each matter presented to the board of managers of Hoya Intermediate, the Vivid Seats PubCo designee will be entitled to two (2) votes and the Hoya Topco designee will be entitled to one (1) vote. Accordingly, Hoya Topco’s ability to influence the operations of Hoya Intermediate following the Closing will be by virtue of its ownership of Vivid Seats PubCo common stock. See “Description of Vivid Seats PubCo Securities — Common Stock” and “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Second A&R LLCA.”

(6)

Vivid Seats PubCo will directly and indirectly own approximately 39.4% of the outstanding Intermediate Common Units. The business affairs of Hoya Intermediate will be controlled by a board of managers. Such board of managers will be controlled by Vivid Seats PubCo. See “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Second A&R LLCA.”

Board of Directors of Vivid Seats PubCo Following the Business Combination

Upon the Closing, the Vivid Seats Board will include nine (9) directors, one (1) of which will be the chief executive officer of Vivid Seats PubCo, five (5) of which will be designated by Hoya Topco (one (1) of which will be independent) and three (3) of which will be designated by Sponsor (two (2) of which will be independent).

Upon completion of the business combination, Vivid Seats PubCo’s Private Equity Owner will control a majority of the combined voting power of all classes of Vivid Seats PubCo’s outstanding voting shares and will have the ability to influence the election of its board of directors. As a result, Vivid Seats PubCo expects to be a controlled company within the meaning of the Nasdaq corporate governance standards, and may elect not to comply with certain Nasdaq corporate governance requirements, including the requirements that a majority of the board of directors consist of independent directors and that the nominating and governance committee and compensation committee be composed entirely of independent directors. These requirements will not apply to Vivid Seats PubCo as long as it remains a controlled company.

Accounting Treatment

The business combination will be accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, Vivid Seats PubCo has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Hoya Intermediate having a relative majority of the voting power of the combined company, the


 

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operations of Hoya Intermediate and its subsidiaries constituting the only ongoing operations of the combined company, and senior management of Hoya Intermediate comprising the majority of the senior management of the combined company.

Accordingly, for accounting purposes, the financial statements of the combined company will represent a continuation of the financial statements of Hoya Intermediate. The net assets of Vivid Seats PubCo will be stated at historical cost, with no goodwill or other intangible assets recorded.

Appraisal Rights

Under Section 239 of the CICA, the holders of Horizon public shares will not have appraisal or dissenter rights in connection with the business combination. Holders of public shares should consult their Cayman Islands legal counsel regarding their rights under the CICA.

Other Proposals

In addition to the proposal to approve and adopt the Transaction Agreement and the business combination, Horizon shareholders will be asked to vote on:

 

   

a proposal to approve, by special resolution, the Plan of Merger annexed to the Transaction Agreement and attached to this proxy statement/prospectus/consent solicitation statement as Annex K and to authorize the merger of Horizon with and into Vivid Seats PubCo, upon which the separate corporate existence of Horizon will cease and Vivid Seats PubCo will become the surviving corporation;

 

   

the following three separate proposals to approve the following material differences between Horizon amended and restated memorandum and articles of association and the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws that will be the certificate of incorporation and bylaws of Vivid Seats PubCo following the Merger:

 

  i.

To authorize the change in the authorized capital stock of Horizon from 400,000,000 Horizon Class A ordinary shares, 40,000,000 shares of Horizon Class B ordinary shares, and 1,000,000 preference shares, par value $0.0001 per share, to 500,000,000 shares of Vivid Seats Class A common stock, 250,000,000 shares of Vivid Seats Class B common stock and 50,000,000 shares of preferred stock, par value $0.0001 per share, of Vivid Seats PubCo.

 

  ii.

To authorize that certain provisions of the Vivid Seats PubCo Amended and Restated Charter and certain provisions of the Vivid Seats PubCo Amended and Restated Bylaws, in each case, will be subject to the Stockholders’ Agreement.

 

  iii.

To authorize that the Vivid Seats PubCo Amended and Restated Charter will grant an explicit waiver regarding corporate opportunities to certain “exempted persons” (including Sponsor and Hoya Topco and their respective affiliates, members, directors, officers and/or employees, including any of the foregoing who will serve as directors or officers of Vivid Seats PubCo);

 

  iv.

To authorize that the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats Amended and Restated Bylaws will adopt Delaware as the exclusive forum for certain stockholder litigation;

 

  v.

To authorize all other changes in connection with the replacement of Horizon’s amended and restated memorandum and articles of association with the Vivid Seats PubCo Amended and Restated Charter and the Vivid Seats PubCo Amended and Restated Bylaws as part of the Merger (copies of which are attached to this proxy statement/prospectus/consent solicitation


 

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  statement as Annex C and Annex D, respectively), including (a) changing the corporate name from “Horizon Acquisition Corporation” to “Vivid Seats Inc.,” (b) electing not to be governed by Section 203 of the DGCL and (c) removing certain provisions related to Horizon’s status as a blank check company that will no longer be applicable upon consummation of the business combination, all of which Horizon’s board of directors believes is necessary to adequately address the needs of Vivid Seats PubCo after the business combination.

 

   

a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of shares of Vivid Seats PubCo in connection with the business combination and the PIPE Subscription (the “NYSE Proposal”); and

 

   

a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal.

For more information, see the sections entitled “Proposal No. 2 — The Merger Proposal,” “Proposal No. 3 — Organizational Documents Proposal A,” “Proposal No. 4 — Organizational Documents Proposal B,” “Proposal No. 5 — Organizational Documents Proposal C,” “Proposal No. 6 — Organizational Documents Proposal D,” “Proposal No. 7 — Organizational Documents Proposal E,” “Proposal No. 8 —The NYSE Proposal” and “Proposal No. 9 — The Adjournment Proposal.”

Date, Time and Place of Extraordinary General Meeting

The extraordinary general meeting will be held at                  a.m., local time, on                 , 2021, at the offices of Kirland & Ellis LLP located at 601 Lexington Avenue, New York, NY 10022 and via a live webcast available at                , or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

Voting Power; Record Date for the Extraordinary General Meeting

You will be entitled to vote or direct votes to be cast at the extraordinary general meeting if you owned shares of Horizon Class A ordinary shares or Horizon Class B ordinary shares at the close of business on                 , 2021, which is the record date for the extraordinary general meeting. You are entitled to one vote for each share of Horizon Class A ordinary shares or Horizon Class B ordinary shares that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were                 shares of Horizon Class A ordinary shares and Horizon Class B ordinary shares outstanding in the aggregate, of which                 are public shares and                  are founder shares held by Sponsor and Horizon’s independent directors.

Proxy Solicitation

Proxies may be solicited by mail. Horizon has engaged                 to assist in the solicitation of proxies. If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of Horizon Shareholders — Revoking Your Proxy.”


 

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Quorum and Required Vote for Proposals for the Extraordinary General Meeting

A quorum of Horizon shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if a majority of Horizon Class A ordinary shares and Horizon Class B ordinary shares outstanding and entitled to vote at the extraordinary general meeting is represented in person or by proxy. Abstentions will count as present for the purposes of establishing a quorum. As of the record date for the extraordinary general meeting,                  ordinary shares would be required to achieve a quorum.

The approval of the Business Combination Proposal, the Organizational Documents Proposals, the NYSE Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of not less than two-thirds of Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Accordingly, if a valid quorum is otherwise established, a shareholder’s failure to vote by proxy or to vote in person at the extraordinary general meeting will have no effect on the outcome of any vote on the Proposals.

The Initial Shareholders have, pursuant to a letter agreement with Horizon, agreed to, among other things, to vote at any meeting of Horizon’s shareholders, and in any action by written consent of Horizon’s shareholders, all of their ordinary shares in favor of the adoption and approval of the Transaction Agreement, the transactions contemplated thereby, including the Merger, and the other approvals contemplated to be sought with respect thereto. As of the date of this proxy statement/prospectus/consent solicitation statement, the Initial Shareholders own approximately             % of the issued and outstanding Horizon Class A ordinary shares and             % of the issued and outstanding Horizon Class B ordinary shares.

Record Date for Consent Solicitation

You will be entitled to deliver a Written Consent in response to the consent solicitation if you owned Horizon IPO Warrants at the close of business on                 , 2021, which is the record date for delivery of consents to the proposed Warrant Amendment. If your Horizon IPO Warrants are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that your consent related to the Horizon IPO Warrants you beneficially own is properly delivered. On the record date, there were Horizon IPO Public Warrants and         Horizon IPO Private Placement Warrants outstanding.

Horizon’s Solicitation of Written Consents

In order to provide consent in the consent solicitation, holders are required to consent by executing the Written Consent (or requesting that their broker or nominee consent on their behalf) to the Warrant Amendment attached as Annex M. If approved, the Warrant Amendment would amend and restate the Horizon IPO Warrants, as contemplated by the Transaction Agreement, to implement certain changes that are intended to result in the Horizon IPO Warrants being accounted for as equity within the balance sheet of Horizon, instead of as a liability measured at fair value with non-cash fair value adjustments recorded in earnings at each reporting period. The accounting treatment of the amended and restated warrant terms is currently under evaluation.

Specifically, as set forth in the proposed form of the Warrant Amendment attached thereto as Annex M, the Warrant Amendment proposes to, among other things: (i) amend the rights specific to the Horizon IPO Private Placement Warrants such that (A) the rights specific to such warrants are retained by the holder thereof


 

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regardless of such holder’s identity, (B) such warrants are no longer subject to redemption by Horizon at any price and (C) such warrants are no longer generally exercisable on a “cashless basis”; (ii) eliminate Horizon’s ability to redeem any Horizon IPO Public Warrants unless the Horizon Class A ordinary shares are trading at a price equal to or in excess of $18.00 per share; and (iii) remove certain language related to the treatment of Horizon IPO Warrants in the event of a tender offer for the shares underlying such warrants. For additional details please see the section entitled “Horizon’s Solicitation of Written Consents — Proposed Amendment.”

The consent solicitation will expire on the Consent Solicitation End Date, which is 11:59 p.m., Eastern Daylight Time, on                 , 2021, or such later time and date to which Horizon may extend. The Written Consent must be received by Horizon by the Consent Solicitation End Date, as described in this proxy statement/prospectus/consent solicitation statement. If the Consent Period is extended, Horizon will make a public announcement of such extension by no later than 9:00 a.m., Eastern Daylight Time, on the next business day following the Consent Solicitation End Date as in effect immediately prior to such extension.

Horizon reserves the right at any time or from time to time to amend the consent solicitation, including by changing the terms of the Warrant Amendment. If Horizon makes a material change in the terms of the consent solicitation or the information concerning the consent solicitation, Horizon will extend the consent solicitation to the extent required by applicable law.

Effectiveness of the Warrant Amendment is conditioned upon receiving, by the Consent Solicitation End Date, the consent of holders of at least 65% of the outstanding Horizon IPO Public Warrants and, solely with respect to any amendments to the terms of the Horizon IPO Private Placement Warrants or any provision of the Warrant Agreement with respect to the Horizon IPO Private Placement Warrants, 65% of the outstanding Horizon IPO Private Placement Warrants. If requisite consents are obtained from holders of the Horizon IPO Warrants by the Consent Solicitation End Date, the Warrant Amendment will be effected by an amendment and restatement of the Warrant Agreement in the form of Annex M attached to the accompanying proxy statement/prospectus/consent solicitation statement, which is to be executed by Horizon and the Warrant Agent promptly following the Consent Solicitation End Date. Effectiveness of the Warrant Amendment is not conditioned upon consummation of the business combination.

If you elect to provide your consent, you may withdraw your consent at any time before the Consent Solicitation End Date by following the instructions in this proxy statement/prospectus/consent solicitation statement. If the Consent Solicitation End Date is extended, you may withdraw your consent at any time until the extended Consent Solicitation End Date.

The Sponsor currently holds 5,166,666 Horizon IPO Public Warrants and all of the Horizon IPO Private Placement Warrants and has agreed in the Transaction Agreement to use commercially reasonable efforts to revise the terms of the Horizon IPO Warrants such that the Horizon IPO Warrants be treated as equity under the rules and guidelines of the SEC at and after the closing of the Transactions, including using commercially reasonable efforts to obtain any shareholder or warrantholder approvals if necessary to accomplish the foregoing.

Recommendation to Horizon Shareholders

Horizon’s board of directors believes that each of the Business Combination Proposal, the Merger Proposal, Organizational Documents Proposal A, Organizational Documents Proposal B, Organizational Documents Proposal C, the NYSE Proposal and the Adjournment Proposal is in the best interests of Horizon and its shareholders and recommends that its shareholders vote “FOR” each of the Proposals to be presented at the extraordinary general meeting.


 

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When you consider the recommendation of the board of directors in favor of approval of the Proposals, you should keep in mind that Sponsor, members of the board of directors and officers have interests in the business combination that are different from or in addition to (and which may conflict with) your interests as a shareholder. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

Emerging Growth Company

Each of Horizon and Vivid Seats PubCo is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and they may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. Each of Horizon and Vivid Seats PubCo has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, Horizon and Vivid Seats PubCo, as emerging growth companies, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may limit comparability of Horizon’s and Vivid Seats PubCo’s financial statements with certain other public companies because of the potential differences in accounting standards used.

Vivid Seats PubCo will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) ending after the fifth anniversary of the closing of the business combination, (b) in which Vivid Seats PubCo has total annual gross revenue of at least $1.07 billion or (c) in which Vivid Seats PubCo is deemed to be a large accelerated filer, which means the market value of Vivid Seats PubCo’s common equity that is held by non-affiliates exceeds $700 million as of the prior June 30th; and (2) the date on which Vivid Seats PubCo has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus/consent solicitation statement, you should carefully read this proxy statement/prospectus/consent solicitation statement, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” Such risks include, but are not limited to:

Risks related to Vivid Seats’ business and industry, including that:

 

   

The COVID-19 pandemic has had, and is likely to continue to have, a material negative impact on our business and operating results.

 

   

Our business is dependent on the continued occurrence of large-scale sporting events, concerts and theater shows and on relationships with buyers, sellers and distribution partners and any change in such occurrence or relationships could adversely affect our business.


 

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Changes in Internet search engine algorithms or changes in marketplace rules could have a negative impact on traffic for our sites and ultimately, our business and results of operations.

 

   

We face intense competition in the ticketing industry.

 

   

Our business is dependent on the willingness of artists, teams and promoters to continue to support the secondary ticket market and any decrease in such support may result in decreased demand for our services.

 

   

If we do not continue to maintain and improve our platform and brand or develop successful new solutions and enhancements or improve existing ones, our business will suffer.

 

   

We may be adversely affected by the occurrence of extraordinary events or factors affecting concert, sporting and theater events.

 

   

We may be unsuccessful in potential future acquisition endeavors.

 

   

Due to our business’ seasonality, our financial performance in particular financial periods may not be indicative of, or comparable to, our financial performance in subsequent financial periods.

 

   

The failure to retain, motivate or integrate any of our senior management team or other skilled personnel could have an adverse effect on our business, financial condition or results of operations.

 

   

The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or applications of privacy regulations.

 

   

Unfavorable legislative outcomes, or outcomes in legal proceedings in which we may be involved, may adversely affect our business and operating results.

 

   

System interruption and the lack of integration and redundancy in our systems and infrastructure may have an adverse impact on our business, financial condition and results of operations.

 

   

Cyber security risks, data loss or other breaches of our network security could materially harm our business and results of operations.

 

   

We may fail to adequately protect or enforce our intellectual property rights or face potential liability and expense for legal claims alleging that the operation of our business infringes intellectual property rights of third parties.

 

   

Our payments system depends on third-party providers.

 

   

The agreements governing our indebtedness impose restrictions on us that limit the discretion of management in operating our business.

 

   

We depend on the cash flows of our subsidiaries in order to satisfy our obligations, and we may not be able to generate sufficient cash flows or raise the additional capital necessary to fund our liquidity needs.

Risks related to the business combination and Horizon, including that:

 

   

Sponsor has agreed to vote in favor of the proposals described herein to be presented at the extraordinary general meeting of shareholders, regardless of how Horizon’s public shareholders vote.

 

   

No third-party valuation has been obtained in determining whether to pursue the business combination.

 

   

Sponsor and Horizon’s directors have interests that are different from, or in addition to (and which may conflict with), the interests of Horizon’s shareholders.

 

   

The announcement of the proposed business combination could disrupt Vivid Seats’ business.

 

   

Historical financial results, unaudited pro forma financial information and financial projections with respect to Vivid Seats may not prove to be reflective of what Vivid Seats’ actual financial results would be if it were a public company.


 

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If third parties bring claims against Horizon, the proceeds held in the Trust Account could be reduced.

 

   

Horizon’s shareholders may be held liable for claims by third parties against Horizon to the extent of distributions received by them upon redemption of their shares.

Risks related to the redemption, including that:

 

   

If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their public shares.

 

   

If a public shareholder fails to receive notice of Horizon’s offer to redeem public shares in connection with the business combination such shares may not be redeemed.

 

   

There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the shareholder in a better future economic position.

Risks if the business combination is not consummated, including that:

 

   

Horizon may redeem its public shares and liquidate, in which case its public shareholders may receive only $10.00 per share, or less in certain circumstances, and Horizon’s warrants will expire worthless.

 

   

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances and you may be forced to sell your public shares or Horizon IPO Public Warrants, potentially at a loss.

 

   

If the funds not being held in the Trust Account are insufficient to allow Horizon to operate until at least August 25, 2022 (or if such date is extended at a duly called meeting of Horizon’s shareholders, such later date), Horizon may be unable to complete its initial business combination.

Risks related to our organizational structure after the business combination, including that:

 

   

Our Private Equity Owner will control us, and its interest may conflict with ours or yours in the future.

 

   

Following the Closing, we will be a “controlled company” within the meaning of Nasdaq listing standards.

 

   

Our only material asset will be our direct and indirect interests in Hoya Intermediate.

 

   

The Tax Receivable Agreement will require us to make cash payments to Hoya Topco.

 

   

Our ability to pay dividends may be limited by our holding company structure and Delaware law.

U.S. Federal Income Tax Considerations

For a discussion summarizing the U.S. federal income tax considerations of the Merger, the exercise of redemption rights and the adoption of the Warrant Amendment, please see “U.S. Federal Income Tax Considerations.”


 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF HORIZON

The following table shows selected historical financial information of Horizon for the periods and as of the dates indicated. Horizon’s statement of operations data and cash flow data for the period from June 12, 2020 (inception) through December 31, 2020 as restated and balance sheet data as of December 31, 2020 as restated are derived from Horizon’s audited financial statements contained in its Annual Report on Form 10-K/A for the year ended December 31, 2020 filed with the SEC and included elsewhere in this proxy statement/prospectus/consent solicitation statement. Horizon’s unaudited condensed statement of operations data and cash flow data for the three months ended March 31, 2021 and condensed balance sheet data as of March 31, 2021 are derived from Horizon’s unaudited financial statements contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC and included elsewhere in this proxy statement/prospectus/consent solicitation statement. The unaudited selected historical financial information set forth below has been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such information.

The following selected historical financial information should be read together with the consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Horizon” appearing elsewhere in this proxy statement/prospectus/consent solicitation statement. The selected historical financial information in this section is not intended to replace Horizon’s consolidated financial statements and the related notes. The historical financial information presented here is not necessarily indicative of the results that may be expected in the future.

 

     March 31, 2021
(unaudited)
    For the period from
June 20, 2020
(inception) through
December 31, 2020
 
           (As restated)  

Statement of Operations Data:

    

General and administrative expenses

   $ 962,762     $ 538,313  

Loss from operations

     (962,762     (538,313

Other income

    

Change in fair value of derivative warrant liabilities

     8,628,420       (16,517,250

Interest earned from interest-bearing cash account

     240       (578,950

Net gain on investments held in Trust Account

     8,037       18,465  
  

 

 

   

 

 

 

Net income

   $ 7,673,935     $ (17,616,048
  

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding of Class A ordinary shares

     54,398,433       54,364,337  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class A ordinary shares

   $ 0.00     $ 0.00  
  

 

 

   

 

 

 

Basic and diluted weighted average shares outstanding of Class B ordinary shares

     13,599,608       13,269,125  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class B ordinary shares

   $ 0.56     $ (1.33
  

 

 

   

 

 

 

Condensed Balance Sheet Data (At Period End):

    

Total assets

   $ 545,086,831     $ 545,277,797  
  

 

 

   

 

 

 

Total liabilities

   $ 41,940,281     $ 49,805,181  

Class A ordinary shares; 49,814,654 and 49,047,261 shares subject to possible redemption at $10.00 per share as of March 31, 2021 and December 31, 2020, respectively

   $ 498,146,540     $ 490,472,610  

 

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     March 31, 2021
(unaudited)
    For the period from
June 20, 2020
(inception) through
December 31, 2020
 
           (As restated)  

Shareholder’s Equity:

    

Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

   $ –       $ –    

Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 4,583,779 and 5,351,172 shares issued and outstanding (excluding 49,814,654 and 49,047,261 shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively

     458       535  

Class B ordinary shares, $0.0001 par value; 40,000,000 shares authorized; 13,599,608 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

     1,360       1,360  

Additional Paid-in Capital

     14,940,305       22,614,159  

Accumulated Deficit

     (9,942,113     (17,616,048
  

 

 

   

 

 

 

Total shareholders’ equity

   $ 5,000,010     $ 5,000,006  
  

 

 

   

 

 

 

Cash Flow Data:

    

Net cash used in operating activities

   $ (142,759   $ (487,392

Net cash used in investing activities

     –         (543,984,330

Net cash provided by financing activities

     –         545,413,196  

 

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SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION OF VIVID SEATS

The following table shows selected historical financial information of Vivid Seats for the periods and as of the dates indicated. The selected historical financial information of Vivid Seats as of and for the years ended December 31, 2019 and 2020 was derived from the audited historical consolidated financial statements of Vivid Seats included elsewhere in this proxy statement/prospectus/consent solicitation statement. The selected historical financial information of Vivid Seats for the three months ended March 31, 2020 and 2021 and as of March 31, 2021 was derived from the unaudited historical consolidated financial statements included elsewhere in this proxy statement/prospectus/consent solicitation statement. The unaudited selected historical financial information set forth below has been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such information. Vivid Seats, prior to the consummation of the Transactions, refers to Hoya Intermediate and its consolidated subsidiaries.

The following selected historical financial information should be read together with the consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vivid Seats” appearing elsewhere in this proxy statement/prospectus/consent solicitation statement. The selected historical financial information in this section is not intended to replace Vivid Seats’ consolidated financial statements and the related notes. The historical financial information presented here is not necessarily indicative of the results that may be expected in the future.

 

     Years Ended December 31,     Three Months Ended
March 31,
 
     2019     2020     2020     2021  
     (in thousands except unit and per unit data)  

Revenues

   $ 468,925     $ 35,077     $ 69,661     $ 24,114  

Costs and expenses:

        

Cost of revenues (exclusive of depreciation and amortization shown separately below)

     103,334       22,937       19,868       3,496  

Marketing and selling

     178,446       38,121       31,947       7,955  

General and administrative

     104,004       67,952       23,159       16,300  

Depreciation and amortization

     93,078       48,247       23,897       295  

Impairment charges

     —         573,838       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

   $ (9,937   $ (716,018   $ (29,210   $ (3,932
  

 

 

   

 

 

   

 

 

   

 

 

 

Other expenses

        

Interest expense – net

     41,497       57,482       9,293       16,319  

Loss on extinguishment of debt

     2,414       685       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (53,848   $ (774,185   $ (38,503   $ (20,251

Net loss per unit attributable to Common Unit holders, basic and diluted:

   $ (682,472   $ (7,953,192   $ (446,641   $ (270,730

Weighted average Common Units outstanding, basic and diluted

     100       100       100       100  

 

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     As of December 31,      As of
March 31,
 
     2019      2020      2021  
Consolidated Balance Sheet Data:    (in thousands)  

Current assets

   $ 129,917      $ 408,115      $ 440,208  

Non-current assets

     1,367,132        751,015        752,124  

Total assets

     1,497,049        1,159,130        1,192,332  

Current liabilities

     163,239        331,271        373,298  

Non-current liabilities

     608,441        871,413        881,505  

Total liabilities

     771,680        1,202,684        1,254,803  

Redeemable preferred units

     207,093        228,227        235,049  

Accumulated deficit

     (252,490      (1,026,675      (1,046,926

Total members’ equity (deficit)

   $ 518,276      $ (271,781    $ (297,520

 

     Years Ended
December 31,
     Three Months Ended
March 31,
 
     2019      2020      2020      2021  
Consolidated Statements of Cash Flows Data:    (in thousands)  

Net cash provided by (used in) operating activities

   $ 76,478      $ (33,892    $ 11,130      $ 30,761  

Net cash used in investing activities

     (40,155      (7,605      (3,113      (1,726

Net cash provided by (used in) financing activities

     (55,462      245,545        48,953        (1,603

Key Performance Indicators and Non-GAAP Financial Measure

Vivid Seats reviews a number of operational and financial metrics, including the following, which are used to measure performance of the business, identify trends, and make strategic decisions.

 

     Years Ended
December 31,
    Three Months Ended
March 31,
 
     2019      2020     2020      2021  
     (in thousands)  

Marketplace gross order value (“Marketplace GOV”)(1)

   $ 2,279,773      $ 347,259     $ 403,377      $ 116,473  

Total Marketplace orders(2)

     7,185        1,066       1,252        293  

Total Resale orders(3)

     303        49       45        13  

Adjusted EBITDA(4)

   $ 119,172      $ (80,204   $ 1,179      $ 4,187  

 

(1)

Marketplace GOV represents the total transactional amount of Marketplace segment orders placed on the Vivid Seats platform in a period, inclusive of fees, exclusive of taxes, and net of event cancellations that occurred during that period. Marketplace GOV was negatively impacted by event cancellations in the amount of $22.2 million during the year ended December 31, 2019 and $216.0 million during the year ended December 31, 2020. Marketplace GOV was negatively impacted by event cancellations in the amount of $52.8 million during the three months ended March 31, 2020 and $18.5 million during the three months ended March 31, 2021.

(2)

Total Marketplace orders represents the volume of Marketplace segment orders placed on the Vivid Seats platform during a period, net of event cancellations occurring during the period. During the year ended December 31, 2019, the Marketplace segment had 54,961 event cancellations, compared to 549,085 event cancellations during the year ended December 31, 2020. During the three months ended March 31, 2020, the Marketplace segment had 141,027 event cancellations, compared to 51,775 event cancellations during the three months ended March 31, 2021. A Marketplace order may include more than one ticket.

(3)

Total Resale orders represents the volume of Resale segment orders sold by the Vivid Seats’ resale team in a period, net of event cancellations that occurred during that period. During the year ended December 31, 2019, the Resale segment had 1,517 event cancellations, compared to 20,644 event cancellations during the year ended December 31, 2020. During the three months ended March 31, 2020, the Resale segment had


 

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  9,978 event cancellations, compared to 1,141 event cancellations during the three months ended March 31, 2021. A Resale order may include more than one ticket.
(4)

Adjusted EBITDA is not a measure defined under GAAP. See below for further information about how Vivid Seats calculates adjusted EBITDA.

Adjusted EBITDA is a non-GAAP measure frequently used by research analysts, investors and other interested parties to evaluate companies. Vivid Seats believes that this measure is helpful in highlighting trends in its operating results, because it excludes the impact of items that are outside the control of management or not reflective of its ongoing operations and performance.

Adjusted EBITDA is a measure not defined under GAAP. It has limitations, because it excludes certain types of expenses and it does not reflect changes in working capital needs. Furthermore, other companies may calculate adjusted EBITDA or similarly titled measures differently, limiting their usefulness as comparative measures.

Adjusted EBITDA is presented here as a supplemental measure only. You are encouraged to evaluate each adjustment. The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net loss.

 

     Years Ended December 31,      Three Months Ended
March 31,
 
     2019      2020      2020      2021  
     (in thousands)  

Net loss

   $ (53,848    $ (774,185    $ (38,503    $ (20,251

Interest expense – net

     41,497        57,482        9,293        16,319  

Depreciation and amortization

     93,078        48,247        23,897        295  

Sales tax liability(1)

     10,045        6,772        4,913        2,261  

Transaction costs(2)

     8,857        359        359        3,546  

Equity-based compensation(3)

     5,174        4,287        1,186        1,091  

Senior management transition costs(4)

     2,706        —          —          —    

Loss on extinguishment of debt(5)

     2,414        685        —          —    

Litigation, settlements and related costs(6)

     2,256        1,347        34        641  

Change to annual bonus program(7)

     2,810        —          —          —    

Customer loyalty program stand-up costs(8)

     3,223        —          —          —    

Impairment charges(9)

     —          573,838        —          —    

Loss on asset disposals(10)

     960        169        —          —    

Severance related to COVID-19(11)

     —          795        —          285  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 119,172      $ (80,204    $ 1,179      $ 4,187  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

These expenses relate to sales tax liabilities incurred during the periods presented. Vivid Seats incurs sales tax expenses in jurisdictions where it expects to remit sales tax payments. Vivid Seats does not currently collect sales tax from ticket buyers under its existing IT configuration. Vivid Seats is in the process of upgrading its IT infrastructure, which will enable it to collect sales tax from ticket buyers going forward. Vivid Seats expects these upgrades to be complete by the end of 2021.

(2)

Transaction costs incurred during the years ended December 31, 2019 and 2020 consist primarily of transaction and transition related fees and expenses incurred in relation to completed and attempted acquisitions. During 2019, Vivid Seats completed the acquisition of Fanxchange, in addition to pursuing an attempted acquisition that was ultimately abandoned. Acquisition-related transaction costs consist of legal, accounting, tax and other professional fees, as well as personnel-related costs, which consist of severance and retention bonuses. Transition costs, which primarily consist of personnel costs associated with the integration of the Fanxchange platform into Vivid Seats, reflected above were incurred in the first 12 months following the completed acquisition of Fanxchange. Vivid Seats does not believe these acquisition-related costs to be representative of normal, recurring, cash operating expenses.


 

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During the three months ended March 31, 2021, Vivid Seats incurred transaction costs related to the Transactions. These costs consist primarily of legal, accounting, tax and other professional fees, which are non-recurring in nature.

(3)

Vivid Seats incurs equity-based compensation expenses, which it does not consider to be indicative of its core operating performance.

(4)

During 2019, Vivid Seats incurred costs associated with the transition to its current senior management team, including its current Chief Executive Officer. These costs include recruiting costs and costs to compensate Vivid Seats’ new Chief Executive Officer for benefits forfeited at his previous employer.

(5)

Losses incurred in 2019 related to the repayment of Vivid Seats’ $40 million second lien term loan. Losses incurred in 2020 resulted from the retirement of Vivid Seats’ revolving credit facility in May 2020.

(6)

These expenses relate to external legal costs and settlement costs incurred, which were unrelated to Vivid Seats’ core business operations.

(7)

Vivid Seats restructured its employee incentive compensation plan during 2019, which resulted in $2.8 million of incremental costs.

(8)

During August 2019, Vivid Seats initiated the Vivid Seats Rewards customer loyalty program. The company incurred $3.2 million of initial stand-up costs related to the commencement of the program. These stand-up costs consist primarily of customer incentives and marketing costs, which are not expected to reoccur.

(9)

During 2020, Vivid Seats incurred impairment charges triggered by the effects of the COVID-19 pandemic. The impairment charges resulted in a reduction in the carrying values of the company’s goodwill, indefinite-lived trademark, definite-lived intangible assets, and other long-lived assets. See Vivid Seats’ audited financial statements included elsewhere in this proxy statement/prospectus/consent solicitation statement for additional information.

(10)

During 2019 and 2020, Vivid Seats incurred approximately $1.0 million and $0.2 million, respectively, related to asset disposals, which are not considered indicative of its core operating performance.

(11)

These charges relate to severance costs resulting from significant reductions in employee headcount during 2020 due to the effects of the COVID-19 pandemic.


 

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Summary Unaudited Pro Forma Condensed Combined Financial Information

The summary unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 combines the unaudited condensed statement of operations of Horizon for the three months ended March 31, 2021 with the unaudited condensed consolidated statement of operations of Hoya Intermediate for the three months ended March 31, 2021 and gives effect to the Transactions as if they had occurred on January 1, 2020. The summary unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 combines the audited statement of operations of Horizon for the year ended December 31, 2020 with the audited consolidated statement of operations of Hoya Intermediate for the year ended December 31, 2020 and gives effect to the Transactions as if they had occurred on January 1, 2020. The summary unaudited pro forma condensed combined balance sheet as of March 31, 2021 combines the unaudited condensed balance sheet of Horizon as of March 31, 2021 with the unaudited condensed consolidated balance sheet of Hoya Intermediate as of March 31, 2021, giving effect to the Transactions and related adjustments as if they had been consummated on that date.

The summary unaudited pro forma condensed combined financial information has been derived from and should be read in conjunction with the unaudited pro forma condensed combined financial information, including the notes thereto, which is included in this proxy statement/prospectus/consent solicitation statement under “Unaudited Pro Forma Condensed Combined Financial Information.”

The summary unaudited pro forma condensed combined financial information is presented for informational purposes only. The summary unaudited pro forma condensed combined financial information does not purport to represent what the combined company’s results of operations or financial condition would have been had the specified transactions actually occurred on the dates indicated, and does not purport to project the combined company’s results of operations or financial condition for any future period or as of any future date. The summary unaudited pro forma condensed combined financial information does not reflect any cost savings that may be realized as a result of the Transactions. Additionally, the unaudited pro forma adjustments made in the summary unaudited pro forma condensed combined financial information, which are described in those notes, are preliminary and may be revised.

 

     Pro Forma
Combined
(Assuming No
Redemptions)
     Pro Forma
Combined
(Assuming
Maximum
Redemptions)
 
     (in thousands, except unit/share and per
unit/share amounts)
 

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data for the Three Months Ended March 31, 2021:

     

Revenues

   $ 24,114      $ 24,114  

Net income

     1,950        1,950  

Net income attributable to Vivid Seats PubCo

   $ 768      $ 768  

Basic and diluted weighted average shares outstanding of Class A ordinary shares

     76,948,433        76,948,433  

Basic and diluted net income per share, Class A ordinary shares

   $ 0.01      $ 0.01  

 

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     Pro Forma
Combined
(Assuming No
Redemptions)
     Pro Forma
Combined
(Assuming
Maximum
Redemptions)
 
     (in thousands, except unit/share and per
unit/share amounts)
 

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data for the Year Ended December 31, 2020:

     

Revenues

   $ 35,077      $ 35,077  

Net loss

     (823,965      (823,965

Net loss attributable to Vivid Seats PubCo

   $ (324,642    $ (324,642

Basic and diluted weighted average shares outstanding of Class A ordinary shares

     76,948,433        76,948,433  

Basic and diluted net loss per share, Class A ordinary shares

   $ (4.22    $ (4.22

Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data as of March 31, 2021:

     

Total assets

   $ 1,190,863      $ 1,190,863  

Total liabilities

     871,882        871,882  

Non controlling interest

     193,302        193,302  

Total members’/stockholders’ equity (deficit)

   $ 125,679      $ 125,679  

 

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MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

Horizon

Market Price and Ticker Symbol

Horizon Class A ordinary shares, the units and the Horizon Public IPO Warrants are currently listed on the NYSE under the symbols “HZAC,” “HZAC.U” and “HZAC WS,” respectively.

The closing price of the Horizon Class A ordinary shares, the units and the Horizon Public IPO Warrants on April 21, 2021, the last trading day before announcement of the execution of the Transaction Agreement, was $9.80, $10.00 and $1.11, respectively. As of                 , 2021, the record date for the extraordinary general meeting, the most recent closing price for each Horizon Class A ordinary share, unit and Horizon IPO Public Warrant was $                , $                 and $                , respectively.

Holders

As of December 31, 2020, 2021, there were two holders of record of Horizon Class A ordinary shares, one holder of record of Horizon Class B ordinary shares, two holders of record of the units and two holders of record of the Horizon Public IPO Warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Horizon Class A ordinary shares, units and Horizon Public IPO Warrants are held of record by banks, brokers and other financial institutions.

Dividend Policy

Horizon has not paid any cash dividends on its ordinary shares to date and does not intend to pay any cash dividends prior to the completion of the business combination.

Following the completion of the business combination, Vivid Seats PubCo will be a holding company with no material assets other than its ownership of equity interests in Hoya Intermediate. As such, Vivid Seats PubCo will not have any independent means of generating revenue. However, management of Vivid Seats PubCo expects to cause Hoya Intermediate to make distributions to its members, including Vivid Seats PubCo, in an amount at least sufficient to allow Vivid Seats PubCo to pay all applicable taxes, to make payments under the Tax Receivable Agreement, and to pay Vivid Seats PubCo’s corporate and other overhead expenses.

Vivid Seats PubCo has not paid any cash dividends on its Vivid Seats Class A common stock to date and does not intend to pay cash dividends prior to the completion of the business combination. The payment of cash dividends on shares of Vivid Seats Class A common stock in the future will be within the discretion of Vivid Seats PubCo’s board of directors at such time, and will depend on numerous factors, including:

 

   

general economic and business conditions;

 

   

Vivid Seats PubCo’s strategic plans and prospects;

 

   

Vivid Seats PubCo’s business and investment opportunities;

 

   

Vivid Seats PubCo’s financial condition and operating results, including its cash position and its net income;

 

   

working capital requirements and anticipated cash needs;

 

   

contractual restrictions and obligations, including payment obligations pursuant to the Tax Receivable Agreement and restrictions pursuant to any credit facility; and

 

   

legal, tax and regulatory restrictions.


 

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Vivid Seats PubCo

There is no public market for shares of Vivid Seats PubCo’s common stock.


 

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RISK FACTORS

Horizon shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus/consent solicitation statement, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus/consent solicitation statement.

Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us” or “our” refer to the business of Vivid Seats prior to the Closing, which will be the business of Vivid Seats PubCo and its subsidiaries following the Closing. In addition, the risks relating to the COVID-19 pandemic may also have the effect of significantly heightening many of the other risks associated with our business and an investment in our common shares.

Risks Relating to the COVID-19 Pandemic

The global COVID-19 pandemic has had, and is likely to continue to have, a material negative impact on our business and operating results. The ultimate magnitude of this impact will depend on a variety of factors, including the duration of the pandemic, the availability and acceptance of vaccines and other mitigation efforts, restrictions or new operational requirements in place or that result as our operations recommence on a jurisdiction by jurisdiction basis, the state of both the U.S. and global economies as a result of the pandemic, and the public’s willingness to attend events with large numbers of people, all of which are unknowable at this time.

The global spread and impact of the COVID-19 pandemic is complex, unpredictable, and continuously evolving and has resulted in significant disruption and additional risks to our business, the entertainment industry, and the global economy. The COVID-19 pandemic has led governments and other authorities around the world to impose measures intended to control its spread, including restrictions on large gatherings of people, travel bans, border closings and restrictions, business closures, quarantines, shelter-in-place orders, and social distancing measures. As a result, in mid-March 2020, as the unprecedented impact of the global COVID-19 pandemic became clearer, concert promoters, venue operators, sports leagues and theaters around the globe shut down. Our business depends on concert, sporting and theater events in order to generate most of our revenue from ticket sales in the secondary ticket market. As of today, certain sports leagues have recommenced, but they have largely done so either without fans or at reduced capacity, and thus without the typical need for ticketing. There has also been extremely limited concert and theater activity with events that are occurring generally having reduced capacity. Until such time as fans are allowed at sporting events, concerts and theatrical performances in meaningful numbers, our revenue will be negatively impacted and it is possible these circumstances continue for a longer period of time than currently anticipated. For example, revenues during the year ended December 31, 2020 decreased $433.8 million as compared to the year ended December 31, 2019 and $45.5 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

Due to the unprecedented nature of the global COVID-19 pandemic and its impacts on our business, our ability to forecast our cash inflows is hampered, and therefore our focus is on forecasting and managing operating costs and cash outflows. At this time, it is impossible to know or predict when events will be held at a pre-pandemic scope and scale as national and local governments around the world continue to enforce various restrictions on large gatherings. These restrictions have largely remained in place and continue to impact the ability to host large-scale events. It is currently unclear as to what restrictions will be placed on future events.

We face ancillary risks and uncertainties arising from the global COVID-19 pandemic in addition to the shutdown or limitation of concert, sporting and theater events. COVID-19 may also precipitate or aggravate other risk factors described herein, which have had, and may continue to have, a material negative impact on our business and operating results. Many of these risks and uncertainties may extend beyond the duration of the current shutdowns due to the uncertainty around how the live music, sporting and theater industries will change

 

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as a result of the pandemic. The risks and uncertainties described herein should be read in conjunction with those set forth below. Such additional or attendant risks and uncertainties include, among other things:

 

   

the impact of any lingering economic downturn or recession resulting from the pandemic, including without limitation any reduction in discretionary spending or confidence for both buyers and sellers, that would result in a decline in ticket sales and attendance;

 

   

a reduction in the profitability of our operations when concert, sporting and theater events resume, due to governmental restrictions or safety precautions and protocols voluntarily undertaken, such as the potential that venues may not be able to be filled to capacity due to spacing and social distancing limitations, which could limit the number of tickets sold;

 

   

the impact on our workforce, which may include the loss of key personnel as employees find other employment and lowered employee morale or inability to replace hourly/seasonal workforce, all of which may negatively impact our ability to capitalize on opportunities and conduct our operations in the future;

 

   

potential decreased willingness or ability for artists to tour due to varying restrictions across jurisdictions, including the possibility that national or sub-national borders are closed to travel, which could reduce the demand for our services;

 

   

potential changes to consumer preferences for consumption of live music, sporting or theater events due to fear of, or restrictions on, large gatherings;

 

   

loss of ticketing sales due to the economic impacts of the pandemic whereby certain venue operators are no longer in operation, reducing the number of events our marketplace can serve;

 

   

the inability to pursue expansion opportunities or acquisitions due to capital constraints;

 

   

the future availability or increased cost of insurance coverage; and

 

   

the incurrence of additional expenses related to compliance, precautions and management of our company during and after the pandemic.

The likelihood of the realization or intensification of these risks and uncertainties and the ultimate magnitude of their impact on us are not knowable or quantifiable at this time. The global COVID-19 pandemic and its impacts may continue to endure for an unknown period of time. In addition, as has already occurred in various locations, the potential exists for additional waves of the pandemic after the current wave of infections subsides. In addition, new COVID-19 variants may emerge, which could lead to additional restrictions being put into place for a greater duration of time. Different jurisdictions will lift social distancing guidelines and restrictions on gatherings of people at different times and will have different rules in place thereafter. The longer the duration of the global COVID-19 pandemic, and the greater the ancillary and lingering effects, the greater the negative impact on us and our results of operations will be. While vaccination programs have begun around the world, the ultimate impact of such programs on the pandemic and its duration, including the ability to effectively and widely manufacture and distribute vaccines and the acceptance of the vaccine by the general population, remain unknown. Moreover, even after restrictions on gatherings are lifted and vaccines are more widely distributed and available, the public’s willingness to attend large events may remain depressed for a significant length of time, and we cannot predict if and when demand to attend such events will return to pre-COVID-19 levels.

In addition, due to the reduction in cash flows we have experienced from the global COVID-19 pandemic, we have proactively taken a number of steps to enhance our liquidity position, such as streamlining of expenses and implementation of policies to provide customers with options other than cash refunds upon event cancellations. Our decreased cash flows have heightened and intensified the risks described under the “Risks Relating to Our Leverage” section of the risk factors included below. As such, there can be no assurances that we will remain in compliance with the covenants in our Term Loan Facilities (as defined below), or that we would be able to obtain waivers or amendments in order to avoid default.

We will continue to evaluate and explore additional mechanisms to attempt to ensure that we have adequate capital to fund our business, including through the issuance and sale of additional debt or equity securities. The

 

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terms of future debt agreements could include more restrictive covenants, or require incremental collateral, which may further restrict our business operations or be unavailable due to our covenant restrictions then in effect. There is no guarantee that debt financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations. Additionally, the impact of the global COVID-19 pandemic on the financial markets could adversely impact our ability to raise funds.

Risks Relating to Our Business and the Live Events and Ticketing Industries

Our business is dependent on the continued occurrence of large-scale sporting events, concerts and theater shows and any decrease in the number of such events may result in decreased demand for our services.

Ticket sales are sensitive to fluctuations in the number of entertainment, sporting and theater events and activities offered by promoters, teams and facilities, and adverse trends in the entertainment, sporting and leisure event industries could adversely affect our business, financial condition and results of operations. We rely on third parties to create and perform at live music, sporting and theater events, and any unwillingness to tour, lack of availability of popular artists or decrease in the number of games or performances held could limit our ability to generate revenue. Accordingly, our success depends, in part, upon the ability of these third parties to correctly anticipate public demand for particular events, as well as the availability of popular artists, entertainers and teams, and any decrease in availability or failure to anticipate public demand could result in reduced demand for our services, which would adversely affect our business, financial condition and results of operations.

Our business depends on relationships with buyers, sellers and distribution partners, and any adverse changes in these relationships could adversely affect our business, financial condition and results of operations.

Our business is dependent on maintaining our deep and longstanding relationships with the parties that use our platform to buy and sell tickets, including individual customers, ticket sellers, and distribution partners that sell tickets to consumers using our ticket inventory, payment platform and customer service. We cannot provide assurance that we will be able to maintain existing relationships, or enter into or maintain new relationships, on acceptable terms, if at all, and the failure to do so could have a material adverse effect on our business, financial condition and results of operations. Another important component of our success is our ability to maintain existing and build new relationships with parties in the ticketing ecosystem. Any adverse change in these relationships, including the inability of these parties to fulfill their obligations to our business for any reason, could adversely affect our business, financial condition and results of operations.

Changes in Internet search engine algorithms and dynamics, or search engine disintermediation, or changes in marketplace rules could have a negative impact on traffic for our sites and ultimately, our business and results of operations.

We rely heavily on Internet search engines, such as Google, to generate traffic to our website, through a combination of organic and paid searches. Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to our website can be negatively affected. In addition, a search engine could, for competitive or other purposes, alter its search algorithms or results causing our website to be placed lower in organic search query results. If a major search engine changes its algorithms in a manner that negatively affects the search engine ranking of our website or those of our partners, our business, results of operations and financial condition would be harmed. Furthermore, our failure to successfully manage our search engine optimization could result in a substantial decrease in traffic to our website, as well as increased costs if we were to replace free traffic with paid traffic, which may harm our business, results of operations and financial condition.

We also rely on application marketplaces, such as Apple’s App Store and Google’s Play, to enable downloads of our applications. Such marketplaces have in the past made, and may in the future make, changes that make access to our products more difficult. For example, our applications may receive unfavorable treatment compared to the promotion and placement of competing applications, such as the order in which they appear within marketplaces. Further, Apple and Google App Stores are an important distribution channel. If they choose

 

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to charge commissions on our products and we fail to negotiate compatible terms, it may harm our business, results of operations and financial condition. Similarly, if problems arise in our relationships with providers of application marketplaces, traffic to our site and our user growth could be harmed.

We face intense competition in the ticketing industry, and we may not be able to maintain or increase our current revenue, which could adversely affect our business, financial condition and results of operations.

Our business faces significant competition from other national, regional and local primary and secondary ticketing service providers to secure new and retain existing sellers, buyers and distribution partners on a continuous basis. We also face competition in the resale of tickets from other resale marketplaces and other ticket resellers. The advent of new technology, particularly as it relates to online ticketing, has amplified this competition. The intense competition that we face in the ticketing industry could cause the volume of our ticketing business to decline, and we may not be able to maintain or increase our current revenue due to such decline, which could adversely affect our business, financial condition and results of operations.

Other variables related to the competitive environment that could adversely affect our financial performance by, among other things, leading to decreases in overall revenue, event attendance, ticket prices and fees or profit margins include:

 

   

competitors’ offerings that may include more favorable terms or pricing;

 

   

technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive alternatives than we currently offer, which may lead to a loss of ticket sales or lower ticket fees;

 

   

other entertainment options or ticket inventory selection and variety that we do not offer; and

 

   

increased pricing in the primary ticket marketplace, which could result in reduced profits for secondary ticket sellers and reduced demand for our services.

Our business is dependent on the willingness of artists, teams and promoters to continue to support the secondary ticket market and any decrease in such support may result in decreased demand for our services.

Our business is dependent on the secondary ticket market for events put on by artists, teams and promoters. We rely upon the willingness of such artists, teams and promoters to support the secondary ticket market and any decrease in support of the resale market, such as by enacting restrictions regarding resale policies or partnering with other resale marketplaces on an exclusive basis, could result in reduced demand for our services, which would adversely affect our business, financial condition and results of operations.

If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements or improve existing ones, our business will suffer.

Our ability to attract and retain sellers, buyers and distribution partners depends in large part on our ability to provide a user-friendly and effective platform, develop and improve our platform and introduce compelling new solutions and enhancements. Our industry is characterized by rapidly changing technology, new service and product introductions and changing demands of sellers, buyers and distribution partners. We spend substantial time and resources understanding such parties’ needs and responding to them. Building new solutions is costly and complex, and the timetable for commercial release is difficult to predict and may vary from our historical experience. In addition, after development, sellers, buyers and distribution partners may not be satisfied with our enhancements or perceive that the enhancements do not adequately meet their needs. The success of a new solution or enhancement to our platform can depend on several factors, including timely completion and delivery, competitive pricing, adequate quality testing, integration with our platform, user awareness and overall

market acceptance and adoption. If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements or improve existing ones, our business, results of operations and financial condition could be harmed.

 

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The reputation and brand of our marketplace is important to our success, and if we are not able to maintain and enhance our brand, our business, financial condition and results of operation may be adversely affected.

We believe that maintaining and enhancing our reputation and brand as a differentiated ticketing marketplace serving sellers, buyers and distribution partners is critical retaining our relationship with our existing sellers, buyers and distribution partners and to our ability to attract new sellers, buyers and distribution partners. The successful promotion of our brand attributes will depend on a number of factors that we control and some factors outside of our control.

The promotion of our brand requires us to make substantial expenditures and management investment, which will increase as our market becomes more competitive and as we seek to expand our marketplace. To the extent these activities yield increased revenue, this revenue may not offset the increased expenses we incur. If we do not successfully maintain and enhance our brand and successfully differentiate our marketplace from competitive products and services, our business may not grow, we may not be able to compete effectively and we could lose sellers, buyers or distribution partners or fail to attract potential new sellers, buyers and distribution partners, all of which would adversely affect our business, results of operations and financial condition.

There are also factors outside of our control, which could undermine our reputation and harm our brand. Negative perception of our marketplace may harm our business, including as a result of complaints or negative publicity about us; the promotion on our platform of events that are deemed to be COVID-19 “superspreader” events by the media; our inability to timely comply with local laws, regulations and/or consumer protection related guidance; the use of our platform to sell fraudulent tickets; responsiveness to issues or complaints and timing of refunds and/or reversal of payments on our platform; actual or perceived disruptions or defects in our platform; security incidents; or lack of awareness of our policies or changes to our policies that sellers, buyers or others perceive as overly restrictive, unclear or inconsistent with our values.

If we are unable to maintain a reputable platform that provides valuable solutions and desirable events, then our ability to attract and retain sellers, buyers and distribution partners could be impaired and our reputation, brand and business could be harmed.

Our success depends, in significant part, on concert, sporting and theater events and economic and other factors adversely affecting such events could have a material adverse effect on our business, financial condition and results of operations.

A decline in attendance at, or reduction in the number of, live concert, sporting and theater events may have an adverse effect on our revenue and operating income. In addition, during periods of economic slowdown and recession, many consumers have historically reduced their discretionary spending and advertisers have reduced their advertising expenditures. The impact of economic slowdowns, including the current economic environment due to COVID-19, on our business is difficult to predict, but may result in reductions in ticket sales and our ability to generate revenue. The risks associated with our business may become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at live concert, sporting and theater events. Many of the factors affecting the number and availability of live concert, sporting and theater events are beyond our control. For instance, certain sports leagues have experienced labor disputes leading to threatened or actual player lockouts. Any such lockouts that result in shortened or canceled seasons could adversely impact our business both due to the loss of games and ticketing opportunities as well as the possibility of decreased attendance following such a lockout due to adverse fan reaction.

Our business depends on discretionary consumer and corporate spending. Many factors related to corporate spending and discretionary consumer spending, including economic conditions affecting disposable consumer income such as unemployment levels, fuel prices, interest rates, changes in tax rates and tax laws that impact companies or individuals, and inflation can significantly impact our operating results. Business conditions, as well as various industry conditions, including corporate spending, can also significantly impact our operating results as these factors can affect premium seat sales. Negative factors such as challenging economic conditions

 

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and public concerns over terrorism and security incidents, particularly when combined, can also impact corporate and consumer spending. In addition, the impact of the economic downturn resulting from the COVID-19 pandemic, including a reduction in discretionary spending and confidence for consumers has resulted in a decline in ticket sales and attendance, which has impacted our operating results and growth. There can be no assurance that consumer and corporate spending will not continue to be adversely impacted by current economic conditions, or by any future deterioration in economic conditions, which could have a material adverse effect on our business, financial condition and results of operations.

We may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks, disease epidemics or pandemics, severe weather events and natural disasters.

The occurrence and threat of extraordinary events, such as terrorist attacks, intentional or unintentional mass-casualty incidents, public health concerns such as contagious disease epidemics or pandemics, natural disasters or similar severe weather events, may deter artists from touring, teams from holding games and/or substantially decrease the use of and demand for our services, which may decrease our revenue or expose us to substantial liability. Terrorism and security incidents in the past, military actions in foreign locations, periodic elevated terrorism alerts and fears from publicized contagious disease epidemics and pandemics have raised numerous challenging operating factors, including public concerns regarding air travel, military actions and additional national or local catastrophic incidents, causing a nationwide disruption of commercial and leisure activities. In the event of actual or threatened terrorism events, some artists may refuse to travel or book tours, which could adversely affect our business. Attendance at events may decline due to fears over terrorism, which could adversely impact our operating results.

Additionally, our business may be adversely affected by disease epidemics or pandemics, severe weather events and natural disasters. The occurrence of these events may deter buyers from attending and purchasing tickets to live concerts, sporting or theater events, which could negatively impact our business and financial performance. Moreover, performers, venues, teams or promoters may decide to cancel concert, sporting and theater events due to social distancing requirements, such as those imposed in response to the COVID-19 pandemic, or due to severe weather events or natural disasters. Cancellations of such events can adversely affect our financial performance, as we are obligated to issue refunds or credits for tickets purchased for those events that are not rescheduled.

We may enter into future acquisitions and take certain actions in connection with such transactions, including actions taken to comply with antitrust, competition and other regulations, that could affect our business and results of operations; if we are unsuccessful in our future acquisition endeavors, our business could be adversely impacted.

Our future growth rate depends in part on our selective acquisition of additional businesses. A portion of our growth has been attributable to acquisitions, such as the acquisition of Fanxchange Limited in 2019. We may be unable to identify other suitable targets for further acquisition or make further acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully complete the acquisition would depend on a variety of factors, and may include our ability to obtain financing on acceptable terms and requisite government approvals. In addition, our Term Loan Facilities restrict our ability to make certain acquisitions. In connection with future acquisitions, we could take certain actions that could adversely affect our business, including:

 

   

using a significant portion of our available cash;

 

   

issuing equity securities, which would dilute current stockholders’ percentage ownership;

 

   

incurring substantial debt;

 

   

incurring or assuming contingent liabilities, known or unknown;

 

   

incurring amortization expenses related to intangibles; and

 

   

incurring large accounting write-offs or impairments.

 

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In addition, acquisitions involve inherent risks which, if realized, could adversely affect our business and results of operations, including those associated with:

 

   

integrating the operations, financial reporting, technologies and personnel of acquired companies, including establishing and maintaining a system of internal controls appropriate for a public company environment;

 

   

managing geographically dispersed operations;

 

   

the diversion of management’s attention from other business concerns;

 

   

the inherent risks in entering markets or lines of business in which we have either limited or no direct experience;

 

   

the potential loss of key employees, customers and strategic partners of acquired companies; and

 

   

the impact of laws and regulations relating to antitrust at the state, federal and international levels, which could significantly affect our ability to complete acquisitions and expand our business.

Our operations are seasonal and our results of operations vary from quarter to quarter and year over year, so our financial performance in certain financial quarters or years may not be indicative of, or comparable to, our financial performance in subsequent financial quarters or years.

We believe our financial results and cash needs will vary greatly from quarter to quarter and year to year depending on, among other things, the timing of tours, tour cancellations, event ticket sales, seasonal and other fluctuations in our operating results, the timing of guaranteed payments, financing activities, acquisitions and investments and receivables management. Because our results may vary significantly from quarter to quarter and year to year, our financial results for one quarter or year cannot necessarily be compared to another quarter or year and may not be indicative of our future financial performance in subsequent quarters or years. Typically, we experience our lowest financial performance in the first and second quarters of the calendar year due to the timing of large-scale events and concert onsales. In addition, the timing of tours of top grossing acts can impact comparability of quarterly results year over year and potentially annual results. Similarly, the number of games in playoff series and the teams involved can vary year over year and impact our results. The seasonality of our business could create cash flow management risks if we do not adequately anticipate and plan for periods of decreased activity, which could negatively impact our ability to execute on our strategy, which in turn could harm our results of operations. Due to the unprecedented stoppage of concert, sporting and theater events globally in mid-March of 2020 due to the global COVID-19 pandemic, we did not experience our typical seasonality trends in 2020.

We rely on the experience and expertise of our senior management team, key technical employees and other highly skilled personnel and the failure to retain, motivate or integrate any of these individuals could have an adverse effect on our business, financial condition or results of operations.

Our success depends upon the continued service of our senior management team and key technical employees, as well as our ability to continue to attract and retain additional highly qualified personnel. Our future success depends on our continuing ability to identify, hire, develop, motivate, retain and integrate highly skilled personnel for all areas of our organization. Each of our executive officers, key technical personnel and other employees could terminate his or her relationship with us at any time. The loss of any member of our senior management team or key personnel might significantly delay or prevent the achievement of our business objectives and could harm our business and our relationships. Competition in our industry for qualified employees is intense. In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees.

We face significant competition for personnel, particularly in Chicago, Illinois and Toronto, Ontario. To attract top talent, we have had to offer, and believe we will need to continue to offer, competitive compensation and benefits packages. We may also need to increase our employee compensation levels in response to

 

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competition. In 2020, as a result of the COVID-19 pandemic, we reduced our workforce by approximately 50%. This workforce reduction may hurt our employment brand and may make it more difficult to hire employees in the future. Further, as the economy recovers from the COVID-19 pandemic, we may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs or successfully integrate new hires, our efficiency, ability to meet forecasts and our employee morale, productivity and retention could suffer, which may harm our business.

Impairment of our goodwill could negatively impact our financial results and financial condition.

In accordance with GAAP, we test goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired. If the carrying amount of our goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded. During the year ended December 31, 2020, we recognized a total non-cash impairment charge of $573.8 million, including an impairment of goodwill of $377.1 million. As of March 31, 2021, we had goodwill of approximately $683.3 million, which constituted approximately 57% of our total assets at that date. Due to the volatile stock market, the current economic uncertainty and other factors, we cannot provide assurance that remaining goodwill will not be further impaired in future periods. Impairment may result from, among other things, a significant decline in our expected cash flows, an adverse change in the business climate and slower growth rates in our industry. If we are required to record an impairment charge for goodwill in the future, this would adversely impact our financial condition and financial results.

Risks Relating to Government Regulation and Litigation

The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing applications of privacy regulations.

We receive, transmit and store a large volume of personal data and other user data. Numerous federal, state and international laws address privacy, data protection and the collection, storing, sharing, use, disclosure and protection of personal data and other user data. In the United States, numerous states already have, and are looking to expand, data protection legislation requiring companies like ours to consider solutions to meet differing needs and expectations of buyers and sellers. For example, California enacted the California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020. The CCPA establishes a new privacy framework for covered businesses such as ours, and may require us to modify our data processing practices and policies and incur compliance related costs and expenses. The CCPA provides new and enhanced data privacy rights to California residents, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared. The CCPA also created restrictions on “sales” of personal information that allow California residents to opt-out of certain sharing of their personal information and prohibits covered businesses from discriminating against consumers (e.g., charging more for services) for exercising any of their CCPA rights. The CCPA provides for potentially severe statutory penalties, and a private right of action for data breaches resulting from a failure to implement reasonable security procedures and practices. In addition, in November 2020, California voters approved the California Privacy Rights Act (“CPRA”) ballot initiative which introduced significant amendments to the CCPA and established and funded a dedicated California privacy regulator, the California Privacy Protection Agency (“CPPA”). The amendments introduced by the CPRA go into effect on January 1, 2023, and new implementing regulations are expected to be introduced by the CPPA. Some observers have noted that the CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business. Further, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (“CDPA”), a comprehensive privacy statute that shares similarities with the CCPA, CPRA, and legislation proposed in other states. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.

 

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Outside the United States, personal data and other user data is increasingly subject to legislation and regulations in numerous jurisdictions around the world, the intent of which is to protect the privacy of information that is collected, processed and transmitted in or from the governing jurisdiction. Foreign data protection, privacy, information security, user protection and other laws and regulations are often more restrictive than those in the United States. In particular, the United Kingdom, the European Union and the European Economic Area (EEA) and their member states traditionally have taken broader views as to types of data that are subject to privacy and data protection laws and regulations, and have imposed greater legal obligations on companies in this regard. For example, the European Union General Data Protection Regulation (GDPR) became effective May 25, 2018. The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior. Although we do not currently trigger the application of the GDPR, if we materially alter our operations such that we become established in the EU/UK (e.g. by employing individuals in those locations), begin monitoring individuals in the EU/UK or demonstrate an intention to offer goods and services to individuals in the EU/UK, we will be required to comply with the GDPR and applicable UK data privacy laws. The GDPR and UK data privacy laws enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers. If we are required to comply with the GDPR or UK data privacy laws, this may significantly increase our operational costs and our overall risk exposure.

We are also subject to the Payment Card Industry (“PCI”) Data Security Standard, which is a standard designed to protect credit card account data as mandated by payment card industry entities. We rely on vendors to handle PCI matters and to ensure PCI compliance. Despite our compliance efforts, we may become subject to claims that we have violated the PCI Data Security Standard based on past, present, and future business practices. Our actual or perceived failure to comply with the PCI Data Security Standard can subject us to fines, termination of banking relationships, and increased transaction fees.

The interpretation and application of many privacy and data protection laws are, and will likely remain, uncertain, and it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our existing data management practices or product features. If so, in addition to the possibility of fines, lawsuits and other claims and penalties, we could be required to fundamentally change our business activities and practices or modify our products, which could harm our business. In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us. Any inability to adequately address privacy, data protection and data security concerns or comply with applicable privacy, data protection or data security laws, regulations, policies and other obligations could result in additional cost and liability to us, damage our reputation, inhibit sales and harm our business.

Our failure, and/or the failure by the various third-party service providers and partners with which we do business, to comply with applicable privacy policies or federal, state or similar international laws and regulations

or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in the unauthorized release of personal data or other user data, or the perception that any such failure or compromise has occurred, could negatively harm our brand and reputation, result in a loss of sellers, buyers or distribution partners, discourage potential sellers or buyers from trying our platform and/or result in fines and/or proceedings by governmental agencies and/or users, any of which could have a material adverse effect on our business, results of operations and financial condition.

 

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Unfavorable outcomes in legal proceedings in which we may be involved may adversely affect our business and operating results.

Our results may be affected by the outcome of pending and future litigation. Unfavorable rulings in our legal proceedings may have a negative impact on us that may be greater or smaller depending on the nature of the rulings. In addition, we are currently, and from time to time in the future may be, subject to various other claims, investigations, legal and administrative cases and proceedings (whether civil or criminal) or lawsuits by governmental agencies or private parties. If the results of these investigations, proceedings or suits are unfavorable to us or if we are unable to successfully defend against third-party lawsuits, we may be required to pay monetary damages or may be subject to fines, penalties, injunctions or other censure that could have a material adverse effect on our business, financial condition and results of operations. Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim, we may have to devote significant financial and management resources to address these issues, which could harm our business, financial condition and results of operations.

Unfavorable legislative outcomes may adversely affect our industry, our business and our operating results.

In addition to concerns related to network and data security, the collection, transfer, use, disclosure, security and retention of personal or sensitive information and other user data are governed by existing and evolving federal, state and international laws, as described above. We have expended significant capital and other resources to keep abreast of the evolving privacy landscape. However, due to the changes in the data privacy regulatory environment, we may incur additional costs and challenges to our business that restrict or limit our ability to collect, transfer, use, disclose, secure, or retain personal or sensitive information. These changes in data privacy laws may require us to modify our current or future products, services, programs, practices or policies, which may in turn impact the products and services available to our customers.

Additionally, some states regulate the secondary ticket market, such as by setting maximum resale prices, and any further regulation or unfavorable legislative outcomes imposing additional restrictions on ticket resales may adversely affect our industry, our business and our operating results.

Risks Relating to Information Technology, Cybersecurity and Intellectual Property

The success of our operations depends, in part, on the integrity of our systems and infrastructure, as well as affiliate and third-party computer systems, computer networks and other communication systems. System interruption and the lack of integration and redundancy in these systems and infrastructure may have an adverse impact on our business, financial condition and results of operations.

System interruption and the lack of integration and redundancy in the information systems and infrastructure, both of our own ticketing systems and other computer systems and of affiliate and third-party software, computer networks and other communications systems service providers on which we rely, may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations. Similarly, due to our reliance on a network of technology systems, many of which are outside of our control, changes to interfaces upon which we rely or a reluctance of our counterparties to continue supporting our systems could lead to technology interruptions. Such interruptions could occur by virtue of natural disaster, malicious actions such as hacking or acts of terrorism or war, or human error. In addition, the loss of some or all of certain key personnel could require us to expend additional resources to continue to maintain our software and systems and could subject us to systems interruptions. The large infrastructure plant that is required to operate our systems requires an ongoing investment of time, money and effort to maintain or refresh hardware and software and to ensure it remains at a level capable of servicing the demand and volume of business that we receive. Failure to do so may result in system instability, degradation in performance, or unfixable security vulnerabilities that could adversely impact both the business and the consumers utilizing our services.

 

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While we have backup systems for certain aspects of our operations, disaster recovery planning by its nature cannot be sufficient for all eventualities. In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption. If any of these adverse events were to occur, it could adversely affect our business, financial condition and results of operations.

Cyber security risks, data loss or other breaches of our network security could materially harm our business and results of operations, and the processing, storage, use and disclosure of personal or sensitive information could give rise to liabilities and additional costs as a result of governmental regulation, litigation and conflicting legal requirements relating to personal privacy rights.

Due to the nature of our business, we process, store, use, transfer and disclose certain personal or sensitive information about our customers and employees. Penetration of our network or other misappropriation or misuse of personal or sensitive information and data, including credit card information and other personally identifiable information, could cause interruptions in our operations and subject us to increased costs, litigation, inquiries and actions from governmental authorities, and financial or other liabilities. In addition, security breaches, incidents or the inability to protect information could lead to increased incidents of ticketing fraud and counterfeit tickets. Security breaches and incidents could also significantly damage our reputation with sellers, buyers, distribution partners and other third parties, and could result in significant costs related to remediation efforts, such as credit or identity theft monitoring. Such incidents may occur in the future, resulting in unauthorized, unlawful, or inappropriate access to, inability to access, disclosure of, or loss of the sensitive, proprietary and confidential information that we handle.

Although we have developed systems and processes that are designed to protect customer and employee information and to prevent security breaches or incidents (which could result in data loss or other harm or loss), such measures cannot provide absolute security or certainty. It is possible that advances in computer and hacker capabilities, new variants of malware, the development of new penetration methods and tools, inadvertent violations of company policies or procedures or other developments could result in a compromise of customer or employee information or a breach of the technology and security processes that are used to protect customer and employee information. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems may change frequently and as a result, may be difficult for our business to detect for long periods of time. In addition, despite our best efforts, we may be unaware of or unable to anticipate these techniques or implement adequate preventative measures. We have expended significant capital and other resources to protect against and remedy such potential security breaches, incidents and their consequences and will continue to do so in the future.

We also face risks associated with security breaches and incidents affecting third parties with which we are affiliated or with which we otherwise conduct business. In particular, hardware, software or applications we develop or procure from third parties may contain defects in design or manufacture and/or may pose a security risk that could unexpectedly compromise information security. Sellers, buyers and distribution partners are generally concerned with the security and privacy of the internet, and any publicized security problems affecting our businesses and/or third parties may discourage sellers, buyers or distribution partners from doing business with us, which could have an adverse effect on our business, financial condition and results of operations.

Laws in all states and U.S. territories require businesses to notify affected individuals, governmental entities, and/or credit reporting agencies of certain security incidents affecting personal information. Such laws are inconsistent, and compliance in the event of a widespread security incident is complex and costly and may be difficult to implement. Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim.

 

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If we fail to adequately protect or enforce our intellectual property rights, our competitive position and our business could be materially adversely affected.

We believe that our proprietary technologies and information, including our software, informational databases, and other components that make our products and services are critical to our success, and we seek to protect our technologies, products and services through a combination of intellectual property rights, including trademarks, domain names, copyrights and trade secrets, as well as through contractual restrictions with employees, customers, suppliers, affiliates and others. Despite our efforts, it may be possible for a third party to copy or otherwise obtain and use our intellectual property without authorization which, if discovered, might require legal action to correct. In addition, third parties may independently and lawfully develop products or services substantially similar to ours. We do not currently hold patents over our technology. We seek to protect our trade secrets and proprietary know-how and technology methods through confidentiality agreements and other access control measures. Failure of such strategies to protect our technology or our inability to protect patents in the future to the extent we obtain them could have a materially adverse impact on our business, financial condition and results of operations.

We have been granted trademark registrations with the United States Patent and Trademark Office and/or various foreign authorities for certain of our brands. Our existing or future trademarks may be adjudicated invalid by a court or may not afford us adequate protection against competitors.

We cannot be certain that the measures we implement will prevent infringement, misappropriation or other violations of our intellectual property rights, particularly in foreign countries where the laws may not protect our proprietary rights as fully as they do in the United States. Our failure to protect our intellectual property rights in a meaningful manner or challenges to our related contractual rights could result in erosion of our brand names or other intellectual property and could adversely affect our business, financial condition and results of operations. Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations.

We may face potential liability and expense for legal claims alleging that the operation of our business infringes intellectual property rights of third parties, who may assert claims against us for unauthorized use of such rights.

We cannot be certain that the operation of our business does not, or will not, infringe or otherwise violate the intellectual property rights of third parties. From time to time, we have been and may in the future be, subject to legal proceedings and claims alleging that we infringe or otherwise violate the intellectual property rights of third parties. These claims, whether or not successful, could divert management time and attention away from our business and harm our reputation and financial condition. In addition, the outcome of litigation is uncertain, and third parties asserting claims could secure a judgment awarding substantial damages, as well as injunctive or other equitable relief against us, which could require us to rebrand, redesign, or reengineer our platform, products or services, and/or effectively block our ability to distribute, market or sell our products and services.

Our payments system depends on third-party providers and is subject to risks that may harm our business.

We rely on third-party providers to support our payment system, as our buyers primarily use credit cards to purchase tickets on our marketplace. Nearly all our revenue is associated with payments processed through a single provider, which relies on banks and payment card networks to process transactions. If this provider or any of its vendors do not operate well with our platform, our payments systems and our business could be adversely affected. If this provider does not perform adequately, determines certain types of transactions are prohibitive for any reason, if this provider’s technology does not interoperate well with our platform, or if our relationships with this provider, the bank or the payment card networks on which it relies were to terminate unexpectedly, buyers may find our platform more difficult to use. Such an outcome could harm the ability of sellers to use our platform, which could cause them to use our platform less and harm our business.

 

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Our payment processing partner requires us to comply with payment card network operating rules, which are set and interpreted by the payment card networks. The payment card networks could adopt new operating rules or interpret or re-interpret existing rules in ways that might prohibit us from providing certain services to some buyers or sellers, be costly to implement or difficult to follow. We are required to reimburse our payment processor for fines assessed by payment card networks if we, or buyers or sellers using our platform, violate these rules, such as our processing of various types of transactions that may be interpreted as a violation of certain payment card network operating rules. Changes to these rules and requirements, or any change in our designation by payment card networks, could require a change in our business operations and could result in limitations on or loss of our ability to accept payment cards, any of which could negatively impact our business.

Additionally, while we deploy sophisticated technology to detect fraudulent purchase activity, we may incur losses if we fail to prevent the use of fraudulent credit card information on transactions in the future. Fraud schemes are becoming increasingly sophisticated and common, and our ability to detect and combat fraudulent schemes may be negatively impacted by the adoption of new payment methods and new technology platforms. If we or this provider fail to identify fraudulent activity or are unable to effectively combat the use of fraudulent credit cards on our platform or if we otherwise experience increased levels of disputed credit card payments, our results of operations and financial positions could be materially adversely affected.

Finally, payment card networks and our payment processing partner could increase the fees they charge us for their services, which would increase our operating costs and reduce our margins. Any such increase in fees could also harm our business, results of operations and financial condition.

Risks Relating to Our Indebtedness

We anticipate that, upon completion of the business combination, we will continue to be party to debt agreements that could restrict our operations and impair our financial condition. The agreements governing our indebtedness will impose restrictions on us that limit the discretion of management in operating our business and that, in turn, could impair our ability to meet our obligations under our debt.

The agreements governing our Term Loan Facilities (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vivid Seats”) include restrictive covenants that, among other things, restrict our ability to:

 

   

incur additional debt;

 

   

pay dividends and make distributions;

 

   

make certain investments;

 

   

repurchase our stock and prepay certain indebtedness;

 

   

create liens;

 

   

enter into transactions with affiliates;

 

   

modify the nature of our business;

 

   

transfer and sell assets, including material intellectual property;

 

   

enter into agreements prohibiting our ability to grant liens in favor of our senior secured creditors;

 

   

amend or modify the terms of any junior financing arrangements;

 

   

amend our organizational documents; and

 

   

merge or consolidate.

In addition, our Term Loan Facilities include other restrictions. Our failure to comply with the terms and covenants of our indebtedness could lead to a default under the terms of the governing documents, which would entitle the lenders to accelerate the indebtedness and declare all amounts owed due and payable.

 

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As of March 31, 2021, our total indebtedness, excluding unamortized debt discounts and debt issuance costs of $16.0 million, was $903.4 million. The gross proceeds of gross proceeds from the PIPE Subscription and funds held in the Trust Account are expected to be used to, among other things, repay our Term Loan Facilities to a net debt amount (consisting of long-term debt, less cash and cash equivalents) of $132.1 million under both the no redemption scenario and the maximum redemption scenario. We may also incur significant additional indebtedness in the future.

Our substantial indebtedness could have adverse consequences, including:

 

   

making it more difficult for us to satisfy our obligations;

 

   

increasing our vulnerability to adverse economic, regulatory and industry conditions;

 

   

limiting our ability to obtain additional financing for future working capital, capital expenditures, acquisitions and other purposes;

 

   

requiring us to dedicate a substantial portion of our cash flow from operations to fund payments on our debt, thereby reducing funds available for operations and other purposes;

 

   

limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

 

   

making us more vulnerable to increases in interest rates; and

 

   

placing us at a competitive disadvantage compared to our competitors that have less debt.

We depend on the cash flows of our subsidiaries in order to satisfy our obligations.

We rely on distributions and loans from our subsidiaries to meet our payment requirements under our obligations. If our subsidiaries are unable to pay dividends or otherwise make payments to us, we may not be able to make debt service payments on our obligations. Subject to certain exceptions, each of our subsidiaries guarantees our indebtedness under our Term Loan Facilities. We conduct substantially all of our operations through our subsidiaries. Our operating cash flows and consequently our ability to service our debt is therefore principally dependent upon our subsidiaries’ earnings and their distributions of those earnings to us and may also be dependent upon loans or other payments of funds to us by those subsidiaries. In addition, the ability of our subsidiaries to provide funds to us may be subject to restrictions under our Term Loan Facilities and may be subject to the terms of such subsidiaries’ future indebtedness, as well as the availability of sufficient surplus funds under applicable law.

We may not be able to generate sufficient cash flows or raise the additional capital necessary to fund our operations or other liquidity needs.

As of March 31, 2021, we had cash and cash equivalents of $312.8 million. The remaining cash and cash equivalents balance is available to us to fund our operating, investing and financing activities. In addition, due to the COVID-19 pandemic, which has drastically changed the landscape of the concerts, sporting and theater events industries, we experienced a significant decrease in our revenues as a result of decreased volume in 2020. Our revenues were $35 million and $469 million for the years ended December 31, 2020 and 2019, respectively, and the net cash provided by (used in) operating activities was $(33.9) million and $76.5 million for the years ended December 31, 2020 and 2019, respectively. Revenues for the three months ended March 31, 2021 were $24 million and the net cash provided by operating activities was $30.8 million. There is significant uncertainty regarding the extent and duration of the impact that the COVID-19 pandemic will have on our business, and we could exhaust our available financial resources sooner than we expect.

We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing on favorable terms, if at all. Our ability to obtain financing will depend on a number of factors, including:

 

   

general economic and capital market conditions, including as a result of the COVID-19 pandemic;

 

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the availability of credit from banks or other lenders;

 

   

investor confidence in us; and

 

   

our results of operations.

We cannot assure you that our business will generate sufficient cash flow from operations, or that we will be able to obtain financing, in an amount sufficient to fund our operations or other liquidity needs. If we raise additional equity financing, our security holders may experience significant dilution of their ownership interests, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of Vivid Seats PubCo common stock.

If we need additional capital and cannot raise it on acceptable terms, if at all, we may not be able to, among other things:

 

   

develop and enhance our platform and solutions;

 

   

continue to invest in our technology development and marketing organizations;

 

   

hire, train and retain employees;

 

   

respond to competitive pressures or unanticipated working capital requirements; or

 

   

pursue acquisition opportunities.

Our inability to do any of the foregoing could reduce our ability to compete successfully and could have an adverse effect on our business.

Risks Related to the Business Combination and Horizon

Sponsor has agreed to vote in favor of the business combination and the other proposals described herein to be presented at the extraordinary general meeting of shareholders, regardless of how Horizon’s public shareholders vote.

Sponsor has agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the extraordinary general meeting of shareholders. As of the date of this proxy statement/prospectus/consent solicitation statement, Sponsor owns approximately 43% of Horizon’s ordinary shares. Accordingly, it is more likely that the necessary shareholder approval will be received than would be the case if Sponsor agreed to vote its shares in accordance with the majority of the votes cast by Horizon’s public shareholders.

Neither the Horizon board of directors nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the business combination.

Neither the Horizon board of directors nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that Horizon is paying for Vivid Seats is fair to Horizon from a financial point of view. Neither the Horizon board of directors nor any committee thereof obtained a third-party valuation in connection with the business combination. In analyzing the business combination, the Horizon board of directors conducted due diligence on Vivid Seats. The Horizon board of directors also consulted with its management and legal counsel, financial advisors and other advisors and considered a number of factors, uncertainties and risks, including, but not limited to, those discussed under “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination,” and concluded that the business combination was in the best interest of Horizon’s shareholders. Accordingly, investors will be relying solely on the judgment of the Horizon board of directors in valuing Vivid Seats, and the Horizon board of directors may not have properly valued such businesses. The lack of a third-party valuation may also lead an increased number of shareholders to vote against the business combination or demand redemption of their shares, which could potentially impact Horizon’s ability to consummate the business combination.

 

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Since Sponsor and Horizon’s directors have interests that are different from, or in addition to (and which may conflict with), the interests of Horizon’s shareholders, a conflict of interest may have existed in determining whether the business combination is appropriate as Horizon’s initial business combination. Such interests include that Sponsor will lose the value of its investment in Horizon IPO Private Placement Warrants and founder shares if a business combination is not completed.

When you consider the recommendation of Horizon’s board of directors in favor of approval of the Business Combination Proposal and the other proposals included herein, you should keep in mind that Sponsor and Horizon’s directors have interests in such proposals that are different from, or in addition to, those of Horizon shareholders and warrant holders generally. Horizon’s board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the business combination and transaction agreements and in recommending to Horizon’s shareholders that they vote in favor of the proposals presented at the extraordinary general meeting of shareholders, including the Business Combination Proposal. Horizon shareholders should take these interests into account in deciding whether to approve the Proposals, including the Business Combination Proposal. These interests include, among other things:

 

   

the fact that Sponsor has agreed not to redeem any Class A ordinary shares held by it in connection with a shareholder vote to approve a proposed initial transaction;

 

   

the fact that Sponsor paid an aggregate of $155 million for 15,500,000 Horizon Class A ordinary shares (after giving effect to forfeitures in connection with the underwriters’ overallotment option being reduced or not exercised) (none of which were transferred to Horizon’s independent directors and none of which were transferred to Horizon’s strategic advisors) and such securities may have a higher value at the time of the business combination, estimated at approximately $155 million based on the closing price of $10.00 per public share on the NYSE on June 28, 2021;

 

   

the fact that Sponsor paid an aggregate of $25,000 for 13,599,608 Horizon Class B ordinary shares (after giving effect to forfeitures in connection with the underwriters’ overallotment option being reduced or not exercised) (the “Sponsor Shares”) (none of which were transferred to Horizon’s independent directors and none of which were transferred to Horizon’s strategic advisors) and such securities may have a higher value at the time of the business combination, estimated at approximately $136 million based on the closing price of $10.00 per public share on the NYSE on June 28, 2021;

 

   

the fact that Sponsor paid an aggregate of $9.78 million for the 6,519,791 Horizon IPO Private Placement Warrants currently owned by Sponsor, and such warrants will expire worthless if a transaction is not consummated by August 25, 2022; the warrants held by Sponsor had an aggregate market value of approximately $11,605,228 based upon the closing price of $1.78 per warrant on the NYSE on June 28, 2021;

 

   

the fact that Sponsor and Horizon’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Sponsor Shares held by them if Horizon fails to complete an initial transaction by August 25, 2022;

 

   

the fact that the Registration Rights Agreement will be entered into by Horizon;

 

   

the fact that, at the option of Sponsor, any amounts outstanding under any loan made by Sponsor or any of its affiliates to Horizon in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Vivid Seats Class A common stock in connection with the consummation of the business combination;

 

   

the right of Sponsor to hold shares of Vivid Seats Class A common stock, as well as Vivid Seats PubCo Warrants, following the business combination, subject to certain lock-up periods;

 

   

the continued indemnification of Horizon’s existing directors and officers and the continuation of Horizon’s directors’ and officers’ liability insurance after the business combination (i.e., a “tail policy”);

 

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the fact that Sponsor and Horizon’s officers and directors will not be reimbursed for any out-of-pocket expenses (estimated at $0 as of June 28, 2021) if an initial transaction is not consummated by August 25, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event Horizon is unable to complete an initial transaction by August 25, 2022, Sponsor has agreed to indemnify Horizon to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which Horizon has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Horizon, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that Horizon may be entitled to distribute or pay over funds held by Horizon outside the Trust Account to Sponsor or any of its affiliates prior to the Closing;

 

   

the fact that Hoya Intermediate shall pay Sponsor $11.7 million in cash at Closing in consideration for the Sponsor Backstop Commitment;

 

   

that Sponsor can earn a positive return on its investment even if other Horizon shareholders experience a negative return given the potential option value for the new warrants; and

 

   

the fact that Sponsor will enter into the Exchange Agreement, pursuant to which all Horizon Class B ordinary shares will be exchanged for (i) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise price of $10.00 per share (the “Horizon $10.00 Exercise Warrants”), (ii) warrants to purchase 17,000,000 shares of Horizon Class A ordinary shares at an exercise of $15.00 per share (the “Horizon $15.00 Exercise Warrants”) and (iii) 50,000 shares of Horizon Class A ordinary shares, as more particularly set forth in the Exchange Agreement.

The existence of financial and personal interests of one or more of Horizon’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of Horizon and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. See the section entitled “Proposal No.1 — The Business Combination Proposal – Interests of Certain Persons in the Business Combination” for a further discussion of these considerations.

The financial and personal interests of Sponsor and Horizon’s directors may have influenced their motivation in identifying and selecting Vivid Seats as a business combination target, completing an initial business combination with Vivid Seats and influencing the operation of the business following the initial business combination. In considering the recommendations of Horizon’s board of directors to vote for the proposals, its shareholders should consider these interests.

The exercise of the Horizon board of directors’ discretion in agreeing to changes or waivers in the terms of the Transaction Agreement, including closing conditions, may result in a conflict of interest when determining whether such changes to the terms or waivers of conditions are appropriate and in Horizon’s shareholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Transaction Agreement, would require Horizon to agree to amend the Transaction Agreement, to consent to certain actions taken by Vivid Seats or to waive rights that Horizon is entitled to under the Transaction Agreement, including those related to closing conditions. Such events could arise because of changes in the course of Vivid Seats’ businesses or a request by Vivid Seats to undertake actions that would otherwise be prohibited by the terms of the Transaction Agreement or the occurrence of other events that would have a material adverse effect on Vivid Seats’ businesses and would entitle Horizon to terminate the Transaction Agreement. In any of such circumstances, it would be at Horizon’s discretion, acting through its board of directors, to grant its consent or waive those rights. The

 

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existence of financial and personal interests of one or more of the directors described in the preceding risk factors (and described elsewhere in this proxy statement/prospectus/consent solicitation statement) may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for Horizon and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus/consent solicitation statement, Horizon does not believe there will be any changes or waivers that Horizon’s board of directors would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, Horizon will circulate a new or amended proxy statement/prospectus/consent solicitation statement and resolicit Horizon’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

The announcement of the proposed business combination could disrupt Vivid Seats’ relationships with its clients, counterparties, vendors and other business partners and others, as well as its operating results and business generally.

Whether or not the business combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the business combination on Vivid Seats’ business include the following:

 

   

its employees may experience uncertainty about their future roles, which might adversely affect Vivid Seats’ ability to retain and hire key personnel and other employees;

 

   

Buyers, sellers, distribution partners and other parties with which Vivid Seats maintains business relationships may experience uncertainty about its future and rescind their deposits, seek alternative relationships with third parties, seek to alter their business relationships with Vivid Seats or fail to extend an existing relationship with Vivid Seats; and

 

   

Vivid Seats has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed business combination.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Vivid Seats’ results of operations and cash available to fund its businesses.

Subsequent to consummation of the business combination, Vivid Seats may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on Vivid Seats’ financial condition, results of operations and the price of its securities, which could cause you to lose some or all of your investment.

Horizon cannot assure you that the due diligence conducted in relation to Vivid Seats has identified all material issues or risks associated with Vivid Seats, its business or the industry in which it competes. Furthermore, Horizon cannot assure you that factors outside of Vivid Seats’ and Horizon’s control will not later arise. As a result of these factors, Vivid Seats may be exposed to liabilities and incur additional costs and expenses and it may be forced to later write down or write off assets, restructure its operations, or incur impairment or other charges that could result in Vivid Seats reporting losses. Even if Horizon’s due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with its preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on Vivid Seats’ financial condition and results of operations and could contribute to negative market perceptions about its securities or Vivid Seats. Additionally, Horizon has no indemnification rights against Hoya Topco and the Vivid Seats Companies under the Transaction Agreement. Accordingly, any shareholders or warrant holders of Horizon who choose to remain Vivid Seats PubCo’s stockholders or warrant holders following the business combination could suffer a reduction in the value of their shares or warrants. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

 

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The historical financial results of Vivid Seats and unaudited pro forma financial information included elsewhere in this proxy statement/prospectus/consent solicitation statement may not be indicative of what Vivid Seats’ actual financial position or results of operations would have been if it were a public company.

The historical financial results of Vivid Seats included in this proxy statement/prospectus/consent solicitation statement do not reflect the financial condition, results of operations or cash flows it would have achieved as a public company during the periods presented or those Vivid Seats PubCo will achieve in the future. Vivid Seats PubCo’s financial condition and future results of operations could be materially different from amounts reflected in Vivid Seats’ historical financial statements included elsewhere in this proxy statement/prospectus/consent solicitation statement, so it may be difficult for investors to compare Vivid Seats PubCo’s future results to historical results or to evaluate its relative performance or trends in its business.

Similarly, the unaudited pro forma financial information in this proxy statement/prospectus/consent solicitation statement is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, Vivid Seats PubCo being treated as the “acquired” company for financial reporting purposes in the business combination, the total debt obligations and the cash and cash equivalents of Vivid Seats on the date the business combination closes and the number of Horizon’s public shares that are redeemed in connection with the business combination. Accordingly, such pro forma financial information may not be indicative of Vivid Seats PubCo’s future operating or financial performance and Vivid Seats PubCo’s actual financial condition and results of operations may vary materially from the pro forma results of operations and balance sheet contained elsewhere in this proxy statement/prospectus/consent solicitation statement, including as a result of such assumptions not being accurate. See “Unaudited Pro Forma Condensed Combined Financial Information.”

Financial projections with respect to Vivid Seats may not prove to be reflective of actual financial results.

In connection with the business combination, Horizon’s board of directors considered, among other things, internal financial forecasts prepared by, or at the direction of, the management of Vivid Seats, the key elements of which are set forth in the section entitled “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination.” Vivid Seats does not, as a matter of general practice, publicly disclose long-term forecasts or internal projections of its future performance, revenue, financial condition or other results. None of these projections or forecasts were prepared with a view towards public disclosure or compliance with the published guidelines of the SEC, GAAP or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections and forecasts are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them. These projections and forecasts are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of Vivid Seats. There can be no assurance that Vivid Seats PubCo’s financial condition, including its cash flows or results of operations, will be consistent with those set forth in such projections and forecasts, which could have an adverse impact on the market price of Vivid Seats Class A common stock or the business, financial condition and results of operations of Vivid Seats PubCo following the Closing.

Sponsor, Hoya Topco, Vivid Seats or Horizon’s or Vivid Seats’ respective directors, officers, advisors or affiliates may elect to purchase shares from public shareholders prior to the consummation of the business combination, which may influence the vote on the business combination and reduce the public “float” of Horizon Class A ordinary shares.

As of March 31, 2021, Sponsor and Horizon’s directors, officers and advisors and certain of their respective affiliates hold approximately 28.7% Horizon Class A ordinary shares and 100% of Horizon Class B ordinary shares. At any time at or prior to the business combination, subject to applicable securities laws, Sponsor, Hoya Topco or Horizon’s or Vivid Seats’ respective directors, officers, advisors or affiliates may (1) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the

 

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Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (2) execute agreements to purchase such shares from such investors in the future or (3) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of Horizon’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that Sponsor, Hoya Topco or Horizon’s or Vivid Seats’ respective directors, officers, advisors or affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to (1) increase the likelihood of approving the Proposals and (2) limit the number of public shares electing to redeem, including to satisfy any redemption threshold.

Entering into any such arrangements may have a depressive effect on Horizon Class A ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the business combination). If such transactions are effected, the consequence could be to cause the business combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Proposals and would likely increase the chances that the Proposals would be approved. In addition, if such purchases are made, the public “float” of Horizon’s public shares and the number of beneficial holders of Horizon’s securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of Horizon’s securities on a national securities exchange.

If third parties bring claims against Horizon, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by holders of Horizon Class A ordinary shares may be less than $10.00 per share.

Horizon’s placing of funds in the Trust Account may not protect those funds from third-party claims against Horizon. Although Horizon seeks to have all vendors, service providers (other than its independent registered public accounting firm), prospective target businesses or other entities with which Horizon does business execute agreements with Horizon waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against Horizon’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, Horizon’s management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to Horizon than any alternative.

Examples of possible instances where Horizon may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where Horizon is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with Horizon and will not seek recourse against the Trust Account for any reason. Upon redemption of the public shares, if Horizon is unable to complete an initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with its initial business combination, Horizon will be required to provide for payment of claims of creditors that were not waived that may be brought against Horizon within the 10 years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

 

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Sponsor has agreed that it will be liable to Horizon if and to the extent any claims by a third party (other than Horizon’s independent registered public accounting firm) for services rendered or products sold to Horizon, or a prospective target business with which Horizon has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under Horizon’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Sponsor will not be responsible to the extent of any liability for such third-party claims. Horizon has not independently verified whether Sponsor has sufficient funds to satisfy its indemnity obligations and Horizon has not asked Sponsor to reserve for such indemnification obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for Horizon’s initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, Horizon may not be able to complete its initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. No member of Horizon’s management team will indemnify Horizon for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

If, after Horizon distributes the proceeds in the Trust Account to Horizon’s public shareholders, it files a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against Horizon that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of Horizon’s board of directors may be viewed as having breached their fiduciary duties to Horizon’s creditors, thereby exposing the members of Horizon’s board of directors and Horizon to claims of punitive damages.

If, after Horizon distributes the proceeds in the Trust Account to Horizon’s public shareholders, Horizon files a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against Horizon that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy and/or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by Horizon’s shareholders. In addition, Horizon’s board of directors may be viewed as having breached its fiduciary duty to Horizon’s creditors and/or having acted in bad faith by paying public shareholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and Horizon to claims of punitive damages.

If, before distributing the proceeds in the Trust Account to Horizon’s public shareholders, Horizon files a bankruptcy or winding-up petition or an involuntary bankruptcy petition is filed against Horizon that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of Horizon’s shareholders and the per-share amount that would otherwise be received by Horizon shareholders in connection with Horizon’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to Horizon’s public shareholders, Horizon files a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against Horizon that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in Horizon’s bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of Horizon’s shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, the per-share amount that would otherwise be received by Horizon’s public shareholders in connection with its liquidation would be reduced.

 

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Horizon’s shareholders may be held liable for claims by third parties against Horizon to the extent of distributions received by them upon redemption of their shares.

If Horizon is unable to complete the business combination or another business combination within the required time period, Horizon will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to Horizon to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Horizon public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Horizon’s remaining shareholders and its board of directors, dissolve and liquidate, subject (in each case) to Horizon’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Horizon cannot assure you that it will properly assess all claims that may be potentially brought against Horizon. As a result, Horizon’s shareholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its shareholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Horizon cannot assure you that third parties will not seek to recover from its shareholders amounts owed to them by Horizon.

The public shareholders will experience dilution as a consequence of, among other transactions, the issuance of Vivid Seats Class A common stock as consideration in the business combination and the PIPE Subscriptions as well as future issuances pursuant to the 2021 Plan. Having a minority share position may reduce the influence that Horizon’s current shareholders have on the management of Vivid Seats PubCo.

The issuance of a significant number of shares of Vivid Seats Class A common stock in the business combination and in the PIPE Subscription will dilute the equity interest of existing Horizon shareholders in Vivid Seats PubCo and may adversely affect prevailing market prices for its public shares and/or Vivid Seats Public IPO Warrants.

It is anticipated that, upon completion of the business combination and assuming no redemptions of Horizon Class A ordinary shares in connection with the business combination, Vivid Seats PubCo’s ownership will be as follows: (1) Horizon public shareholders will own approximately 19.9% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (2) the PIPE Investors (as defined herein), excluding Sponsor and certain affiliates of Sponsor, will own approximately 1.8% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); (3) Sponsor, together with certain of its affiliates, will own (i) approximately 17.7% (assuming no exercise of Vivid Seats PubCo Warrants held by Sponsor) or (ii) approximately 29.9% (assuming full exercise of Horizon $10.00 Exercise Warrants and Horizon $15.00 Exercise Warrants (each as defined herein) held by Sponsor), of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class A common stock); and (4) Hoya Topco will own approximately 60.6% of Vivid Seats PubCo’s outstanding common stock (which will be in the form of shares of Vivid Seats Class B common stock). As a result of the voting power controlled by Hoya Topco, following the business combination, Vivid Seats PubCo will qualify as a “controlled company” within the meaning of applicable Nasdaq listing rules. The board of managers of Hoya Topco is controlled by our Private Equity Owner and its affiliates, and consequently the Private Equity Owner will, for so long as it controls Hoya Topco, control the vote of all matters submitted to a vote of Vivid Seats PubCo’s shareholders through Hoya Topco’s ownership of approximately 60.6% of the voting power of Vivid Seats PubCo’s outstanding common stock following the business combination. In addition to its voting power, the Private Equity Owner, for so long as it controls Hoya Topco, will be entitled to nominate five (5) directors to the Vivid Seats Board pursuant to the Stockholders’ Agreement. In turn, Vivid Seats PubCo will hold approximately 39.4% of Intermediate Common Units and Hoya Topco will hold approximately 60.6% of the Intermediate Common Units, which interests will be controlled the Private Equity Owner for so long as it

 

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controls Hoya Topco. The PIPE Investors have agreed to purchase in the aggregate 22,500,000 shares of Vivid Seats Class A common stock at $10.00 per share for an aggregate commitment amount of $225.0 million in the PIPE Subscription. In this proxy statement/prospectus/consent solicitation statement, we assume that approximately $769.0 million of the gross proceeds from the PIPE Subscription and funds held in the Trust Account will be used to fund (i) the business combination, the (ii) the partial repayment of our Term Loan Facilities to a net debt amount (consisting of long-term debt, less cash and cash equivalents) of approximately $132.1 million under both the no redemption scenario and maximum redemption scenario, and (iii) the payment of certain transaction expenses. The ownership percentage with respect to Vivid Seats PubCo (a) does not take into account (1) warrants to purchase Vivid Seats Class A common stock that will remain outstanding immediately following the business combination or warrants to purchase Vivid Seats Class B common stock issued in connection with the business combination or (2) the issuance of any shares upon completion of the business combination under the 2021 Plan, but (b) does include founder shares, which will automatically convert into shares of Vivid Seats Class A common stock on a one-for-one basis upon the consummation of the business combination (such shares of Vivid Seats Class A common stock will be subject to transfer restrictions). If the actual facts are different from these assumptions, the above levels of ownership interest will be different.

Future issuances of shares of Vivid Seats Class A common stock, including pursuant to the 2021 Plan, may significantly dilute the equity interests of existing holders of Horizon’s securities and may adversely affect prevailing market prices for Vivid Seats PubCo’s securities.

The listing of Vivid Seats PubCo securities on Nasdaq will not benefit from the process undertaken in connection with an underwritten initial public offering.

Vivid Seats PubCo will apply to list Vivid Seats Class A common stock and Vivid Seats PubCo Warrants on Nasdaq under the symbols “SEAT” and “SEAT WS” to be effective at the time of the Closing. Unlike an underwritten initial public offering of the Vivid Seats PubCo securities, the initial listing of Vivid Seats PubCo’s securities as a result of the business combination will not benefit from the following:

 

   

the book-building process undertaken by underwriters that helps to inform efficient price discovery with respect to opening trades of newly listed securities;

 

   

underwriter support to help stabilize, maintain or affect the public price of the new issue immediately after listing; and

 

   

underwriter due diligence review of the offering and potential liability for material misstatements or omissions of fact in a prospectus used in connection with the securities being offered or for statements made by its securities analysts or other personnel.

The lack of such a process in connection with our listing could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for the securities during the period immediately following the listing.

The Merger may result in adverse tax consequences for holders of public shares.

U.S. Holders (as defined in “U.S. Federal Income Tax Considerations — U.S. Holders”) may be subject to U.S. federal income tax as a result of the Merger. Because the Merger will occur prior to the redemption of public shares, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Merger. Additionally, non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations — Non-U.S. Holders” below) may become subject to withholding tax on any dividends paid or deemed paid on shares of Vivid Seats Class A common stock after the Merger.

 

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As discussed more fully under “U.S. Federal Income Tax Considerations,” the Merger should constitute a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the Code. However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) of the Code to the facts and circumstances relating to Horizon, this result is not entirely clear. Accordingly, due to the absence of such guidance, it is not possible to predict whether the IRS or a court considering the issue would take a contrary position. If the Merger fails to qualify as a reorganization under Section 368(a)(1)(F) of the Code, subject to the PFIC rules described in further detail below, a U.S. Holder generally would recognize gain or loss with respect to its public shares or Horizon IPO Public Warrants in an amount equal to the difference, if any, between the fair market value of the corresponding Vivid Seats Class A common stock or Vivid Seats PubCo warrants received in the Merger and the U.S. Holder’s adjusted tax basis in its public shares and Horizon IPO Public Warrants surrendered in exchange therefor.

In the case of a transaction, such as the Merger, that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders will be subject to Section 367(b) of the Code and, as a result: a U.S. Holder that on the day of the Merger beneficially owns (actually and constructively) public shares with a fair market value of less than $50,000 on the date of the Merger generally will not recognize any gain or loss and will not be required to include any part of Horizon’s earnings in income in respect of the Merger; a U.S. Holder that on the day of the Merger beneficially owns (actually and constructively) public shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of Horizon’s stock entitled to vote and less than 10% or more of the total value of all classes of Horizon’s stock, generally will recognize gain (but not loss) in respect of the Merger as if such U.S. Holder exchanged its public shares in a taxable transaction, unless such U.S. Holder elects in accordance with applicable Treasury Regulations to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to the public shares held directly by such U.S. Holder; and a U.S. Holder that on the day of the Merger beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of Horizon’s stock entitled to vote or 10% or more of the total value of all classes of Horizon’s stock, will generally be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to the public shares held directly by such U.S. Holder; however, any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (commonly referred to as the participation exemption).

Notwithstanding the foregoing, if Horizon qualifies as a PFIC, a U.S. Holder of public shares or Horizon IPO Public Warrants may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its public shares or Horizon IPO Public Warrants pursuant to the Merger under PFIC rules of the Code equal to the excess, if any, of the fair market value of the Vivid Seats Class A common stock or Vivid Seats PubCo warrants received in the Merger over the U.S. Holder’s adjusted tax basis in the corresponding public shares or Horizon IPO Public Warrants surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Merger, see the discussion in the section entitled “U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations.”

All holders are urged to consult their tax advisors for the tax consequences of the Merger to their particular situation. For a more detailed description of the U.S. federal income tax consequences associated with the Merger, see “U.S. Federal Income Tax Considerations.”

 

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Risks Related to the Redemption

Public shareholders who wish to redeem their public shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus/consent solicitation statement, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the Trust Account.

A public shareholder will be entitled to receive cash for any public shares to be redeemed only if such public shareholder: (1)(a) holds public shares or (b) if the public shareholder holds public shares through units, the public shareholder elects to separate its units into the underlying public shares and warrants prior to exercising its redemption rights with respect to the public shares; (2) prior to 5:00 p.m. Eastern Time on                 , 2021 (two business days before the scheduled date of the extraordinary general meeting) submits a written request to Continental Stock Transfer & Trust Company, Horizon’s transfer agent, that Horizon redeems all or a portion of its public shares for cash, affirmatively certifying in its request if it “IS” or “IS NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other shareholder with respect to Horizon’s ordinary shares; and (3) tenders its public shares to Horizon’s transfer agent physically or electronically through DTC. In order to obtain a physical share certificate, a shareholder’s broker or clearing broker, DTC and Horizon’s transfer agent will need to act to facilitate this request. It is Horizon’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from Horizon’s transfer agent. However, because Horizon does not have any control over this process or over DTC, it may take significantly longer than two weeks to obtain a physical share certificate. If it takes longer than anticipated to obtain a physical certificate, public shareholders who wish to redeem their public shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

If the business combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds, including timely tendering its shares to Horizon’s transfer agent, Horizon will redeem such public shares for a per-share price, payable in cash calculated as of two business days prior to the consummation of the business combination, including interest (net of taxes payable). Please see the section entitled “Extraordinary General Meeting of Horizon Shareholders — Redemption Rights” for additional information on how to exercise your redemption rights.

If a public shareholder fails to receive notice of Horizon’s offer to redeem public shares in connection with the business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

If, despite Horizon’s compliance with the proxy rules, a public shareholder fails to receive Horizon’s proxy materials, such public shareholder may not become aware of the opportunity to redeem his, her or its public shares. In addition, the proxy materials that Horizon is furnishing to holders of public shares in connection with the business combination describe the various procedures that must be complied with in order to validly redeem the public shares. In the event that a public shareholder fails to comply with these procedures, its public shares may not be redeemed. Please see the section entitled “Extraordinary General Meeting of Horizon Shareholders — Redemption Rights” for additional information on how to exercise your redemption rights.

If you or a “group” of shareholders of which you are a part are deemed to hold an aggregate of more than 15% of the public shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the public shares.

A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the public shares. In order to determine whether a shareholder is acting in concert or as a group with another shareholder, Horizon will require each public shareholder seeking to exercise redemption rights to certify to it whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other

 

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public information relating to stock ownership available to Horizon at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which Horizon makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over Horizon’s ability to consummate the business combination and you could suffer a material loss on your investment in Horizon if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if Horizon consummates the business combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the public shares and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. Horizon cannot assure you that the value of such excess shares will appreciate over time following the business combination or that the market price of the public shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders may challenge Horizon’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

However, Horizon’s shareholders’ ability to vote all of their shares (including such excess shares) for or against the business combination is not restricted by this limitation on redemption.

There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the shareholder in a better future economic position.

Horizon can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the completion of the business combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the business combination, may cause an increase in Horizon’s share price, and may result in a lower value realized now than a shareholder of Horizon might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A shareholder should consult the shareholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

Risks if the Business Combination is not Consummated

If Horizon is not able to complete the business combination with Vivid Seats by August 25, 2022 (or if such date is extended at a duly called meeting of shareholders, such later date) nor able to complete another initial business combination by such date, Horizon would cease all operations except for the purpose of winding up and it would redeem its public shares and liquidate, in which case Horizon’s public shareholders may receive only $10.00 per share, or less than such amount in certain circumstances, and Horizon’s warrants will expire worthless.

If Horizon is not able to complete the business combination with Vivid Seats by August 25, 2022 (or if such date is extended at a duly called meeting of shareholders, such later date) nor able to complete another initial business combination by such date, Horizon will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject, in each case, to Horizon’s obligations under Cayman Islands law to provide for claims of creditors and the other requirements of applicable law. In such case, Horizon’s public shareholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and Horizon’s warrants will expire worthless.

 

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You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or Horizon IPO Public Warrants, potentially at a loss.

Horizon’s public shareholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (1) the completion of Horizon’s initial business combination, and then only in connection with those Horizon Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend Horizon’s amended and restated memorandum and articles of association to modify the substance or timing of its obligation to redeem 100% of its public shares if Horizon does not complete its initial business combination within the required time period; and (3) the redemption of all of Horizon’s public shares if Horizon is unable to complete its initial business combination by August 25, 2022 (or if such date is extended at a duly called meeting of shareholders, such later date), subject to applicable law and as further described herein. In that case, public shareholders may be forced to wait beyond the end of the required time period before they receive funds from the Trust Account. In no other circumstances will a public shareholder have any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to the proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or Horizon IPO Public Warrants, potentially at a loss.

If the funds not being held in the Trust Account are insufficient to allow Horizon to operate until at least August 25, 2022 (or if such date is extended at a duly called meeting of Horizon’s shareholders, such later date), Horizon may be unable to complete its initial business combination.

The funds available to Horizon outside of the Trust Account may not be sufficient to allow it to operate until August 25, 2022 (or if such date is extended at a duly called meeting of Horizon’s shareholders, such later date), assuming that Horizon’s initial business combination is not completed during that time. Horizon expects to incur significant costs in pursuit of its acquisition plans. However, its affiliates are not obligated to make loans to Horizon or invest in it in the future, and Horizon may not be able to raise additional financing from unaffiliated parties necessary to fund its expenses. Any such event in the future may negatively impact the analysis regarding Horizon’s ability to continue as a going concern at such time.

Of the funds available to Horizon, Horizon could use a portion of the funds to pay fees to consultants to assist Horizon with its search for a target business. Horizon could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or Transaction Agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although Horizon does not have any current intention to do so. If Horizon entered into a letter of intent or transaction agreement where Horizon paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of Horizon’s breach or otherwise), Horizon might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If Horizon is unable to complete its initial business combination, its public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of the Trust Account and Horizon’s warrants will expire worthless. See “— If third parties bring claims against Horizon, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by holders of Horizon Class A ordinary shares may be less than $10.00 per share” and other risk factors herein.

Risks Related to Organizational Structure After the Business Combination

Vivid Seats PubCo’s Private Equity Owner will control us, and its interests may conflict with ours or yours in the future.

Immediately following the Closing, Hoya Topco, which is controlled by our Private Equity Owner and its affiliates, will control approximately 60.6% of the voting power of our outstanding common stock, which means that, based on its percentage voting power controlled after the business combination, our Private Equity Owner

 

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will control the vote of all matters submitted to a vote of our shareholders. This control will enable our Private Equity Owner to control the election of the members of the Vivid Seats Board (subject to the terms of the Stockholders’ Agreement) and all other corporate decisions. Even when our Private Equity Owner ceases to control a majority of the total voting power, for so long as our Private Equity Owner continues to own a significant percentage of our common stock, our Private Equity Owner will still be able to significantly influence the composition of our Board and the approval of actions requiring shareholder approval. Accordingly, for such period of time, our Private Equity Owner will have significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers, decisions on whether to raise future capital and amending our charter and bylaws, which govern the rights attached to our common stock. In particular, for so long as our Private Equity Owner continues to own a significant percentage of our common stock, our Private Equity Owner will be able to cause or prevent a change of control of us or a change in the composition of the Vivid Seats Board and could preclude any unsolicited acquisition of us. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of Vivid Seats Class A common stock as part of a sale of us and ultimately might affect the market price of the Vivid Seats Class A common stock.

In connection with the business combination, we will enter into a Stockholders’ Agreement with Hoya Topco, which is controlled by our Private Equity Owner, that provides the Topco Equityholders (as defined herein) the right to nominate (i) five (5) directors to the Vivid Seats Board (as defined herein), so long as the Topco Equityholders, in the aggregate, beneficially own at least 24% of the aggregate number of shares of Vivid Seats PubCo common stock that are issued and outstanding on the Closing Date (the “Closing Amount”), of which at least one (1) will qualify as an “independent director” under applicable stock exchange regulations, (ii) four (4) directors to the Vivid Seats Board, so long as the Topco Equityholders, in the aggregate, beneficially own at least 18% but less than 24% of the Closing Amount, (iii) three (3) directors to the Vivid Seats Board, so long as the Topco Equityholders, in the aggregate, beneficially own at least 12% but less than 18% of the Closing Amount, (iv) two (2) directors to the Vivid Seats Board, so long as the Topco Equityholders, in the aggregate, beneficially own at least 6% but less than 12% of the Closing Amount and (v) until the date the Topco Equityholders, in the aggregate, beneficially own a number of voting shares representing less than five percent (5%) off the aggregate number of shares of Vivid Seats PubCo common stock held, directly or indirectly, by the Topco Equityholders on the Closing Date, one (1) director to the Vivid Seats Board. Pursuant to the foregoing provisions of the Stockholder’s Agreement, immediately following the Closing, Vivid Seats PubCo’s Private Equity Owner will be able to designate the majority of the directors of the Vivid Seats Board and generally have control over the business and affairs of Vivid Seats PubCo. See “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Stockholders’ Agreement” for more details with respect to the Stockholders’ Agreement.

Our Private Equity Owner and its affiliates engage in a broad spectrum of activities, including investments in our industry generally. In the ordinary course of their business activities, our Private Equity Owner and its affiliates may engage in activities where their interests conflict with our interests or those of our other shareholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. The Vivid Seats PubCo Amended and Restated Charter to be effective at or prior to the Closing will provide that none of our Private Equity Owner, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) or its affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Our Private Equity Owner also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, our Private Equity Owner may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you or may not prove beneficial.

 

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Following the Closing, we will be a “controlled company” within the meaning of Nasdaq listing standards and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of companies that are subject to such requirements.

After the Closing, we will qualify as a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our board of directors consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) director nominees be selected or recommended to the board by independent directors.

We expect to rely on certain of these exemptions after the Closing. As a result, we will not have a compensation committee consisting entirely of independent directors and our directors will not be nominated or selected solely by independent directors. We may also rely on the other exemptions so long as we qualify as a controlled company. To the extent we rely on any of these exemption, holders of Vivid Seats Class A common stock will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Our only material asset will be our direct and indirect interests in Hoya Intermediate, and we are accordingly dependent upon distributions from Hoya Intermediate to pay dividends, taxes and other expenses, including payments we are required to make under the Tax Receivable Agreement.

Vivid Seats PubCo will be a holding company with no material assets other than its direct and indirect ownership of equity interests in Hoya Intermediate. As such, Vivid Seats PubCo will not have any independent means of generating revenue. We intend to cause Hoya Intermediate to make distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under the Tax Receivable Agreement we will enter upon Closing with Hoya Intermediate, the TRA Holder Representative, Hoya Topco and the other TRA Holders, and to pay our corporate and other overhead expenses. To the extent that Vivid Seats PubCo needs funds, and Hoya Intermediate is restricted from making such distributions under applicable laws or regulations, or is otherwise unable to provide such funds, it could materially and adversely affect our liquidity and financial condition.

The Tax Receivable Agreement will require us to make cash payments to Hoya Topco (or other parties that become entitled to rights to payment under the Tax Receivable Agreement) in respect of certain tax benefits and such payments may be substantial. In certain cases, payments under the Tax Receivable Agreement may (i) exceed any actual tax benefits or (ii) be accelerated.

At the Closing of the business combination, Vivid Seats PubCo, Hoya Intermediate, the TRA Holder Representative, Hoya Topco and the other TRA Holders will enter into the Tax Receivable Agreement. Pursuant to the Tax Receivable Agreement, we will generally be required pay Hoya Topco and the other TRA Holders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Tax Group (i.e., Vivid Seats PubCo and applicable consolidated, unitary, or combined subsidiaries) realizes, or is deemed to realize, as a result of certain Tax Attributes, which include:

 

   

existing tax basis in certain assets of Hoya Intermediate and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service;

 

   

tax basis adjustments resulting from taxable exchanges of Intermediate Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the Second A&R LLCA;

 

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certain tax attributes of Blocker Corporations holding Intermediate Common Units that are acquired directly or indirectly by us pursuant to a Reorganization Transaction;

 

   

certain tax benefits realized by us as a result of certain U.S. federal income tax allocations of taxable income or gain away from us to other members of Hoya Intermediate and deductions or losses to Vivid Seats PubCo and away from other members of Hoya Intermediate, in each case, as a result of the business combination; and

 

   

tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement.

Payments under the Tax Receivable Agreement generally will be based on the tax reporting positions that we determine (with the amount of subject payments determined in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent), and the IRS or another taxing authority may challenge all or any part of a position taken with respect to Tax Attributes or the utilization thereof, as well as other tax positions that we take, and a court may sustain such a challenge. In the event that any Tax Attributes initially claimed or utilized by the Tax Group are disallowed, the TRA Holders will not be required to reimburse us for any excess payments that may previously have been made pursuant to the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, any excess payments made to such TRA Holders will be applied against and reduce any future cash payments otherwise required to be made by us to the applicable TRA Holders under the Tax Receivable Agreement, after the determination of such excess. However, a challenge to any Tax Attributes initially claimed or utilized by the Tax Group may not arise for a number of years following the initial time of such payment and, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement. As a result, there might not be future cash payments against which such excess can be applied and we could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.

Moreover, the Tax Receivable Agreement will provide that, in certain early termination events (including certain changes of control, material breaches, or at our option subject to the approval of a majority of our independent directors), we will be required to make a lump-sum cash payment to all the TRA Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to there being sufficient future taxable income of the Tax Group to fully utilize the Tax Attributes over certain specified time periods and that all Intermediate Common Units (including Intermediate Common Units held by Blocker Corporations) that had not yet been exchanged for are deemed exchanged. The lump-sum payment could be material and could materially exceed any actual tax benefits that the Tax Group realizes subsequent to such payment.

Payments under the Tax Receivable Agreement will be our obligations and not obligations of Hoya Intermediate. Any actual increase in our allocable share of Hoya Intermediate and its relevant subsidiaries’ tax basis in relevant assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of the Vivid Seats Class A common stock at the time of an exchange of Intermediate Common Units by a TRA Holder pursuant to the terms of the Second A&R LLCA and the amount and timing of the recognition of the Tax Group’s income for applicable tax purposes. While many of the factors that will determine the amount of payments that we will be required to make under the Tax Receivable Agreement are outside of our control, the aggregate payments we will be required to make under the Tax Receivable Agreement could be substantial. There can be no assurance that Vivid Seats PubCo will be able to finance its obligations under the Tax Receivable Agreement in a manner that does not adversely affect its working capital and growth requirements.

 

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Any payments made by us under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid. Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement. Furthermore, our future obligation to make payments under the Tax Receivable Agreement could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the Tax Attributes that may be deemed realized under the Tax Receivable Agreement.

For more information, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements — Tax Receivable Agreement.

In certain circumstances, Hoya Intermediate will be required to make distributions to us and Hoya Topco, and the distributions that Hoya Intermediate will be required to make may be substantial.

Hoya Intermediate is treated, and will continue to be treated, as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to U.S. federal income tax. Instead, its taxable income is generally allocated to its members, including us. Pursuant to the Second A&R LLCA, following the Closing, Hoya Intermediate will make cash distributions, or tax distributions, to the members, including us, calculated using an assumed tax rate, to provide liquidity to its members to pay taxes on such member’s allocable share of the cumulative taxable income, reduced by cumulative taxable losses. Under applicable tax rules, Hoya Intermediate will be required to allocate net taxable income disproportionately to its members in certain circumstances. Because tax distributions may be made on a pro rata basis to all members and such tax distributions may be determined based on the member who is allocated the largest amount of taxable income on a per Intermediate Common Unit basis and an assumed tax rate that is the highest tax rate applicable to any member, Hoya Intermediate may be required to make tax distributions that, in the aggregate, exceed the amount of taxes that Hoya Intermediate would have paid if it were taxed on its net income at the assumed rate.

As a result of (i) potential differences in the amount of net taxable income allocable to us and to Hoya Topco, (ii) the lower maximum tax rate applicable to corporations than individuals and (iii) the use of an assumed tax rate in calculating Hoya Intermediate’s distribution obligations, we may receive distributions significantly in excess of our actual tax liabilities and our obligations to make payments under the Tax Receivable Agreement. If we do not distribute such cash balances as dividends on Vivid Seats Class A common stock and instead, for example, hold such cash balances or lend them to Hoya Intermediate, Hoya Topco would benefit from any value attributable to such accumulated cash balances as a result of its right to acquire shares of Vivid Seats Class A common stock or, at our election, an amount of cash equal to the fair market value thereof, in exchange for its Intermediate Common Units. We will have no obligation to distribute such cash balances to our shareholders, and no adjustments will be made to the consideration provided to an exchanging holder in connection with a direct exchange or redemption of Hoya Intermediate limited liability company interests under the Second A&R LLCA as a result of any retention of cash by Vivid Seats PubCo.

If we were deemed an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), following the Closing, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

An issuer will generally be deemed to be an “investment company” for purposes of the Investment Company Act if:

 

   

it is an “orthodox” investment company because it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or

 

   

it is an inadvertent investment company because, absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.

 

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We believe that we are engaged primarily in the business of providing ticketing services and not primarily in the business of investing, reinvesting or trading in securities. We hold ourselves out as a full-service ticketing marketplace and do not propose to engage primarily in the business of investing, reinvesting or trading in securities. Accordingly, we do not believe that Vivid Seats PubCo or Hoya Intermediate is an “orthodox” investment company as described in the first bullet point above. Furthermore, Vivid Seats PubCo treats Hoya Intermediate as a majority-owned subsidiary for purposes of the Investment Company Act. Therefore, we believe that less than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis following the Closing will comprise assets that could be considered investment securities. Accordingly, we do not believe that Vivid Seats PubCo or Hoya Intermediate will be an inadvertent investment company by virtue of the 40% inadvertent investment company test as described in the second bullet point above. In addition, we believe we will not be an investment company under section 3(b)(1) of the Investment Company Act because we will be primarily engaged in a non-investment company business.

The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies. Among other things, the Investment Company Act and the rules thereunder limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities, prohibit the issuance of stock options, and impose certain governance requirements. Following the Closing, we intend to continue to conduct our operations so that we will not be deemed to be an investment company under the Investment Company Act. However, if anything were to happen that would cause us to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates (including Hoya Intermediate) and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among Hoya Intermediate, us or our senior management team, or any combination thereof and materially and adversely affect our business, financial condition and results of operations.

Following the business combination, we expect to continue to pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.

Although we expect to pay cash dividends to our stockholders following the business combination, our board of directors may, in its discretion, increase or decrease the level of dividends or discontinue the payment of dividends entirely. In addition, as a holding company, we are dependent upon the ability of Hoya Intermediate to generate earnings and cash flows and distribute them to us so that we may pay our obligations and expenses (including our taxes and payments under the Tax Receivable Agreement) and pay dividends to our stockholders. We expect to cause Hoya Intermediate to make distributions to its members, including us. However, the ability of Hoya Intermediate to make such distributions will be subject to its operating results, cash requirements and financial condition, restrictive covenants in our debt instruments and applicable Delaware law (which may limit the amount of funds available for distribution to its members). Our ability to declare and pay dividends to our stockholders is likewise subject to Delaware law (which may limit the amount of funds available for dividends). If, as a consequence of these various limitations and restrictions, we are unable to generate sufficient distributions from our business, we may not be able to make, or may be required to reduce or eliminate, the payment of dividends on Vivid Seats Class A common stock.

Risks Related to Being a Public Company

The market price and trading volume of our securities may be volatile and could decline significantly following the business combination.

Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of Vivid Seats Class A common stock and warrants in spite of our operating performance. We cannot assure you that the market price of

 

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Vivid Seats Class A common stock and warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

 

   

the realization of any of the risk factors presented in this proxy statement/prospectus/consent solicitation statement;

 

   

difficult global market and economic conditions;

 

   

loss of investor confidence in the global financial markets and investing in general;

 

   

inability to attract, retain or motivate our active executive managing directors, investment professionals, managing directors or other key personnel;

 

   

inability to refinance or replace our Term Loan Facilities either on acceptable terms or at all;

 

   

adverse market reaction to indebtedness we may incur, securities we may grant under our 2021 Plan or otherwise, or any other securities we may issue in the future, including shares of Vivid Seats Class A common stock;

 

   

unanticipated variations in our quarterly operating results or dividends;

 

   

failure to meet securities analysts’ earnings estimates;

 

   

publication of negative or inaccurate research reports about us or the live events or ticketing industry or the failure of securities analysts to provide adequate coverage of Vivid Seats Class A common stock in the future;

 

   

changes in market valuations of similar companies;

 

   

speculation in the press or investment community about our business;

 

   

additional or unexpected changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; and

 

   

increases in compliance or enforcement inquiries and investigations by regulatory authorities.

In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.

We may be subject to securities class action litigation, which may harm our business, financial condition and results of operations.

Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and damages, and divert management’s attention from other business concerns, which could seriously harm our business, financial condition and results of operations.

We may also be called on to defend ourselves against lawsuits relating to our business operations. Some of these claims may seek significant damage amounts due to the nature of our business. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings. A future on-payment outcome in a legal proceeding could have an adverse impact on our business, financial condition and results of operations. In addition, current and future litigation, regardless of its merits, could result in substantial legal fees, settlement or judgment costs and a diversion of management’s attention and resources that are needed to successfully run our business.

 

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We have identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal control over financial reporting. In connection with the audit of our financial statements for the fiscal year ended December 31, 2020, we identified deficiencies in our internal control over financial reporting, which in the aggregate, constitute a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. We determined that we had deficiencies related to implementation of segregation of duties as part of our control activities, establishment of clearly defined roles within our finance and accounting functions and the number of personnel in our finance and accounting functions with an appropriate level of technical accounting and SEC reporting experience, which in the aggregate, constitute a material weakness.

To address this material weakness, we plan to hire additional qualified personnel and establish more robust processes to support our internal control over financial reporting, including clearly defined roles and responsibilities and appropriate segregation of duties. While we intend to implement a plan to remediate this material weakness, we cannot predict the success of such plan or the outcome of our assessment of this plan at this time. If our steps are insufficient to successfully remediate the material weakness and otherwise establish and maintain an effective system of internal control over financial reporting, the reliability of our financial reporting, investor confidence in us, and the value of our common stock could be materially and adversely affected. We can give no assurance that this implementation will remediate this deficiency in internal control or that additional material weaknesses in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, or cause us to fail to meet our periodic reporting obligations. Effective internal control over financial reporting is necessary for us to provide reliable and timely financial reports and, together with adequate disclosure controls and procedures, are designed to reasonably detect and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our periodic reporting obligations. For as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. We could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.

We will be obligated to develop and maintain proper and effective internal control over financial reporting in order to comply with Section 404 of the Sarbanes-Oxley Act, and these internal controls may not be determined to be effective, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

Following the business combination, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Additionally, once we no longer qualify as an “emerging growth company,” we will be required to have our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. An adverse report may be issued in the event our independent registered public accounting firm is not satisfied with the level at which our controls are documented, designed or operating.

 

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A material weakness is a deficiency, or combination of deficiencies, in internal controls, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal controls that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. When evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is ineffective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, we could fail to meet our reporting obligations or be required to restate our financial statements for prior periods. Investors may also lose confidence in the accuracy and completeness of our financial reports, the market price of Vivid Seats Class A common stock and warrants could be negatively affected, and we could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.

The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from our business operations.

As a public company, we will be subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires the filing of annual, quarterly and current reports with respect to a public company’s business and financial condition. The Sarbanes-Oxley Act requires, among other things, that a public company establish and maintain effective internal control over financial reporting. As a result, we will incur significant legal, accounting and other expenses that we did not incur prior to the business combination. Our management team and many of our other employees will need to devote substantial time to compliance, and may not effectively or efficiently manage our transition into a public company.

These rules and regulations will result in us incurring substantial legal and financial compliance costs and will make some activities more time-consuming and costly. For example, these rules and regulations will likely make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers.

We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make Vivid Seats Class A common stock less attractive to investors.

We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including:

 

   

not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;

 

   

reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

 

   

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation or golden parachute payments not previously approved.

 

   

Our status as an emerging growth company will end as soon as any of the following takes place:

 

   

the last day of the fiscal year in which we have more than $1.07 billion in annual revenue;

 

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the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;

 

   

the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or

 

   

the last day of the fiscal year ending after the fifth anniversary of the Closing of the business combination.

We cannot predict if investors will find our securities less attractive after the business combination if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors find our securities less attractive because we rely on any of these exemptions, there may be a less active trading market for our securities and the market price of those securities may be more volatile.

Further, the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company, which is neither an emerging growth company nor a company that has opted out of using the extended transition period, difficult because of the potential differences in accounting standards used.

A significant portion of our total outstanding shares of Vivid Seats Class A common stock are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of Vivid Seats Class A common stock to drop significantly, even if our business is doing well.

Subject to certain exceptions, pursuant to the Stockholders’ Agreement, Sponsor and Hoya Topco are contractually restricted during the Lock-up Period from transferring any lock-up shares; provided that each of the Sponsor and Hoya Topco may transfer fifty percent of their lock-up shares on the date that is six months following the Closing Date and the remaining lock-up shares on any date, at least six months following the Closing Date, on which (i) the price per lock-up share exceeds $15.00 per share for 20 trading days within a 30 day trading period and (ii) the average daily trading volume exceeds one million shares of Vivid Seats Class A common stock during such 30 trading day period.

Following the expiration of the Lock-up Period, neither Sponsor nor Hoya Topco will be restricted from selling shares of Vivid Seats Class A common stock held by them or that may be received by them in exchange for Intermediate Common Units, Vivid Seats Class B common stock or warrants, as the case may be, other than by applicable securities laws. As such, sales of a substantial number of shares of Vivid Seats Class A common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Vivid Seats Class A common stock. Upon completion of the business combination, Sponsor and the PIPE Investors will collectively own approximately 19.5% of Vivid Seats Class A common stock and Hoya Topco will own 100% of the Vivid Seats Class B common stock, translating to a 60.6% voting interest, assuming that no public shareholders redeem their public shares in connection with the business combination. Assuming redemption of 38,898,433 shares of Horizon Class A ordinary shares (which represents all redeemable Horizon Class A ordinary shares) are redeemed in connection with the business combination, in the aggregate, the collective ownership of Sponsor and the PIPE Investors would rise to 39.4% of Vivid Seats Class A common stock and the voting interest of Vivid Seats PubCo held by Hoya Topco would remain the same .

 

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As restrictions on resale end and registration statements for the sale of shares of Vivid Seats Class A common stock, Vivid Seats Class B common stock and warrants by the parties to the Registration Rights Agreement are available for use, the sale or possibility of sale of these shares of Vivid Seats Class A common stock, Vivid Seats Class B common stock (after conversion to Vivid Seats Class A common stock) and warrants could have the effect of increasing the volatility in the market price of Vivid Seats Class A common stock or warrants, or decreasing the market price itself.

Warrants will become exercisable for Vivid Seats Class A common stock, which will increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Following the Closing, there will be 24,652,605 outstanding warrants to purchase 24,625,605 shares of Vivid Seats Class A common stock at an exercise price of $11.50 per share, which warrants will become exercisable on the later of the date that is (i) 30 days following the Closing and (ii) August 25, 2021. All such warrants will be issued in exchange for the Horizon IPO Public Warrants (including 5,166,666 Horizon IPO Public Warrants purchased by Sponsor its affiliates in the IPO) and Horizon IPO Private Placement Warrants issued by Horizon in connection with the IPO. In addition, Sponsor will hold 17,000,000 Vivid Seats PubCo $10.00 Exercise Warrants and 17,000,000 Vivid Seats PubCo $15.00 Exercise Warrants. To the extent such warrants are exercised, additional shares of Vivid Seats Class A common stock will be issued, which will result in dilution to the holders of Vivid Seats Class A common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Vivid Seats Class A common stock.

In addition, following the Closing, there will be 6,000,000 Vivid Seats PubCo Class B Warrants held by Hoya TopCo. Upon exercise of a Hoya Intermediate Warrant by Hoya TopCo, a corresponding Vivid Seats PubCo Class B Warrant will be exercised automatically. Prior to the exercise of any such warrants, Hoya TopCo will own 118,200,000 shares of Vivid Seats Class B common stock, translating to an approximate 60.6% of Vivid Seats PubCo’s voting power. Such Vivid Seats Class B common stock is cancelable upon the issuance of a share of Vivid Seats Class A common stock in exchange for Intermediate Common Units held by Hoya TopCo.

An active trading market for our securities may not develop or be maintained.

We can provide no assurance that an active trading market for Vivid Seats Class A common stock and warrants will develop after the Closing, or, if such a market develops, that we will be able to maintain an active trading market for those securities on Nasdaq or any other exchange in the future. If an active market for our securities does not develop or is not maintained after the business combination, or if we fail to satisfy the continued listing standards of Nasdaq for any reason and our securities are delisted, it may be difficult for our security holders to sell their securities without depressing the market price for the securities or at all. An inactive trading market may also impair our ability to both raise capital by selling shares of capital stock and acquire other complementary products, technologies or businesses by using our shares of capital stock as consideration.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

The trading market for our securities will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We will not control these analysts, and the analysts who publish information about our company may have relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

 

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We may amend the terms of the Vivid Seats PubCo Warrants in a manner that may be adverse to holders of Vivid Seats Public IPO Warrants with the approval by the holders of at least 65% of the then outstanding Vivid Seats Public IPO Warrants. As a result, the exercise price of your Vivid Seats PubCo Warrants could be increased, the exercise period could be shortened and the number of shares of Vivid Seats Class A common stock purchasable upon exercise of a Vivid Seats PubCo Warrant could be decreased, all without a Vivid Seats PubCo Warrant holder’s approval.

Our Vivid Seats PubCo Warrants are issued in registered form under a warrant agreement (the “Existing Warrant Agreement”) between Continental Stock Transfer & Trust Company, as warrant agent, and Horizon. The Existing Warrant Agreement provides that the terms of the Vivid Seats PubCo Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Vivid Seats Public IPO Warrants to make any change that adversely affects the interests of the registered holders of Vivid Seats Public IPO Warrants. Accordingly, we may amend the terms of the Vivid Seats Public IPO Warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding Vivid Seats Public IPO Warrants approve of such amendment. Although our ability to amend the terms of the Vivid Seats Public IPO Warrants with the consent of at least 65% of the then outstanding Vivid Seats Public IPO Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Vivid Seats PubCo Warrants, convert the Vivid Seats PubCo Warrants into cash or Vivid Seats Class A common stock, shorten the exercise period or decrease the number of shares of Vivid Seats Class A common stock purchasable upon exercise of a Vivid Seats PubCo Warrant.

Registration of the shares of Vivid Seats Class A common stock issuable upon exercise of the Vivid Seats Public IPO Warrants under the Securities Act may not be in place when an investor desires to exercise Vivid Seats Public IPO Warrants.

Under the terms of the Existing Warrant Agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of Vivid Seats Class A common stock issuable upon exercise of the Vivid Seats Public IPO Warrants and thereafter will use our commercially reasonable efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Vivid Seats Class A common stock issuable upon exercise of the Vivid Seats Public IPO Warrants, until the expiration of the Vivid Seats Public IPO Warrants in accordance with the provisions of the Existing Warrant Agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the Vivid Seats Public IPO Warrants are not registered under the Securities Act, we will be required to permit holders to exercise their Vivid Seats PubCo Warrants on a cashless basis. However, no Vivid Seats PubCo Warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if the Vivid Seats Class A common stock is at the time of any exercise of a Vivid Seats PubCo Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of Vivid Seats PubCo Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any Vivid Seats PubCo Warrant, or issue securities or other compensation in exchange for the Vivid Seats PubCo Warrants in the event that we are unable to register or qualify the shares underlying the Vivid Seats PubCo Warrants under applicable state securities laws and there is no exemption available. If the issuance of the shares of Vivid Seats Class A common stock upon exercise of the Vivid Seats PubCo Warrants is not so registered or qualified or exempt from

 

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registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their Vivid Seats PubCo Warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Vivid Seats Class A common stock included in the units. If and when the Vivid Seats PubCo Warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of Vivid Seats Class A common stock upon exercise of the Vivid Seats PubCo Warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.

We may redeem your unexpired Vivid Seats Public IPO Warrants prior to their exercise at a time that is disadvantageous to holders of such warrants, thereby making their Vivid Seats Public IPO Warrants worthless.

We have the ability to redeem outstanding Vivid Seats Public IPO Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Vivid Seats 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 we give proper notice of such redemption and provided certain other conditions are met. If and when the Vivid Seats Public IPO Warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of Vivid Seats Class A common stock upon exercise of the Vivid Seats Public IPO Warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our commercially reasonable efforts to register or qualify such shares of Vivid Seats Class A common stock under the blue sky laws of the state of residence in those states in which the Vivid Seats Public IPO Warrants were offered by us in Horizon’s initial public offering. Redemption of the outstanding Vivid Seats Public IPO Warrants could force you to: (i) exercise your Vivid Seats Public IPO Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your Vivid Seats Public IPO Warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding Vivid Seats Public IPO Warrants are called for redemption, is likely to be substantially less than the market value of your Vivid Seats Public IPO Warrants.

None of the Vivid Seats Private Placement IPO Warrants issued to Sponsor in a private placement that occurred concurrently with Horizon’s initial public offering will be redeemable by us so long as they are held by Sponsor or its permitted transferees.

Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third-party.

The Vivid Seats PubCo Amended and Restated Charter and Vivid Seats PubCo Amended and Restated Bylaws will contain several provisions that may make it more difficult or expensive for a third party to acquire control of us without the approval of our board of directors. These provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that stockholders may consider favorable, include the following:

 

   

the sole ability of directors to fill a vacancy on the board of directors;

 

   

advance notice requirements for stockholder proposals and director nominations;

 

   

after Vivid Seats PubCo no longer qualifies as a “controlled company” under applicable Nasdaq listing rules, provisions limiting stockholders’ ability (i) to call special meetings of stockholders, (ii) to require extraordinary general meetings of stockholders to be called and (iii) to take action by written consent;

 

   

the ability of the board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our governing body.

 

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the division of the board of directors into three classes, with each class serving staggered three year terms; and

 

   

the lack of cumulative voting for the election of directors.

These provisions of the Vivid Seats PubCo Amended and Restated Charter and Vivid Seats PubCo Amended and Restated Bylaws could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of Vivid Seats Class A common stock in the future, which could reduce the market price of Vivid Seats Class A common stock. For more information, see “Description of Vivid Seats PubCo Securities.”

The provisions of the proposed Vivid Seats PubCo Amended and Restated Charter requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against its directors and officers.

The proposed Vivid Seats PubCo Amended and Restated Charter provides that, to the fullest extent permitted by law, and unless we provide consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, the Vivid Seats PubCo Amended and Restated Charter or the Vivid Seats PubCo Amended and Restated Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine, provided that this provision, including for any “derivative action,” will not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The Vivid Seats PubCo Amended and Restated Charter will further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. By becoming a stockholder in our company, you will be deemed to have notice of and consented to the exclusive forum provisions of the Vivid Seats PubCo Amended and Restated Charter. There is uncertainty as to whether a court would enforce such a provision relating to causes of action arising under the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

These provisions may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in the proposed Vivid Seats PubCo Amended and Restated Charter to be inapplicable or unenforceable in such action.

 

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EXTRAORDINARY GENERAL MEETING OF HORIZON SHAREHOLDERS

General

Horizon is furnishing this proxy statement/prospectus/consent solicitation statement to its shareholders as part of the solicitation of proxies by Horizon’s board of directors for use at the extraordinary general meeting of shareholders to be held on                 , 2021, and at any adjournment or postponement thereof. This proxy statement/prospectus/consent solicitation statement is first being furnished to Horizon’s shareholders on or about                 , 2021. This proxy statement/prospectus/consent solicitation statement provides you with information you need to know to be able to vote or instruct your vote to be cast at the extraordinary general meeting.

Date, Time and Place

The extraordinary general meeting of Horizon’s shareholders will be held at                  a.m. local time, on                 , 2021 at the offices of Kirkland & Ellis located at 601 Lexington Avenue, New York, NY 10022, and as a virtual meeting. You will be able to attend, vote your shares and submit questions during the extraordinary general meeting via a live webcast available at              . The meeting will be held virtually over the internet by means of a live audio webcast.

To register for the virtual meeting, please follow these instructions as applicable to the nature of your ownership of Horizon’s ordinary shares.

If your shares are registered in your name with Horizon’s transfer agent and you wish to attend the virtual meeting, go to              , enter the control number you received on your proxy card and click on the “Click here” to preregister for the online meeting link at the top of the page. Just prior to the start of the meeting you will need to log back into the meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

Beneficial shareholders who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to                 . Beneficial shareholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the online meeting. After contacting Horizon’s transfer agent, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the virtual meeting. Beneficial shareholders should contact Horizon’s transfer agent at least five business days prior to the meeting date.

Voting Power; Record Date for the Extraordinary General Meeting

You will be entitled to vote or direct votes to be cast at the extraordinary general meeting if you owned Horizon Class A ordinary shares or Horizon Class B ordinary shares at the close of business on                 , 2021, which is the record date for the extraordinary general meeting. You are entitled to one vote for each Horizon Class A ordinary share or Horizon Class B ordinary share that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were                  Horizon Class A ordinary shares and Horizon Class B ordinary shares outstanding in the aggregate, of which                 are public shares and                 are Horizon Class A ordinary shares underlying the private placement units held by Sponsor and                 are founder shares held by the Sponsor and affiliates of the Sponsor.

Vote of Sponsor, Directors and Officers of Horizon

In connection with its IPO, Horizon entered into agreements with each of Sponsor and Horizon’s directors and officers pursuant to which each agreed to vote any Horizon Class A ordinary shares or Horizon Class B

 

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ordinary shares owned by them in favor of the Business Combination Proposal. As of the date of this proxy statement/prospectus/consent solicitation statement, Sponsor and Horizon’s directors and officers own an aggregate of 28.7% of Horizon’s Class A ordinary shares and 100% of Horizon’s Class B ordinary shares.

Sponsor and Horizon’s directors and officers have waived any redemption rights, including with respect to shares of Horizon’s Class A ordinary shares purchased in the IPO or in the aftermarket, in connection with the business combination. The founder shares and Horizon Class A ordinary shares underlying the private placement units held by Sponsor have no redemption rights upon Horizon’s liquidation and will be worthless if no business combination is effected by Horizon by August 25, 2022 (or if such date is extended at a duly called meeting of Horizon’s shareholders, such later date). However, Sponsor and Horizon’s directors and officers are entitled to redemption rights upon Horizon’s liquidation with respect to any other Horizon Class A ordinary shares they may own.

Quorum and Required Vote for Proposals for the Extraordinary General Meeting

A quorum of Horizon shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if a majority of the Horizon ordinary shares outstanding and entitled to vote at the extraordinary general meeting is represented in person or by proxy. Abstentions will count as present for the purposes of establishing a quorum.

The approval of the Business Combination Proposal, the Organizational Documents Proposals, the NYSE Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of not less than two-thirds of the Horizon ordinary shares who, being present and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

Abstentions will have no effect on the Proposals. Brokers are not entitled to vote on the Proposals absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Proposals.

The Closing is conditioned on the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals and the NYSE Proposal at the extraordinary general meeting. The Organizational Documents Proposals are conditioned on the approval of the Business Combination Proposal, the Merger Proposal and the NYSE Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus/consent solicitation statement.

Recommendation to Horizon Shareholders

After careful consideration, the Horizon board of directors recommends that Horizon shareholders vote “FOR” each Proposal being submitted to a vote of the Horizon shareholders at the extraordinary general meeting.

For a more complete description of Horizon’s reasons for the approval of the business combination and the recommendation of the Horizon’s board of directors, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Horizon’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Voting Your Shares

Each Horizon Class A ordinary share and each Horizon Class B ordinary share that you own in your name entitles you to one vote on each of the Proposals for the extraordinary general meeting. Your one or more proxy

 

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cards show the number of Horizon Class A ordinary shares and Horizon Class B ordinary shares that you own. There are several ways to vote your Horizon Class A ordinary shares and Horizon Class B ordinary shares:

 

   

You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. If you vote by proxy card, your “proxy”, whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your Horizon Class A ordinary shares or Horizon Class B ordinary shares will be voted as recommended by Horizon’s board of directors. Horizon’s board of directors recommends voting “FOR” the Business Combination Proposal, “FOR” the Merger Proposal, “FOR” the Organizational Documents Proposals, “FOR” the NYSE Proposal and “FOR” the Adjournment Proposal.

 

   

You can attend the extraordinary general meeting and vote in person even if you have previously voted by submitting a proxy pursuant to any of the methods noted above. You will be given a ballot when you arrive. However, if your Horizon Class A ordinary shares or Horizon Class B ordinary shares are held in the name of your broker, bank or other nominee, you must get a proxy from the broker, bank or other nominee. That is the only way Horizon can be sure that the broker, bank or nominee has not already voted your Horizon Class A ordinary shares or Horizon Class B ordinary shares.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before the extraordinary general meeting or at such meeting by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify Horizon’s secretary, in writing, before the extraordinary general meeting that you have revoked your proxy; or

 

   

you may attend the extraordinary general meeting, revoke your proxy, and vote in person, as indicated above.

No Additional Matters May Be Presented at the Extraordinary General Meeting

The extraordinary general meeting has been called to consider only the approval of the Business Combination Proposal, the Merger Proposal, the Organizational Documents Proposals, the NYSE Proposal and the Adjournment Proposal. Under Horizon’s amended and restated memorandum and articles of association, other than procedural matters incident to the conduct of the extraordinary general meeting, no other matters may be considered at the extraordinary general meeting if they are not included in this proxy statement/prospectus/consent solicitation statement, which serves as the notice of the extraordinary general meeting.

Who Can Answer Your Questions About Voting Your Shares

If you have any questions about how to vote or direct a vote in respect of your Horizon Class A ordinary shares or Horizon Class B ordinary shares, you may call Morrow Sodali LLC, Horizon’s proxy solicitor, at (800) 662-5200 (banks and brokerage firms, please call collect: (203) 658-9400).

Redemption Rights

Under Horizon’s amended and restated memorandum and articles of association, any holders of Horizon’s Class A ordinary shares may elect that such shares be redeemed in exchange for a pro rata share of the aggregate

 

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amount on deposit in the Trust Account, including interest but net of franchise and income taxes payable, calculated as of two (2) business days prior to the Closing. If demand is properly made and the business combination is consummated, these shares, immediately prior to the business combination, will cease to be outstanding and will represent only the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of Horizon’s IPO (calculated as of two (2) business days prior to the Closing, including interest but net of franchise and income taxes payable). For illustrative purposes, based on the fair value of