|
Nevada
|
| |
6770
|
| |
84-4052441
|
|
|
(State of Incorporation)
|
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(IRS Employer
Identification No.) |
|
|
Joel L. Rubinstein
Jonathan P. Rochwarger Elliott M. Smith Winston & Strawn LLP 200 Park Avenue New York, New York 10166 Tel: (212) 294-6700 |
| |
Scott D. Miller
Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 Tel: (212) 558-4000 |
| |
R. Stanton Dodge
DraftKings Inc. 222 Berkeley Street, 5th Floor Boston, Massachusetts 02116 |
|
|
Large accelerated filer
☐
|
| |
Accelerated filer
☐
|
|
|
Non-accelerated filer
☒
|
| |
Smaller reporting company
☒
|
|
| | | |
Emerging growth company
☒
|
|
|
Title of each class of securities to
be registered |
| |
Amount to be
registered(1) |
| |
Proposed maximum
offering price per share |
| |
Proposed maximum
aggregate offering price |
| |
Amount of
registration fee |
| ||||||||||||
|
Shares of Class A Common Stock(2)(3)
|
| | | | 87,306,117 | | | | | | 10.66(4) | | | | | | 930,683,207.22(4) | | | | | $ | 120,802.68 | | |
| Warrants(5) | | | | | 19,666,667 | | | | | | 2.34(6) | | | | | | 46,020,000.78(6) | | | | | | 5,973.40 | | |
|
Shares of Class A Common Stock(3)(7)
|
| | | | 19,666,667 | | | | | $ | 11.50(8) | | | | | | 226,166,670.50(8) | | | | | $ | 29,356.43 | | |
|
Total
|
| | | | | | | | | | | | | | | $ | 1,202,869,878.50 | | | | | $ | 156,132.51 | | |
| [ ], 2020 | | | By Order of the Board of Directors, | |
| | | |
Jeff Sagansky
Chief Executive Officer and Chairman |
|
| | |
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| | | | 299 | | | |
| | | | F-1 | | | |
| | | | A-1 | | | |
| | | | B-1 | | | |
| | | | C-1 | | | |
| | | | D-1 | | | |
| | | | E-1 | | | |
| | | | F-1 | | | |
| | | | G-1 | | |
| | |
Assuming No
Redemptions of Public Shares |
| |
Assuming
Maximum Redemptions of Public Shares(1) |
| ||||||
DK Equityholders
|
| | | | 60.7% | | | | | | 67.3% | | |
SBT Sellers
|
| | | | 13.2% | | | | | | 14.7% | | |
DEAC Public Stockholders
|
| | | | 12.9% | | | | | | 3.4% | | |
Initial Stockholders
|
| | | | 1.2% | | | | | | 1.3% | | |
PIPE Investors(2)
|
| | | | 12.0% | | | | | | 13.3% | | |
(in millions)
|
| |
Assuming No
Redemption(1) |
| |
Assuming
Maximum Redemption(2) |
| ||||||
Sources | | | | ||||||||||
Proceeds from Trust Account(3)
|
| | | $ | 403 | | | | | $ | 95 | | |
Private Placement
|
| | | | 305 | | | | | | 305 | | |
Convertible Notes(4)
|
| | | | 67 | | | | | | 67 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Total Sources
|
| | | $ | 3,512 | | | | | $ | 3,204 | | |
Uses | | | | | | | | | | | | | |
Cash to Balance Sheet
|
| | | $ | 527 | | | | | $ | 219 | | |
Cash to SBT Shareholders(5)
|
| | | | 198 | | | | | | 198 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Transaction costs(7)
|
| | | | 50 | | | | | | 50 | | |
Total Uses
|
| | | $ | 3,512 | | | | | $ | 3,204 | | |
| | |
For the Period
from March 27, 2019 (Date of Inception) to September 30, 2019 |
| |||
Statement of Operations Data | | | |||||
Revenue
|
| | | $ | — | | |
General and administrative expenses
|
| | | | 433,756 | | |
Loss from operations
|
| | | | (433,756) | | |
Other income: | | | | | | | |
Interest income
|
| | | | 3,390,875 | | |
Provision for income tax
|
| | | | (620,995) | | |
Net income
|
| | | $ | 2,336,124 | | |
Weighted average shares outstanding of Class A common stock
|
| | | | 40,000,000 | | |
Basic and diluted net income per share, Class A
|
| | | $ | 0.06 | | |
Weighted average shares outstanding of Class B common stock
|
| | | | 10,014,960 | | |
Basic and diluted net loss per share, Class B
|
| | | $ | (0.01) | | |
| | |
September 30,
2019 |
| |||
Balance Sheet Data | | | |||||
Total assets
|
| | | $ | 403,775,665 | | |
Total liabilities
|
| | | | 14,470,410 | | |
Total shareholders’ equity
|
| | | | 389,305,255 | | |
| | |
Nine Months Ended
September 30, 2019 |
| |
Nine Months Ended
September 30, 2018 |
| |
For The Year Ended
December 31, 2018 |
| |
For The Year Ended
December 31, 2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Statement of Operations Data | | | | | | ||||||||||||||||||||
Revenue
|
| | | $ | 191,995 | | | | | | 133,016 | | | | | $ | 226,277 | | | | | | 191,844 | | |
Total costs and expenses
|
| | | | 307,411 | | | | | | 208,639 | | | | | | 303,058 | | | | | | 265,042 | | |
Loss from operations
|
| | | | (115,416) | | | | | | (75,623) | | | | | | (76,781) | | | | | | (73,198) | | |
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income
|
| | | | 1,364 | | | | | | 537 | | | | | | 666 | | | | | | (1,541) | | |
Other expense, net
|
| | | | | | | | | | | | | | | | | | | | | | (607) | | |
Income Tax Expense
|
| | | | 35 | | | | | | 63 | | | | | | 105 | | | | | | 210 | | |
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | | | | $ | (76,220) | | | | | $ | (75,556) | | |
Statement of Cash Flows Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities
|
| | | | (64,168) | | | | | | (52,225) | | | | | | (45,830) | | | | | | (88,437) | | |
Net cash provided by (used in) investing activities
|
| | | | (25,971) | | | | | | (13,711) | | | | | | (26,421) | | | | | | (7,715) | | |
Net cash provided by (used in) financing activities
|
| | | | 8,246 | | | | | | 91,862 | | | | | | 140,892 | | | | | | 118,531 | | |
| | |
September 30,
2019 |
| |
September 30,
2018 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance Sheet Data | | | | | | ||||||||||||||||||||
Total assets
|
| | | $ | 259,839 | | | | | | N/A | | | | | $ | 299,393 | | | | | $ | 183,033 | | |
Total liabilities
|
| | | | 290,505 | | | | | | N/A | | | | | | 223,343 | | | | | | 182,389 | | |
Total redeemable convertible preferred stock and stockholders’ deficit
|
| | | | (30,666) | | | | | | N/A | | | | | | 76,050 | | | | | | 644 | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
Adjusted EBITDA (dollars in thousands)(1)
|
| | | $ | (92,255) | | | | | $ | (62,851) | | | | | $ | (58,850) | | | | | $ | (49,946) | | |
Monthly Unique Payers (MUPs) (in thousands)(2)
|
| | | | 565 | | | | | | 485 | | | | | | 601 | | | | | | 574 | | |
Average Revenue per MUP (ARPMUP) (in whole
dollars)(2) |
| | | $ | 38 | | | | | $ | 30 | | | | | $ | 31 | | | | | $ | 28 | | |
| | |
Nine Months Ended
September 30, 2019 |
| |
Nine Months Ended
September 30, 2018 |
| |
For The Year Ended
December 31, 2018 |
| |
For The Year Ended
December 31, 2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Statement of Operations Data | | | | | | ||||||||||||||||||||
Revenue
|
| | | € | 68,345 | | | | | € | 69,631 | | | | | € | 94,147 | | | | | € | 66,087 | | |
Total costs and expenses
|
| | | | 61,190 | | | | | | 50,393 | | | | | | 66,560 | | | | | | 49,393 | | |
Profit from operations
|
| | | € | 7,155 | | | | | | 19,238 | | | | | € | 27,587 | | | | | | 16,694 | | |
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial income
|
| | | | 22 | | | | | | 121 | | | | | | 97 | | | | | | 37 | | |
Financial expenses
|
| | | | 676 | | | | | | 44 | | | | | | 340 | | | | | | 177 | | |
Income tax expense
|
| | | | 297 | | | | | | 417 | | | | | | 565 | | | | | | 264 | | |
Net income
|
| | | € | 6,204 | | | | | € | 18,898 | | | | | € | 26,779 | | | | | € | 16,290 | | |
Statement of Cash Flows Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities
|
| | | € | 14,744 | | | | | € | 15,310 | | | | | € | 30,949 | | | | | € | 18,260 | | |
Net cash provided by (used in) investing activities
|
| | | | (14,055) | | | | | | (12,875) | | | | | | (17,384) | | | | | | (14,307) | | |
Net cash provided by (used in) financing activities
|
| | | | (12,279) | | | | | | (445) | | | | | | (1,184) | | | | | | 190 | | |
| | |
September 30,
2019 |
| |
September 30,
2018 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance Sheet Data | | | | | | ||||||||||||||||||||
Total assets
|
| | | € | 92,418 | | | | | | N/A | | | | | € | 72,656 | | | | | € | 43,947 | | |
Total liabilities
|
| | | | 37,920 | | | | | | N/A | | | | | | 14,207 | | | | | | 11,057 | | |
Total equity
|
| | | | 54,498 | | | | | | N/A | | | | | | 58,449 | | | | | | 32,890 | | |
| | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| ||||||
| | |
(in thousands, except share and per share data)
|
| |||||||||
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data Nine Months Ended September 30, 2019
|
| | | | | | | | | | | | |
Revenue
|
| | | $ | 268,773 | | | | | $ | 268,773 | | |
Net loss per share – basic and diluted
|
| | | $ | (0.38) | | | | | $ | (0.41) | | |
Weighted-average shares outstanding – basic and diluted
|
| | | | 331,350,425 | | | | | | 300,830,293 | | |
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data Year Ended December 31, 2018
|
| | | | | | | | | | | | |
Revenue
|
| | | $ | 308,533 | | | | | $ | 308,533 | | |
Net loss per share – basic and diluted
|
| | | $ | (0.29) | | | | | $ | (0.32) | | |
Weighted-average shares outstanding – basic and diluted
|
| | | | 331,350,425 | | | | | | 300,830,293 | | |
Summary Unaudited Pro Forma Condensed Combined Balance Sheet
Data as of September 30, 2019 |
| | | ||||||||||
Total assets
|
| | | $ | 1,497,816 | | | | | $ | 1,190,478 | | |
Total liabilities
|
| | | $ | 307,616 | | | | | $ | 307,616 | | |
Total deficit
|
| | | $ | 1,190,200 | | | | | $ | 882,862 | | |
| | | | | | | | |
Combined Pro Forma
|
| |||||||||
| | |
Diamond
Eagle (Historical) |
| |
Pro Forma
Combined (Assuming No Redemption) |
| |
Pro Forma
Combined (Assuming Maximum Redemption) |
| |||||||||
As of and for the Nine Months Ended September 30, 2019
(Unaudited) |
| | | | | | | | | | | | | | | | | | |
Book Value per share(1)
|
| | | $ | 0.10 | | | | | $ | 3.59 | | | | | $ | 2.93 | | |
Weighted average shares outstanding of Class A common stock – basic and diluted
|
| | | | 40,000,000 | | | | | | 331,350,425 | | | | | | 300,830,293 | | |
Weighted average shares outstanding of Class B common stock – basic and diluted
|
| | | | 10,014,960 | | | | | | | | | | | | | | |
Net income (loss) per share of Class A common stock – basic and diluted
|
| | | $ | 0.06 | | | | | $ | (0.38) | | | | | $ | (0.41) | | |
Net income (loss) per share of Class B common stock – basic and diluted
|
| | | $ | (0.01) | | | | | | | | | | | | | | |
| | | | | | | | |
Combined Pro Forma
|
| |||||||||
| | |
Diamond
Eagle (Historical) |
| |
Pro Forma
Combined (Assuming No Redemption) |
| |
Pro Forma
Combined (Assuming Maximum Redemption) |
| |||||||||
As of and for the Year Ended December 31, 2018 | | | | | | | | | | | | | | | | | | | |
Book Value per share(1)
|
| | | | N/A(2) | | | | | | N/A(3) | | | | | | N/A(3) | | |
Weighted average shares outstanding of Class A common stock – basic and diluted
|
| | | | N/A(2) | | | | | | 331,350,425 | | | | | | 300,830,293 | | |
Weighted average shares outstanding of Class B common stock – basic and diluted
|
| | | | N/A(2) | | | | | | | | | | | | | | |
Net income (loss) per share of Class A common stock – basic and diluted
|
| | | | N/A(2) | | | | | $ | (0.29) | | | | | $ | (0.32) | | |
Net income (loss) per share of Class B common stock – basic and diluted
|
| | | | N/A(2) | | | | | | | | | | | | | | |
| | DEAC’S BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE BUSINESS COMBINATION PROPOSAL AND THE OTHER PROPOSALS TO BE PRESENTED AT THE SPECIAL MEETING ARE IN THE BEST INTERESTS OF AND ADVISABLE TO THE DEAC STOCKHOLDERS AND RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE PROPOSALS DESCRIBED ABOVE. | | |
(in millions)
|
| |
Assuming No
Redemption(1) |
| |
Assuming Maximum
Redemption(2) |
| ||||||
Sources | | | | ||||||||||
Proceeds from Trust Account(3)
|
| | | $ | 403 | | | | | $ | 95 | | |
Private Placement
|
| | | | 305 | | | | | | 305 | | |
Convertible Notes(4)
|
| | | | 67 | | | | | | 67 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Total Sources
|
| | | $ | 3,512 | | | | | $ | 3,204 | | |
Uses | | | | | | | | | | | | | |
Cash to Balance Sheet
|
| | | $ | 527 | | | | | $ | 219 | | |
Cash to SBT Shareholders(5)
|
| | | | 198 | | | | | | 198 | | |
Sellers’ Equity
|
| | | | 2,700 | | | | | | 2,700 | | |
DEAC Upfront Founder Equity(6)
|
| | | | 37 | | | | | | 37 | | |
Transaction costs(7)
|
| | | | 50 | | | | | | 50 | | |
Total Uses
|
| | | $ | 3,512 | | | | | $ | 3,204 | | |
|
Advisory Charter Proposal
|
| |
Current Charter
|
| |
Proposed Charter
|
|
Advisory Proposal A –
Changes in Share Capital |
| | The Current Charter authorizes 401,000,000 shares, consisting of (a) 400,000,000 shares of common stock, including 380,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (b) 1,000,000 shares of preferred stock. | | | The Proposed Charter would authorize 2,100,000,000 shares, consisting of (a) 1,800,000,000 shares of common stock, including 900,000,000 shares of Class A common stock and 900,000,000 shares of Class B common stock, and (b) 300,000,000 shares of preferred stock. | |
Advisory Proposal B –
Voting Rights of Common Stock |
| | The Current Charter provides that the holders of each share of common stock of DEAC is entitled to one vote for each share on each matter properly submitted to the stockholders entitled to vote. | | | The Proposed Charter provides holders of shares of New DraftKings Class A common stock will be entitled to cast one vote per Class A share, and holders of shares of Class B common stock will be entitled to cast 10 votes per Class B share on each matter properly submitted to the stockholders entitled to vote. | |
Advisory Proposal C –
Declassification of the New DraftKings Board |
| | The Current Charter provides that the DEAC Board is divided into three classes, with only one class of directors being elected in each year and each class serving a three-year term. | | | The Proposed Charter provides that the New DraftKings board of directors will consist of one class of directors only, whose term will continue to the next annual meeting of stockholders. | |
Advisory Proposal D –
Limiting the Ability to Act by Written Consent |
| | The Current Charter provides that any action required or permitted to be taken by the stockholders of DEAC must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the | | | The Proposed Charter provides that any action required or permitted to be taken by the stockholders of New DraftKings may be taken by written consent; provided that, from and after the time that Mr. Robins beneficially owns less than a majority of the voting power of the outstanding shares of stock entitled to | |
Advisory Charter Proposal
|
| |
Current Charter
|
| |
Proposed Charter
|
|
| | | stockholders, other than with respect to the Class B common stock, which action may be taken by written consent. | | | vote thereon, no such action may be taken by written consent of the stockholders. | |
Advisory Proposal E –
Forum Selection |
| | The Current Charter provides that the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, will be the exclusive forum for certain actions and claims. | | | The Proposed Charter provides that the Eighth Judicial District Court of Clark County, Nevada, or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Nevada, will be the exclusive forum for certain actions and claims. | |
Advisory Proposal F –
Required Vote to Amend the Charter |
| | The Current Charter provides that the Current Charter may be amended in accordance with Delaware law; provided that, as long as any shares of Class B common stock are outstanding, any amendment to the Current Charter that would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock requires the vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class. | | | The Proposed Charter provides that amendments to certain provisions of the Proposed Charter will require the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings once Mr. Robins beneficially owns shares of New DraftKings stock representing less than a majority of the voting power of New DraftKings stock. Prior to that time, amendments to those provisions will require the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New DraftKings. | |
Advisory Proposal G –
Required Vote to Amend the Bylaws |
| | The Current Charter provides that the bylaws may only be adopted, amended, altered or repealed with the approval of a majority of the DEAC Board or by the holders of a majority of DEAC’s outstanding shares. | | | The Proposed Charter provides that the bylaws may be amended, altered, rescinded or repealed or adopted by the New DraftKings board of directors or the affirmative vote of the holders of at least two-thirds of the voting power of the capital stock of New DraftKings once Mr. Robins beneficially owns shares of New DraftKings stock representing less than a majority of the voting power of the outstanding capital stock of New DraftKings. Prior to that time, amendments to those provisions through stockholder action will require the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock of New DraftKings. | |
Advisory Charter Proposal
|
| |
Current Charter
|
| |
Proposed Charter
|
|
Advisory Proposal H –
Required Vote to Change Number of Directors |
| | The Current Charter provides that the number of directors is determined by the DEAC Board. | | | The Proposed Charter provides that the number of directors is fixed and may be modified by the New DraftKings board of directors and, from and after the time that Mr. Robins ceases to beneficially own shares of New DraftKings stock representing at least a majority of the voting power of the capital stock of New DraftKings, the number of directors may be modified by the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings. | |
Advisory Proposal I –
Redemption Rights and Transfer Restrictions with Respect to Capital Stock held by Unsuitable Persons and Their Affiliates |
| | The Current Charter does not contain provisions providing for redemption rights and transfer restrictions with respect to capital stock held by Unsuitable Persons or their affiliates. | | | The Proposed Charter provides that common stock or any other equity securities of New DraftKings, or securities exchangeable or exercisable for, or convertible into, such other equity securities of New DraftKings, owned or controlled by an a stockholder who is an Unsuitable Person (as defined under “Description of New DraftKings Securities — Redemption Rights and Transfer Restrictions with Respect to Capital Stock Held by Unsuitable Persons and Their Affiliates”) or such person’s affiliate will be subject to mandatory sale and transfer on the terms and conditions set forth in the Proposed Charter. | |
Total Consideration (in 000s)
|
| |
Amounts
|
| |
Shares
|
| ||||||
Share consideration – DraftKings(2)
|
| | | $ | 2,232,100 | | | | | | 205,913 | | |
Cash consideration – SBTech(1)
|
| | | | 197,640 | | | | | | — | | |
Share consideration – SBTech(2)
|
| | | | 482,079 | | | | | | 44,472 | | |
Total Merger Consideration
|
| | | $ | 2,911,819 | | | | | | 250,385 | | |
Total Capitalization (in 000s)
|
| |
No
Redemptions |
| |
%
|
| |
Maximum
Redemptions |
| |
%
|
| ||||||||||||
DraftKings rollover equity – New DraftKings Class A
|
| | | | 205,913 | | | | | | 62.1 | | | | | | 205,913 | | | | | | 68.4 | | |
SBTech rollover equity
|
| | | | 44,472 | | | | | | 13.4 | | | | | | 44,472 | | | | | | 14.8 | | |
DEAC public shareholders
|
| | | | 40,000 | | | | | | 12.1 | | | | | | 9,480 | | | | | | 3.2 | | |
DEAC Founders Shares
|
| | | | 3,659 | | | | | | 1.1 | | | | | | 3,659 | | | | | | 1.2 | | |
DEAC shares issued upon conversion of Convertible
Notes |
| | | | 6,835 | | | | | | 2.1 | | | | | | 6,835 | | | | | | 2.3 | | |
DEAC shares issued in PIPE Offering
|
| | | | 30,471 | | | | | | 9.2 | | | | | | 30,471 | | | | | | 10.1 | | |
Total Shares
|
| | | | 331,350 | | | | | | 100.0 | | | | | | 300,830 | | | | | | 100.0 | | |
|
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
Goodwill
|
| | | | 4,738 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 415,156 | | | | |
|
A
|
| | | | | 419,894 | | | | | | — | | | | | | | | | 419,894 | | |
Deposits
|
| | | | 1,654 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,654 | | | | | | — | | | | | | | | | 1,654 | | |
Deferred tax assets
|
| | | | — | | | | | | — | | | | | | 154 | | | | | | (154) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Other non-current assets
|
| | | | — | | | | | | — | | | | | | 317 | | | | | | 154 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 471 | | | | | | — | | | | | | | | | 471 | | |
Total Assets
|
| | | | 259,839 | | | | | | 403,775 | | | | | | 74,155 | | | | | | — | | | | | | 324,858 | | | | | | | | | | | | 435,189 | | | | | | | | | | | | 1,497,816 | | | | | | (307,338) | | | | | | | | | 1,190,478 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | | — | | | | | | 470 | | | | | | — | | | | | | (470) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Accounts payable and accrued
expenses |
| | | | 68,108 | | | | | | — | | | | | | — | | | | | | 13,307 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 81,415 | | | | | | — | | | | | | | | | 81,415 | | |
Liabilities to customers
|
| | | | 158,949 | | | | | | — | | | | | | — | | | | | | 1,015 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 159,964 | | | | | | — | | | | | | | | | 159,964 | | |
Term note, current portion
|
| | | | 3,750 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | |
|
—
|
| | | | | — | | | | | | | | | | | | 3,750 | | | | | | — | | | | | | | | | 3,750 | | |
Settlement liability, current portion
|
| | | | 2,977 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 2,977 | | | | | | — | | | | | | | | | 2,977 | | |
Trade payables
|
| | | | — | | | | | | — | | | | | | 6,234 | | | | | | (6,234) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Other accounts payable
|
| | | | — | | | | | | — | | | | | | 7,618 | | | | | | (7,618) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Total current liabilities
|
| | | | 233,784 | | | | | | 470 | | | | | | 13,852 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 248,106 | | | | | | — | | | | | | | | | 248,106 | | |
Deferred underwriting commissions
|
| | | | — | | | | | | 14,000 | | | | | | — | | | | | | — | | | | | | (14,000) | | | | |
|
B
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Other long-term liabilities
|
| | | | 56,721 | | | | | | — | | | | | | — | | | | | | 519 | | | | | | — | | | | | | | | | | | | 2,270 | | | | |
|
C
|
| | | | | 59,510 | | | | | | — | | | | | | | | | 59,510 | | |
Accrued severance pay, net
|
| | | | — | | | | | | — | | | | | | 519 | | | | | | (519) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
Total liabilities
|
| | | | 290,505 | | | | | | 14,470 | | | | | | 14,371 | | | | | | — | | | | | | (14,000) | | | | | | | | | | | | 2,270 | | | | | | | | | | | | 307,616 | | | | | | — | | | | | | | | | 307,616 | | |
Class A common stock subject to possible redemption
|
| | | | — | | | | | | 384,305 | | | | | | — | | | | | | — | | | | | | (384,305) | | | | |
|
F
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | — | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
Series E-1 Redeemable Convertible Preferred Stock
|
| | | | 119,671 | | | | | | — | | | | | | — | | | | | | — | | | | | | (119,671) | | | | |
|
H
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Series F Redeemable Convertible Preferred Stock
|
| | | | 138,453 | | | | | | — | | | | | | — | | | | | | — | | | | | | (138,453) | | | | |
|
H
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class A common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | |
|
D
|
| | | | | 4 | | | | |
|
A
|
| | | | | 33 | | | | | | (3) | | | | |
|
K
|
| | | | | 30 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3 | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4 | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | | | |
|
G
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20 | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class B common stock
|
| | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | (1) | | | | |
|
G
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 389 | | | | | | — | | | | | | — | | | | | | — | | | | | | (389) | | | | |
|
H
|
| | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Share capital
|
| | | | — | | | | | | — | | | | | | 3 | | | | | | — | | | | | | — | | | | | | | | | | | | (3) | | | | |
|
D
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Actuarial reserve
|
| | | | — | | | | | | — | | | | | | (156) | | | | | | — | | | | | | — | | | | | | | | | | | | 156 | | | | |
|
D
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Additional paid-in capital
|
| | | | 680,958 | | | | | | 2,663 | | | | | | — | | | | | | — | | | | | | (6,000) | | | | |
|
C
|
| | | | | 492,699 | | | | |
|
A
|
| | | | | 2,188,508 | | | | | | (307,335) | | | | |
|
K
|
| | | | | 1,881,173 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 68,347 | | | | |
|
D
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 304,711 | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 384,301 | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,336 | | | | |
|
I
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 258,493 | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | [ ] | | | | |
|
J
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Retained earnings
|
| | | | — | | | | | | 2,336 | | | | | | 59,175 | | | | | | (61,511) | | | | | | 0 | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accumulated deficit
|
| | | | (970,137) | | | | | | — | | | | | | — | | | | | | 61,511 | | | | | | (26,456) | | | | |
|
C
|
| | | | | (59,175) | | | | |
|
D
|
| | | | | (998,341) | | | | | | — | | | | | | | | | | | | (998,341) | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of
September 30, 2019 |
| | | | | | | | | | |
As of
September 30, 2019 |
| |||||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase
Price Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No Redemptions) |
| |
Additional
Pro Forma Adjustments (Assuming Maximum Redemptions) (Note 4 — PF) |
| | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,748) | | | | |
|
D
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (2,336) | | | | |
|
I
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | [ ] | | | | |
|
J
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total parent stockholders’ equity
|
| | | | (288,790) | | | | | | 5,000 | | | | | | 59,022 | | | | | | — | | | | | | 981,287 | | | | | | | | | | | | 433,681 | | | | | | | | | | | | 1,190,200 | | | | | | (307,338) | | | | | | | | | 882,862 | | |
Non-controlling interest
|
| | | | — | | | | | | — | | | | | | 762 | | | | | | — | | | | | | — | | | | | | | | | | | | (762) | | | | |
|
D
|
| | | | | — | | | | | | — | | | | | | | | | — | | |
Total stockholders’ equity
|
| | | | (288,790) | | | | | | 5,000 | | | | | | 59,784 | | | | | | — | | | | | | 981,287 | | | | | | | | | | | | 432,919 | | | | | | | | | | | | 1,190,200 | | | | | | (307,338) | | | | | | | | | 882,862 | | |
Total Liabilities and Stockholders’ Equity
|
| | | | 259,839 | | | | | | 403,775 | | | | | | 74,155 | | | | | | — | | | | | | 324,858 | | | | | | | | | | | | 435,189 | | | | | | | | | | | | 1,497,816 | | | | | | (307,338) | | | | | | | | | 1,190,478 | | |
|
| | |
For the Nine
Months Ended September 30, 2019 |
| |
For the period
from March 27, 2019 (inception) to September 30, 2019 |
| |
For the Nine
Months Ended September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the Nine
Months Ended September 30, 2019 |
| ||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No and Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Net revenue
|
| | | $ | 191,995 | | | | | $ | — | | | | | $ | 76,778 | | | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 268,773 | | |
Cost of revenue
|
| | | | 64,718 | | | | | | — | | | | | | 40,235 | | | | | | — | | | | | | — | | | | | | | | | | | | 9,127 | | | | |
|
AA
|
| | | | | 114,080 | | |
Gross Profit
|
| | | | 127,277 | | | | | | — | | | | | | 36,543 | | | | | | — | | | | | | — | | | | | | | | | | | | (9,127) | | | | | | | | | | | | 154,693 | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing
|
| | | | 124,867 | | | | | | — | | | | | | 4,924 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 129,791 | | |
General and administrative
|
| | | | 78,181 | | | | | | 434 | | | | | | 8,451 | | | | | | — | | | | | | (860) | | | | |
|
AA
|
| | | | | 495 | | | | |
|
BB
|
| | | | | 86,701 | | |
Product and technology
|
| | | | 39,645 | | | | | | — | | | | | | — | | | | | | 15,289 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 54,934 | | |
Research and development expenses
|
| | | | | | | | | | | | | | | | 15,289 | | | | | | (15,289) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses
|
| | | | 242,693 | | | | | | 434 | | | | | | 28,664 | | | | | | — | | | | | | (860) | | | | | | | | | | | | 495 | | | | | | | | | | | | 271,426 | | |
Loss from Operations
|
| | | | (115,416) | | | | | | (434) | | | | | | 7,879 | | | | | | — | | | | | | 860 | | | | | | | | | | | | (9,622) | | | | | | | | | | | | (116,733) | | |
Interest income (expense)
|
| | | | 1,364 | | | | | | — | | | | | | — | | | | | | (210) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,154 | | |
Other income – interest on trust account
|
| | | | — | | | | | | 3,391 | | | | | | — | | | | | | — | | | | | | (3,391) | | | | |
|
BB
|
| | | | | — | | | | | | | | | | | | — | | |
| | |
For the Nine
Months Ended September 30, 2019 |
| |
For the period
from March 27, 2019 (inception) to September 30, 2019 |
| |
For the Nine
Months Ended September 30, 2019 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the Nine
Months Ended September 30, 2019 |
| ||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting
Policies and Reclassification Adjustments (Note 2) |
| |
Pro Forma
Adjustments (Assuming No and Maximum Redemptions) (Note 4 — PF) |
| | | | | | | |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma
Combined (Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Financial Income
|
| | | | – | | | | | | – | | | | | | 25 | | | | | | (25) | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | |
Financial Expenses
|
| | | | – | | | | | | – | | | | | | (235) | | | | | | 235 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | |
Loss before Income Tax Expense
|
| | | | (114,052) | | | | | | 2,957 | | | | | | 7,669 | | | | | | — | | | | | | (2,531) | | | | | | | | | | | | (9,622) | | | | | | | | | | | | (115,579) | | |
Income Tax Expense
|
| | | | 35 | | | | | | 621 | | | | | | 334 | | | | | | — | | | | | | 936 | | | | |
|
CC
|
| | | | | 6,919 | | | | |
|
CC
|
| | | | | 8,845 | | |
Net Income/(Loss)
|
| | | | (114,087) | | | | | | 2,336 | | | | | | 7,335 | | | | | | — | | | | | | (3,467) | | | | | | | | | | | | (16,541) | | | | | | | | | | | | (124,424) | | |
No Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 331,350,425 | | |
Loss per share (Basic and Diluted) attributable to Class A common stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.38) | | |
Maximum Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 300,830,293 | | |
Loss per share (Basic and Diluted) attributable to Class A common stockholders
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.41) | | |
| | |
For the Twelve Months Ended December 31, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Twelve
Months Ended December 31, 2018 |
| ||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting Policies and
Reclassification Adjustments (Note 2) |
| |
Pro Forma Adjustments
(Assuming No and Maximum Redemptions) (Note 4 — PF) |
| |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma Combined
(Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Net revenue
|
| | | $ | 226,277 | | | | | | | | | | | $ | 82,256 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | 308,533 | | |
Cost of revenue
|
| | | | 48,689 | | | | | | | | | | | | 49,551 | | | | | | — | | | | | | — | | | | | | 15,554 | | | | |
|
AA
|
| | | | | 113,911 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 117 | | | | |
|
BB
|
| | | | | | | | ||
Gross Profit
|
| | | | 177,588 | | | | | | – | | | | | | 32,705 | | | | | | — | | | | | | — | | | | | | (15,671) | | | | | | | | | | | | 194,622 | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing
|
| | | | 145,580 | | | | | | | | | | | | 4,399 | | | | | | — | | | | | | — | | | | | | 98 | | | | |
|
BB
|
| | | | $ | 150,077 | | |
General and administrative
|
| | | | 75,904 | | | | | | | | | | | | 9,024 | | | | | | — | | | | | | — | | | | | | 190 | | | | |
|
AA
|
| | | | | 86,578 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,460 | | | | |
|
BB
|
| | | | | | | |
Product and technology
|
| | | | 32,885 | | | | | | | | | | | | — | | | | | | 11,954 | | | | | | — | | | | | | 66 | | | | |
|
BB
|
| | | | | 44,905 | | |
Research and development expenses
|
| | | | | | | | | | | | | | | 11,954 | | | | | | (11,954) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses
|
| | | | 254,369 | | | | | | – | | | | | | 25,377 | | | | | | — | | | | | | — | | | | | | 1,814 | | | | | | | | | | | | 281,560 | | |
Loss from Operations
|
| | | | (76,781) | | | | | | – | | | | | | 7,328 | | | | | | — | | | | | | — | | | | | | (17,485) | | | | | | | | | | | | (86,938) | | |
Interest income (expense)
|
| | | | 666 | | | | | | | | | | | | — | | | | | | (287) | | | | | | — | | | | | | — | | | | | | | | | | | | 379 | | |
Other income – interest on trust account
|
| | | | – | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | |
For the Twelve Months Ended December 31, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Twelve
Months Ended December 31, 2018 |
| ||||||||||||||||||
| | |
DraftKings
(Historical) |
| |
DEAC
(Historical) |
| |
SBTech
(As Adjusted) (Note 3) |
| |
Accounting Policies and
Reclassification Adjustments (Note 2) |
| |
Pro Forma Adjustments
(Assuming No and Maximum Redemptions) (Note 4 — PF) |
| |
Purchase Price
Allocation Adjustments (Note 4 — PPA) |
| | | | | | | |
Pro Forma Combined
(Assuming No and Maximum Redemptions) |
| |||||||||||||||||||||
Financial Income
|
| | | | — | | | | | | | | | | | | 115 | | | | | | (115) | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Financial Expenses
|
| | | | — | | | | | | | | | | | | (402) | | | | | | 402 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Loss before Income Tax Expense
|
| | | | (76,115) | | | | | | — | | | | | | 7,041 | | | | | | — | | | | | | — | | | | | | (17,485) | | | | | | | | | | | | (86,559) | | |
Income Tax Expense
|
| | | | 105 | | | | | | | | | | | 668 | | | | | | — | | | | | | — | | | | | | 9,182 | | | | |
|
CC
|
| | | | | 9,955 | | | |
Net Income/(Loss)
|
| | | | (76,220) | | | | | | — | | | | | | 6,373 | | | | | | — | | | | | | — | | | | | | (26,667) | | | | | | | | | | | | (96,514) | | |
No Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares
outstanding |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 331,350,425 | | |
Loss per share (Basic and Diluted)
attributable to Class A common stockholders |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.29) | | |
Maximum Redemption Scenario | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 300,830,293 | | |
Loss per share (Basic and Diluted)
attributable to Class A common stockholders |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.32) | | |
| | |
$ / €
|
| |||
Period end exchange rate as of September 30, 2019
|
| | | | 1.09 | | |
Average exchange rate for nine months ended September 30, 2019
|
| | | | 1.12 | | |
Average exchange rate for year ended December 31, 2018
|
| | | | 1.18 | | |
| | |
As of
September 30, 2019 |
| | | | | | | | | | | | | |
As of
September 30, 2019 |
| |
As of
September 30, 2019 |
| |||||||||
| | |
IFRS
SBTech (in EUR) |
| |
Total
Adjustments (in EUR) |
| | | | | | | |
U.S. GAAP
SBTech (in EUR) |
| |
U.S. GAAP
SBTech (in USD) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | € | 9,361 | | | | | € | — | | | | | | | | | | | € | 9,361 | | | | | $ | 10,208 | | |
Trade receivables, net
|
| | | | 18,921 | | | | | | — | | | | | | | | | | | | 18,921 | | | | | | 20,633 | | |
Other current assets
|
| | | | 3,833 | | | | | | 134 | | | | |
|
A
|
| | | | | 3,967 | | | | | | 4,326 | | |
Total current assets
|
| | | | 32,115 | | | | | | 134 | | | | | | | | | | | | 32,249 | | | | | | 35,167 | | |
NON-CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | 25,053 | | | | | | — | | | | | | | | | | | | 25,053 | | | | | | 27,320 | | |
Right-of-use assets
|
| | | | 24,662 | | | | | | (24,662) | | | | |
|
B
|
| | | | | — | | | | | | — | | |
Property, plant and equipment, net
|
| | | | 10,268 | | | | | | — | | | | | | | | | | | | 10,268 | | | | | | 11,197 | | |
Deferred tax assets
|
| | | | 275 | | | | | | (134) | | | | |
|
A
|
| | | | | 141 | | | | | | 154 | | |
Other non-current assets
|
| | | | 45 | | | | | | 246 | | | | |
|
B
|
| | | | | 291 | | | | | | 317 | | |
Total assets
|
| | | | 92,418 | | | | | | (24,416) | | | | | | | | | | | | 68,002 | | | | | | 74,155 | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade payables
|
| | | | 5,717 | | | | | | — | | | | | | | | | | | | 5,717 | | | | | | 6,234 | | |
Lease liabilities
|
| | | | 2,423 | | | | | | (2,423) | | | | |
|
B
|
| | | | | — | | | | | | — | | |
Other accounts payable
|
| | | | 6,986 | | | | | | — | | | | | | | | | | | | 6,986 | | | | | | 7,618 | | |
Total current liabilities
|
| | | | 15,126 | | | | | | (2,423) | | | | | | | | | | | | 12,703 | | | | | | 13,852 | | |
NON-CURRENT LIABILITIES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | 22,318 | | | | | | (22,318) | | | | |
|
B
|
| | | | | — | | | | | | — | | |
Accrued severance pay, net
|
| | | | 476 | | | | | | — | | | | | | | | | | | | 476 | | | | | | 519 | | |
Total non-current liabilities
|
| | | | 22,794 | | | | | | (22,318) | | | | | | | | | | | | 476 | | | | | | 519 | | |
SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share capital
|
| | | | 3 | | | | | | — | | | | | | | | | | | | 3 | | | | | | 3 | | |
Actuarial reserve
|
| | | | (143) | | | | | | — | | | | | | | | | | | | (143) | | | | | | (156) | | |
Retained earnings
|
| | | | 53,939 | | | | | | 325 | | | | |
|
B
|
| | | | | 54,264 | | | | | | 59,175 | | |
Equity attributable to owners of the parent
|
| | | | 53,799 | | | | | | 325 | | | | | | | | | | | | 54,124 | | | | | | 59,022 | | |
Non-controlling interest
|
| | | | 699 | | | | | | — | | | | | | | | | | | | 699 | | | | | | 762 | | |
Total equity
|
| | | | 54,498 | | | | | | 325 | | | | | | | | | | | | 54,823 | | | | | | 59,784 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | 92,418 | | | | | | (24,416) | | | | | | | | | | | | 68,002 | | | | | | 74,155 | | |
| | |
For nine months
ended September 30, 2019 |
| | | | | | | | | | | | | |
For nine months
ended September 30, 2019 |
| |
For nine months
ended September 30, 2019 |
| |||||||||
| | |
IFRS
SBTech (in EUR) |
| |
Total
Adjustments (in EUR) |
| | | | | | | |
U.S. GAAP
SBTech (in EUR) |
| |
U.S. GAAP
SBTech (in USD) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Revenue
|
| | | € | 68,345 | | | | | € | — | | | | | | | | | | | € | 68,345 | | | | | $ | 76,778 | | |
Cost of revenue
|
| | | | 35,816 | | | | | | — | | | | | | | | | | | | 35,816 | | | | | | 40,235 | | |
Gross profit
|
| | | | 32,529 | | | | | | — | | | | | | | | | | | | 32,529 | | | | | | 36,543 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and marketing expenses
|
| | | | 4,383 | | | | | | — | | | | | | | | | | | | 4,383 | | | | | | 4,924 | | |
General and administrative expenses
|
| | | | 7,381 | | | | | | 142 | | | | |
|
B
|
| | | | | 7,523 | | | | | | 8,451 | | |
Research and development expenses
|
| | | | 13,610 | | | | | | — | | | | | | | | | | | | 13,610 | | | | | | 15,289 | | |
Total operating costs and expenses
|
| | | | 25,374 | | | | | | 142 | | | | | | | | | | | | 25,516 | | | | | | 28,664 | | |
Operating income
|
| | | | 7,155 | | | | | | (142) | | | | | | | | | | | | 7,013 | | | | | | 7,879 | | |
Financial income
|
| | | | 22 | | | | | | — | | | | | | | | | | | | 22 | | | | | | 25 | | |
Financial expenses
|
| | | | 676 | | | | | | (467) | | | | |
|
B
|
| | | | | 209 | | | | | | 235 | | |
Profit before tax
|
| | | | 6,501 | | | | | | 325 | | | | | | | | | | | | 6,826 | | | | | | 7,669 | | |
Tax expenses
|
| | | | 297 | | | | | | — | | | | | | | | | | | | 297 | | | | | | 334 | | |
Net profit
|
| | | | 6,204 | | | | | | 325 | | | | | | | | | | | | 6,529 | | | | | | 7,335 | | |
| | |
For year ended
December 31, 2018 |
| | | | | | | | | | | | | |
For year ended
December 31, 2018 |
| |
For year ended
December 31, 2018 |
| |||||||||
| | |
IFRS
SBTech (in EUR) |
| |
Total
Adjustments (in EUR) |
| | | | | | | |
U.S. GAAP
SBTech (in EUR) |
| |
U.S. GAAP
SBTech (in USD) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Revenue
|
| | | € | 94,147 | | | | | € | (24,544) | | | | |
|
C
|
| | | | € | 69,603 | | | | | $ | 82,256 | | |
Cost of revenue
|
| | | | 45,087 | | | | | | (3,158) | | | | |
|
C
|
| | | | | 41,929 | | | | | | 49,551 | | |
Gross profit
|
| | | | 49,060 | | | | | | (21,386) | | | | | | | | | | | | 27,674 | | | | | | 32,705 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and marketing expenses
|
| | | | 3,722 | | | | | | — | | | | | | | | | | | | 3,722 | | | | | | 4,399 | | |
General and administrative expenses
|
| | | | 7,636 | | | | | | — | | | | | | | | | | | | 7,636 | | | | | | 9,024 | | |
Research and development expenses
|
| | | | 10,115 | | | | | | — | | | | | | | | | | | | 10,115 | | | | | | 11,954 | | |
Total operating costs and expenses
|
| | | | 21,473 | | | | | | — | | | | | | | | | | | | 21,473 | | | | | | 25,377 | | |
Operating income
|
| | | | 27,587 | | | | | | (21,386) | | | | | | | | | | | | 6,201 | | | | | | 7,328 | | |
Financial income
|
| | | | 97 | | | | | | — | | | | | | | | | | | | 97 | | | | | | 115 | | |
Financial expenses
|
| | | | 340 | | | | | | — | | | | | | | | | | | | 340 | | | | | | 402 | | |
Profit before tax
|
| | | | 27,344 | | | | | | (21,386) | | | | | | | | | | | | 5,958 | | | | | | 7,041 | | |
Tax expenses
|
| | | | 565 | | | | | | — | | | | |
|
C
|
| | | | | 565 | | | | | | 668 | | |
Net profit
|
| | | | 26,779 | | | | | | (21,386) | | | | | | | | | | | | 5,393 | | | | | | 6,373 | | |
|
(in thousands)
|
| | |||||
Cash consideration(1)
|
| | | $ | 211,134 | | |
Share consideration(2)
|
| | | | 492,703 | | |
Other consideration(3)
|
| | | | 3,356 | | |
Total estimated consideration
|
| | | | 707,193 | | |
|
Cash and cash equivalents
|
| | | $ | 10,208 | | |
|
Trade receivables, net
|
| | | | 20,633 | | |
|
Other current assets
|
| | | | 4,326 | | |
|
Property and equipment, net
|
| | | | 11,320 | | |
|
Intangible assets, net
|
| | | | 261,720 | | |
|
Deferred tax assets
|
| | | | 154 | | |
|
Other non-current assets
|
| | | | 317 | | |
|
Total Assets
|
| | | | 308,678 | | |
|
Trade payables
|
| | | | 6,234 | | |
|
Other accounts payable
|
| | | | 7,618 | | |
|
Other long-term liabilities
|
| | | | 2,270 | | |
|
Accrued severance pay, net
|
| | | | 519 | | |
|
Total liabilities
|
| | | | 16,641 | | |
|
Net assets acquired (a)
|
| | | | 292,037 | | |
|
Estimated purchase consideration (b)
|
| | | | 707,193 | | |
|
Estimated goodwill (b) - (a)
|
| | | | 415,156 | | |
Change in stock price
|
| |
Stock Price
|
| |
Estimated
Consideration |
| |
Goodwill
|
| |||||||||
Decrease of 10%
|
| | | $ | 9.76 | | | | | $ | 658,985 | | | | | $ | 366,948 | | |
Increase of 10%
|
| | | $ | 11.92 | | | | | $ | 755,400 | | | | | $ | 463,363 | | |
| | |
Preliminary Estimated
Asset Fair Value |
| |
Weighted Average
Useful Life (Years) |
| ||||||
| | |
(in thousands, except for useful life)
|
| |||||||||
Developed technology
|
| | | | 130,860 | | | | | | 10 | | |
User Relationships
|
| | | | 100,871 | | | | | | 15 | | |
Trademarks and Trade Names
|
| | | | 29,989 | | | | | | 15 | | |
Total
|
| | | | 261,720 | | | | | | | | |
Less: Net intangible assets reported on SBTech’s historical financial statements
|
| | | | (27,197) | | | | | | | | |
Pro forma adjustment
|
| | | | 234,523 | | | | | | | | |
| | |
Nine Months Ended
September 30, 2019 |
| |
Year Ended
December 31, 2018 |
| ||||||||||||||||||
| | |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| |
Assuming No
Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||||||||
Pro forma net loss
|
| | | | (124,424) | | | | | | (124,424) | | | | | | (96,514) | | | | | | (96,514) | | |
Weighted average shares outstanding of Class A common stock
|
| | | | 331,350,425 | | | | | | 300,830,293 | | | | | | 331,350,425 | | | | | | 300,830,293 | | |
Net loss per share (Basic and Diluted) attributable to Class A common stockholders(1)
|
| | | $ | (0.38) | | | | | $ | (0.41) | | | | | $ | (0.29) | | | | | $ | (0.32) | | |
Name
|
| |
Age
|
| |
Position
|
|
Jeff Sagansky | | |
67
|
| | Chief Executive Officer and Chairman | |
Eli Baker | | |
45
|
| |
President, Chief Financial Officer and Secretary
|
|
Scott M. Delman | | |
60
|
| | Director | |
Joshua Kazam | | |
42
|
| | Director | |
Fredric D. Rosen | | |
76
|
| | Director | |
Scott I. Ross | | |
39
|
| | Director | |
| | | |
DraftKings
|
| |
SBTech
|
|
| 2007 | | | | | |
•
SBTech was founded and officially began its operations.
|
|
| 2012 | | |
•
DraftKings began its operations and offered its first DFS contest to the public for the Major League Baseball (“MLB”) season.
|
| |
•
SBTech’s operator base had grown to six.
|
|
| 2013 | | |
•
MLB became the first major sports organization to invest in, and establish a relationship, with DraftKings.
•
We launched the first mobile app in the DFS industry.
|
| |
•
SBTech’s operator base had grown to eight and just over 200 employees.
|
|
| 2014 | | |
•
We acquired DraftStreet, a DFS operator, increasing our user base by more than 50%, and acquired Starstreet, another DFS operator.
•
We signed a two-year deal to become the official DFS provider of the National Hockey League.
|
| |
•
SBTech’s operator base had grown to 11 and just over 400 employees.
|
|
| 2015 | | |
•
We were named the official DFS game of NASCAR, Ultimate Fighting Championship and Major League Soccer, and announced partnership deals with major sports teams including the New England Patriots, New York Knicks and Chicago Cubs.
•
21st Century Fox America, Inc. (“FOX”) became the first major media company to invest in us.
•
We obtained a license from the United Kingdom Gambling Commission to provide facilities to offer daily fantasy sports contests and other forms of pool betting, and to manufacture gambling software.
|
| |
•
SBTech obtained a license from the United Kingdom Gambling Commission to provide facilities for real event betting and to manufacture gambling software.
|
|
| | | |
DraftKings
|
| |
SBTech
|
|
| 2016 | | |
•
We acquired a leading provider of DFS Mixed Martial Arts contests, Kountermove, to bolster our user base in the burgeoning space of combat sports.
•
We explored a possible combination with a DFS competitor, but did not receive Federal Trade Commission approval.
|
| |
•
SBTech re-domiciled SBTech in the Isle of Man, and acquired a Maltese B2B license from the Malta Gaming Authority for hosting and management of remote gaming operators.
•
SBTech acquired two Romanian licenses from the National Gambling Office of Romania for the production of gambling software and the hosting of a gambling platform.
•
SBTech launched our Sportsbook into the newly regulated Romanian and Portuguese jurisdictions, opened an office in London and accepted our first retail sports bet in Mexico.
|
|
| 2017 | | |
•
We were granted a skill gaming license in Malta, allowing for further expansion in the European Union.
|
| |
•
SBTech launched a sportsbook for the Czech Republic National Lottery, marking SBTech’s first major lottery partner.
•
SBTech’s sportsbook launched in the Spanish regulated market.
|
|
| 2018 | | |
•
PASPA was struck down by the U.S. Supreme Court, opening the potential for state-by-state authorization of sports betting.
•
We launched the first online sportsbook in New Jersey.
•
We opened our first retail sportsbooks in Atlantic City, New Jersey (Resorts Casino and Hotel) and D’Iberville, Mississippi (Scarlet Pearl Casino Resort).
|
| |
•
SBTech entered the Danish sports betting and iGaming industry by partnering with the Danish National Lottery, Danske Spil, under the brand YOUBET.
•
SBTech was awarded a B2B remote gambling license in Gibraltar, where we opened an office.
•
SBTech became one of the first sportsbook providers to be licensed in the state of Mississippi as a manufacturer and distributor by the Mississippi Gaming Commission, and we debuted our retail sportsbook at the Golden Nugget’s Biloxi Casino as well as two Churchill Downs properties.
•
SBTech was awarded a Casino Service Industry Enterprise transactional waiver by the New Jersey Gaming Board and debuted a retail sportsbook at the Golden Nugget Atlantic City.
|
|
| | | |
DraftKings
|
| |
SBTech
|
|
| 2019 | | |
•
We officially launched iGaming in New Jersey with blackjack, roulette, video poker and slots.
•
We announced a landmark partnership with the National Football League (“NFL”) which made us the Official Daily Fantasy Partner of the NFL.
•
We were named the Official Daily Fantasy Game of the PGA Tour.
•
Our online sportsbook launched in Indiana, New Hampshire, Pennsylvania and West Virginia.
•
We launched retail sportsbooks in Iowa (Wild Rose) and New York (del Lago).
•
We were selected by the state of New Hampshire as its exclusive sportsbook partner.
|
| |
•
SBTech launched our online sportsbook and iGaming offerings with Churchill Downs, and our online sportsbook with the Golden Nugget in New Jersey.
•
SBTech obtained conditional manufacturer and operator licenses from the Pennsylvania Gaming Commission, a manufacturer and Distributer license from the Arkansas Racing Commission and a temporary supplier’s license from the Indiana Gaming Commission, allowing us to launch our retail sportsbook in Pennsylvania, Indiana and Arkansas with Churchill Downs properties.
•
SBTech signed a five-year agreement with the Oregon State Lottery to provide its online and retail sportsbook offering, and successfully launched the first online sportsbook offering in the State of Oregon in October 2019. The retail sportsbook offering is expected to be rolled out mid-2020.
•
SBTech launched an online sportsbook for the State Lottery and Monopoly of Azerbaijan, and signed agreements to provide its online and retail sportsbook solution with the Finnish state lottery, Viekkaus, and the Swedish state lottery, Svenska Spel, in 2020.
|
|
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | | | | $ | 226,227 | | | | | $ | 191,844 | | |
Net Loss
|
| | | | (114,087) | | | | | | (75,149) | | | | | | (76,220) | | | | | | (75,556) | | |
Adjusted EBITDA(1)
|
| | | $ | (92,255) | | | | | $ | (62,851) | | | | | $ | (58,850) | | | | | $ | (49,946) | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | | | | $ | (76,220) | | | | | $ | (75,556) | | |
Adjusted for:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 9,629 | | | | | | 4,757 | | | | | | 7,499 | | | | | | 6,301 | | |
Interest (income) expense, net
|
| | | | (1,364) | | | | | | (537) | | | | | | (666) | | | | | | 1,541 | | |
Income tax expense
|
| | | | 35 | | | | | | 63 | | | | | | 105 | | | | | | 210 | | |
Stock-based compensation
|
| | | | 8,519 | | | | | | 5,376 | | | | | | 7,210 | | | | | | 4,500 | | |
Transaction-related costs(1)
|
| | | | 2,603 | | | | | | — | | | | | | — | | | | | | 10,697 | | |
Litigation, settlement and related costs(2)
|
| | | | 2,410 | | | | | | 2,639 | | | | | | 3,222 | | | | | | 1,754 | | |
Other non-operating costs(3)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 607 | | |
Adjusted EBITDA
|
| | | $ | (92,255) | | | | | $ | (62,851) | | | | | $ | (58,850) | | | | | $ | (49,946) | | |
| | |
Nine months ended September 30,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||
Revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | | | | $ | 58,979 | | | | | | 44.3% | | |
Cost of revenue
|
| | | | 64,718 | | | | | | 26,576 | | | | | | 38,142 | | | | | | 143.5% | | |
Sales and marketing
|
| | | | 124,867 | | | | | | 107,127 | | | | | | 17,740 | | | | | | 16.6% | | |
Product and technology
|
| | | | 39,645 | | | | | | 22,897 | | | | | | 16,748 | | | | | | 73.1% | | |
General and administrative
|
| | | | 78,181 | | | | | | 52,039 | | | | | | 26,142 | | | | | | 50.2% | | |
Loss from operations
|
| | | | (115,416) | | | | | | (75,623) | | | | | | (39,793) | | | | | | 52.6% | | |
Interest income, net
|
| | | | 1,364 | | | | | | 537 | | | | | | 827 | | | | | | 154.0% | | |
Loss before income tax expense
|
| | | | (114,052) | | | | | | (75,086) | | | | | | (38,966) | | | | | | 51.9% | | |
Income tax expense
|
| | | | 35 | | | | | | 63 | | | | | | (28) | | | | | | -44.4% | | |
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | | | | $ | (38,938) | | | | | | 51.8% | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
$ Change
|
| |
% Change
|
| ||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||
Revenue
|
| | | $ | 226,277 | | | | | $ | 191,844 | | | | | $ | 34,433 | | | | | | 17.9% | | |
Cost of revenue
|
| | | | 48,689 | | | | | | 31,750 | | | | | | 16,939 | | | | | | 53.4% | | |
Sales and marketing
|
| | | | 145,580 | | | | | | 156,632 | | | | | | (11,052) | | | | | | -7.1% | | |
Product and technology
|
| | | | 32,885 | | | | | | 20,212 | | | | | | 12,673 | | | | | | 62.7% | | |
General and administrative
|
| | | | 75,904 | | | | | | 56,448 | | | | | | 19,456 | | | | | | 34.5% | | |
Loss from operations
|
| | | | (76,781) | | | | | | (73,198) | | | | | | (3,583) | | | | | | 4.9% | | |
Interest income (expense), net
|
| | | | 666 | | | | | | (1,541) | | | | | | 2,207 | | | | | | -143.2% | | |
Other income (expense), net
|
| | | | — | | | | | | (607) | | | | | | 607 | | | | | | n.m. | | |
Loss before income taxes expense
|
| | | | (76,115) | | | | | | (75,346) | | | | | | (769) | | | | | | 1.0% | | |
Income tax expense
|
| | | | 105 | | | | | | 210 | | | | | | (105) | | | | | | -50.0% | | |
Net loss
|
| | | $ | (76,220) | | | | | $ | (75,556) | | | | | $ | (664) | | | | | | 0.9% | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Net cash used by operating activities
|
| | | $ | (64,168) | | | | | $ | (52,225) | | | | | $ | (45,830) | | | | | $ | (88,437) | | |
Net cash used in investing activities
|
| | | | (25,971) | | | | | | (13,711) | | | | | | (26,421) | | | | | | (7,715) | | |
Net cash provided by financing activities
|
| | | | 8,246 | | | | | | 91,862 | | | | | | 140,892 | | | | | | 118,531 | | |
Net increase (decrease) in cash
|
| | | | (81,893) | | | | | | 25,926 | | | | | | 68,641 | | | | | | 22,379 | | |
Cash at beginning of period
|
| | | | 117,908 | | | | | | 49,267 | | | | | | 49,267 | | | | | | 26,888 | | |
Cash at end of period
|
| | | $ | 36,015 | | | | | $ | 75,193 | | | | | $ | 117,908 | | | | | $ | 49,267 | | |
| | |
Total
|
| |
Less than
1 year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Operating lease obligations(1)
|
| | | $ | 57,539 | | | | | $ | 1,390 | | | | | $ | 13,418 | | | | | $ | 13,547 | | | | | $ | 29,184 | | |
Vendors and licenses(2)
|
| | | | 140,252 | | | | | | 26,738 | | | | | | 84,081 | | | | | | 20,283 | | | | | | 9,150 | | |
Debt obligations(3)
|
| | | | 14,750 | | | | | | 3,750 | | | | | | 11,000 | | | | | | — | | | | | | — | | |
Other commitments(4)
|
| | | | 2,977 | | | | | | — | | | | | | 2,977 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 215,518 | | | | | $ | 31,878 | | | | | $ | 111,476 | | | | | $ | 33,830 | | | | | $ | 38,334 | | |
| | |
Nine months ended
September 30, |
| |
Year ended
December 31, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| ||||||||||||
| | |
(€ in thousands)
|
| |||||||||||||||||||||
Revenue
|
| | | € | 68,345 | | | | | € | 69,631 | | | | | € | 94,147 | | | | | € | 66,087 | | |
Gross profit
|
| | | | 32,529 | | | | | | 36,384 | | | | | | 49,060 | | | | | | 34,243 | | |
Net profit after tax
|
| | | | 6,204 | | | | | | 18,898 | | | | | | 26,779 | | | | | | 16,290 | | |
| | |
Nine months ended September 30,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
€ Change
|
| |
% Change
|
| ||||||||||||
| | |
(€ in thousands)
|
| |||||||||||||||||||||
Revenue | | | | € | 68,345 | | | | | € | 69,631 | | | | | € | (1,286) | | | | | | -1.8% | | |
Cost of revenue
|
| | | | 35,816 | | | | | | 33,247 | | | | | | 2,569 | | | | | | 7.7% | | |
Gross profit
|
| | | | 32,529 | | | | | | 36,384 | | | | | | (3,855) | | | | | | -10.6% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development expenses
|
| | | | 13,610 | | | | | | 8,409 | | | | | | 5,201 | | | | | | 61.9% | | |
Selling and marketing expenses
|
| | | | 4,383 | | | | | | 3,124 | | | | | | 1,259 | | | | | | 40.3% | | |
General and administrative expenses
|
| | | | 7,381 | | | | | | 5,613 | | | | | | 1,768 | | | | | | 31.5% | | |
Profit from operations
|
| | | | 7,155 | | | | | | 19,238 | | | | | | (12,083) | | | | | | -62.8% | | |
Financial income
|
| | | | 22 | | | | | | 121 | | | | | | (99) | | | | | | -81.8% | | |
Financial expense
|
| | | | 676 | | | | | | 44 | | | | | | 632 | | | | | | 1,436.4% | | |
Profit before tax
|
| | | | 6,501 | | | | | | 19,315 | | | | | | (12,814) | | | | | | -66.3% | | |
Tax expenses
|
| | | | 297 | | | | | | 417 | | | | | | (120) | | | | | | -28.8% | | |
Net profit
|
| | | € | 6,204 | | | | | € | 18,898 | | | | | € | (12,694) | | | | | | -67.2% | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
€ Change
|
| |
% Change
|
| ||||||||||||
| | |
(€ in thousands, except percentages)
|
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Revenue | | | | € | 94,147 | | | | | € | 66,087 | | | | | € | 28,060 | | | | | | 42.5% | | |
Cost of revenue
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| | | | 45,087 | | | | | | 31,844 | | | | | | 13,243 | | | | | | 41.6% | | |
Gross profit
|
| | | | 49,060 | | | | | | 34,243 | | | | | | 14,817 | | | | | | 43.3% | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development expenses
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| | | | 10,115 | | | | | | 8,693 | | | | | | 1,422 | | | | | | 16.4% | | |
Selling and marketing expenses
|
| | | | 3,722 | | | | | | 2,964 | | | | | | 758 | | | | | | 25.6% | | |
General and administrative expenses
|
| | | | 7,636 | | | | | | 5,892 | | | | | | 1,744 | | | | | | 29.6% | | |
Profit from operations
|
| | | | 27,587 | | | | | | 16,694 | | | | | | 10,893 | | | | | | 65.3% | | |
Financial income
|
| | | | 97 | | | | | | 37 | | | | | | 60 | | | | | | 162.2% | | |
Financial expense
|
| | | | 340 | | | | | | 177 | | | | | | 163 | | | | | | 92.1% | | |
Profit before tax
|
| | | | 27,344 | | | | | | 16,554 | | | | | | 10,790 | | | | | | 65.2% | | |
Tax expenses
|
| | | | 565 | | | | | | 264 | | | | | | 301 | | | | | | 114.0% | | |
Net profit
|
| | | € | 26,779 | | | | | € | 16,290 | | | | | € | 10,489 | | | | | | 64.4% | | |
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Nine months ended
September 30, |
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Year ended
December 31, |
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2019
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2018
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2018
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2017
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(€ in thousands)
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Net cash provided by operating activities
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| | | € | 14,744 | | | | | € | 15,310 | | | | | € | 30,949 | | | | | € | 18,260 | | |
Net cash used in investing activities
|
| | | | (14,055) | | | | | | (12,875) | | | | | | (17,384) | | | | | | (14,307) | | |
Net cash provided by (used in) financing activities
|
| | | | (12,279) | | | | | | (445) | | | | | | (1,184) | | | | | | 190 | | |
Effects of exchange rate changes
|
| | | | 220 | | | | | | 75 | | | | | | (104) | | | | | | (6) | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | (11,370) | | | | | | 2,065 | | | | | | 12,277 | | | | | | 4,137 | | |
Cash, cash equivalents at beginning of period
|
| | | | 20,731 | | | | | | 8,454 | | | | | | 8,454 | | | | | | 4,317 | | |
Cash, cash equivalents at end of period
|
| | | € | 9,361 | | | | | € | 10,519 | | | | | € | 20,731 | | | | | € | 8,454 | | |
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Total
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| |
Less than
1 year |
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1 – 3 Years
|
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3 – 5 Years
|
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More than
5 Years |
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(€ in thousands)
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Lease obligations(1)
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| | | € | 26,746 | | | | | € | 3,227 | | | | | € | 6,767 | | | | | € | 6,080 | | | | | € | 10,672 | | |
| | |
Fair Market Value of New DraftKings Class A Common Stock
|
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Redemption Date
(period to expiration of warrants) |
| |
$10.00
|
| |
$11.00
|
| |
$12.00
|
| |
$13.00
|
| |
$14.00
|
| |
$15.00
|
| |
$16.00
|
| |
$17.00
|
| |
$18.00
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57 months
|
| | | | 0.257 | | | | | | 0.277 | | | | | | 0.294 | | | | | | 0.310 | | | | | | 0.324 | | | | | | 0.337 | | | | | | 0.348 | | | | | | 0.358 | | | | | | 0.365 | | |
54 months
|
| | | | 0.252 | | | | | | 0.272 | | | | | | 0.291 | | | | | | 0.307 | | | | | | 0.322 | | | | | | 0.335 | | | | | | 0.347 | | | | | | 0.357 | | | | | | 0.365 | | |
51 months
|
| | | | 0.246 | | | | | | 0.268 | | | | | | 0.287 | | | | | | 0.304 | | | | | | 0.320 | | | | | | 0.333 | | | | | | 0.346 | | | | | | 0.357 | | | | | | 0.365 | | |
48 months
|
| | | | 0.241 | | | | | | 0.263 | | | | | | 0.283 | | | | | | 0.301 | | | | | | 0.317 | | | | | | 0.332 | | | | | | 0.344 | | | | | | 0.356 | | | | | | 0.365 | | |
45 months
|
| | | | 0.235 | | | | | | 0.258 | | | | | | 0.279 | | | | | | 0.298 | | | | | | 0.315 | | | | | | 0.330 | | | | | | 0.343 | | | | | | 0.356 | | | | | | 0.365 | | |
42 months
|
| | | | 0.228 | | | | | | 0.252 | | | | | | 0.274 | | | | | | 0.294 | | | | | | 0.312 | | | | | | 0.328 | | | | | | 0.342 | | | | | | 0.355 | | | | | | 0.364 | | |
39 months
|
| | | | 0.221 | | | | | | 0.246 | | | | | | 0.269 | | | | | | 0.290 | | | | | | 0.309 | | | | | | 0.325 | | | | | | 0.340 | | | | | | 0.354 | | | | | | 0.364 | | |
36 months
|
| | | | 0.213 | | | | | | 0.239 | | | | | | 0.263 | | | | | | 0.285 | | | | | | 0.305 | | | | | | 0.323 | | | | | | 0.339 | | | | | | 0.353 | | | | | | 0.364 | | |
33 months
|
| | | | 0.205 | | | | | | 0.232 | | | | | | 0.257 | | | | | | 0.280 | | | | | | 0.301 | | | | | | 0.320 | | | | | | 0.337 | | | | | | 0.352 | | | | | | 0.364 | | |
30 months
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| | | | 0.196 | | | | | | 0.224 | | | | | | 0.250 | | | | | | 0.274 | | | | | | 0.297 | | | | | | 0.316 | | | | | | 0.335 | | | | | | 0.351 | | | | | | 0.364 | | |
27 months
|
| | | | 0.185 | | | | | | 0.214 | | | | | | 0.242 | | | | | | 0.268 | | | | | | 0.291 | | | | | | 0.313 | | | | | | 0.332 | | | | | | 0.350 | | | | | | 0.364 | | |
24 months
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| | | | 0.173 | | | | | | 0.204 | | | | | | 0.233 | | | | | | 0.260 | | | | | | 0.285 | | | | | | 0.308 | | | | | | 0.329 | | | | | | 0.348 | | | | | | 0.364 | | |
21 months
|
| | | | 0.161 | | | | | | 0.193 | | | | | | 0.223 | | | | | | 0.252 | | | | | | 0.279 | | | | | | 0.304 | | | | | | 0.326 | | | | | | 0.347 | | | | | | 0.364 | | |
18 months
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| | | | 0.146 | | | | | | 0.179 | | | | | | 0.211 | | | | | | 0.242 | | | | | | 0.271 | | | | | | 0.298 | | | | | | 0.322 | | | | | | 0.345 | | | | | | 0.363 | | |
15 months
|
| | | | 0.130 | | | | | | 0.164 | | | | | | 0.197 | | | | | | 0.230 | | | | | | 0.262 | | | | | | 0.291 | | | | | | 0.317 | | | | | | 0.342 | | | | | | 0.363 | | |
12 months
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| | | | 0.111 | | | | | | 0.146 | | | | | | 0.181 | | | | | | 0.216 | | | | | | 0.250 | | | | | | 0.282 | | | | | | 0.312 | | | | | | 0.339 | | | | | | 0.363 | | |
9 months
|
| | | | 0.090 | | | | | | 0.125 | | | | | | 0.162 | | | | | | 0.199 | | | | | | 0.237 | | | | | | 0.272 | | | | | | 0.305 | | | | | | 0.336 | | | | | | 0.362 | | |
6 months
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| | | | 0.065 | | | | | | 0.099 | | | | | | 0.137 | | | | | | 0.178 | | | | | | 0.219 | | | | | | 0.259 | | | | | | 0.296 | | | | | | 0.331 | | | | | | 0.362 | | |
3 months
|
| | | | 0.034 | | | | | | 0.065 | | | | | | 0.104 | | | | | | 0.150 | | | | | | 0.197 | | | | | | 0.243 | | | | | | 0.286 | | | | | | 0.326 | | | | | | 0.361 | | |
0 months
|
| | | | — | | | | | | — | | | | | | 0.042 | | | | | | 0.115 | | | | | | 0.179 | | | | | | 0.233 | | | | | | 0.281 | | | | | | 0.323 | | | | | | 0.361 | | |
| | |
DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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Authorized Capital Stock
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| | The Current Charter authorizes 401,000,000 shares of capital stock, consisting of (a) 400,000,000 shares of common stock, including 380,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (b) 1,000,000 shares of preferred stock. | | |
New DraftKings will be authorized to issue 2,100,000,000 shares of capital stock, consisting of (i) 900,000,000 shares of Class A common stock, par value $0.0001 per share, (ii) 900,000,000 shares of Class B common stock, par value $0.0001 per share, and (iii) 300,000,000 shares of preferred stock, par value $0.0001 per share.
As of [ ], 2020, upon consummation of the Business Combination, we expect there will be [ ] million shares of New DraftKings Class A common stock and [ ] million shares of New DraftKings Class B common stock (in each case, assuming no redemptions) outstanding. Following consummation of the Business Combination, New DraftKings is not expected to have any preferred stock outstanding.
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Rights of Preferred Stock
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| | The Current Charter permits DEAC’s board of directors to provide out of the unissued shares of preferred stock for one or more series of preferred stock and to establish from time to time the number of shares to be included in each such series | | | The Proposed Charter permits New DraftKings’ board of directors to fix for any class or series of preferred stock the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | and to fix the voting rights, if any, designations, powers, preference and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof. | | | including, without limitation, dividend rights, dividend rates, conversion rights, exchange rights, voting rights, rights and terms of redemption, dissolution preferences, and treatment in the case of a merger, business combination transaction, or sale of New DraftKings’ assets, which rights may be greater than the rights of the holders of the common stock. | |
Number and Qualification of Directors
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| | The Current Charter provides that the number of directors of DEAC, other than those who may be elected by the holders of one or more series of preferred stock voting separately by class or series, will be fixed from time to time exclusively by DEAC’s board of directors pursuant to a resolution adopted by a majority of DEAC’s board of directors. | | | Subject to any rights of holders of preferred stock to elect additional directors under specified circumstances, the number of directors will be fixed from time to time pursuant to a resolution adopted by the New DraftKings board of directors, or, from and after the time that Mr. Robins beneficially owns less than a majority of the voting power of the outstanding capital stock of New DraftKings, by the affirmative vote of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings. Directors need not be stockholders of New DraftKings. | |
Classification of the Board of Directors
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| | Delaware law permits a corporation to classify its board of directors into as many as three classes with staggered terms of office. Under the Current Charter, the DEAC Board is classified into three classes of directors with staggered terms of office. | | | The NRS permits a corporation to classify its board of directors into as many as four classes with staggered terms of office, where at least one-fourth of the directors must be elected annually. However, the New DraftKings amended and restated articles of incorporation does not provide for a classified board of directors, and thus all directors will be elected each year for one-year terms. | |
Removal of Directors
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| | Under the DGCL, holders of a majority of shares of each class entitled to vote at an election of directors may vote to remove any director or the entire board without cause unless (i) the board is a classified board, in which case directors may be removed only for cause, or (ii) the corporation has cumulative voting, in which case, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect such director. Thus, under the DGCL, a director of a corporation that does not have a classified board or permit cumulative voting may be removed, without cause, by the affirmative vote of a majority of the outstanding | | |
The NRS requires the vote of the holders of at least two-thirds of voting power of the issued and outstanding stock entitled to vote at an election of directors in order to remove a director or all of the directors. Furthermore, the NRS does not make a distinction between removals for cause and removals without cause.
The New DraftKings amended and restated articles of incorporation provides that any or all of the directors may be removed from office at any time with or without cause by the affirmative vote of the holders representing not less than two-thirds of the voting power of the then-outstanding shares of capital stock of New DraftKings entitled to vote at an annual or special meeting duly noticed and called.
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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shares entitled to vote at an election of directors.
The Current Charter provides that any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then-outstanding shares of capital stock of DEAC entitled to vote generally in the election of directors, voting together as a single class.
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Voting
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| | The Current Charter provides that the holders of the Class A common stock and the Class B common stock exclusively possess all voting power with respect to DEAC. The holders of shares of DEAC common stock shall be entitled to one vote for each such share on each matter properly submitted to DEAC’s stockholders on which the holders of DEAC’s common stock are entitled to vote. | | | Holders of New DraftKings Class A common stock will be entitled to cast one vote per Class A share, while holders of New DraftKings Class B common stock will be entitled to cast 10 votes per Class B share. Generally, holders of all classes of New DraftKings common stock vote together as a single class, and an action is approved by New DraftKings stockholders if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, while directors are elected by a plurality of the votes cast. | |
Cumulative Voting
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| | Delaware law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation; however, the Current Charter does not authorize cumulative voting. | | | Nevada law provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its articles of incorporation as long as certain procedures are followed; however, the Proposed Charter does not authorize cumulative voting. | |
Vacancies on the Board of Directors
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| | The Current Charter provides that vacancies in DEAC’s board of directors and newly created directorships resulting from any increase in the authorized number of directors or resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum or by a sole remaining director (and not by stockholders). | | | Subject to the rights of holders of any series of preferred stock and the terms and conditions of the Stockholders Agreement, vacancies in the New DraftKings’ board of directors and newly created directorships resulting from any increase in the authorized number of directors or from any other cause will be filled by, and only by, a majority of the directors then in office, even though less than a quorum. | |
Special Meeting of the Board of Directors
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| | There is no such provision in the Current Charter. | | | Special meetings of the New DraftKings’ board of directors may be called by the Chairperson, the Chief Executive Officer, the President, or two or more Directors (or the sole Director, if applicable) of New DraftKings. | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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Stockholder Action by Written Consent
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The DGCL provides that, unless the articles or certificate of incorporation provides otherwise, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if the holders of outstanding stock having at least the minimum number of votes that would be necessary to authorize or take the action at a meeting of stockholders consent to the action in writing. In addition, the DGCL requires a corporation to give prompt notice of the taking of corporate action without a meeting by less than unanimous written consent to those stockholders who did not consent in writing.
Under the Current Charter, any action required or permitted to be taken by the stockholders of DEAC must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders, other than with respect to the Class B common stock with respect to which action may be taken by written consent.
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The NRS provides that, unless the articles of incorporation or bylaws provides otherwise, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the meeting, the holders of outstanding stock having at least a majority of the voting power of the capital stock of New DraftKings, or a different proportion of voting power if required for such action at the meeting, consent to the action in writing.
The New DraftKings amended and restated articles of incorporation provide that any action required or permitted to be taken by the stockholders of New DraftKings may be effected by an action by written consent in lieu of a meeting with the approval of the holders of outstanding capital stock having not less than the minimum voting power that would be necessary to authorize or take such action at a meeting at which all shares of capital stock entitled to vote thereon were present and voted; however, from and after the time that Mr. Robins beneficially owns less than a majority of the voting power of the capital stock of New DraftKings, no action which is required to be taken or which may be taken at any annual or special meeting of stockholders of New DraftKings may be taken by written consent without a meeting.
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Amendment of the Charter
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| | Under Delaware law, an amendment to a charter generally requires the approval of DEAC’s board of directors and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. | | |
Nevada law provides generally that a resolution of the board of directors is required to propose an amendment to a corporation’s articles of incorporation and that the amendment must be approved by the affirmative vote of a majority of the voting power of all classes of New DraftKings capital stock entitled to vote, as well as a majority of any class adversely affected.
Amendments to the Proposed Charter must be approved by (1) a majority of the combined voting power of all shares entitled to vote, voting together as a single class, so long as shares representing a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote are beneficially owned by Mr. Robins or (2) two-thirds of the combined voting
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | power of all shares entitled to vote, voting together as a single class, thereafter. | |
Amendment of the Bylaws
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| | DEAC’s board of directors is expressly authorized to make, alter, amend or repeal the amended and restated bylaws. The bylaws may also be adopted, amended, altered or repealed by the DEAC stockholders representing a majority of the voting power of all of the then-outstanding shares of capital stock of DEAC entitled to vote generally in the election of directors. | | | The New DraftKings amended and restated bylaws may be amended or repealed by the affirmative vote of a majority of the New DraftKings board of directors or by stockholders representing either a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote, so long as shares representing a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote are beneficially owned by Mr. Robins, or thereafter, by at least two-thirds of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote. | |
Quorum
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Board of Directors. A majority of DEAC’s board of directors constitutes a quorum at any meeting of DEAC’s board of directors.
Stockholders. The presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock representing a majority of the voting power of all outstanding shares of capital stock entitled to vote at such meeting constitutes a quorum.
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Board of Directors. At all meetings of the New DraftKings board of directors, a majority of the directors will constitute a quorum for the transaction of business.
Stockholders. The holders of a majority of the voting power of all shares of New DraftKings capital stock issued and outstanding and entitled to vote constitute a quorum at all meetings of New DraftKings stockholders for the transaction of business.
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Special Meetings of Stockholders
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Under Delaware law, a special meeting of stockholders may be called by the board of directors or by any other person authorized in the certificate of incorporation or bylaws to call a special stockholder meeting.
The DEAC bylaws provide that a special meeting of stockholders may be called by the Secretary of DEAC at the written request of the majority of the board of directors of DEAC, by the Chairman of the board, by the President of DEAC or by the stockholders owning a majority of the shares outstanding and entitled to vote.
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The NRS permits special meetings of stockholders to be called by the entire board of directors, any two directors or the President, unless the articles of incorporation or bylaws provide otherwise.
Subject to the rights, if any, of the holders of any class or series of preferred stock then outstanding of New DraftKings, special meetings of stockholders may be called at any time (a) by the Chairman of the New DraftKings board of directors or by the Chief Executive Officer upon direction of the Board pursuant to a resolution adopted by a majority of the entire New DraftKings board of directors or by the holders of a majority of the voting power of the capital stock of New DraftKings, so long as shares representing a majority of the voting power of all of the then-outstanding shares of capital stock of New DraftKings entitled to vote are
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | beneficially owned by Mr. Robins, and (b) thereafter, only by the Chairman of the Board of Directors or by the Chief Executive Officer of New DraftKings upon the direction of the New DraftKings board of directors pursuant to a resolution adopted by a majority of the entire Board, and may not be called by any other person or persons. | |
Notice of Stockholder Meetings
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| | Whenever notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. | | | Whenever stockholders are required or permitted to take any action at a meeting, a timely notice in writing or by electronic transmission, in the manner consistent with the NRS, of the meeting, which will state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purposes for which the meeting is called, will be mailed to or transmitted electronically to each stockholder of record entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting. Unless otherwise provided by law, the charter or the bylaws, notice will be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. | |
Stockholder Proposals (Other than Nominations of Persons for Election as Directors)
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| | No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in DEAC’s notice of meeting (or any supplement thereto) given by or at the direction of DEAC’s board of directors, (ii) otherwise properly brought before the annual meeting by or at the direction of DEAC’s board of directors or (iii) otherwise properly brought before the annual meeting by any DEAC stockholder (x) who is a stockholder of record entitled to vote at such annual meeting on the date of the giving of the required notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with applicable notice procedures. | | |
No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in New DraftKings’ notice of meeting delivered pursuant to the bylaws, (ii) properly brought before the annual meeting by or at the direction of the board (or a committee thereof) or (iii) otherwise properly brought before the annual meeting by any stockholder of New DraftKings who is entitled to vote at the meeting, who complies with the notice procedures set forth in the bylaws and who is a stockholder of record at the time such notice is delivered to the Secretary of New DraftKings.
The stockholder must (i) give timely notice thereof in proper written form to the
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | Secretary of New DraftKings and (ii) the business must be a proper matter for stockholder action. To be timely, a stockholder’s notice must be received by the Secretary at the principal executive offices of New DraftKings not less than 90 or more than 120 days before the meeting. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a stockholder’s notice. Additionally, the stockholder must provide information pursuant to the advance notice provisions in the New DraftKings bylaws. | |
Stockholder Nominations of Persons for Election as Directors
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| | Nominations of persons for election to DEAC’s board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to DEAC’s notice of meeting only by giving notice to the secretary must be received by the secretary at the principal executive offices of DEAC (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date (or if there has been no prior annual meeting), notice by the stockholder to be timely must be so received no earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by DEAC; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by DEAC. | | |
Nominations of persons for election to the New DraftKings board of directors at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in New DraftKings’ notice of such special meeting, may be made (i) by or at the direction of the board of directors or (ii) by any stockholder of New DraftKings (x) who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in the New DraftKings Bylaws.
For a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of New DraftKings (i) in the case of an annual meeting, not later than the close of business not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting or, if the number of directors to be elected to the board of directors is increased and the first public announcement naming all of the nominees for directors or specifying the size of the increased board of directors is less than 100 days prior to the meeting, the close of business on the 10th day following the day on which public announcement of the date
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | of such meeting is first made; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by New DraftKings. In no event will the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice. Additionally, the stockholder must provide information pursuant to the advance notice provisions in the New DraftKings bylaws. | |
Limitation of Liability of Directors and Officers
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| |
The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit.
The Current Charter provides that no director will be personally liable, except to the extent an exemption from liability or limitation is not permitted under the DGCL, unless a director violated his or her duty of loyalty to the DEAC or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from his or her actions as a director.
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The NRS has a similar, but somewhat broader provision limiting or eliminating the individual liability of both directors and officers unless the articles of incorporation provide for greater liability. Under the NRS, a director or officer is not liable unless the presumption that such person acted in good faith, on an informed basis and with a view to the interests of the corporation has been rebutted. In addition, there must be proof both that the act or failure to act constituted a breach of a fiduciary duty as a director or officer and that such breach involved intentional misconduct, fraud or a knowing violation of law, a more stringent burden than a breach of the duty of loyalty or deriving an improper personal benefit under the DGCL. In addition, the NRS provision permitting limitation of liability applies to both directors and officers and expressly applies to liabilities owed to creditors of the corporation. Furthermore, under the NRS, it is not necessary to adopt provisions in the articles of incorporation limiting personal liability of directors as this limitation is provided by statute. Thus, the NRS provides broader protection from personal liability for directors and officers than the DGCL.
Under the New DraftKings amended and restated articles of incorporation and bylaws, no director or officer will be personally liable to New DraftKings, or its stockholders or its creditors for any damages as a result of any act or failure to
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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act in his or her capacity as a director or officer to the fullest extent permitted by Nevada law.
In addition, New DraftKings renounces in its amended and restated articles of incorporation, any interest or expectancy to participate in specific or specified classes or categories of business opportunities, limiting certain types of claims against directors or officers for certain possible breaches of the duty of loyalty.
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Indemnification of Directors, Officers
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The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity.
The Current Charter provides that DEAC will indemnify each director and officer to the fullest extent permitted by applicable law.
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The NRS generally permits a corporation to indemnify any director or officer who acted in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of the corporation (and, in the case of a non-derivative action involving a criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful). Under the NRS, the person seeking indemnity may also be indemnified if he or she is not liable for his or her actions under Nevada law as described under “— Limitation of Liability of Directors and Officers” above.
The New DraftKings amended and restated articles of incorporation and bylaws provide that New DraftKings will indemnify each current, former or prospective director, officer, employee or agent to the fullest extent permitted by Nevada law.
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Dividends
|
| | Unless further restricted in the certificate of incorporation, the DGCL permits a corporation to declare and pay dividends out of either (i) surplus, or (ii) if no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year (provided that the amount of capital of the corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets). The DGCL defines surplus as the excess, at any time, of the net assets of a corporation over its stated capital. In addition, the DGCL provides that a corporation may redeem or repurchase its | | | The NRS provides that no distribution (including dividends on, or redemption or repurchases of, shares of capital stock) may be made if, after giving effect to such distribution, (i) the corporation would not be able to pay its debts as they become due in the usual course of business, or, (ii) except as otherwise specifically permitted by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed at the time of a dissolution to satisfy the preferential rights of preferred stockholders. In making those determinations, the board of directors may consider financial statements prepared on the basis of accounting practices that are reasonable in the | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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shares only when the capital of the corporation is not impaired and only if such redemption or repurchase would not cause any impairment of the capital of a corporation.
The Current Charter provides that, subject to applicable law, the rights, if any, of the holders of any outstanding series of preferred stock and the charter requirements relating to business combinations, holders of shares of common stock are entitled to receive such dividends and other distributions (payable in cash, property or capital stock of DEAC) when, as and if declared thereon by DEAC’s board of directors from time to time out of any assets or funds legally available therefor and will share equally on a per share basis in such dividends and distributions.
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circumstances, a fair valuation, including but not limited to unrealized appreciation and depreciation, or any other method that is reasonable in the circumstances.
The Proposed Charter provides that holders of Class A common stock are entitled, on a per share basis, to such dividends and other distributions of cash, property, shares of capital stock or rights to acquire shares of capital stock of New DraftKings as may be declared by the Board from time to time with respect to common stock out of assets or funds legally available therefor. Dividends will not be declared or paid on the Class B common stock and holders of Class B common stock will have no entitlement in respect of dividends thereon.
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Liquidation
|
| | In the event of any voluntary or involuntary liquidation, dissolution or winding up of DEAC, after payment or provision for payment of the debts and other liabilities of DEAC, the holders of shares of common stock shall be entitled to receive all the remaining assets of DEAC available for distribution to its stockholders, ratably in proportion to the number of shares of common stock held by them. | | | On the liquidation, dissolution, distribution of assets or winding up of New DraftKings, each holder of New DraftKings Class A common stock will be entitled to a pro rata distribution of the net assets, if any, available for distribution to common stockholders. Holders of New DraftKings Class B common stock will not be entitled to receive any distribution of New DraftKings’ assets of whatever kind available until distribution has first been made to all holders of New DraftKings Class A common stock. | |
Supermajority Voting Provisions
|
| | Amendments to Article VIII (Indemnification) of the Current Charter require the affirmative vote of DEAC’s stockholders holding at least two-thirds of the voting power of all outstanding shares of capital stock of DEAC. | | | Amendments to certain provisions of the Proposed Charter will require the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings once Mr. Robins beneficially owns shares of New DraftKings capital stock representing less than a majority of the voting power of New DraftKings capital stock. Prior to that time, amendments to those provisions will require the affirmative vote of the holders of a majority of the voting power of the outstanding voting stock of New DraftKings. See “Description of New DraftKings Securities — Anti-Takeover Effects of Provisions of the New DraftKings Amended and Restated Articles of | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | Incorporation, the New DraftKings Amended and Restated Bylaws and Applicable Law”. In addition, removal of directors and changes to the number of directors requires the affirmative vote of the holders of at least two-thirds of the voting power of the outstanding capital stock of New DraftKings in certain circumstances. | |
Anti-Takeover Provisions and Other Stockholder Protections
|
| | The anti-takeover provisions and other stockholder protections in the Current Charter include the staggered board, blank check preferred stock, and an election to be subject to Section 203 of the DGCL, which regulates corporate takeovers, among others. | | |
See “Description of New DraftKings Securities — Anti-Takeover Effects of Provisions of the New DraftKings Amended and Restated Articles of Incorporation, the New DraftKings Amended and Restated Bylaws and Applicable Law” for further information regarding the anti-takeover provisions related thereto.
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Preemptive Rights
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| | There are no preemptive rights provisions in the Current Charter. | | | There are no preemptive rights relating to shares of New DraftKings Class A common stock. | |
Fiduciary Duties of Directors
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| | Under Delaware law, the standards of conduct for directors have developed through Delaware court case law. Generally, directors must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. Members of the board of directors or any committee designated by the board of directors are similarly entitled to rely in good faith upon the records of the corporation and upon such information, opinions, reports and statements presented to the corporation by corporate officers, employees, committees of the board of directors or other persons as to matters such member reasonably believes are within such other person’s professional or expert competence, provided that such other person has been selected with reasonable care by or on behalf of the corporation. Such appropriate reliance on records and other information protects directors from liability related to decisions made based on such records and other information. | | | Nevada requires that directors and officers of Nevada corporations exercise their powers in good faith and with a view to the interests of the corporation. As a matter of law, under the NRS, directors and officers are presumed to act in good faith, on an informed basis and with a view to the interests of the corporation in making business decisions. In performing such duties, directors and officers may exercise their business judgment through reliance on information, opinions, reports, financial statements and other financial data prepared or presented by corporate directors, officers or employees who are reasonably believed to be reliable and competent. Professional reliance may also be extended to legal counsel, public accountants, advisers, bankers or other persons as to matters reasonably believed to be within their professional competence, and to the work of a committee (on which the particular director or officer does not serve) if the committee was established and empowered by the corporation’s board of directors, and if the committee’s work was within its designated authority and was about matters on which the committee was reasonably believed to merit confidence. However, directors and officers may not rely on such information, opinions, reports, | |
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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| | | | | | books of account or similar statements if they have knowledge concerning the matter in question that would make such reliance unwarranted. | |
Inspection of Books and Records
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| | Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. | | |
Inspection rights under Nevada law are more limited. The NRS grants any person who has been a stockholder of record of a corporation for at least six months immediately preceding the demand, or any person holding, or thereunto authorized in writing by the holders of, at least 5% of all of its outstanding shares, upon at least five days’ written demand, the right to inspect in person or by agent or attorney, during usual business hours (i) the articles of incorporation and all amendments thereto, (ii) the bylaws and all amendments thereto and (iii) a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them respectively. A Nevada corporation may require a stockholder to furnish the corporation with an affidavit that such inspection is for a proper purpose related to his or her interest as a stockholder of the corporation.
In addition, the NRS grants certain stockholders the right to inspect the books of account and records of a corporation for any proper purpose. The right to inspect the books of account and all financial records of a corporation, to make copies of records and to conduct an audit of such records is granted only to a stockholder who owns at least 15% of the issued and outstanding shares of a Nevada corporation, or who has been authorized in writing by the holders of at least 15% of such shares. However, these requirements do not apply to any corporation that furnishes to its stockholders a detailed, annual financial statement or any corporation that has filed during the preceding 12 months all reports required to be filed pursuant to Section 13 or Section 15(d) of the Exchange Act.
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DEAC Stockholder Rights
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New DraftKings Stockholder Rights
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Choice of Forum
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| | The Current Charter generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of DEAC, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of DEAC to DEAC or DEAC’s stockholders, (iii) any action asserting a claim against DEAC, its directors, officers or employees arising pursuant to any provision of the DGCL or its charter or bylaws, or (iv) any action asserting a claim against DEAC, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, subject to certain exceptions. | | | The Proposed Charter generally designates the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for any or all actions, suits, proceedings, whether civil, administrative or investigative or that asserts any claim or counterclaim, (a) brought in the name or right of New DraftKings or on its behalf; (b) asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of New DraftKings to New DraftKings or New DraftKings’ stockholders; (c) arising or asserting a claim pursuant to any provision of NRS Chapters 78 or 92A or any provision of the charter or bylaws; (d) to interpret, apply, enforce or determine the validity of the Proposed Charter or bylaws; or (e) asserting a claim governed by the internal affairs doctrine, subject to certain exceptions, to the fullest extent permitted by law. | |
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Before the Business
Combination |
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After the Business Combination
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Assuming No
Redemption |
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Assuming Maximum
Redemption |
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Name and Address of
Beneficial Owner |
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Number of
shares of DEAC common stock |
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%
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% of
Total Voting Power** |
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Number of
shares of New DraftKings Class A Common Stock |
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%
|
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Number of
shares of New DraftKings Class B Common Stock |
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%
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% of
Total Voting Power** |
| |
Number of
shares of New DraftKings Class A Common Stock |
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%
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Number of
shares of New DraftKings Class B Common Stock |
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%
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% of
Total Voting Power** |
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Eagle Equity Partners,
LLC(1)(2) |
| | | | 5,020,000 | | | | | | 10.0 | | | | | | 10.0 | | | | | | 2,718,529 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,529 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Jeff Sagansky(1)(2)
|
| | | | 5,020,000 | | | | | | 10.0 | | | | | | 10.0 | | | | | | 2,718,529 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,529 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Eli Baker(1)(2)
|
| | | | 5,020,000 | | | | | | 10.0 | | | | | | 10.0 | | | | | | 2,718,529 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,529 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Harry E. Sloan(1)(3)
|
| | | | 4,900,000 | | | | | | 9.8 | | | | | | 9.8 | | | | | | 2,718,528 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,718,528 | | | | | | 1.0% | | | | | | — | | | | | | — | | | | | | * | | |
Fredric Rosen(1)(4)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Joshua Kazam(1)(5)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 153,333 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Scott Ross(1)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 20,000 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 20,000 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Scott Delman(1)(6)
|
| | | | 20,000 | | | | | | * | | | | | | * | | | | | | 86,666 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 86,666 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
All Directors and Executive
Officers of DEAC as a Group (Seven Individuals) |
| | | | 10,000,000 | | | | | | 20.0% | | | | | | 20.0% | | | | | | 5,850,389 | | | | | | 1.9% | | | | | | — | | | | | | — | | | | | | * | | | | | | 5,850,389 | | | | | | 2.1% | | | | | | — | | | | | | — | | | | | | * | | |
Directors and Executive Officers of New DraftKings After
Consummation of the Business Combination |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Jason Robins(7)(8)(9)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 9,354,949 | | | | | | 2.9% | | | | | | [ ] | | | | | | 100% | | | | | | [ ] | | | | | | 9,354,949 | | | | | | 3.3% | | | | | | [ ] | | | | | | 100% | | | | | | [ ] | | |
Matthew Kalish(7)(9)(10)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 4,101,340 | | | | | | 1.3% | | | | | | — | | | | | | — | | | | | | * | | | | | | 4,101,340 | | | | | | 1.5% | | | | | | — | | | | | | — | | | | | | * | | |
Paul Liberman(7)(9)(11)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 4,759,510 | | | | | | 1.5% | | | | | | — | | | | | | — | | | | | | * | | | | | | 4,759,510 | | | | | | 1.7% | | | | | | — | | | | | | — | | | | | | * | | |
R. Stanton Dodge(7)(9)(12)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,493,639 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 2,493,639 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Jason Park(7)(9)(13)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 258,662 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | | | | | 258,662 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
All Directors and Executive
Officers of New DraftKings as a Group ([ ] Individuals) |
| | | | — | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
Five Percent Holders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Shalom Meckenzie(14)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 35,007,377 | | | | | | 11.3% | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | 35,007,377 | | | | | | 12.5% | | | | | | — | | | | | | — | | | | | | [ ] | | |
RPII DK LLC(7)(9)
|
| | | | — | | | | | | — | | | | | | — | | | | | | 23,253,572 | | | | | | 7.5% | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | 23,253,572 | | | | | | 8.3% | | | | | | — | | | | | | — | | | | | | [ ] | | |
TFCF Sports Enterprises,
LLC(7)(9) |
| | | | — | | | | | | — | | | | | | — | | | | | | 18,948,839 | | | | | | 6.1% | | | | | | — | | | | | | — | | | | | | [ ] | | | | | | 18,948,839 | | | | | | 6.8% | | | | | | — | | | | | | — | | | | | | [ ] | | |
Name
|
| |
Position with New
DraftKings |
| |
Age as of Special
Meeting |
| |
Nominated By
|
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[ ]
|
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[ ]
|
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[ ]
|
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[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
[ ]
|
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
Name
|
| |
Position with New
DraftKings |
| |
Age as of
Special Meeting |
| |||
Jason Robins
|
| |
Chief Executive Officer
|
| | | | 39 | | |
Matthew Kalish
|
| |
President, DraftKings North America
|
| | | | 38 | | |
Paul Liberman
|
| |
President, Global Technology and Product
|
| | | | 36 | | |
R. Stanton Dodge
|
| |
Chief Legal Officer and Secretary
|
| | | | 52 | | |
Jason Park
|
| |
Chief Financial Officer
|
| | | | 43 | | |
Name and Position
|
| |
Fiscal
Year |
| |
Salary
($) |
| |
Bonus
($) |
| |
Option
Awards ($) (1) |
| |
Non-Equity
Incentive Plan Compensation ($) (2) |
| |
All Other
Compensation ($) (3) |
| |
Total
($) |
| |||||||||||||||||||||
Jason Robins
|
| | | | 2018 | | | | | $ | 400,000 | | | | | $ | 0 | | | | | $ | 12,847,259 | | | | | $ | 500,000 | | | | | $ | 9,250 | | | | | $ | 13,756,509 | | |
Chief Executive Officer
|
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Matthew Kalish
|
| | | | 2018 | | | | | $ | 300,000 | | | | | $ | 0 | | | | | $ | 3,015,662 | | | | | $ | 300,000 | | | | | $ | 9,250 | | | | | $ | 3,624,912 | | |
Chief Revenue Officer
|
| | | | | | | | |||||||||||||||||||||||||||||||||||
Paul Liberman
|
| | | | 2018 | | | | | $ | 300,000 | | | | | $ | 0 | | | | | $ | 2,817,791 | | | | | $ | 300,000 | | | | | $ | 10,588 | | | | | $ | 3,428,379 | | |
Chief Operating Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
|
| |
Time-Vested
Options ($) |
| |
PSP
Options ($) |
| |
LTIP
Performance Options ($) |
| |||||||||
Jason Robins
|
| | | $ | 1,212,322 | | | | | $ | 672,223 | | | | | $ | 10,962,714 | | |
Matthew Kalish
|
| | | $ | 296,096 | | | | | $ | 527,023 | | | | | $ | 2,192,543 | | |
Paul Liberman
|
| | | $ | 493,493 | | | | | $ | 131,756 | | | | | $ | 2,192,543 | | |
Name
|
| |
Grant Date
|
| |
Number of
Securities Underlying Unexercised Options Exercisable (#) |
| |
Number of
Securities Underlying Unexercised Options Unexercisable (#) |
| |
Equity Incentive
Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| ||||||||||||||||||
Jason Robins
|
| | | | 7/12/2013(1) | | | | | | 2,000,000 | | | | | | ― | | | | | | | | | | | $ | 0.09 | | | | | | 7/12/2023 | | |
| | | | | 9/22/2014(1) | | | | | | 400,000 | | | | | | ― | | | | | | | | | | | $ | 0.22 | | | | | | 9/22/2024 | | |
| | | | | 2/18/2015(1) | | | | | | 1,566,592 | | | | | | 104,440 | | | | | | | | | | | $ | 0.22 | | | | | | 2/18/2025 | | |
| | | | | 8/27/2015(1) | | | | | | 678,728 | | | | | | 156,630 | | | | | | | | | | | $ | 0.22 | | | | | | 8/27/2025 | | |
| | | | | 3/24/2016(1) | | | | | | 3,260,919 | | | | | | 1,482,236 | | | | | | | | | | | $ | 0.22 | | | | | | 3/24/2026 | | |
| | | | | 5/3/2017(1) | | | | | | 1,103,807 | | | | | | 1,419,182 | | | | | | | | | | | $ | 1.35 | | | | | | 5/3/2027 | | |
| | | | | 4/18/2018(2) | | | | | | 321,238 | | | | | | 2,248,664 | | | | | | | | | | | $ | 1.16 | | | | | | 4/18/2028 | | |
| | | | | 4/18/2018(3) | | | | | | ― | | | | | | ― | | | | | | 1,307,645 | | | | | $ | 1.16 | | | | | | 4/18/2028 | | |
| | | | | 5/3/2018(4) | | | | | | ― | | | | | | ― | | | | | | 21,376,180 | | | | | $ | 1.16 | | | | | | 5/3/2028 | | |
Matt Kalish
|
| | | | 9/22/2014(1) | | | | | | 207,320 | | | | | | ― | | | | | | | | | | | $ | 0.22 | | | | | | 9/22/2024 | | |
| | | | | 2/18/2015(1) | | | | | | 695,413 | | | | | | 52,220 | | | | | | | | | | | $ | 0.22 | | | | | | 2/18/2025 | | |
| | | | | 8/27/2015(1) | | | | | | 481,932 | | | | | | 111,216 | | | | | | | | | | | $ | 0.22 | | | | | | 8/27/2025 | | |
| | | | | 3/24/2016(1) | | | | | | 1,630,459 | | | | | | 741,118 | | | | | | | | | | | $ | 0.22 | | | | | | 3/24/2026 | | |
| | | | | 5/3/2017(1) | | | | | | 459,919 | | | | | | 591,326 | | | | | | | | | | | $ | 1.35 | | | | | | 5/3/2027 | | |
| | | | | 4/18/2018(2) | | | | | | 78,458 | | | | | | 549,212 | | | | | | | | | | | $ | 1.16 | | | | | | 4/18/2028 | | |
| | | | | 4/18/2018(3) | | | | | | ― | | | | | | ― | | | | | | 1,025,194 | | | | | $ | 1.16 | | | | | | 4/18/2028 | | |
| | | | | 5/3/2018(4) | | | | | | ― | | | | | | ― | | | | | | 4,275,236 | | | | | $ | 1.16 | | | | | | 5/3/2028 | | |
Paul Liberman
|
| | | | 7/12/2013(1) | | | | | | 2,415,000 | | | | | | ― | | | | | | | | | | | $ | 0.09 | | | | | | 7/12/2023 | | |
| | | | | 9/22/2014(1) | | | | | | 302,160 | | | | | | ― | | | | | | | | | | | $ | 0.22 | | | | | | 9/22/2024 | | |
| | | | | 2/18/2015(1) | | | | | | 783,296 | | | | | | 52,220 | | | | | | | | | | | $ | 0.22 | | | | | | 2/18/2025 | | |
| | | | | 8/27/2015(1) | | | | | | 469,687 | | | | | | 108,390 | | | | | | | | | | | $ | 0.22 | | | | | | 8/27/2025 | | |
| | | | | 3/24/2016(1) | | | | | | 1,630,459 | | | | | | 741,118 | | | | | | | | | | | $ | 0.22 | | | | | | 3/24/2026 | | |
| | | | | 5/3/2017(1) | | | | | | 459,919 | | | | | | 591,326 | | | | | | | | | | | $ | 1.35 | | | | | | 5/3/2027 | | |
| | | | | 4/18/2018(2) | | | | | | 130,764 | | | | | | 915,352 | | | | | | | | | | | $ | 1.16 | | | | | | 4/18/2028 | | |
| | | | | 4/18/2018(3) | | | | | | ― | | | | | | ― | | | | | | 256,298 | | | | | $ | 1.16 | | | | | | 4/18/2028 | | |
| | | | | 5/3/2018(4) | | | | | | ― | | | | | | ― | | | | | | 4,275,236 | | | | | $ | 1.16 | | | | | | 5/3/2028 | | |
Name
|
| |
Fees Earned or
Paid in Cash ($) |
| |
Stock Awards
($) |
| |
Option Awards
($) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| |||||||||||||||
Woodrow Levin
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 94,256 | | | | | $ | 0 | | | | | $ | 94,256 | | |
Ryan Moore
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Steve Murray
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Hany Nada
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Richard Rosenblatt
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 236,891 | | | | | $ | 0 | | | | | $ | 236,891 | | |
Marni Walden
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 203,992 | | | | | $ | 0 | | | | | $ | 203,992 | | |
John Salter
|
| | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Name
|
| |
Number of
Shares |
| |
Purchase Price
($) |
| ||||||
Revolution Growth III, LP(1)
|
| | | | 2,269,718 | | | | | | 4,999,998.10 | | |
GGV Capital Select L.P.(2)
|
| | | | 1,815,775 | | | | | | 3,999,999.80 | | |
RPII DK LLC(3)
|
| | | | 1,361,830 | | | | | | 2,999,997.10 | | |
Entities affiliated with Accomplice, LLC(4)
|
| | | | 478,003 | | | | | | 1,053,000.46 | | |
Entities affiliated with Redpoint Ventures(5)
|
| | | | 453,943 | | | | | | 999,998.30 | | |
Name
|
| |
Number of
Shares |
| |
Purchase Price
($) |
| ||||||
Revolution Growth III, LP(1)
|
| | | | 3,922,245 | | | | | | 9,999,998.97 | | |
Italianflare & Co., as nominee for Hadley Harbor Master Investors (Cayman) L.P.(2)
|
| | | | 980,561 | | | | | | 2,499,999.11 | | |
Accomplice Fund II, L.P.(3)
|
| | | | 784,449 | | | | | | 1,999,999.80 | | |
Jason Robins Revocable Trust u/d/t January 8, 2014(4)
|
| | | | 39,222 | | | | | | 99,998.85 | | |
Name
|
| |
Common
Units |
| |
Incentive
Units(1) |
| |
Cash
Consideration ($) |
| |
In-Kind
Consideration ($)(2) |
| ||||||||||||
DraftKings
|
| | | | 4,500,000 | | | | | | — | | | | | | — | | | | | | 3,000,000 | | |
Accomplice Fund II, L.P.(3)
|
| | | | 1,500,000 | | | | | | — | | | | | | 1,000,000 | | | | | | — | | |
Hany Nada(4)
|
| | | | 375,000 | | | | | | — | | | | | | 250,000 | | | | | | — | | |
Jason Robins(5)
|
| | | | — | | | | | | 126,603 | | | | | | — | | | | | | — | | |
Jason Park(6)
|
| | | | — | | | | | | 63,301 | | | | | | — | | | | | | — | | |
| | |
Page
|
| |||
Condensed Financial Statements as of September 30, 2019 | | | | | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-8 | | | |
Financial Statements as of March 31, 2019 | | | |||||
| | | | F-17 | | | |
| | | | F-18 | | | |
| | | | F-19 | | | |
| | | | F-20 | | | |
| | | | F-21 | | | |
| | | | F-22 | | |
|
Unaudited Condensed Consolidated Financial Statements as of September 30, 2019 and December 31,
2018 |
| | | | | | |
| | | | | F-30 | | | |
| | | | | F-32 | | | |
| | | | | F-33 | | | |
| | | | | F-34 | | | |
| | | | | F-35 | | | |
| Consolidated Financial Statements as of December 31, 2018 and 2017 | | | | | | | |
| | | | | F-50 | | | |
| | | | | F-51 | | | |
| | | | | F-53 | | | |
| | | | | F-54 | | | |
| | | | | F-55 | | | |
| | | | | F-56 | | |
|
Unaudited Condensed Interim Consolidated Financial Statements as of September 30, 2019 and December 31, 2018
|
| | | | | | |
| | | | | F-83 | | | |
| | | | | F-85 | | | |
| | | | | F-86 | | | |
| | | | | F-88 | | | |
| | | | | F-89 | | | |
| Consolidated Financial Statements as of December 31, 2018 and 2017 | | | | | | | |
| | | | | F-95 | | | |
| | | | | F-96 | | | |
| | | | | F-97 | | | |
| | | | | F-98 | | | |
| | | | | F-99 | | | |
| | | | | F-100 | | |
|
ASSETS:
|
| ||||||
| Current assets: | | | | | | | |
|
Cash and cash equivalents
|
| | | $ | 870,851 | | |
|
Prepaid expenses
|
| | | | 280,605 | | |
|
Total current assets
|
| | | | 1,151,456 | | |
|
Cash and investments held in Trust Account
|
| | | | 402,624,209 | | |
|
Total Assets
|
| | |
$
|
403,775,665
|
| |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
| | | | | | |
| Current liabilities: | | | | | | | |
|
Accounts payable
|
| | | $ | 470,410 | | |
|
Total current liabilities
|
| | | | 470,410 | | |
|
Deferred underwriting compensation
|
| | | | 14,000,000 | | |
|
Total Liabilities
|
| | | | 14,470,410 | | |
|
Class A common shares subject to possible redemptions; 38,430,525 shares at redemption value of approximately $10.00 per share
|
| | | | 384,305,250 | | |
| Stockholders’ equity: | | | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
| | | | — | | |
|
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 1,569,475 shares
issued and outstanding, (excluding 38,430,525 shares subject to possible redemption) |
| | | | 157 | | |
|
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares
issued and outstanding |
| | | | 1,000 | | |
|
Additional paid-in capital
|
| | | | 2,662,724 | | |
|
Retained earnings
|
| | | | 2,336,124 | | |
|
Total stockholders’ equity, net
|
| | | | 5,000,005 | | |
|
Total liabilities and stockholders’ equity
|
| | |
$
|
403,775,665
|
| |
| | |
Three Months
Ended September 30, 2019 |
| |
For the period from
March 27, 2019 (inception) to September 30, 2019 |
| ||||||
Revenue: | | | | $ | — | | | | | $ | — | | |
General and administrative expenses
|
| | | | 247,387 | | | | | | 433,756 | | |
Loss from operations
|
| | | | (247,387) | | | | | | (433,756) | | |
Other income — interest on Trust Account
|
| | | | 2,195,999 | | | | | | 3,390,875 | | |
Income before provision for income tax
|
| | | | 1,948,612 | | | | | | 2,957,119 | | |
Provision for income tax
|
| | | | (409,209) | | | | | | (620,995) | | |
Net income
|
| | | $ | 1,539,403 | | | | | $ | 2,336,124 | | |
Two Class Method: | | | | | | | | | | | | | |
Weighted average number of Class A common stock outstanding
|
| | | | 40,000,000 | | | | | | 40,000,000 | | |
Net income per common stock, Class A — basic and diluted
|
| | | $ | 0.04 | | | | | $ | 0.06 | | |
Weighted average number of Class B common stock outstanding
|
| | | | 10,000,000 | | | | | | 10,014,960 | | |
Net loss per common stock, Class B — basic and diluted
|
| | | $ | (0.01) | | | | | $ | (0.01) | | |
| | |
Common Stock
|
| | | | | | | | | | | | | | | | | | | |||||||||||||||||||||
| | |
Class A
|
| |
Class B
|
| |
Additional
Paid-in Capital |
| |
Retained
Earnings |
| |
Total
Stockholders’ Equity |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Issuance of common stock to initial shareholder at approximately $0.002 per share
|
| | | | — | | | | | $ | — | | | | | | 10,062,500 | | | | | $ | 1,006 | | | | | $ | 23,994 | | | | | $ | — | | | | | $ | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (675) | | | | | | (675) | | |
Balance, March 31, 2019
|
| | | | — | | | | | | — | | | | | | 10,062,500 | | | | | | 1,006 | | | | | | 23,994 | | | | | | (675) | | | | | | 24,325 | | |
Sale of Units to the public at $10.00 per unit
|
| | | | 40,000,000 | | | | | | 4,000 | | | | | | — | | | | | | — | | | | | | 399,996,000 | | | | | | — | | | | | | 400,000,000 | | |
Underwriters’ discount and offering expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (22,555,870) | | | | | | — | | | | | | (22,555,870) | | |
Sale of 6,333,334 Private Placement Warrants at $1.50 per warrant
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,500,001 | | | | | | — | | | | | | 9,500,001 | | |
Forfeiture of Class B shares by initial shareholders
|
| | | | — | | | | | | — | | | | | | (62,500) | | | | | | (6) | | | | | | 6 | | | | | | — | | | | | | — | | |
Change in value of common stock subject to possible redemption
|
| | | | (38,276,585) | | | | | | (3,828) | | | | | | — | | | | | | — | | | | | | (382,762,022) | | | | | | — | | | | | | (382,765,850) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 797,396 | | | | | | 797,396 | | |
Balance, June 30, 2019
|
| | | | 1,723,415 | | | | | | 172 | | | | | | 10,000,000 | | | | | | 1,000 | | | | | | 4,202,109 | | | | | | 796,721 | | | | | | 5,000,002 | | |
Change in value of common stock subject to possible redemption
|
| | | | (153,940) | | | | | | (15) | | | | | | — | | | | | | — | | | | | | (1,539,385) | | | | | | — | | | | | | (1,539,400) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,539,403 | | | | | | 1,539,403 | | |
Balance, September 30, 2019
|
| | | | 1,569,475 | | | | | $ | 157 | | | | | | 10,000,000 | | | | | $ | 1,000 | | | | | $ | 2,662,724 | | | | | $ | 2,336,124 | | | | | $ | 5,000,005 | | |
|
| | |
For the period from
March 27, 2019 (inception) to September 30, 2019 |
| |||
Cash flows from operating activities: | | | | | | | |
Net income
|
| | | $ | 2,336,124 | | |
Adjustments to reconcile net income to net cash used in operating activities:
|
| | | | | | |
Trust income reinvested in Trust Account
|
| | | | (3,390,875) | | |
Changes in operating assets and liabilities: | | | | | | | |
Prepaid expenses
|
| | | | (280,605) | | |
Accounts payable
|
| | | | 246,085 | | |
Net cash used in operating activities
|
| | | | (1,089,271) | | |
Cash flows from investing activities: | | | | | | | |
Principal deposited in Trust Account
|
| | | | (400,000,000) | | |
Interest income released from Trust Account to pay taxes
|
| | | | 766,666 | | |
Net cash used in investing activities
|
| | | | (399,233,334) | | |
Cash flows from financing activities: | | | | | | | |
Proceeds from private placement of warrants
|
| | | | 9,500,001 | | |
Proceeds from sale of Class A common stock
|
| | | | 400,000,000 | | |
Payment of underwriters’ discount
|
| | | | (8,000,000) | | |
Payment of offering costs
|
| | | | (306,545) | | |
Net cash provided by financing activities
|
| | | | 401,193,456 | | |
Increase in cash during period
|
| | | | 870,851 | | |
Cash at beginning of period
|
| | | | — | | |
Cash at end of period
|
| | | $ | 870,851 | | |
Supplemental disclosure of cash flow information: | | | | | | | |
Cash paid during the year for income taxes
|
| | | $ | 766,666 | | |
Supplemental disclosure of non-cash financing activities: | | | | | | | |
Deferred underwriting compensation
|
| | | $ | 14,000,000 | | |
Class A common stock subject to possible redemption
|
| | | $ | 384,305,250 | | |
Offering costs paid by sponsor in exchange for founder shares (Class B Common Stock)
|
| | | $ | 25,000 | | |
Deferred offering costs included in accounts payable
|
| | | $ | 224,325 | | |
| | |
Carrying Value
|
| |
Gross
Unrealized Holding Gain |
| |
Quoted Prices in
Active Markets (Level 1) |
| |||||||||
U.S. Government Treasury Securities as of September 30, 2019(1)
|
| | | $ | 402,622,630 | | | | | $ | 34,420 | | | | | $ | 402,657,050 | | |
|
ASSETS:
|
| ||||||
| Current asset: | | | | | | | |
|
Cash
|
| | | $ | — | | |
|
Deferred offering costs
|
| | | | 26,733 | | |
|
Total assets
|
| | | $ | 26,733 | | |
|
LIABILITIES AND STOCKHOLDER’S EQUITY:
|
| | | | | | |
| Current Liabilities: | | | | | | | |
|
Accrued expenses
|
| | | $ | 2,408 | | |
| Stockholder’s equity: | | | | | | | |
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
| | | | — | | |
|
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; none issued and outstanding
|
| | | | | | |
|
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,062,500 shares issued and outstanding(1)
|
| | | | 1,006 | | |
|
Additional paid-in capital
|
| | | | 23,994 | | |
|
Accumulated deficit
|
| | | | (675) | | |
|
Total stockholder’s equity
|
| | | | 24,325 | | |
|
Total liabilities and stockholder’s equity
|
| | | $ | 26,733 | | |
|
Revenue
|
| | | $ | — | | |
|
General and administrative expenses
|
| | | | 675 | | |
|
Net loss attributable to stockholder
|
| | | $ | (675) | | |
|
Weighted average number of shares of common stock outstanding(1)
|
| | | | 8,750,000 | | |
|
Basic and diluted net loss per share attributable to stockholder
|
| | | $ | (0.00) | | |
| | |
Class B Common stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholder’s Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Issuance of common stock to initial stockholder at approximately $0.002 per share(1)
|
| | | | 10,062,500 | | | | | $ | 1,006 | | | | | $ | 23,994 | | | | | $ | — | | | | | $ | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (675) | | | | | | (675) | | |
Balances as of March 31, 2019
|
| | | | 10,062,500 | | | | | $ | 1,006 | | | | | $ | 23,994 | | | | | $ | (675) | | | | | $ | 24,325 | | |
| Cash flows from operating activities: | | | | | | | |
|
Net loss
|
| | | | (675) | | |
|
Changes in operating assets and liabilities:
|
| | | | | | |
|
Increase in accured expense
|
| | | | 2,408 | | |
|
Increase in deferred offering costs
|
| | | | (1,733) | | |
|
Net cash provided by operating activities
|
| | | | — | | |
|
Net change in cash
|
| | | | — | | |
|
Cash at beginning of period
|
| | | | — | | |
|
Cash at end of period
|
| | | $ | — | | |
| Supplemental Schedule of Non-Cash Financing Activities: | | | | | | | |
|
Offering costs paid by Sponsor in exchange for Founder Shares
|
| | | $ | 25,000 | | |
|
Deferred offering costs included in accrued expenses
|
| | | $ | 1,733 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 36,015 | | | | | $ | 117,908 | | |
Cash reserved for users
|
| | | | 137,165 | | | | | | 111,698 | | |
Receivables reserved for users
|
| | | | 21,784 | | | | | | 21,334 | | |
Prepaid expenses and other current assets
|
| | | | 11,456 | | | | | | 11,233 | | |
Total current assets
|
| | | | 206,420 | | | | | | 262,173 | | |
Property and equipment, net
|
| | | | 26,039 | | | | | | 14,102 | | |
Intangible assets, net
|
| | | | 20,988 | | | | | | 16,876 | | |
Goodwill
|
| | | | 4,738 | | | | | | 4,738 | | |
Deposits
|
| | | | 1,654 | | | | | | 1,504 | | |
Total assets
|
| | | $ | 259,839 | | | | | $ | 299,393 | | |
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | | $ | 68,108 | | | | | $ | 56,149 | | |
Liabilities to users
|
| | | | 158,949 | | | | | | 132,769 | | |
Term note, current portion
|
| | | | 3,750 | | | | | | 3,750 | | |
Settlement liability, current portion
|
| | | | 2,977 | | | | | | 3,272 | | |
Total current liabilities
|
| | | | 233,784 | | | | | | 195,940 | | |
Other long-term liabilities
|
| | | | 56,721 | | | | | | 27,403 | | |
Total liabilities
|
| | | $ | 290,505 | | | | | $ | 223,343 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Commitments and Contingencies (Note 13) | | | | | | | | | | | | | |
Stockholders’ Deficit: | | | | | | | | | | | | | |
Series E-1 Redeemable Convertible Preferred Stock, $0.001 par value; 54,901 shares authorized, issued and outstanding at September 30, 2019 and December 31, 2018; liquidation preference of $120,943 as of September 30, 2019 and December 31, 2018
|
| | | | 119,671 | | | | | | 119,427 | | |
Series F Redeemable Convertible Preferred Stock, $0.001 par value; 78,445
shares authorized at September 30, 2019 and December 31, 2018, respectively, 55,349 and 57,068 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively; liquidation preference of $141,117 and $145,499 as of September 30, 2019 and December 31, 2018, respectively |
| | | | 138,453 | | | | | | 141,850 | | |
Total Redeemable Convertible Preferred Stock
|
| | | | 258,124 | | | | | | 261,277 | | |
Stockholders’ Deficit: | | | | | | | | | | | | | |
Common stock, $0.001 par value 735,000 shares authorized as of September 30,
2019 and December 31, 2018; 388,764 and 384,009 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively |
| | | | 389 | | | | | | 384 | | |
Additional paid-in capital
|
| | | | 680,958 | | | | | | 670,439 | | |
Accumulated deficit
|
| | | | (970,137) | | | | | | (856,050) | | |
Total Stockholders’ Deficit
|
| | | | (288,790) | | | | | | (185,227) | | |
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
|
| | | $ | 259,839 | | | | | $ | 299,393 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | |
Cost of revenue
|
| | | | 64,718 | | | | | | 26,576 | | |
Sales and marketing
|
| | | | 124,867 | | | | | | 107,127 | | |
Product and technology
|
| | | | 39,645 | | | | | | 22,897 | | |
General and administrative
|
| | | | 78,181 | | | | | | 52,039 | | |
Loss from operations
|
| | | | (115,416) | | | | | | (75,623) | | |
Interest income, net
|
| | | | 1,364 | | | | | | 537 | | |
Loss before income tax expense
|
| | | | (114,052) | | | | | | (75,086) | | |
Income tax expense
|
| | | | 35 | | | | | | 63 | | |
Net loss
|
| | | $ | (114,087) | | | | | $ | (75,149) | | |
| | |
Convertible
Redeemable Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balances at December 31, 2017
|
| | | | 54,901 | | | | | $ | 119,009 | | | | | | 379,932 | | | | | $ | 380 | | | | | $ | 661,085 | | | | | $ | (779,830) | | | | | $ | (118,365) | | |
Issuance of Series F Redeemable Convertible Preferred Stock
|
| | | | 37,448 | | | | | | 92,676 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 2,385 | | | | | | 2 | | | | | | 434 | | | | | | — | | | | | | 436 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 892 | | | | | | 1 | | | | | | 1,146 | | | | | | — | | | | | | 1,147 | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 383 | | | | | | | | | | | | | | | | | | (383) | | | | | | | | | | | | (383) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,376 | | | | | | — | | | | | | 5,376 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | (75,149) | | | | | | (75,149) | | |
Balances at September 30, 2018
|
| | | | 92,349 | | | | | $ | 212,068 | | | | | | 383,209 | | | | | | 383 | | | | | | 667,658 | | | | | | (854,979) | | | | | | (186,938) | | |
Balance at December 31, 2018
|
| | | | 111,969 | | | | | | 261,277 | | | | | | 384,009 | | | | | | 384 | | | | | | 670,439 | | | | | | (856,050) | | | | | | (185,227) | | |
Issuance of Series F Redeemable Convertible Preferred Stock
|
| | | | 2,879 | | | | | | 7,804 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 2,145 | | | | | | 2 | | | | | | 723 | | | | | | — | | | | | | 725 | | |
Common Stock Issued
|
| | | | — | | | | | | — | | | | | | 1,906 | | | | | | 2 | | | | | | 437 | | | | | | — | | | | | | 439 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 704 | | | | | | 1 | | | | | | 1,167 | | | | | | — | | | | | | 1,168 | | |
Repurchase of Series F Preferred
Stock |
| | | | (4,598) | | | | | | (11,722) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 765 | | | | | | — | | | | | | — | | | | | | (765) | | | | | | — | | | | | | (765) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,519 | | | | | | — | | | | | | 8,519 | | |
Issuance of warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 438 | | | | | | — | | | | | | 438 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (114,087) | | | | | | (114,087) | | |
Balances at September 30, 2019
|
| | | | 110,250 | | | | | $ | 258,124 | | | | | | 388,764 | | | | | $ | 389 | | | | | $ | 680,958 | | | | | $ | (970,137) | | | | | $ | (288,790) | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net loss
|
| | |
$
|
(114,087)
|
| | | | $ | (75,149) | | |
Adjustments to reconcile net loss to cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | |
|
9,629
|
| | | | | 4,757 | | |
Non-cash rent expense
|
| | |
|
325
|
| | | | | 37 | | |
Non-cash interest expense
|
| | |
|
16
|
| | | | | 24 | | |
Loss on exit activities
|
| | |
|
179
|
| | | | | — | | |
Loss on disposal of fixed assets
|
| | |
|
730
|
| | | | | — | | |
Stock-based compensation expense
|
| | |
|
8,519
|
| | | | | 5,376 | | |
Issuance of warrants
|
| | |
|
438
|
| | | | | — | | |
Advertising expense paid through issuance of Common Stock
|
| | |
|
1,168
|
| | | | | 1,147 | | |
Deferred income taxes
|
| | |
|
27
|
| | | | | 25 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Cash reserved for users
|
| | |
|
(25,467)
|
| | | | | (14,257) | | |
Receivables reserved for users
|
| | |
|
(450)
|
| | | | | (3,486) | | |
Prepaid expenses and other current assets
|
| | |
|
(223)
|
| | | | | (3,067) | | |
Deposits
|
| | |
|
(150)
|
| | | | | 893 | | |
Accounts payable and accrued expenses
|
| | |
|
11,764
|
| | | | | 7,379 | | |
Other long-term liability
|
| | |
|
17,966
|
| | | | | 7,581 | | |
Settlement liability
|
| | |
|
(295)
|
| | | | | (1,255) | | |
Liabilities to users
|
| | |
|
26,180
|
| | | | | 17,823 | | |
Acquisition of state licenses
|
| | |
|
(437)
|
| | | | | (53) | | |
Net cash used in operating activities
|
| | | | (64,168) | | | | | | (52,225) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | |
|
(15,892)
|
| | | | | (3,972) | | |
Capitalization of internal-use software costs
|
| | |
|
(10,079)
|
| | | | | (9,739) | | |
Net cash used in investing activities
|
| | | | (25,971) | | | | | | (13,711) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Repayment of notes payable
|
| | |
|
—
|
| | | | | (1,250) | | |
Net proceeds from issuance of common stock
|
| | |
|
439
|
| | | | | — | | |
Net proceeds from issuance of Series F redeemable convertible Preferred Stock
|
| | |
|
7,804
|
| | | | | 92,676 | | |
Repurchase of Preferred Stock
|
| | |
|
(722)
|
| | | | | — | | |
Proceeds from exercise of stock options
|
| | |
|
725
|
| | | | | 436 | | |
Net cash provided by financing activities
|
| | | | 8,246 | | | | | | 91,862 | | |
Net Increase (Decrease) in Cash
|
| | | | (81,893) | | | | | | 25,926 | | |
Cash at Beginning of Year
|
| | | | 117,908 | | | | | | 49,267 | | |
Cash at End of Period
|
| | | $ | 36,015 | | | | | $ | 75,193 | | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | | | | | | | | | | | | | |
Non-cash Redemption of Series F redeemable convertible preferred to stock through issuance of Promissory Note
|
| | |
$
|
11,000
|
| | | | $ | 0 | | |
Accretion of preferred stock
|
| | |
$
|
765
|
| | | | $ | 383 | | |
Supplemental Disclosure of Cash Activities: | | | | | | | | | | | | | |
Cash paid for interest
|
| | |
$
|
184
|
| | | | $ | 202 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Computer equipment and software
|
| | | $ | 9,357 | | | | | $ | 5,537 | | |
Furniture and fixtures
|
| | | | 5,845 | | | | | | 4,018 | | |
Leasehold improvements
|
| | | | 16,945 | | | | | | 7,924 | | |
Property and Equipment
|
| | | | 32,147 | | | | | | 17,479 | | |
Accumulated depreciation
|
| | | | (6,108) | | | | | | (3,377) | | |
Property and Equipment, net
|
| | | $ | 26,039 | | | | | $ | 14,102 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| |
—
|
| | | $ | 3,328 | | | | | $ | (3,328) | | | | | $ | — | | |
Internally developed software
|
| |
1.80 years
|
| | | | 39,016 | | | | | | (18,342) | | | | | | 20,674 | | |
State licenses
|
| |
.75 years
|
| | | | 688 | | | | | | (374) | | | | | | 314 | | |
| | | | | | | $ | 43,032 | | | | | $ | (22,044) | | | | | $ | 20,988 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| |
.5 years
|
| | | $ | 3,328 | | | | | $ | (3,013) | | | | | $ | 315 | | |
Internally developed software
|
| |
1.91 years
|
| | | | 28,937 | | | | | | (12,572) | | | | | | 16,365 | | |
State licenses
|
| |
.75 years
|
| | | | 251 | | | | | | (55) | | | | | | 196 | | |
| | | | | | | $ | 32,516 | | | | | $ | (15,640) | | | | | $ | 16,876 | | |
Years ending December 31,
|
| | | | | | |
2019 (remaining three months)
|
| | | $ | 2,548 | | |
2020
|
| | | | 7,847 | | |
2021
|
| | | | 5,369 | | |
2022
|
| | | | 5,224 | | |
Total | | | | $ | 20,988 | | |
| | |
At September 30,
|
| |
At December 31,
|
| ||||||
| | |
2019
|
| |
2018
|
| ||||||
Accounts payable
|
| | | $ | 15,135 | | | | | $ | 11,626 | | |
Accrued marketing fees
|
| | | | 13,948 | | | | | | 3,237 | | |
Accrued payroll and related expenses
|
| | | | 13,062 | | | | | | 9,857 | | |
Accrued litigation, lobbying & compliance
|
| | | | 5,375 | | | | | | 5,566 | | |
Accrued partnership fees
|
| | | | 4,881 | | | | | | 4,340 | | |
Accrued loyalty points
|
| | | | 4,376 | | | | | | 7,272 | | |
Accrued other
|
| | | | 4,561 | | | | | | 7,269 | | |
Accrued operating taxes
|
| | | | 3,510 | | | | | | 2,741 | | |
Accrued professional fees
|
| | | | 2,114 | | | | | | 1,978 | | |
Accrued software licenses
|
| | | | 1,146 | | | | | | 2,263 | | |
Accounts payable and accrued expenses
|
| | | $ | 68,108 | | | | | $ | 56,149 | | |
(in thousands)
|
| |
Preferred Shares
Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying Value
|
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,671 | | |
Series F redeemable convertible preferred stock
|
| | | | 78,445 | | | | | | 55,349 | | | | | $ | 138,453 | | |
Total
|
| | | | 133,346 | | | | | | 110,250 | | | | | $ | 258,124 | | |
(in thousands)
|
| |
Preferred Shares
Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying Value
|
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,427 | | |
Series F redeemable convertible preferred stock
|
| | | | 78,445 | | | | | | 57,068 | | | | | $ | 141,850 | | |
Total
|
| | | | 133,346 | | | | | | 111,969 | | | | | $ | 261,277 | | |
|
In thousands
|
| |
Number of
Shares |
| |
Weighted
Average Exercise Price |
| |
Weighted Average
Remaining Contractual Term (years) |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Outstanding at December 31, 2017
|
| | | | 61,562 | | | | | $ | 0.51 | | | | | | 8.00 | | | | | $ | 32,401 | | |
Granted – Time Vesting
|
| | | | 13,564 | | | | | | 1.23 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | 5,320 | | | | | | 1.16 | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 35,058 | | | | | | 1.16 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (2,297) | | | | | | 0.25 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (1,171) | | | | | | 0.84 | | | | | | | | | | | | | | |
Forfeited – PSP
|
| | | | (159) | | | | | | 1.16 | | | | | | | | | | | | | | |
Outstanding at December 31, 2018
|
| | | | 111,877 | | | | | $ | 0.84 | | | | | | 8.15 | | | | | $ | 69,765 | | |
Granted – Time Vesting
|
| | | | 15,874 | | | | | | 1.65 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | 6,263 | | | | | | 1.66 | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 5,250 | | | | | | 1.66 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (2,131) | | | | | | 0.34 | | | | | | | | | | | | | | |
Exercised – PSP
|
| | | | (44) | | | | | | 1.16 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (1,007) | | | | | | 1.17 | | | | | | | | | | | | | | |
Forfeited – PSP
|
| | | | (54) | | | | | | 1.23 | | | | | | | | | | | | | | |
Outstanding at September 30, 2019
|
| | | | 136,028 | | | | | $ | 1.01 | | | | | | 7.88 | | | | | $ | 90,298 | | |
Vested and Expected to Vest as of September 30, 2019
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Time Vesting
|
| | | | 75,637 | | | | | $ | 0.79 | | | | | | 6.91 | | | | | $ | 63,621 | | |
PSP
|
| | | | 5,320 | | | | | $ | 1.16 | | | | | | 8.55 | | | | | $ | 2,698 | | |
LTIP
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Nine Months ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Provision for income taxes
|
| | | $ | 35 | | | | | $ | 63 | | |
Years ending December 31,
|
| | | | | | |
2019 (remaining three months)
|
| | | $ | 1,390 | | |
2020
|
| | | | 6,702 | | |
2021
|
| | | | 6,716 | | |
2022
|
| | | | 6,903 | | |
2023
|
| | | | 6,644 | | |
Thereafter
|
| | | | 29,184 | | |
Total | | | | $ | 57,539 | | |
|
Years ending December 31,
|
| | | | | | |
2019 (remaining three months)
|
| | | $ | 26,738 | | |
2020
|
| | | | 42,992 | | |
2021
|
| | | | 41,089 | | |
2022
|
| | | | 14,720 | | |
2023
|
| | | | 5,563 | | |
Thereafter
|
| | | | 9,150 | | |
Total | | | | $ | 140,252 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
United States
|
| | | $ | 189,046 | | | | | $ | 128,408 | | |
Other
|
| | | | 2,949 | | | | | | 4,608 | | |
Total net revenue
|
| | | $ | 191,995 | | | | | $ | 133,016 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 117,908 | | | | | $ | 49,267 | | |
Cash reserved for users
|
| | | | 111,698 | | | | | | 89,065 | | |
Receivables reserved for users
|
| | | | 21,334 | | | | | | 17,247 | | |
Prepaid expenses and other current assets
|
| | | | 11,233 | | | | | | 9,019 | | |
Total current assets
|
| | | | 262,173 | | | | | | 164,598 | | |
Property and equipment, net
|
| | | | 14,102 | | | | | | 1,603 | | |
Intangible assets, net
|
| | | | 16,876 | | | | | | 10,201 | | |
Goodwill
|
| | | | 4,738 | | | | | | 4,399 | | |
Deposits
|
| | | | 1,504 | | | | | | 2,232 | | |
Total assets
|
| | | $ | 299,393 | | | | | $ | 183,033 | | |
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | | $ | 56,149 | | | | | $ | 50,363 | | |
Liabilities to users
|
| | | | 132,769 | | | | | | 106,207 | | |
Term note, current portion
|
| | | | 3,750 | | | | | | 2,500 | | |
Settlement liability, current portion
|
| | | | 3,272 | | | | | | 2,408 | | |
Total current liabilities
|
| | | | 195,940 | | | | | | 161,478 | | |
Term note, net of current portion
|
| | | | — | | | | | | 2,500 | | |
Settlement liability, net of current portion
|
| | | | — | | | | | | 3,076 | | |
Other long-term liabilities
|
| | | | 27,403 | | | | | | 15,335 | | |
Total liabilities
|
| | | $ | 223,343 | | | | | $ | 182,389 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Commitments and contingencies (Note 14) | | | | | | | | | | | | | |
Redeemable convertible preferred stock: | | | | | | | | | | | | | |
Series E-1 redeemable convertible preferred stock, $0.001 par value; 54,901 shares
authorized, issued and outstanding at December 31, 2018 and 2017; liquidation preference of $120,943 |
| | | $ | 119,427 | | | | | $ | 119,009 | | |
Series F redeemable convertible preferred stock, $0.001 par value; 78,445 shares authorized, 57,068 shares issued and outstanding at December 31, 2018; liquidation preference of $145,499 as of December 31, 2018
|
| | | | 141,850 | | | | | | — | | |
Total redeemable convertible preferred stock
|
| | | | 261,277 | | | | | | 119,009 | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Common stock, $0.001 par value 735,000 and 545,000 shares authorized as of December 31, 2018 and 2017; 384,009 and 379,932 shares issued and outstanding at December 31, 2018 and 2017
|
| | | | 384 | | | | | | 380 | | |
Additional paid-in capital
|
| | | | 670,439 | | | | | | 661,085 | | |
Accumulated deficit
|
| | | | (856,050) | | | | | | (779,830) | | |
Total stockholders’ deficit
|
| | | | (185,227) | | | | | | (118,365) | | |
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
| | | $ | 299,393 | | | | | $ | 183,033 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Revenue
|
| | | $ | 226,277 | | | | | $ | 191,844 | | |
Cost of revenue
|
| | | | 48,689 | | | | | | 31,750 | | |
Sales and marketing
|
| | | | 145,580 | | | | | | 156,632 | | |
Product and technology
|
| | | | 32,885 | | | | | | 20,212 | | |
General and administrative
|
| | | | 75,904 | | | | | | 56,448 | | |
Loss from operations
|
| | | | (76,781) | | | | | | (73,198) | | |
Other income (expenses): | | | | | | | | | | | | | |
Interest income (expense)
|
| | | | 666 | | | | | | (1,541) | | |
Other expense, net
|
| | | | — | | | | | | (607) | | |
Total other income (expenses), net
|
| | | | 666 | | | | | | (2,148) | | |
Loss before income tax expense
|
| | | | (76,115) | | | | | | (75,346) | | |
Income tax expense
|
| | | | 105 | | | | | | 210 | | |
Net loss
|
| | | $ | (76,220) | | | | | $ | (75,556) | | |
| | |
Convertible Redeemable
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balances at December 31,
2016 |
| | | | 184,499 | | | | | $ | 490,971 | | | | | | 22,291 | | | | | $ | 22 | | | | | $ | 3,998 | | | | | $ | (704,274) | | | | | $ | (700,254) | | |
Conversion of Debt to Series E Preferred Stock
|
| | | | 103,077 | | | | | | 160,928 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of Series E-1 Redeemable Convertible Preferred Stock
|
| | | | 54,901 | | | | | | 118,623 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of Series D
Redeemable Convertible Preferred Stock for In-kind Transfer |
| | | | 714 | | | | | | 1,077 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Conversion of Preferred Stock
to Common Stock |
| | | | (288,290) | | | | | | (654,103) | | | | | | 353,850 | | | | | | 354 | | | | | | 653,749 | | | | | | — | | | | | | 654,103 | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 1,233 | | | | | | 1 | | | | | | 179 | | | | | | — | | | | | | 180 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 2,558 | | | | | | 3 | | | | | | 172 | | | | | | — | | | | | | 175 | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 1,513 | | | | | | — | | | | | | — | | | | | | (1,513) | | | | | | — | | | | | | (1,513) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,500 | | | | | | — | | | | | | 4,500 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (75,556) | | | | | | (75,556) | | |
Balances at December 31,
2017 |
| | | | 54,901 | | | | | | 119,009 | | | | | | 379,932 | | | | | | 380 | | | | | | 661,085 | | | | | | (779,830) | | | | | | (118,365) | | |
Issuance of Series F Preferred
Stock |
| | | | 57,068 | | | | | | 141,590 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Exercise of Stock Options
|
| | | | — | | | | | | — | | | | | | 2,385 | | | | | | 2 | | | | | | 550 | | | | | | — | | | | | | 552 | | |
Common Stock Issued
|
| | | | — | | | | | | — | | | | | | 393 | | | | | | 1 | | | | | | 339 | | | | | | — | | | | | | 340 | | |
Issuance of Common Stock for In-kind Transfer
|
| | | | — | | | | | | — | | | | | | 1,299 | | | | | | 1 | | | | | | 1,933 | | | | | | — | | | | | | 1,934 | | |
Accretion of Preferred Stock Issuance Cost
|
| | | | — | | | | | | 678 | | | | | | — | | | | | | — | | | | | | (678) | | | | | | — | | | | | | (678) | | |
Stock-Based Compensation Expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,210 | | | | | | — | | | | | | 7,210 | | |
Net Loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (76,220) | | | | | | (76,220) | | |
Balances at December 31,
2018 |
| | | | 111,969 | | | | | $ | 261,277 | | | | | | 384,009 | | | | | $ | 384 | | | | | $ | 670,439 | | | | | $ | (856,050) | | | | | $ | (185,227) | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (76,220) | | | | | $ | (75,556) | | |
Adjustments to reconcile net loss to cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 7,499 | | | | | | 6,301 | | |
Non-cash rent expense
|
| | | | 37 | | | | | | (120) | | |
Non-cash interest expense
|
| | | | 31 | | | | | | 1,487 | | |
Stock-based compensation expense
|
| | | | 7,210 | | | | | | 4,500 | | |
Advertising expense paid through issuance of Common Stock
|
| | | | 1,934 | | | | | | 1,252 | | |
Amortization of debt discount
|
| | | | — | | | | | | 141 | | |
Gain on derivative fair value adjustment
|
| | | | — | | | | | | (184) | | |
Loss on exit activities
|
| | | | — | | | | | | 877 | | |
Loss on disposal of assets
|
| | | | — | | | | | | 185 | | |
Loss on conversion of promissory notes
|
| | | | — | | | | | | 650 | | |
Deferred income taxes
|
| | | | 19 | | | | | | 145 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Cash reserved for users
|
| | | | (22,633) | | | | | | (17,346) | | |
Receivables reserved for users
|
| | | | (4,087) | | | | | | 5,680 | | |
Prepaid expenses and other current assets
|
| | | | (2,214) | | | | | | (4,175) | | |
Deposits
|
| | | | 728 | | | | | | (133) | | |
Accounts payable and accrued expenses
|
| | | | 5,699 | | | | | | (29,793) | | |
Other long-term liabilities
|
| | | | 12,068 | | | | | | 5,307 | | |
Settlement liability
|
| | | | (2,212) | | | | | | 783 | | |
Liabilities to users
|
| | | | 26,562 | | | | | | 11,562 | | |
Acquisition of state licenses
|
| | | | (251) | | | | | | — | | |
Net cash used in operating activities
|
| | | | (45,830) | | | | | | (88,437) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (13,683) | | | | | | (599) | | |
Capitalization of internal-use software costs
|
| | | | (12,738) | | | | | | (7,116) | | |
Net cash used in investing activities
|
| | | | (26,421) | | | | | | (7,715) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Repayment of notes payable
|
| | | | (1,250) | | | | | | — | | |
Net cost due to conversion of Series E Stock
|
| | | | — | | | | | | (272) | | |
Net proceeds due to issuance of Series E-1 Redeemable Convertible Preferred
Stock |
| | | | — | | | | | | 118,623 | | |
Net proceeds due to issuance of Series F Redeemable Convertible Preferred Stock
|
| | | | 141,590 | | | | | | — | | |
Proceeds from exercise of stock options
|
| | | | 552 | | | | | | 180 | | |
Net cash provided by financing activities
|
| | | | 140,892 | | | | | | 118,531 | | |
Net Increase in Cash
|
| | | | 68,641 | | | | | | 22,379 | | |
Cash at Beginning of Year
|
| | |
|
49,267
|
| | | |
|
26,888
|
| |
Cash at End of Year
|
| | | $ | 117,908 | | | | | $ | 49,267 | | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | | | | | | | | | | | | | |
Accretion of preferred stock
|
| | | $ | 678 | | | | | $ | 1,513 | | |
Conversion of Series A through E of preferred stock to common stock
|
| | | | — | | | | | | 654,103 | | |
Conversion of convertible notes into preferred stock
|
| | | | — | | | | | | 160,928 | | |
Common stock Issued
|
| | | | 340 | | | | | | — | | |
Supplemental Disclosure of Cash Activities: | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 261 | | | | | $ | 285 | | |
| Computer equipment and software | | | 3 years | |
| Furniture and fixtures | | | 7 years | |
| Leasehold improvements | | | Lesser of the lease terms or the estimated useful lives of the improvements, generally 1 – 10 years | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Computer equipment and software
|
| | | $ | 5,537 | | | | | $ | 1,485 | | |
Furniture and fixtures
|
| | | | 4,018 | | | | | | 1,100 | | |
Leasehold improvements
|
| | | | 7,924 | | | | | | 1,210 | | |
Property and Equipment
|
| | | | 17,479 | | | | | | 3,795 | | |
Accumulated depreciation
|
| | | | (3,377) | | | | | | (2,192) | | |
Property and Equipment, net
|
| | | $ | 14,102 | | | | | $ | 1,603 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| | 0.5 years | | | | $ | 3,328 | | | | | $ | (3,013) | | | | | $ | 315 | | |
Internally developed software
|
| | 1.91 years | | | | | 28,937 | | | | | | (12,572) | | | | | | 16,365 | | |
State Licenses
|
| | 0.75 years | | | | | 251 | | | | | | (55) | | | | | | 196 | | |
Intangible Assets, net
|
| | | | | | $ | 32,516 | | | | | $ | (15,640) | | | | | $ | 16,876 | | |
| | |
Weighted-
Average Amortization Period |
| |
Gross
Carrying Amount |
| |
Accumulated
Amortization |
| |
Net
|
| |||||||||
User relationships
|
| | 1.5 years | | | | $ | 3,328 | | | | | $ | (2,383) | | | | | $ | 945 | | |
Internally developed software
|
| | 1.96 years | | | | | 16,199 | | | | | | (6,943) | | | | | | 9,256 | | |
Intangible Assets, net
|
| | | | | | $ | 19,527 | | | | | $ | (9,326) | | | | | $ | 10,201 | | |
Year ending December 31,
|
| | | | | | |
2019
|
| | | $ | 7,738 | | |
2020
|
| | | | 5,718 | | |
2021
|
| | | | 3,420 | | |
Total | | | | $ | 16,876 | | |
|
Balance as of December 31, 2016
|
| | | $ | 4,399 | | |
|
Goodwill acquired
|
| | | | — | | |
|
Balance as of December 31, 2017
|
| | | $ | 4,399 | | |
|
Goodwill acquired
|
| | | | 339 | | |
|
Balance as of December 31, 2018
|
| | | $ | 4,738 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Accounts payable
|
| | | $ | 11,626 | | | | | $ | 13,074 | | |
Accrued payroll and related expenses
|
| | | | 9,857 | | | | | | 7,305 | | |
Accrued loyalty points
|
| | | | 7,272 | | | | | | 5,163 | | |
Accrued other
|
| | | | 7,269 | | | | | | 2,604 | | |
Accrued litigation, lobbying & compliance
|
| | | | 5,566 | | | | | | 2,205 | | |
Accrued partnership fees
|
| | | | 4,340 | | | | | | — | | |
Accrued marketing fees
|
| | | | 3,237 | | | | | | 16,638 | | |
Accrued operating taxes
|
| | | | 2,741 | | | | | | 981 | | |
Accrued software & licenses
|
| | | | 2,263 | | | | | | 197 | | |
Accrued professional fees
|
| | | | 1,978 | | | | | | 2,196 | | |
Accounts payable and accrued expenses
|
| | | $ | 56,149 | | | | | $ | 50,363 | | |
(in thousands)
|
| |
Preferred
Shares Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying Value
|
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,427 | | |
Series F redeemable convertible preferred stock
|
| | | | 78,445 | | | | | | 57,068 | | | | | | 141,850 | | |
Total | | | | | 133,346 | | | | | | 111,969 | | | | | $ | 261,277 | | |
(in thousands)
|
| |
Preferred
Shares Authorized |
| |
Preferred
Shares Issued and Outstanding |
| |
Carrying
Value |
| |||||||||
Series E-1 redeemable convertible preferred stock
|
| | | | 54,901 | | | | | | 54,901 | | | | | $ | 119,009 | | |
| | |
2018
|
| |
2017
|
| ||||||
Risk-free interest rate
|
| | | | 2.80% | | | | | | 2.06% | | |
Expected term (in years)
|
| | | | 6.11 | | | | | | 6.11 | | |
Expected volatility
|
| | | | 41.98% | | | | | | 42.70% | | |
Expected dividend yield
|
| | | | 0% | | | | | | 0% | | |
In thousands
|
| |
Number of
Shares |
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term (years) |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Outstanding at December 31, 2016
|
| | | | 44,530 | | | | | $ | 0.22 | | | | | | 8.24 | | | | | $ | 30,680 | | |
Granted – Time Vesting
|
| | | | 14,165 | | | | | | 1.22 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | — | | | | | | — | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 5,131 | | | | | | 1.04 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (1,306) | | | | | | 0.15 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (958) | | | | | | 0.61 | | | | | | | | | | | | | | |
Outstanding at December 31, 2017
|
| | | | 61,562 | | | | | $ | 0.51 | | | | | | 8.00 | | | | | $ | 32,401 | | |
Granted – Time Vesting
|
| | | | 13,564 | | | | | | 1.23 | | | | | | | | | | | | | | |
Granted – PSP
|
| | | | 5,320 | | | | | | 1.16 | | | | | | | | | | | | | | |
Granted – LTIP
|
| | | | 35,058 | | | | | | 1.16 | | | | | | | | | | | | | | |
Exercised – Time Vesting
|
| | | | (2,297) | | | | | | 0.25 | | | | | | | | | | | | | | |
Forfeited – Time Vesting
|
| | | | (1,171) | | | | | | 0.84 | | | | | | | | | | | | | | |
Forfeited – PSP
|
| | | | (159) | | | | | | 1.16 | | | | | | | | | | | | | | |
Outstanding at December 31, 2018
|
| | | | 111,877 | | | | | $ | 0.84 | | | | | | 8.15 | | | | | $ | 69,765 | | |
Vested and Expected to Vest as of December 31, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Time Vesting
|
| | | | 62,262 | | | | | $ | 0.58 | | | | | | 6.90 | | | | | $ | 52,158 | | |
PSP
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
LTIP
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
United States
|
| | | $ | (76,122) | | | | | $ | (75,445) | | |
Foreign
|
| | | | 7 | | | | | | 99 | | |
Loss before provision for (benefit from) income taxes
|
| | | $ | (76,115) | | | | | $ | (75,346) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Current: | | | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | — | | |
State
|
| | | | — | | | | | | — | | |
Foreign
|
| | | | 86 | | | | | | 65 | | |
Total current provision
|
| | | | 86 | | | | | | 65 | | |
Deferred: | | | | | | | | | | | | | |
Federal
|
| | | | 9 | | | | | | 36 | | |
State
|
| | | | 10 | | | | | | 109 | | |
Foreign
|
| | | | — | | | | | | — | | |
Total deferred provision
|
| | | | 19 | | | | | | 145 | | |
Total expense (benefit)
|
| | | $ | 105 | | | | | $ | 210 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Provision for income taxes at statutory rate
|
| | | $ | (15,984) | | | | | $ | (25,400) | | |
State taxes, net of federal benefit
|
| | | | (7,525) | | | | | | (2,769) | | |
Stock-based compensation expense
|
| | | | 430 | | | | | | 536 | | |
Non-deductible lobbying expenses
|
| | | | 1,352 | | | | | | 2,505 | | |
Change in valuation allowance
|
| | | | 21,584 | | | | | | (66,370) | | |
Impact of federal rate change on net deferred taxes
|
| | | | — | | | | | | 90,889 | | |
Other
|
| | | | 248 | | | | | | 819 | | |
Provision for income taxes
|
| | | $ | 105 | | | | | $ | 210 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Share-based compensation
|
| | | $ | 3,472 | | | | | $ | 1,587 | | |
Intangible assets
|
| | | | 187 | | | | | | 131 | | |
Fixed assets
|
| | | | 365 | | | | | | 225 | | |
Accrual & other temporary differences
|
| | | | 12,273 | | | | | | 9,793 | | |
Credit carryforwards
|
| | | | 15 | | | | | | 15 | | |
Net operating loss carryforwards
|
| | | | 203,180 | | | | | | 184,144 | | |
Total deferred tax assets:
|
| | | $ | 219,492 | | | | | $ | 195,895 | | |
Deferred tax liability: | | | | | | | | | | | | | |
Capitalized software costs
|
| | | | (4,364) | | | | | | (2,521) | | |
Total Net Deferred Tax Assets
|
| | | | 215,128 | | | | | | 193,374 | | |
Valuation allowance
|
| | | | (215,292) | | | | | | (193,519) | | |
Net deferred tax liabilities
|
| | | $ | (164) | | | | | $ | (145) | | |
|
Balance as of December 31, 2016
|
| | | $ | 184 | | |
|
Gain upon extinguishment of embedded promissory note derivative
|
| | | | (184) | | |
|
Balance as of December 31, 2017
|
| | | $ | — | | |
Years ending December 31,
|
| | | | | | |
2019
|
| | | $ | 46,910 | | |
2020
|
| | | | 17,145 | | |
2021
|
| | | | 16,514 | | |
2022
|
| | | | 3,800 | | |
2023
|
| | | | 3,413 | | |
Thereafter
|
| | | | 3,000 | | |
Total
|
| | | $ | 90,782 | | |
| | |
December 31,
|
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
United States
|
| | | $ | 219,415 | | | | | $ | 187,261 | | |
Other
|
| | | | 6,862 | | | | | | 4,583 | | |
Total net revenue
|
| | | $ | 226,277 | | | | | $ | 191,844 | | |
| | |
Note
|
| |
September 30,
2019 |
| |
December 31,
2018 |
| |||||||||
| | | | | | | | |
Unaudited
|
| | | | | | | |||
ASSETS | | | | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | | | | | | | 9,361 | | | | | | 20,731 | | |
Trade receivables, net
|
| | | | | | | | | | 18,921 | | | | | | 17,220 | | |
Other current assets
|
| | | | | | | | | | 3,833 | | | | | | 2,876 | | |
Total current assets
|
| | | | | | | | | | 32,115 | | | | | | 40,827 | | |
NON-CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | | | | | | | 25,053 | | | | | | 21,980 | | |
Right-of-use assets
|
| | | | 2 | | | | | | 24,662 | | | | | | — | | |
Property, plant and equipment, net
|
| | | | | | | | | | 10,268 | | | | | | 7,926 | | |
Deferred tax assets
|
| | | | | | | | | | 275 | | | | | | 235 | | |
Other non-current assets
|
| | | | | | | | | | 45 | | | | | | 1,688 | | |
Total non-current assets
|
| | | | | | | | | | 60,303 | | | | | | 31,829 | | |
TOTAL ASSETS
|
| | | | | | | | | | 92,418 | | | | | | 72,656 | | |
| | |
Note
|
| |
September 30,
2019 |
| |
December 31,
2018 |
| |||||||||
| | | | | | | | |
Unaudited
|
| | | | | | | |||
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | |
Trade payables
|
| | | | | | | | | | 5,717 | | | | | | 7,006 | | |
Lease liabilities
|
| | | | 2 | | | | | | 2,423 | | | | | | — | | |
Other accounts payable
|
| | | | | | | | | | 6,986 | | | | | | 6,923 | | |
Total current liabilities
|
| | | | | | | | | | 15,126 | | | | | | 13,929 | | |
NON-CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | 2 | | | | | | 22,318 | | | | | | — | | |
Accrued severance pay, net
|
| | | | | | | | | | 476 | | | | | | 278 | | |
Total non-current liabilities
|
| | | | | | | | | | 22,794 | | | | | | 278 | | |
SHAREHOLDERS’ EQUITY:
|
| | | | 3 | | | | | | | | | | | | | | |
Share capital
|
| | | | | | | | | | 3 | | | | | | 3 | | |
Actuarial reserve
|
| | | | | | | | | | (143) | | | | | | (65) | | |
Retained earnings
|
| | | | | | | | | | 53,939 | | | | | | 57,928 | | |
Equity attributable to owners of the parent
|
| | | | | | | | | | 53,799 | | | | | | 57,866 | | |
Non-controlling interest
|
| | | | | | | | | | 699 | | | | | | 583 | | |
Total equity
|
| | | | | | | | | | 54,498 | | | | | | 58,449 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | | | | | 92,418 | | | | | | 72,656 | | |
|
|
/s/ Richard Carter
Richard Carter
Chief Executive Officer |
| |
/s/ Shay Berka
Shay Berka
Chief Financial Officer |
| |
January 6, 2020
Date of approval of financial statements
|
|
| | |
Nine months period ended
September 30, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
Unaudited
|
| |||||||||
Revenue
|
| | | | 68,345 | | | | | | 69,631 | | |
Cost of revenue
|
| | | | 35,816 | | | | | | 33,247 | | |
Gross profit
|
| | | | 32,529 | | | | | | 36,384 | | |
Research and development expenses
|
| | | | 13,610 | | | | | | 8,409 | | |
Selling and marketing expenses
|
| | | | 4,383 | | | | | | 3,124 | | |
General and administrative expenses
|
| | | | 7,381 | | | | | | 5,613 | | |
Profit from operations
|
| | | | 7,155 | | | | | | 19,238 | | |
Financial income
|
| | | | 22 | | | | | | 121 | | |
Financial expenses
|
| | | | 676 | | | | | | 44 | | |
Profit before tax
|
| | | | 6,501 | | | | | | 19,315 | | |
Tax expenses
|
| | | | 297 | | | | | | 417 | | |
Net Profit
|
| | | | 6,204 | | | | | | 18,898 | | |
Other comprehensive loss: | | | | | | | | | | | | | |
Items not reclassified to profit or loss in subsequent periods | | | | | | | | | | | | | |
re-measurements of accrued severance pay
|
| | | | (155) | | | | | | (39) | | |
Total comprehensive income for the year
|
| | | | 6,049 | | | | | | 18,859 | | |
Profit for the period attributed to: | | | | | | | | | | | | | |
Owners of the parent
|
| | | | 6,011 | | | | | | 18,696 | | |
Non - controlling interest
|
| | | | 193 | | | | | | 202 | | |
| | | | | 6,204 | | | | | | 18,898 | | |
Total comprehensive income for the period attributed to: | | | | | | | | | | | | | |
Owners of the parent
|
| | | | 5,933 | | | | | | 18,676 | | |
Non - controlling interest
|
| | | | 116 | | | | | | 183 | | |
| | | | | 6,049 | | | | | | 18,859 | | |
| | |
Equity attributable to owners of the parent
|
| |
Non-
controlling interest |
| |
Total
Shareholders’ equity |
| |||||||||||||||||||||||||||
For the nine-month period ended September 30, 2019
(Unaudited) |
| |
Share
capital |
| |
Actuarial
reserve |
| |
Retained
earnings |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2019
|
| | | | 3 | | | | | | (65) | | | | | | 57,928 | | | | | | 57,866 | | | | | | 583 | | | | | | 58,449 | | |
Changes during the period: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 6,011 | | | | | | 6,011 | | | | | | 193 | | | | | | 6,204 | | |
Other comprehensive loss
|
| | | | — | | | | | | (78) | | | | | | — | | | | | | (78) | | | | | | (77) | | | | | | (155) | | |
Total comprehensive income
|
| | | | — | | | | | | (78) | | | | | | 6,011 | | | | | | 5,933 | | | | | | 116 | | | | | | 6,049 | | |
Dividend paid
|
| | | | — | | | | | | — | | | | | | (10,000) | | | | | | (10,000) | | | | | | — | | | | | | (10,000) | | |
Balance at September 30, 2019
|
| | | | 3 | | | | | | (143) | | | | | | 53,939 | | | | | | 53,799 | | | | | | 699 | | | | | | 54,498 | | |
| | |
Equity attributable to owners of the parent
|
| |
Non-
controlling interest |
| |
Total
Shareholders’ equity |
| |||||||||||||||||||||||||||
For the nine-month period ended September 30, 2018
(Unaudited) |
| |
Share
capital |
| |
Actuarial
reserve |
| |
Retained
earnings |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2018
|
| | | | 3 | | | | | | (45) | | | | | | 31,419 | | | | | | 31,377 | | | | | | 333 | | | | | | 31,710 | | |
Changes during the period: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 18,696 | | | | | | 18,696 | | | | | | 202 | | | | | | 18,898 | | |
Other comprehensive loss
|
| | | | — | | | | | | (20) | | | | | | — | | | | | | (20) | | | | | | (19) | | | | | | (39) | | |
Total comprehensive income
|
| | | | — | | | | | | (20) | | | | | | 18,696 | | | | | | 18,676 | | | | | | 183 | | | | | | 18,859 | | |
Balance at September 30, 2018
|
| | | | 3 | | | | | | (65) | | | | | | 50,115 | | | | | | 50,053 | | | | | | 516 | | | | | | 50,569 | | |
| | |
Nine months period ended
September 30, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
Unaudited
|
| |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net profit for the period
|
| | | | 6,204 | | | | | | 18,898 | | |
Adjustments to reconcile net profit to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 10,774 | | | | | | 6,255 | | |
Increase in trade receivables
|
| | | | (1,847) | | | | | | (10,554) | | |
Decrease (increase) in other current assets
|
| | | | 490 | | | | | | (1,587) | | |
Increase in other non-current assets
|
| | | | (50) | | | | | | — | | |
Decrease (increase) in deferred tax assets
|
| | | | (40) | | | | | | 56 | | |
Increase (decrease) in trade payables
|
| | | | (1,361) | | | | | | 1,055 | | |
Increase (decrease) in other non-current liabilities
|
| | | | 43 | | | | | | (110) | | |
Increase in lease liabilities
|
| | | | 468 | | | | | | — | | |
Increase (decrease) in accrued severance pay, net
|
| | | | 433 | | | | | | 1,275 | | |
Income tax expenses
|
| | | | 297 | | | | | | 417 | | |
Cash generated from operations
|
| | | | 15,411 | | | | | | 15,705 | | |
Income tax paid
|
| | | | (667) | | | | | | (395) | | |
Net cash provided by operating activities
|
| | | | 14,744 | | | | | | 15,310 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchase of property, plant and equipment
|
| | | | (4,103) | | | | | | (4,819) | | |
Purchase of software and licenses
|
| | | | (166) | | | | | | (284) | | |
Disposal of fixed assets
|
| | | | — | | | | | | 543 | | |
Increase in deposits
|
| | | | — | | | | | | (65) | | |
Repayment of loan from related party
|
| | | | — | | | | | | 1,200 | | |
Internally generated intangible assets
|
| | | | (9,786) | | | | | | (9,450) | | |
Net cash used in investing activities
|
| | | | (14,055) | | | | | | (12,875) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Dividend paid
|
| | | | (10,000) | | | | | | (338) | | |
Payment of lease liabilities
|
| | | | (2,279) | | | | | | — | | |
Repayment of loan received from related party
|
| | | | — | | | | | | (107) | | |
Net cash used in financing activities
|
| | | | (12,279) | | | | | | (445) | | |
Effects of exchange rate changes on cash and cash equivalents
|
| | | | 220 | | | | | | 75 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | (11,370) | | | | | | 2,065 | | |
Cash and cash equivalents at the beginning of the period
|
| | | | 20,731 | | | | | | 8,454 | | |
Cash and cash equivalents at the end of the period
|
| | | | 9,361 | | | | | | 10,519 | | |
| | |
Under
previous policy |
| |
The change
|
| |
Under IFRS 16
|
| |||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | |
Right-of-use assets
|
| | | | — | | | | | | 20,769 | | | | | | 20,769 | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 2,440 | | | | | | 2,440 | | |
Non-current liability: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 18,329 | | | | | | 18,329 | | |
| | |
€
|
| |||
Operating lease commitments as of December 31, 2018
|
| | | | 20,769 | | |
Weighted average incremental borrowing rate as of January 1, 2019
|
| | | | 2.98% | | |
Lease liabilities as of January 1, 2019
|
| | | | 21,388 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
| | |
September 30, 2019
|
| |||||||||
| | |
Number
of options |
| |
Weighted average
exercise price (€) |
| ||||||
Outstanding at beginning of period
|
| | | | 5,217 | | | | | | 927 | | |
Granted
|
| | | | 676 | | | | | | 10,730 | | |
Outstanding at end of period
|
| | | | 5,893 | | | | | | 2,330 | | |
|
| | |
September 30, 2018
|
| |||||||||
| | |
Number
of options |
| |
Weighted average
exercise price (€) |
| ||||||
Outstanding at beginning of period
|
| | | | 3,120 | | | | | | 130 | | |
Granted
|
| | | | — | | | | | | — | | |
Outstanding at end of period
|
| | | | 3,120 | | | | | | 130 | | |
| | |
Nine months ended
|
| |||||||||
| | |
September 30,
2019 |
| |
September 30,
2018 |
| ||||||
| | |
%
|
| |
%
|
| ||||||
Customer A
|
| | | | 47% | | | | | | 51% | | |
Customer B
|
| | | | 8% | | | | | | 8% | | |
Customer C
|
| | | | 7% | | | | | | 7% | | |
Customer D
|
| | | | 4% | | | | | | 6% | | |
Others
|
| | | | 34% | | | | | | 28% | | |
| | | | | 100% | | | | | | 100% | | |
| Tel-Aviv, Israel | | |
Ziv haft
|
|
| January 6, 2020 | | |
Certified Public Accountants (Isr.)
|
|
| | | |
BDO Member Firm
|
|
| | |
Note
|
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
| | | | | |
€ In thousands
|
| |
€ In thousands
|
| ||||||
ASSETS | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | | | | 20,731 | | | | | | 8,454 | | |
Trade receivables, net
|
| |
2
|
| | | | 17,220 | | | | | | 11,694 | | |
Restricted deposits
|
| | | | | | | — | | | | | | 250 | | |
Other current assets
|
| |
4
|
| | | | 2,876 | | | | | | 2,243 | | |
Total current assets
|
| | | | | | | 40,827 | | | | | | 22,641 | | |
NON-CURRENT ASSETS: | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| |
6
|
| | | | 21,980 | | | | | | 15,521 | | |
Property and equipment, net
|
| |
5
|
| | | | 7,926 | | | | | | 3,922 | | |
Deferred tax assets
|
| |
13
|
| | | | 235 | | | | | | 201 | | |
Other non-current assets
|
| |
7
|
| | | | 1,688 | | | | | | 1,662 | | |
Total non-current assets
|
| | | | | | | 31,829 | | | | | | 21,306 | | |
TOTAL ASSETS
|
| | | | | | | 72,656 | | | | | | 43,947 | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | |
Trade payables
|
| | | | | | | 7,006 | | | | | | 4,707 | | |
Loan from related party
|
| | | | | | | — | | | | | | 497 | | |
Other accounts payable
|
| |
8
|
| | | | 6,923 | | | | | | 5,507 | | |
Total current liabilities
|
| | | | | | | 13,929 | | | | | | 10,711 | | |
NON-CURRENT LIABILITIES: | | | | | | | | | | | | | | | | |
Accrued severance pay, net
|
| | | | | | | 278 | | | | | | 346 | | |
Total non-current liabilities
|
| | | | | | | 278 | | | | | | 346 | | |
SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | |
Share capital
|
| |
9
|
| | | | 3 | | | | | | 3 | | |
Actuarial reserve
|
| | | | | | | (65) | | | | | | (45) | | |
Retained earnings
|
| | | | | | | 57,928 | | | | | | 32,599 | | |
Equity attributable to owners of the parent
|
| | | | | | | 57,866 | | | | | | 32,557 | | |
Non-controlling interest
|
| | | | | | | 583 | | | | | | 333 | | |
Total equity
|
| | | | | | | 58,449 | | | | | | 32,890 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | | 72,656 | | | | | | 43,947 | | |
|
|
/s/ Richard Carter
Richard Carter
Chief Executive Officer |
| |
/s/ Shay Berka
Shay Berka
Chief Financial Officer |
| |
January 6, 2020
Date of approval of the
Financial statements |
|
| | |
Note
|
| |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| |||||||||
| | | | | | | | |
€ In thousands
|
| |
€ In thousands
|
| ||||||
Revenue
|
| | | | 10 | | | | | | 94,147 | | | | | | 66,087 | | |
Cost of revenue
|
| | | | 11 | | | | | | 45,087 | | | | | | 31,844 | | |
Gross profit
|
| | | | | | | | | | 49,060 | | | | | | 34,243 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Research and development expenses
|
| | | | | | | | | | 10,115 | | | | | | 8,693 | | |
Selling and marketing expenses
|
| | | | | | | | | | 3,722 | | | | | | 2,964 | | |
General and administrative expenses
|
| | | | | | | | | | 7,636 | | | | | | 5,892 | | |
Total operating expenses
|
| | | | | | | | | | 21,473 | | | | | | 17,549 | | |
Profit from operations
|
| | | | | | | | | | 27,587 | | | | | | 16,694 | | |
Financial income
|
| | | | | | | | | | 97 | | | | | | 37 | | |
Financial expense
|
| | | | | | | | | | 340 | | | | | | 177 | | |
Profit before tax
|
| | | | | | | | | | 27,344 | | | | | | 16,554 | | |
Tax expenses
|
| | | | 13 | | | | | | 565 | | | | | | 264 | | |
Net profit
|
| | | | | | | | | | 26,779 | | | | | | 16,290 | | |
Other comprehensive loss: | | | | | | | | | | | | | | | | | | | |
Items that will not be reclassified to profit or loss: | | | | | | | | | | | | | | | | | | | |
Re-measurements of accrued severance pay
|
| | | | | | | | | | 40 | | | | | | 17 | | |
Total comprehensive income for the year
|
| | | | | | | | | | 26,739 | | | | | | 16,273 | | |
Profit for the year attributed to: | | | | | | | | | | | | | | | | | | | |
Owners of the parent
|
| | | | | | | | | | 26,509 | | | | | | 16,110 | | |
Non-controlling interest
|
| | | | | | | | | | 270 | | | | | | 180 | | |
| | | | | | | | | | | 26,779 | | | | | | 16,290 | | |
Total comprehensive income for the year attributed to: | | | | | | | | | | | | | | | | | | | |
Owners of the parent
|
| | | | | | | | | | 26,489 | | | | | | 16,102 | | |
Non-controlling interest
|
| | | | | | | | | | 250 | | | | | | 171 | | |
| | | | | | | | | | | 26,739 | | | | | | 16,273 | | |
| | |
Owners of the parent
|
| |
Non-
controlling interest |
| |
Total
Shareholders’ equity |
| |||||||||||||||||||||||||||
| | |
Share
capital |
| |
Actuarial
reserve |
| |
Retained
earnings |
| |
Total
|
| ||||||||||||||||||||||||
| | |
€ In thousands
|
| |||||||||||||||||||||||||||||||||
Balance at December 31, 2016
|
| | | | 3 | | | | | | (37) | | | | | | 17,489 | | | | | | 17,455 | | | | | | 162 | | | | | | 17,617 | | |
Changes during 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 16,110 | | | | | | 16,110 | | | | | | 180 | | | | | | 16,290 | | |
Other comprehensive loss
|
| | | | — | | | | | | (8) | | | | | | — | | | | | | (8) | | | | | | (9) | | | | | | (17) | | |
Total comprehensive income for the year
|
| | | | — | | | | | | (8) | | | | | | 16,110 | | | | | | 16,102 | | | | | | 171 | | | | | | 16,273 | | |
Dividend declared (see Note 9B)
|
| | | | — | | | | | | — | | | | | | (687) | | | | | | (687) | | | | | | — | | | | | | (687) | | |
Dividend declared and paid
|
| | | | — | | | | | | — | | | | | | (313) | | | | | | (313) | | | | | | — | | | | | | (313) | | |
Balance at December 31, 2017 as previously stated
|
| | | | 3 | | | | | | (45) | | | | | | 32,599 | | | | | | 32,557 | | | | | | 333 | | | | | | 32,890 | | |
Changes in accounting policy-IFRS 9 Financial Instruments (see Note 2)
|
| | | | — | | | | | | — | | | | | | (1,180) | | | | | | (1,180) | | | | | | — | | | | | | (1,180) | | |
Balance at January 1, 2018 as restated
|
| | | | 3 | | | | | | (45) | | | | | | 31,419 | | | | | | 31,377 | | | | | | 333 | | | | | | 31,710 | | |
Changes during 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net profit
|
| | | | — | | | | | | — | | | | | | 26,509 | | | | | | 26,509 | | | | | | 270 | | | | | | 26,779 | | |
Other comprehensive loss
|
| | | | — | | | | | | (20) | | | | | | — | | | | | | (20) | | | | | | (20) | | | | | | (40) | | |
Total comprehensive income for the year
|
| | | | — | | | | | | (20) | | | | | | 26,509 | | | | | | 26,489 | | | | | | 250 | | | | | | 26,739 | | |
Balance at December 31, 2018
|
| | | | 3 | | | | | | (65) | | | | | | 57,928 | | | | | | 57,866 | | | | | | 583 | | | | | | 58,449 | | |
| | |
Note
|
| |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
| | | | | |
€ In thousands
|
| |
€ In thousands
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | |
Net profit for the year
|
| | | | | | | 26,779 | | | | | | 16,290 | | |
Adjustments required to reflect the cash flows from operating
activities: |
| | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | | | | 8,325 | | | | | | 4,222 | | |
Gain on sale of fixed assets
|
| | | | | | | (14) | | | | | | — | | |
Increase in trade receivables
|
| | | | | | | (6,706) | | | | | | (7,602) | | |
Increase in other current assets
|
| |
4
|
| | | | (1,833) | | | | | | (245) | | |
Increase (decrease) in other non-current assets
|
| |
7
|
| | | | 34 | | | | | | (46) | | |
Increase in deferred tax assets
|
| |
13
|
| | | | (34) | | | | | | (56) | | |
Increase in trade payables
|
| | | | | | | 2,402 | | | | | | 3,295 | | |
Increase (decrease) in other non-current liabilities
|
| | | | | | | (107) | | | | | | 13 | | |
Increase in other accounts payable
|
| | | | | | | 1,903 | | | | | | 2,255 | | |
Income tax expenses
|
| |
13
|
| | | | 565 | | | | | | 264 | | |
Cash generated from operations
|
| | | | | | | 31,314 | | | | | | 18,390 | | |
Income tax paid
|
| |
13
|
| | | | (365) | | | | | | (130) | | |
Net cash provided by operating activities
|
| | | | | | | 30,949 | | | | | | 18,260 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | |
Purchase of property, plant and equipment
|
| |
5
|
| | | | (5,999) | | | | | | (3,225) | | |
Disposal of fixed assets
|
| |
5
|
| | | | 169 | | | | | | — | | |
Purchase of software and licenses
|
| |
6
|
| | | | (388) | | | | | | (215) | | |
Proceeds from sale of fixed assets
|
| |
5
|
| | | | 55 | | | | | | — | | |
Decrease in restricted deposits
|
| | | | | | | 250 | | | | | | 467 | | |
Increase in deposits
|
| |
7
|
| | | | (60) | | | | | | (72) | | |
Loans granted to related party
|
| |
14
|
| | | | — | | | | | | (50) | | |
Repayment of loan from related party
|
| |
14
|
| | | | 1,200 | | | | | | — | | |
Internally generated intangible assets
|
| |
6
|
| | | | (12,611) | | | | | | (11,212) | | |
Net cash used in investing activities
|
| | | | | | | (17,384) | | | | | | (14,307) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | |
Dividend paid
|
| |
9
|
| | | | (687) | | | | | | (313) | | |
Loans received from related party
|
| |
12
|
| | | | 43 | | | | | | 503 | | |
Repayment of loan
|
| |
12
|
| | | | (540) | | | | | | — | | |
Net cash provided by (used in) financing activities
|
| | | | | | | (1,184) | | | | | | 190 | | |
Effects of exchange rate changes on cash and cash equivalents
|
| | | | | | | (104) | | | | | | (6) | | |
Net Increase in cash and cash equivalents
|
| | | | | | | 12,277 | | | | | | 4,137 | | |
Cash and cash equivalents at beginning of the year
|
| | | | | | | 8,454 | | | | | | 4,317 | | |
Cash and cash equivalents at the end of the year
|
| | | | | | | 20,731 | | | | | | 8,454 | | |
Appendix A: Non-cash activities | | | | | | | | | | | | | | | | |
Dividend declared
|
| | | | | | | — | | | | | | 687 | | |
| Level 1 | | | — | | | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
| Level 2 | | | — | | | Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly. | |
| Level 3 | | | — | | | Inputs that are not based on observable market data (valuation techniques that use inputs that are not based on observable market data). | |
Aging Schedule 31.12.2018
|
| |
Within
payment terms |
| |
0-90 days over
payment terms |
| |
90+ days over
payment terms |
| |
Total
|
| ||||||||||||
Payment option 1
|
| | | | 8,890 | | | | | | 1,366 | | | | | | 3,226 | | | | | | 13,482 | | |
Payment option 2
|
| | | | 459 | | | | | | 275 | | | | | | 3,872 | | | | | | 4,606 | | |
Total
|
| | | | 9,349 | | | | | | 1,641 | | | | | | 7,098 | | | | | | 18,088 | | |
|
Aging Schedule 31.12.2017
|
| |
Within
payment terms |
| |
0-90 days over
payment terms |
| |
90+ days over
payment terms |
| |
Total
|
| ||||||||||||
Payment option 1
|
| | | | 6,811 | | | | | | 820 | | | | | | 95 | | | | | | 7,726 | | |
Payment option 2
|
| | | | 1,007 | | | | | | 1,914 | | | | | | 1,047 | | | | | | 3,968 | | |
Total
|
| | | | 7,818 | | | | | | 2,734 | | | | | | 1,142 | | | | | | 11,694 | | |
| | |
As at
December 31, 2018 |
| |
As at
December 31, 2017 |
| ||||||
Europe
|
| | | | 9,018 | | | | | | 5,964 | | |
Rest of the world
|
| | | | 9,070 | | | | | | 5,730 | | |
Total
|
| | | | 18,088 | | | | | | 11,694 | | |
| | |
As at
December 31, 2018 |
| |
As at
December 31, 2017 |
| ||||||
Payment option 1
|
| | | | 13,481 | | | | | | 7,726 | | |
Payment option 2
|
| | | | 4,607 | | | | | | 3,968 | | |
Total
|
| | | | 18,088 | | | | | | 11,694 | | |
|
| | |
Default rate
|
| |
31.12.2018
|
| |
ECL
|
| |||||||||
Payment option 1
|
| | | | 0.62% | | | | | | 13,481 | | | | | | 84 | | |
Payment option 2
|
| | | | 17.02% | | | | | | 4,607 | | | | | | 784 | | |
Total
|
| | | | | | | | | | 18,088 | | | | | | 868 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
As January 1 under IAS 39
|
| | | | — | | | | | | — | | |
Restated through opening retained earnings
|
| | | | 1,180 | | | | | | — | | |
Decrease during the year
|
| | | | (312) | | | | | | — | | |
Total
|
| | | | 868 | | | | | | — | | |
| | |
Annual depreciation rate (%)
|
| |
Main annual depreciation rate (%)
|
| |||
Motor vehicle
|
| |
15
|
| | | | 15 | | |
Computers
|
| |
15-50
|
| | | | 33 | | |
Furniture and office equipment
|
| |
7-15
|
| | | | 15 | | |
Leasehold improvements
|
| |
Over the shorter of the term of the
lease or useful life |
| | | | 10 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Payment option 1
|
| | | | 87,277 | | | | | | 57,322 | | |
Payment option 2
|
| | | | 6,870 | | | | | | 8,765 | | |
Total revenue
|
| | | | 94,147 | | | | | | 66,087 | | |
| | |
Under
previous policy |
| |
The change
|
| |
Under
IFRS 16 |
| |||||||||
Non-current assets: | | | | | | | | | | | | | | | | | | | |
Right-of-use assets
|
| | | | — | | | | | | 20,769 | | | | | | 20,769 | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 2,440 | | | | | | 2,440 | | |
Non-current liability: | | | | | | | | | | | | | | | | | | | |
Lease liabilities
|
| | | | — | | | | | | 18,329 | | | | | | 18,329 | | |
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Prepaid expenses
|
| | | | 1,286 | | | | | | 419 | | |
Institutions
|
| | | | 567 | | | | | | 341 | | |
Related parties
|
| | | | 86 | | | | | | 1,468 | | |
Other receivables
|
| | | | 937 | | | | | | 15 | | |
Total
|
| | | | 2,876 | | | | | | 2,243 | | |
|
| | |
Leasehold
Improvements |
| |
Motor
Vehicle |
| |
Computers
|
| |
Furniture and
Office Equipment |
| |
Total
|
| |||||||||||||||
Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | 783 | | | | | | 121 | | | | | | 4,263 | | | | | | 375 | | | | | | 5,542 | | |
Additions
|
| | | | 1,601 | | | | | | — | | | | | | 3,957 | | | | | | 441 | | | | | | 5,999 | | |
Disposals
|
| | | | (10) | | | | | | (121) | | | | | | (420) | | | | | | (106) | | | | | | (657) | | |
At December 31, 2018
|
| | | | 2,374 | | | | | | — | | | | | | 7,800 | | | | | | 710 | | | | | | 10,884 | | |
Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | (79) | | | | | | (33) | | | | | | (1,338) | | | | | | (170) | | | | | | (1,620) | | |
Depreciation
|
| | | | (319) | | | | | | (18) | | | | | | (1,324) | | | | | | (124) | | | | | | (1,785) | | |
Disposals
|
| | | | 5 | | | | | | 51 | | | | | | 310 | | | | | | 81 | | | | | | 447 | | |
At December 31, 2018
|
| | | | (393) | | | | | | — | | | | | | (2,352) | | | | | | (213) | | | | | | (2,958) | | |
Net book value at December 31, 2018
|
| | | | 1,981 | | | | | | — | | | | | | 5,448 | | | | | | 497 | | | | | | 7,926 | | |
|
| | |
Leasehold
Improvements |
| |
Motor
Vehicle |
| |
Computers
|
| |
Furniture and
Office Equipment |
| |
Total
|
| |||||||||||||||
Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | 313 | | | | | | 121 | | | | | | 1,591 | | | | | | 310 | | | | | | 2,335 | | |
Additions
|
| | | | 470 | | | | | | — | | | | | | 2,690 | | | | | | 65 | | | | | | 3,225 | | |
Disposals
|
| | | | — | | | | | | — | | | | | | (18) | | | | | | — | | | | | | (18) | | |
At December 31, 2017
|
| | | | 783 | | | | | | 121 | | | | | | 4,263 | | | | | | 375 | | | | | | 5,542 | | |
Accumulated depreciation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | (46) | | | | | | (14) | | | | | | (650) | | | | | | (135) | | | | | | (845) | | |
Depreciation
|
| | | | (33) | | | | | | (19) | | | | | | (706) | | | | | | (35) | | | | | | (793) | | |
Disposals
|
| | | | — | | | | | | — | | | | | | 18 | | | | | | — | | | | | | 18 | | |
At December 31, 2017
|
| | | | (79) | | | | | | (33) | | | | | | (1,338) | | | | | | (170) | | | | | | (1,620) | | |
Net book value at December 31, 2017
|
| | | | 704 | | | | | | 88 | | | | | | 2,925 | | | | | | 205 | | | | | | 3,922 | | |
| | |
Internally generated
intangible assets |
| |
Software
and licenses |
| |
Total
|
| |||||||||
Cost | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | 20,070 | | | | | | 215 | | | | | | 20,285 | | |
Additions
|
| | | | 12,611 | | | | | | 388 | | | | | | 12,999 | | |
At December 31, 2018
|
| | | | 32,681 | | | | | | 603 | | | | | | 33,284 | | |
Accumulated Amortization | | | | | | | | | | | | | | | | | | | |
At January 1, 2018
|
| | | | (4,705) | | | | | | (59) | | | | | | (4,764) | | |
Amortization
|
| | | | (6,405) | | | | | | (135) | | | | | | (6,540) | | |
At December 31, 2018
|
| | | | (11,110) | | | | | | (194) | | | | | | (11,304) | | |
Net book value at December 31, 2018
|
| | | | 21,571 | | | | | | 409 | | | | | | 21,980 | | |
|
| | |
Internally generated
intangible assets |
| |
Software and
licenses |
| |
Total
|
| |||||||||
Cost | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | 8,858 | | | | | | — | | | | | | 8,858 | | |
Additions
|
| | | | 11,212 | | | | | | 215 | | | | | | 11,427 | | |
At December 31, 2017
|
| | | | 20,070 | | | | | | 215 | | | | | | 20,285 | | |
Accumulated Amortization | | | | | | | | | | | | | | | | | | | |
At January 1, 2017
|
| | | | (1,335) | | | | | | — | | | | | | (1,335) | | |
Amortization
|
| | | | (3,370) | | | | | | (59) | | | | | | (3,429) | | |
At December 31, 2017
|
| | | | (4,705) | | | | | | (59) | | | | | | (4,764) | | |
Net book value at December 31, 2017
|
| | | | 15,365 | | | | | | 156 | | | | | | 15,521 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Related parties (see also Note 4)*
|
| | | | 1,407 | | | | | | 1,441 | | |
Deposit
|
| | | | 281 | | | | | | 221 | | |
Total
|
| | | | 1,688 | | | | | | 1,662 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Employees, salaries and related liabilities
|
| | | | 3,684 | | | | | | 3,272 | | |
Advances from customers and deposits
|
| | | | 1,767 | | | | | | 390 | | |
Provision for vacation
|
| | | | 976 | | | | | | 813 | | |
Tax payables
|
| | | | 373 | | | | | | 307 | | |
Shareholders
|
| | | | — | | | | | | 687 | | |
Others
|
| | | | 123 | | | | | | 38 | | |
Total
|
| | | | 6,923 | | | | | | 5,507 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
| | |
Authorized
|
| |
Issued and
outstanding |
| ||||||
| | |
Amount
|
| |||||||||
Ordinary shares of USD 0.1 per share
|
| | | | 72,000 | | | | | | 40,800 | | |
|
| | |
Share Option Plan: 2018
|
| |
Share Option Plan: 2017
|
| ||||||||||||||||||
| | |
Number of
Options |
| |
Weighted Average
Exercise Price |
| |
Number of
Options |
| |
Weighted
Average Exercise Price |
| ||||||||||||
| | | | | | | | |
€
|
| | | | | | | |
€
|
| ||||||
Options outstanding at beginning of year
|
| | | | 3,120 | | | | | | 130 | | | | | | 3,120 | | | | | | 130 | | |
Changes during the year: | | | | | | | | | | | | | | | | | | | | | | | | | |
Granted
|
| | | | 2,337 | | | | | | 1,998 | | | | | | — | | | | | | — | | |
Exercised
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Cancelled
|
| | | | 240 | | | | | | 997 | | | | | | — | | | | | | — | | |
Options outstanding at end of year
|
| | | | 5,217 | | | | | | 927 | | | | | | 3,120 | | | | | | 130 | | |
| | |
For the year ended
December 31, |
| |||||||||
| | |
2018
|
| |
2017
|
| ||||||
Europe
|
| | | | 34% | | | | | | 48% | | |
Rest of the world
|
| | | | 66% | | | | | | 52% | | |
| | | | | 100% | | | | | | 100% | | |
| | |
Year ended
|
| |||||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||||||||
| | |
€
|
| |
%
|
| |
€
|
| |
%
|
| ||||||||||||
Customer A
|
| | | | 35,510 | | | | | | 38% | | | | | | 26,840 | | | | | | 41% | | |
Customer B
|
| | | | 14,300 | | | | | | 15% | | | | | | 8,950 | | | | | | 14% | | |
Customer C
|
| | | | 6,870 | | | | | | 7% | | | | | | 8,765 | | | | | | 13% | | |
| | |
Year ended
|
| |||||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||||||||
| | |
€
|
| |
%
|
| |
€
|
| |
%
|
| ||||||||||||
Customer D
|
| | | | 5,432 | | | | | | 6% | | | | | | 2,548 | | | | | | 4% | | |
Others
|
| | | | 32,035 | | | | | | 34% | | | | | | 18,984 | | | | | | 28% | | |
| | | | | 94,147 | | | | | | 100% | | | | | | 66,087 | | | | | | 100% | | |
|
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Payroll and related expenses
|
| | | | 18,934 | | | | | | 15,683 | | |
Game and data providers
|
| | | | 8,724 | | | | | | 5,600 | | |
Depreciation and amortization
|
| | | | 7,962 | | | | | | 3,972 | | |
IT
|
| | | | 3,917 | | | | | | 3,526 | | |
Agent fees
|
| | | | 2,212 | | | | | | 1,468 | | |
Others
|
| | | | 3,338 | | | | | | 1,595 | | |
Total
|
| | | | 45,087 | | | | | | 31,844 | | |
| | |
Loans from
related parties |
| |||
As of January 1, 2018
|
| | | | (497) | | |
Changes from financing cash flows: | | | | | | | |
Loan received from related party
|
| | | | (43) | | |
Exchange rate differences
|
| | | | (27) | | |
Interest
|
| | | | (28) | | |
Repayment of loan including interest
|
| | | | 595 | | |
As of December 31, 2018
|
| | | | — | | |
|
| | |
Loans from
related parties |
| |||
As of January 1, 2017
|
| | | | — | | |
Changes from financing cash flows: | | | | | | | |
Loan received from related party
|
| | | | (503) | | |
Exchange rate differences
|
| | | | 6 | | |
As of December 31, 2017
|
| | | | (497) | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Accrued severance pay, net
|
| | | | 64 | | | | | | 80 | | |
Other provisions and employee-related obligations
|
| | | | 171 | | | | | | 121 | | |
Deferred tax assets
|
| | | | 235 | | | | | | 201 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
At January 1
|
| | | | 201 | | | | | | 145 | | |
Recognized in profit and loss Tax income
|
| | | | 34 | | | | | | 56 | | |
At December 31
|
| | | | 235 | | | | | | 201 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Current tax
|
| | | | 599 | | | | | | 320 | | |
Change in deferred tax
|
| | | | (34) | | | | | | (56) | | |
Total
|
| | | | 565 | | | | | | 264 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Profit before taxation
|
| | | | 27,344 | | | | | | 16,554 | | |
Theoretical tax credit at applicable statutory 0%
|
| | | | — | | | | | | — | | |
Tax Rate difference between Isle of Man and Israeli, Bulgarian and Ukrainian subsidiaries
|
| | | | 463 | | | | | | 188 | | |
Non-allowable expenses
|
| | | | 21 | | | | | | 14 | | |
Recognition of deferred tax assets
|
| | | | (34) | | | | | | (56) | | |
Miscellaneous
|
| | | | 115 | | | | | | 118 | | |
Tax on income
|
| | | | 565 | | | | | | 264 | | |
| | |
Year ended
December 31, 2018 |
| |
Year ended
December 31, 2017 |
| ||||||
Revenue received from related party
|
| | | | 6,870 | | | | | | 8,765 | | |
Lease paid to related party
|
| | | | 480 | | | | | | 127 | | |
Salary to related parties
|
| | | | 395 | | | | | | 331 | | |
Proceeds from sale of vehicle
|
| | | | 55 | | | | | | — | | |
Interest income on loan to related party
|
| | | | (40) | | | | | | 113 | | |
Name
|
| |
Nature of transaction
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Related company
|
| |
Trade receivables, net
|
| | | | 3,823 | | | | | | 3,968 | | |
Related company
|
| | Loan granted* | | | | | 1,407 | | | | | | 2,641 | | |
Related company
|
| |
Ongoing transaction
|
| | | | — | | | | | | 216 | | |
Major shareholder
|
| |
Ongoing transaction
|
| | | | 86 | | | | | | 52 | | |
Name
|
| |
Nature of transaction
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Related company
|
| | Loan received | | | | | — | | | | | | 497 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Salary, benefits and others
|
| | | | 947 | | | | | | 814 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Not later than one year
|
| | | | 3,220 | | | | | | 1,408 | | |
Later than one year and not later five years
|
| | | | 8,089 | | | | | | 4,342 | | |
| | | | | 11,309 | | | | | | 5,750 | | |
|
| | |
Fair value through
profit or loss |
| |
Amortized cost (Loans
and receivables 2017) |
| |
Fair value through Other
comprehensive income (Available for sale 2017) |
| |||||||||||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||||||||
Cash and cash equivalents
|
| | | | — | | | | | | — | | | | | | 20,731 | | | | | | 8,454 | | | | | | — | | | | | | — | | |
Restricted deposits
|
| | | | — | | | | | | — | | | | | | — | | | | | | 250 | | | | | | — | | | | | | — | | |
Trade receivables
|
| | | | — | | | | | | — | | | | | | 17,220 | | | | | | 11,694 | | | | | | — | | | | | | — | | |
Other current and non-current assets
|
| | | | — | | | | | | — | | | | | | 2,713 | | | | | | 2,915 | | | | | | — | | | | | | — | | |
Total
|
| | | | — | | | | | | — | | | | | | 40,664 | | | | | | 23,313 | | | | | | — | | | | | | — | | |
| | |
Fair value through
profit or loss |
| |
Amortized cost
|
| ||||||||||||||||||
| | |
December 31,
2018 |
| |
December 31,
2017 |
| |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||||||||
Trade payables
|
| | | | — | | | | | | — | | | | | | 7,006 | | | | | | 4,707 | | |
Total
|
| | | | — | | | | | | — | | | | | | 7,006 | | | | | | 4,707 | | |
| | |
December 31,
2018 |
| |
December 31,
2017 |
| ||||||
Cash and cash equivalents
|
| | | | 20,731 | | | | | | 8,454 | | |
Restricted deposits
|
| | | | — | | | | | | 250 | | |
Trade receivables
|
| | | | 17,220 | | | | | | 11,694 | | |
Other current and non-current assets
|
| | | | 2,713 | | | | | | 2,915 | | |
Total
|
| | | | 40,664 | | | | | | 23,313 | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||||||||||||||||||||||||||
| | |
Assets
|
| |
Liabilities
|
| |
Total
|
| |
Assets
|
| |
Liabilities
|
| |
Total
|
| ||||||||||||||||||
NIS
|
| | | | 631 | | | | | | (523) | | | | | | 108 | | | | | | 487 | | | | | | (280) | | | | | | 207 | | |
USD
|
| | | | 868 | | | | | | (2,304) | | | | | | (1,436) | | | | | | 6 | | | | | | (1,171) | | | | | | (1,165) | | |
GBP
|
| | | | 1,796 | | | | | | (1,688) | | | | | | 108 | | | | | | 564 | | | | | | (752) | | | | | | (188) | | |
UAH
|
| | | | 14 | | | | | | (58) | | | | | | (44) | | | | | | 45 | | | | | | (47) | | | | | | (2) | | |
| | | | | 3,309 | | | | | | (4,573) | | | | | | (1,264) | | | | | | 1,102 | | | | | | (2,250) | | | | | | (1,148) | | |
| | |
December 31, 2018
|
| |
December 31, 2017
|
| ||||||
Current assets
|
| | | | 40,827 | | | | | | 22,641 | | |
Current liabilities
|
| | | | 13,929 | | | | | | 10,711 | | |
Working capital
|
| | | | 26,898 | | | | | | 11,930 | | |
| | |
Up to
3 months |
| |
Between 3 and
12 months |
| |
Between 1 and
2 years |
| |
Between 2 and
5 years |
| |
Over 5 years
|
| |||||||||||||||
At December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade and other payables
|
| | | | 12,677 | | | | | | 839 | | | | | | 413 | | | | | | — | | | | | | — | | |
Loans from related parties
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 12,677 | | | | | | 839 | | | | | | 413 | | | | | | — | | | | | | — | | |
|
| | |
Up to
3 months |
| |
Between 3 and
12 months |
| |
Between 1 and
2 years |
| |
Between 2 and
5 years |
| |
Over 5 years
|
| |||||||||||||||
At December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade and other payables
|
| | | | 4,372 | | | | | | 1,245 | | | | | | 504 | | | | | | — | | | | | | — | | |
Loans from related parties
|
| | | | — | | | | | | 497 | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | | 4,372 | | | | | | 1,742 | | | | | | 504 | | | | | | — | | | | | | — | | |
|
Name
|
| |
Country of
incorporation |
| |
Proportion of
voting rights and ordinary share capital held |
| |
Nature of business
|
| |
Held by
|
|
Gaming Tech Ltd * | | |
Israel
|
| |
50%
|
| | General and administration, marketing support and research & development | | | SBTech (Global) Limited | |
SBTech Limited — Subsidiary Bulgaria | | |
Bulgaria
|
| |
100%
|
| | Research, development and marketing support | | | SBTech (Global) Limited | |
SBTech Malta Limited
|
| |
Malta
|
| |
100%
|
| | Holder of Maltase and U.S. licenses | | | SBTech (Global) Limited | |
SBTech Cyprus Limited
|
| |
Cyprus
|
| |
100%
|
| | Holding company | | | SBTech (Global) Limited | |
Sky Star Eight Limited
|
| |
UK
|
| |
100%
|
| | Business analytics and commercial support | | | SBTech (Global) Limited | |
SBTech Gibraltar Limited | | |
Gibraltar
|
| |
100%
|
| | Commercial support and holder of Gibraltar license | | | SBTech (Global) Limited | |
SBTech UA | | |
Ukraine
|
| |
100%
|
| | Research and development | | |
SBTech Cyprus Limited
|
|
SBTech US Inc. | | |
United States
|
| |
100%
|
| | IT and Business support | | |
SBTech Malta Limited
|
|
Lucrative Green Leaf Limited | | |
Ireland
|
| |
100%
|
| |
IT & Hosting services
|
| |
SBTech Malta Limited
|
|
| | |
Gaming Tech Ltd
|
| |||||||||
| | |
31.12.2018
|
| |
31.12.2017
|
| ||||||
Current assets
|
| | | | 1,891 | | | | | | 1,846 | | |
Non — current assets
|
| | | | 1,581 | | | | | | 837 | | |
Current liabilities
|
| | | | (1,981) | | | | | | (1,670) | | |
Non — current liabilities
|
| | | | (325) | | | | | | (346) | | |
Total assets, net
|
| | | | 1,166 | | | | | | 667 | | |
NCI
|
| | | | 583 | | | | | | 333 | | |
| | |
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Term
|
| |
Section
|
|
Actual Adjustment Amount | | | 3.4(c) | |
Adverse Recommendation | | | 9.2 | |
Alternative Acquistion | | | 8.5(a) | |
Agreement | | | Preamble | |
Amended and Restated New DK Bylaws | | | 1.1(b) | |
Amended and Restated New DK Charter | | | 1.1(b) | |
Amended Plan | | | 3.3(d)(ii) | |
Appointment Notice | | | 3.5(d)(ii) | |
A&R DK Charter | | | 1.6(b) | |
Assumed DK Stock Plans | | | 2.3(d) | |
Basket Amount | | | 10.2(c)(ii) | |
Burdensome Condition | | | 9.4(c) | |
Cancelled Shares | | | 2.1(b) | |
Cap | | | 10.2(c)(i) | |
Cashed-Out SBT Options | | | 3.3(a) | |
Certificate of Merger | | | 1.2(a) | |
Chosen Courts | | | 14.8 | |
Claim Notice | | | 10.4(a) | |
Claimed Amount | | | 3.6(f) | |
Class A DEAC Shares | | | 7.2(a) | |
Class B DEAC Shares | | | 7.2(a) | |
Closing Date | | | 1.5 | |
Closing Date Lockup Shares | | | 3.6(c) | |
Closing | | | 1.5 | |
Collected Amount Purchase Price | | | 9.11(b) | |
Collected Amount | | | 9.11(b) | |
Continuing Employees | | | 9.10(b) | |
DEAC Audited Financial Statements | | | 7.9(a) | |
DEAC Balance Sheet Date | | | 7.9(a) | |
DEAC Board | | | Recital | |
DEAC Cap Expenses | | | 7.13 | |
DEAC Disclosure Letter | | | Article VII | |
DEAC Earnout Shares | | | 1.8(a) | |
DEAC Financial Statements | | | 7.9(a) | |
DEAC NewCo Common Stock | | | 7.2(c) | |
DEAC NewCo | | | Recital | |
DEAC Record Date | | | 9.1(a) | |
DEAC SEC Reports | | | 7.8 | |
DEAC Shares | | | 7.2(a) | |
DEAC Special Meeting | | | 9.2 | |
DEAC Stockholder Approvals | | | 7.3(a) | |
Term
|
| |
Section
|
|
DEAC Trustee | | | 8.6 | |
DEAC Unaudited Financial Statements | | | 7.9(a) | |
DEAC Warrant | | | 7.2(a) | |
DEAC | | | Preamble | |
DGCL | | | 1.1(a) | |
Disagreement Notice | | | 3.5(d)(i) | |
Disclosure Letters | | | 14.14 | |
DK | | | Preamble | |
DK Audited Financial Statements | | | 6.4(a) | |
DK Balance Sheet Date | | | 6.4(a) | |
DK Board | | | Recital | |
DK Book-Entry Shares | | | 2.2(a) | |
DK Class A Common Stock | | | 1.6(b) | |
DK Class B Common Stock | | | 1.6(b) | |
DK Charter | | | Recital | |
DK Certificates | | | 2.2(a) | |
DK Continuing Employees | | | 9.10(a) | |
DK Disclosure Letter | | | Article VI | |
DK Material Contracts | | | 6.10(a) | |
DK Merger Consideration | | | 2.1(c) | |
DK Merger Effective Time | | | 1.2(a) | |
DK Merger | | | Recital | |
DK Option | | | 2.3 | |
DK/SBT Earnout Group | | | 1.8(a) | |
DK Earnout Shares | | | 1.8(a) | |
DK/SBT Escrowed Earnout Shares | | | 1.8(a) | |
DK Securities | | | 6.2(a) | |
DK Share Exchange Ratio | | | 2.1(c) | |
DK Stockholder Consent | | | 9.16(a) | |
DK Stockholder Notice | | | 9.16(b) | |
Draft SBT Net Debt Statement | | | 3.5(a) | |
Draft SBT Working Capital Statement | | | 3.5(a) | |
Dual Class Structure | | | Recital | |
Earnout Escrow Account | | | 1.8(b)(i) | |
Earnout Escrow Agent | | | 1.8(b)(i) | |
Earnout Escrow Agreement | | | 1.8(b)(i) | |
Equity Investors | | | Recital | |
Escrow Agreement | | | Section 7.14(c) | |
Escrow Fund | | | 3.6(b) | |
Estimated Adjustment Amount | | | 3.4(c) | |
Exchange Agent | | | 2.2(a) | |
Exchange Fund | | | 2.2(a) | |
Exchanged DK Option | | | 2.3(a) | |
Term
|
| |
Section
|
|
Export and Sanctions Regulations | | | 4.22 | |
Final Release Date | | | 3.6(c) | |
Final Released Amount | | | 3.6(f) | |
Former Founder Shares | | | 1.8(a) | |
Indemnified Parties | | | 9.5(a) | |
Indemnified Party | | | 10.4(a) | |
Independent Accountant | | | 1.8(b)(ii) | |
Initial Release Date | | | 3.6(f) | |
Initial Released Amount | | | 3.6(f) | |
Initial SBT Cash Consideration | | | 3.2(a)(G) | |
Interim Option Ruling | | | 13.2(b) | |
Last Comments Date | | | 3.5(g)(ii) | |
Lockup End Date | | | 3.6(c) | |
Lockup Shares | | | 3.6(c) | |
Material Adverse Effect | | | 10.2(a)(i) | |
Material | | | 10.2(a)(i) | |
Merger Sub Common Stock | | | 7.2(b) | |
Merger Sub | | | Preamble | |
NASDAQ Listing Application | | | 9.9 | |
Nevada Articles of Merger | | | 1.1(a) | |
New DK Board of Directors | | | 1.7(a) | |
New DK Indemnified Parties | | | 10.2(a) | |
New DK | | | Recital | |
Nonparty | | | 10.8(b) | |
NRS | | | 1.1(a) | |
NV Merger | | | Recital | |
NV Merger Effective Time | | | 1.1(a) | |
Option Tax Ruling | | | 13.2(b) | |
Outside Date | | | 12.1(b)(i) | |
Owned IT Systems | | | 4.16 | |
Parties | | | Preamble | |
Party | | | Preamble | |
Paying Agent Agreement | | | 3.4(a) | |
Payor | | | 13.6 | |
Per Claim Amount | | | 10.2(c)(iii) | |
Permitted Transfer | | | 3.6(c) | |
Pre-Closing Tax Return | | | 13.4 | |
Promissory Notes | | | 9.15(c) | |
Proxy Statement/Prospectus | | | 9.1(a) | |
Release Date | | | 3.6(f) | |
Release Notice | | | 1.8(b)(ii) | |
Released Amount | | | 3.6(f) | |
Relevant SBT Contractor | | | 4.11(n) | |
Term
|
| |
Section
|
|
Relevant SBT Employee | | | 4.11(a) | |
Resolved | | | 3.6(i) | |
Restraints | | | 11.1(d) | |
Rolled-Over SBT Options | | | 3.3(b) | |
SBT | | | Preamble | |
SBT Audited Financial Statements | | | 4.4(a) | |
SBT Balance Sheet Date | | | 4.4(a) | |
SBT Board | | | Recital | |
SBT Cash Amount | | | 3.1(a)(i) | |
SBT Cash Consideration | | | 3.1(vi) | |
SBT Consideration Shares | | | 3.1(c) | |
SBT Continuing Employees | | | 9.10(a) | |
SBT Disclosure Letter | | | Article IV | |
SBT Employee | | | 4.11(b) | |
SBT Financial Documents | | | 4.19(a) | |
SBT Financial Facilities | | | 4.19(a) | |
SBT Grantees | | | Section 9.10(c) | |
SBT Group Lease Documents | | | 4.17(b) | |
SBT Group Properties | | | 4.17(a) | |
SBT Material Contracts | | | 4.10(a) | |
SBT Option Waiver Letter | | | 3.3(a) | |
SBT Pre-Closing Restructuring | | | 8.7 | |
SBT Policies | | | 4.20 | |
SBT Seller Representative Indemnitees | | | 9.12(f) | |
SBT Sellers | | | Preamble | |
SBT Sellers’ Representative | | | 9.12(a) | |
SBT Shares | | | 4.2(a) | |
SBT Unaudited Financial Statements | | | 4.4(c) | |
SBT Warrants Value | | | 9.15(b) | |
Schemes | | | 4.11(b) | |
Second Released Amount | | | 3.6(f) | |
Second Released Date | | | 3.6(f) | |
Seller Controlled Audit | | | 13.5 | |
Subscription Agreement | | | Section 7.14(c) | |
Surviving Company | | | 1.2(b) | |
Third Party Claim Expenses | | | 10.4(b)(iv) | |
Third Party Claim | | | 10.4(b) | |
Third Party Target | | | 7.17 | |
Third Released Amount | | | 3.6(f) | |
Third Released Date | | | 3.6(f) | |
Transaction Proposals | | | 9.2 | |
Transactions | | | Recital | |
Transferor | | | 3.6(c) | |
Term
|
| |
Section
|
|
Trust Account | | | 7.10 | |
Trust Agreement | | | 7.10 | |
U.S. GAAP | | | 6.4(a) | |
UKGC | | | 4.6(c) | |
Unclaimed Amount | | | 3.6(f) | |
104H Trustee | | | 1.8(a) | |
By:
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Name: |
|
Number of Subscribed Shares subscribed for:
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| | | | | | |
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Price Per Subscribed Share:
|
| | | $ | 10.00 | | |
|
Aggregate Purchase Price:
|
| | | $ | | | |
| DRAFTKINGS INC. | | ||||||
| By: | | | | | |||
| | | | Name: | | | ||
| | | | Title: | | |
| | | | DEAC NV Merger Corp. | | |||
| | | | By: | | |
/s/ Jeff Sagansky
|
|
| | | | | | | Name: Jeff Sagansky | |
| | | | | | | Title: President and Chairman | |
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Signature
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| |
Title
|
| |
Date
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/s/ Jeff Sagansky
Jeff Sagansky
|
| |
President and Chairman
(Principal Executive Officer) |
| |
January 6, 2020.
|
|
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/s/ Eli Baker
Eli Baker
|
| |
Secretary and Vice Chairman
(Principal Financial and Accounting Officer) |
| |
January 6, 2020.
|
|
Exhibit 3.1
DOMESTIC CORPORATION (78) CHARTER I, BARBARA K. CEGAVSKE, the duly qualified and elected Nevada Secretary of State, do hereby certify that DEAC NV Merger Corp. did, on 12/13/2019, file in this office the original ARTICLES OF INCORPORATION-FOR-PROFIT that said document is now on file and of record in the office of the Secretary of State of the State of Nevada, and further, that said document contains all the provisions required by the law of the State of Nevada IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of State, at my office on 12/13/2019. Certificate Number: B20191213437941 BARBARA K. CEGAVSKE You may verify this certificate Secretary of State online at http://www.nvsos.gov
Filed in the Office of Barbara K. Cegavske Secretary of State State Of Nevada Business Number E3504642019-1 Filing Number 20190350463 Filed On 12/13/2019 9:20:00 AM Number of Pages 2 BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov ABOVE SPACE IS FOR OFFICE USE ONLY Formation - Profit Corporation [X] NRS 78 - Articles of Incorporation Domestic Corporation [ ] NRS 80 - Foreign Corporation [ ] NRS 89 - Articles of Incorporation Professional Corporation [ ] 78A Formation - Close Corporation (Name of Close Corporation MUST appear in the below heading) Articles of Formation of ____________________________ a close corporation (NRS 78A) TYPE OR PRINT - USE DARK INK ONLY - DO NOT HIGHLIGHT 1. Name of Entity: (If foreign, name in home jurisdiction) DEAC NV Merger Corp. 2. Registered Agent for Service of Process: (Check only one box) [X] Commercial Registered Agent: (name only below) [ ] Noncommercial Registered Agent (name and address below) [ ] Office or Position with Entity (title and address below) Corporation Service Company Name of Registered Agent OR Title of Office of Position with Entity Nevada Street Address City Zip Code Nevada Mailing Address (if different from street address) City Zip Code 2a. Certificate of Acceptance of Appointment of Registered Agent: I hereby accept appointment as Registered Agent for the above named Entity. If the registered agent is unable to sign the Articles of Incorporation, submit a separate signed Registered Agent Acceptance form. Miranda Groom 12/13/2019 X ________________ Authorized Signature of Registered Agent or On Behalf of Registered Agent Entity Date 3. Governing Board: (NRS 78A, close corporation only, check one box: if yes, complete article 4 below) This corporation is a close corporation operating with a board of directors [ ] Yes OR [X] No 4. Names and Addresses of the Board of Directors/Trustees or Stockholders (NRS 78: Board of Directors/Trustees is required. NRS 78a: Required if the Close Corporation is governed by a board of directors. NRS 89: Required to have the Original stockholders and directors. A certificate from the regulatory board must be submitted showing that each individual is licensed at the time of filing. See instructions) 1) Eli Baker USA Name Country 2121 Avenue of the Stars, Suite 2300 Los Angeles CA 90067 Street Address City State Zip/Postal Code 2) Jeffrey Sagansky USA Name Country 2121 Avenue of the Stars, Suite 2300 Los Angeles CA 90067 Street Address City State Zip/Postal Code 3) Name Country Street Address City State Zip/Postal Code 5. Jurisdiction of Incorporation: (NRS 80 only) 5a. Jurisdiction of incorporation: Nevada 5b. I declare this entity is in good standing in the jurisdiction of its incorporation. [ ] This form must be accompanied by appropriate fees. Page 1 of 2 Revised: 10/9/2019 NV001 - 11/06/2019 Walters Klawer Online
BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov www.nvsilverflume.gov Formation - Profit Corporation Continued, Page 2 6. Benefit Corporation: (For NRS 78, NRS 78A and NRS 89, optional. See instructions.) By selecting "Yes" you are indicating that the corporation is organized as a benefit corporation pursuant to NRS Chapter 78B with a purpose of creating a general or specific public benefit. The purpose for which the benefit corporation is created must be disclosed in the below purpose field. Yes [ ] 7. Purpose/Profession to be practiced: (Required for NRS 80, NRS 89 and any entity selecting Benefit Corporation. See instructions.) The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses or for any other lawful purpose. 8. Authorized Shares: (Number of shares corporation is authorized to issue) Number of Authorized shares with Par value: 1,000 Par value: $0.001 Number of Common shares with Par value: 1,000 Par value: $0.001 Number of Preferred shares with Par value: Par value: $ Number of shares with no par value: If more than one class or series of stock is authorized, please attach the information on an additional sheet of paper. 9. Name and Signature of: Officer making the statement or Authorized Signer for NRS 80. Name, Address and Signature of the Incorporator for NRS 78, 78A, and 89, NRS 89 - Each Organizer/Incorporator must be a licensed Professional. I declare, to the best of my knowledge under penalty of perjury, that the information contained here is correct and acknowledge that pursuant to NRS 239.330, it is a category C felony to knowingly offer any false or forged instrument for filing in the Office of the Secretary of State. John Secaras USA Name County Winston & Strawn LLP, 35 W. Wacker Drive Chicago IL 60601 Address City State Zip/Postal Code X John Secaras (attach additional page if necessary) AN INITIAL LIST OF OFFICERS MUST ACCOMPANY THIS FILING Please include any required or optional information in space below: (attach additional page(s) if necessary) This form must be accompanied by appropriate fees. Page 2 of 2 NV001-11/06/2019 Wolters Kluwer Online Revised: 10/9/2019
Exhibit 3.2
BY LAWS
OF
DEAC NV Merger Corp.
(THE “CORPORATION”)
ARTICLE I
OFFICES
Section 1.1. Registered Office. The registered office of the Corporation within the State of Nevada shall be located at either (a) the principal place of business of the Corporation in the State of Nevada or (b) the office of the corporation or individual acting as the Corporation’s registered agent in Nevada.
Section 1.2. Additional Offices. The Corporation may, in addition to its registered office in the State of Nevada, have such other offices and places of business, both within and outside the State of Nevada, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 2.1. Annual Meetings. The annual meeting of stockholders shall be held at such place, either within or without the State of Nevada, and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a). At each annual meeting, the stockholders entitled to vote on such matters shall elect those directors of the Corporation to fill any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought before the meeting.
Section 2.2. Special Meetings. Subject to the rights of the holders of any outstanding series of the preferred stock of the Corporation (“Preferred Stock”), and to the requirements of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the Chairman of the Board, Chief Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Board, and may not be called by any other person. Special meetings of stockholders shall be held at such place, either within or without the State of Nevada, and at such time and on such date as shall be determined by the Board and stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a).
Section 2.3. Notices. Written notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by Section 9.3 to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Corporation not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by Chapter 78 of the Nevada Revised Statutes (the “Nevada Corporations Act”). If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement thereto). Any meeting of stockholders as to which notice has been given may be postponed, and any meeting of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given before the date previously scheduled for such meeting.
Section 2.4. Quorum. Except as otherwise provided by applicable law, the Corporation’s Certificate of Incorporation, as the same may be amended or restated from time to time (the “Certificate of Incorporation”) or these By Laws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.
Section 2.5. Voting of Shares.
(a) Voting Lists. The Secretary of the Corporation (the “Secretary”) shall prepare, or shall cause the officer or agent who has charge of the stock ledger of the Corporation to prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting; provided, however, that if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address and the number and class of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as permitted by Section 9.5(a), the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.5(a) or to vote in person or by proxy at any meeting of stockholders.
(b) Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot submitted by electronic transmission (as defined in Section 9.3), provided that any such electronic transmission must either set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by the stockholder or proxy holder. The Board, in its discretion, or the chairman of the meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.
(c) Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies need not be filed with the Secretary until the meeting is called to order, but shall be filed with the Secretary before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority. No stockholder shall have cumulative voting rights.
(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
(d) Required Vote. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, at all meetings of stockholders at which a quorum is present, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Certificate of Incorporation, these By Laws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter.
(e) Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may appoint one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by the Board, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election. Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.
Section 2.6. Adjournments. Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 9.2, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
Section 2.7. Advance Notice for Business.
(a) Annual Meetings of Stockholders. No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote at such annual meeting on the date of the giving of the notice provided for in this Section 2.7(a) and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the notice procedures set forth in this Section 2.7(a). Notwithstanding anything in this Section 2.7(a) to the contrary, only persons nominated for election as a director to fill any term of a directorship that expires on the date of the annual meeting pursuant to Section 3.2 will be considered for election at such meeting.
(i) In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary and such business must otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s notice to the Secretary with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date (or if there has been no prior annual meeting), notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Corporation. The public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 2.7(a).
(ii) To be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations) must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend these By Laws, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (E) any material interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.
(iii) The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.7(a), provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.7(a) shall be deemed to preclude discussion by any stockholder of any such business. If the Board or the chairman of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions of this Section 2.7(a) or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 2.7(a), such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.7(a), if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such matter may have been received by the Corporation.
(iv) In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.
(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only pursuant to Section 3.2.
(c) Public Announcement. For purposes of these By Laws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any successor thereto).
Section 2.8. Conduct of Meetings. The chairman of each annual and special meeting of stockholders shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other person as shall be appointed by the Board. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these By Laws or such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairman of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.
ARTICLE III
DIRECTORS
Section 3.1. Powers; Number. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By Laws required to be exercised or done by the stockholders. Directors need not be stockholders or residents of the State of Nevada. Subject to the Certificate of Incorporation, the number of directors shall be fixed exclusively by resolution of the Board.
Section 3.2. Advance Notice for Nomination of Directors.
(a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect directors. Nominations of persons for election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice provided for in this Section 3.2 and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in this Section 3.2.
(b) In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date (or if there has been no prior annual meeting), notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 3.2.
(c) Notwithstanding anything in paragraph (b) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is greater than the number of directors whose terms expire on the date of the annual meeting and there is no public announcement by the Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on the 90th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice required by this Section 3.2 shall also be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement was first made by the Corporation.
(d) To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the person and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s books and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner, if any, on whose behalf the nomination is made, (C) a description of all arrangements or understandings relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed nominee and any other person or persons (including their names), (D) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
(e) If the Board or the chairman of the meeting of stockholders determines that any nomination was not made in accordance with the provisions of this Section 3.2, or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 3.2, then such nomination shall not be considered at the meeting in question. Notwithstanding the foregoing provisions of this Section 3.2, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.
(f) In addition to the provisions of this Section 3.2, a stockholder shall also comply with all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 3.2 shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.
Section 3.3. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these By Laws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board, and may be paid either a fixed sum for attendance at each meeting of the Board or other compensation as director. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on the committee.
ARTICLE IV
BOARD MEETINGS
Section 4.1. Annual Meetings. The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this Section 4.1.
Section 4.2. Regular Meetings. Regularly scheduled, periodic meetings of the Board may be held without notice at such times, dates and places (within or without the State of Nevada) as shall from time to time be determined by the Board.
Section 4.3. Special Meetings. Special meetings of the Board (a) may be called by the Chairman of the Board or President and (b) shall be called by the Chairman of the Board, President or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Nevada) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these By Laws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting. A special meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 9.4.
Section 4.4. Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these By Laws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 4.5. Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By Laws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 4.6. Organization. The chairman of each meeting of the Board shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director, a chairman elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 5.1. Establishment. The Board may by resolution of the Board designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board when required by the resolution designating such committee. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.
Section 5.2. Available Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.
Section 5.3. Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.
Section 5.4. Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these By Laws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these By Laws, each committee designated by the Board may make, alter, amend and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to Article III and Article IV of these By Laws.
ARTICLE VI
OFFICERS
Section 6.1. Officers. The officers of the Corporation elected by the Board shall be a Chief Executive Officer, a Secretary and such other officers (including without limitation, a Chairman of the Board, Presidents, Vice Presidents, Partners, Managing Directors, Senior Managing Directors, Assistant Secretaries and a Treasurer) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be provided in these By Laws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.
(a) Chairman of the Board. The Chairman of the Board shall preside when present at all meetings of the stockholders and the Board. The Chairman of the Board shall have general supervision and control of the acquisition activities of the Corporation subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the Chairman of the Board shall not include supervision or control of the preparation of the financial statements of the Corporation (other than through participation as a member of the Board). The position of Chairman of the Board and Chief Executive Officer may be held by the same person.
(b) Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent any such powers and duties have been prescribed to the Chairman of the Board pursuant to Section 6.1(a) above. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the same person.
(c) President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated by the Board. The position of President and Chief Executive Officer may be held by the same person.
(d) Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function.
(e) Secretary.
(i) The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed by the Board, the Chairman of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature.
(ii) The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates issued for the same and the number and date of certificates cancelled.
(f) Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.
(g) Treasurer. The Treasurer shall perform all duties commonly incident to that office (including, without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Treasurer’s hands and the deposit of the funds of the Corporation in such banks or trust companies as the Board, the Chief Executive Officer or the President may authorize).
Section 6.2. Term of Office; Removal; Vacancies. The elected officers of the Corporation shall be appointed by the Board and shall hold office until their successors are duly elected and qualified by the Board or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.
Section 6.3. Other Officers. The Board may delegate the power to appoint such other officers and agents, and may also remove such officers and agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.
Section 6.4. Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the Certificate of Incorporation or these By Laws otherwise provide. Officers need not be stockholders or residents of the State of Nevada.
ARTICLE VII
SHARES
Section 7.1. Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the Nevada Corporations Act.
Section 7.2. Multiple Classes of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.
Section 7.3. Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by (a) the Chairman of the Board, Chief Executive Officer, the President or a Vice President and (b) the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.
Section 7.4. Consideration and Payment for Shares.
(a) Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of any tangible or intangible property or any benefit to the Corporation including cash, promissory notes, services performed, contracts for services to be performed or other securities, or any combination thereof.
(b) Subject to applicable law and the Certificate of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.
Section 7.5. Lost, Destroyed or Wrongfully Taken Certificates.
(a) If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.
(b) If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.
Section 7.6. Transfer of Stock.
(a) If a certificate representing shares of the Corporation is presented to the Corporation with an endorsement requesting the registration of transfer of such shares or an instruction is presented to the Corporation requesting the registration of transfer of uncertificated shares, the Corporation shall register the transfer as requested if:
(i) in the case of certificated shares, the certificate representing such shares has been surrendered;
(ii) (A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as entitled to such shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares; or (C) with respect to certificated shares or uncertificated shares, the endorsement or instruction is made by any other appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;
(iii) the Corporation has received a guarantee of signature of the person signing such endorsement or instruction or such other reasonable assurance that the endorsement or instruction is genuine and authorized as the Corporation may request; and
(v) such other conditions for such transfer as shall be provided for under applicable law have been satisfied.
(b) Whenever any transfer of shares shall be made for collateral security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for registration of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.
Section 7.7. Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.
Section 7.8. Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Right to Indemnification. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding; provided, however, that, except as provided in Section 8.3 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify an Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if such proceeding (or part thereof) was authorized by the Board.
Section 8.2. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.1, an Indemnitee shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including, without limitation, attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the Nevada Corporations Act requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon the Corporation’s receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified under this Article VIII or otherwise.
Section 8.3. Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification set forth in the Nevada Corporations Act. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the Nevada Corporations Act, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation.
Section 8.4. Non-Exclusivity of Rights. The rights provided to any Indemnitee pursuant to this Article VIII shall not be exclusive of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these By Laws, an agreement, a vote of stockholders or disinterested directors, or otherwise.
Section 8.5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Nevada Corporations Act.
Section 8.6. Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation to the extent and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of Indemnitees under this Article VIII.
Section 8.7. Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these By Laws inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided however, that amendments or repeals of this Article VIII shall require the affirmative vote of the stockholders holding at least 66.7% of the voting power of all outstanding shares of capital stock of the Corporation.
Section 8.8. Certain Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interest of the Corporation for purposes of Section 78.138 of the Nevada Corporations Act.
Section 8.9. Contract Rights. The rights provided to Indemnitees pursuant to this Article VIII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.
Section 8.10. Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, each such portion of this Article VIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required under these By Laws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, if the Board has, in its sole discretion, determined that a meeting shall not be held at any place, but instead shall be held by means of remote communication pursuant to Section 9.5 hereof, then such meeting shall not be held at any place.
Section 9.2. Fixing Record Dates.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 9.2(a) at the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
Section 9.3. Means of Giving Notice.
(a) Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these By Laws notice is required to be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when actually received by the director, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation.
(b) Notice to Stockholders. Whenever under applicable law, the Certificate of Incorporation or these By Laws notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by the Nevada Corporations Act. A notice to a stockholder shall be deemed given as follows: (i) if given by hand delivery, when actually received by the stockholder, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice, (C) if by a posting on an electronic network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the giving of such separate notice, and (D) if by any other form of electronic transmission, when directed to the stockholder. A stockholder may revoke such stockholder’s consent to receiving notice by means of electronic communication by giving written notice of such revocation to the Corporation. Any such consent shall be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known to the Secretary or an Assistant Secretary or to the Corporation’s transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(c) Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process, including but not limited to transmission by telex, facsimile telecommunication, electronic mail, telegram and cablegram.
(d) Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the Nevada Corporations Act, the Certificate of Incorporation or these By Laws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.
(e) Exceptions to Notice Requirements. Whenever notice is required to be given, under the Nevada Corporations Act, the Certificate of Incorporation or these By Laws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Nevada, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
Whenever notice is required to be given by the Corporation, under any provision of the Nevada Corporations Act, the Certificate of Incorporation or these By Laws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Nevada, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to the Nevada Corporations Act. The exception in subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
Section 9.4. Waiver of Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these By Laws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice. All such waivers shall be kept with the books of the Corporation. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section 9.5. Meeting Attendance via Remote Communication Equipment.
(a) Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:
(i) participate in a meeting of stockholders; and
(ii) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and, if entitled to vote, to vote on matters submitted to the applicable stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.
(b) Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these By Laws, members of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section 9.6. Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.
Section 9.7. Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
Section 9.8. Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these By Laws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive Officer, the President, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the Chairman of the Board Chief Executive Officer, President, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.
Section 9.9. Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.
Section 9.10. Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 9.11. Books and Records. The books and records of the Corporation may be kept within or outside the State of Nevada at such place or places as may from time to time be designated by the Board.
Section 9.12. Resignation. Any director, committee member or officer may resign by giving notice thereof in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time it is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 9.13. Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairman of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.
Section 9.14. Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President, any Vice President or any officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.
Section 9.15. Amendments. The Board shall have the power to adopt, amend, alter or repeal the By Laws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the By Laws. The By Laws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting power (except as otherwise provided in Section 8.7) of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the By Laws.
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-4 of our report dated May 5, 2019, relating to the balance sheet of Diamond Eagle Acquisition Corp. as of March 31, 2019, and the related statements of operations, changes in stockholder’s equity and cash flows for the period from March 27, 2019 (date of inception) through March 31, 2019, and to the reference to our Firm under the caption “Experts” in the Registration Statement.
/s/ WithumSmith+Brown, PC | |
New York, New York | |
January 6, 2020 |
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Form S-4 of our report dated January 6, 2020, relating to the consolidated financial statements of DraftKings Inc., which is contained in that Prospectus. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
BDO USA, LLP
Boston, Massachusetts
January 6, 2020
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated January 6, 2020, relating to the consolidated financial statements of SBTech (Global) Limited LTD., which is contained in that Prospectus.
We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ Ziv Haft | |
Ziv Haft Certified Public Accountants (Isr.) BDO Member Firm |
Tel Aviv, Israel
January 6, 2020