Item 2.01. Completion of Acquisition or Disposition of Assets.
On
June 29, 2021, FCAC held a Special Meeting at which the FCAC stockholders considered and adopted, among other matters, the Merger Agreement.
On July 1, 2021, the parties to the Merger Agreement consummated the Transactions. Pursuant to the Merger Agreement, FCAC has acquired
all of the outstanding equity interests of Legacy Sharecare for approximately $3.82 billion in aggregate consideration in the form of
cash and shares of Common Stock. At Closing, Legacy Sharecare stockholders received an aggregate of 271,051,959 shares of New Sharecare
Common Stock and approximately $91.7 million in cash consideration paid on a pro rata basis with respect to Cash Electing Shares (as
defined in the Merger Agreement). As a result of the Business Combination, New Sharecare received gross proceeds of over $571 million,
prior to transaction expenses and payment of cash consideration. See also the information provided in Item 3.02 of this Current Report
on Form 8-K under the caption “Private Placement,” which is incorporated by reference into this Item 2.01.
In
addition, under the Merger Agreement, (i) each option to purchase shares of Legacy Sharecare common stock granted under any Legacy Sharecare
group stock plan that was outstanding and unexercised immediately prior to the Closing, whether or not then vested or exercisable, was
assumed by New Sharecare and converted into an option to purchase shares of New Sharecare Common Stock, (ii) each holder of Sharecare
options entitled to receive New Sharecare options also received an additional number of contingent stock options (the “contingent
options”) to acquire shares of New Sharecare Common Stock that will vest upon the earlier of the date set forth in the corresponding
New Sharecare options and, in each case with respect to one half of the additional contingent stock options, the achievement of each
of the Earnout Conditions, (iii) each vested and exercisable warrant to purchase shares of Legacy Sharecare common stock were converted
into the right to shares of New Sharecare Common Stock and (iv) each warrant to purchase shares of Legacy Sharecare common stock that
was not vested and exercisable immediately prior to the Closing was assumed by New Sharecare and converted into a warrant to purchase
shares of New Sharecare Common Stock, in each case as further described under the Merger Agreement.
In
connection with the consummation of the Business Combination, Sponsor delivered the Sponsor Earnout Shares into escrow and New
Sharecare delivered the Sharecare Earnout Shares into escrow, in each case, that are subject to forfeiture if the Earnout Conditions
are not fully satisfied. If the Earnout Conditions are fully satisfied, the Earnout Shares will be released to the Sponsor and the
Legacy Sharecare stockholders who received shares of Common Stock or contingent options as a result of the Business Combination,
respectively. For a more detailed discussion of Earnout Conditions, see the information provided in Item 1.01 of this Current Report
on Form 8-K under the caption “Earnout Escrow Agreement,” which is incorporated by reference into this Item
2.01.
Prior
to the Special Meeting, holders of 19,864,030 shares of FCAC’s Class A common stock sold in FCAC’s initial public offering
(“Public Shares”) exercised their right to redeem those shares for cash at a price of approximately $10.00 per share,
for an aggregate of approximately $198.6 million. Immediately after giving effect to the Business Combination (including as a result
of the redemptions described above), there were 333,900,179 issued and outstanding shares of Common Stock (excluding the Earnout Shares).
In addition, at the Closing, New Sharecare issued 5,000,000 shares of Series A convertible preferred stock, par value $0.0001 per share
(the “Series A Preferred Stock”), upon conversion of certain Legacy Sharecare Series D preferred stock (the “Legacy
Sharecare Series D Preferred Stock”) held by one investor in accordance with the Merger Agreement.
Upon
the Closing, FCAC’s Class A common stock and warrants ceased trading, and New Sharecare’s Common Stock and warrants began
trading on the Nasdaq Stock Market LLC (“Nasdaq”). FCAC’s public units automatically separated into their component
securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from
Nasdaq. As of the Closing Date, our directors and executive officers and affiliated entities beneficially owned approximately 34.2% of
the outstanding shares of Common Stock, and the former securityholders of FCAC beneficially owned approximately 5.8% of the outstanding
shares of Common Stock.
Cautionary
Note Regarding Forward-Looking Statements
This
Current Report on Form 8-K includes or incorporates by reference forward-looking statements regarding, among other things, the plans,
strategies and prospects, both business and financial, of New Sharecare (both before and after the Business Combination and including
Legacy Sharecare). These statements are based on the beliefs and assumptions of the management of New Sharecare (both before and after
the Business Combination and including Legacy Sharecare). Although New Sharecare believes that its plans, intentions and expectations
reflected in or suggested by these forward-looking statements are reasonable, neither Legacy Sharecare nor New Sharecare can assure
you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to
risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or
assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may
be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,”
“forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,”
“anticipates,” “possible,” “continue,” “might,” “potential” or “intends”
or similar expressions. Certain forward-looking statements are based on projections prepared by, and which are the responsibility
of, New Sharecare’s management. Ernst & Young, New Sharecare’s independent auditor, has not examined, compiled or
otherwise applied procedures with respect to the accompanying forward-looking financial information presented herein and, accordingly,
expresses no opinion or any other form of assurance on it. Forward-looking statements contained or incorporated by reference in
Current Report on Form 8-K include, but are not limited to, statements about:
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●
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the
ability of New Sharecare to realize the benefits expected from the Business Combination;
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●
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the
ability of New Sharecare to maintain the listing of the Common Stock and warrants of New
Sharecare on Nasdaq following the Business Combination;
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●
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New
Sharecare’s success in retaining or recruiting, or changes required in, its officers,
key employees or directors following the Business Combination;
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●
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the
business, operations and financial performance of New Sharecare (both before and after the
Business Combination and including Legacy Sharecare), including:
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|
o
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expectations with respect
to the financial and business performance of New Sharecare, including financial projections and business metrics and any underlying
assumptions thereunder;
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|
o
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future
business plans and growth opportunities, including revenue opportunity available from new
or existing clients and expectations regarding the enhancement of platform capabilities and
addition of new solution offerings;
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|
o
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developments
and projections relating to New Sharecare’s competitors and the digital healthcare
industry;
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o
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the
impact of the COVID-19 pandemic on Legacy Sharecare’s business and the actions
New Sharecare may take in response thereto;
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o
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expectations
regarding future acquisitions, partnerships or other relationships with third parties;
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|
o
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New
Sharecare’s future capital requirements and sources and uses of cash, including New
Sharecare’s ability to obtain additional capital in the future; and
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●
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other
factors detailed under the section entitled “Risk Factors” in this Current
Report on Form 8-K.
|
These
and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Current
Report on Form 8-K are more fully described in the information incorporated by reference under the heading “Risk Factors”
and elsewhere in the information included or incorporated by reference into this Current Report on Form 8-K. The risks and occurrence
of events described in the information incorporated by reference under the heading “Risk Factors” and other sections
of this Current Report on Form 8-K are not exhaustive and could adversely affect the business, financial condition or results of operations
New Sharecare. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can New Sharecare
assess the impact of all such risk factors on the business of New Sharecare, or the extent to which any factor or combination of factors
may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements
are not a guarantee of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All
forward-looking statements attributable to New Sharecare (both before and after the Business Combination and including Legacy Sharecare)
or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. New Sharecare undertakes
no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by law.
Business
The
business of FCAC prior to the Business Combination is described in the Proxy in the section titled “Other Information Related
to FCAC” and that information is incorporated herein by reference. The business of New Sharecare is described in the Proxy
in the section titled “Business of New Sharecare” and that information is incorporated herein by reference.
Risk
Factors
The
risk factors related to New Sharecare’s business and operations are set forth in the Proxy in the section titled “Risk
Factors—Risks Related to Sharecare” and that information is incorporated herein by reference.
Financial
Information
Reference
is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of FCAC, Legacy
Sharecare and doc.ai Incorporated (“doc.ai”). Reference is further made to the disclosure contained in the Proxy in
the sections titled “Summary Historical Financial Information of FCAC,” “Summary Historical Financial Information
of Sharecare,” “Summary Unaudited Pro Forma Condensed Combined Financial Information,” “Comparative
Historical and Unaudited Pro Forma Combined Per Share Information,” “Unaudited Pro Forma Condensed Combined Financial
Information” and “Notes to Unaudited Pro Forma Condensed Combined Financial Statements,” which are incorporated
herein by reference.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
Reference
is made to the disclosure contained in the Proxy in the sections titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations of FCAC,” “Management’s Discussion and Analysis of Financial Condition and
Results of Operations of Sharecare” and “Management’s Discussion and Analysis of Financial Condition and Results
of Operations of doc.ai,” which are incorporated herein by reference.
Quantitative
and Qualitative Disclosures about Market Risk
Reference
is made to the disclosure contained in the Proxy in the sections titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations of Sharecare —Quantitative and Qualitative Disclosures About Market Risk,” which
is incorporated herein by reference.
Properties
The
properties of New Sharecare are described in the Proxy in the section titled “Business of New Sharecare—Properties”
and that information is incorporated herein by reference.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information known to New Sharecare regarding the beneficial ownership of New Sharecare Common Stock as of
the Closing Date by:
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each
person known to New Sharecare to be the beneficial owner of more than 5% of outstanding New
Sharecare Common Stock;
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●
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each
of New Sharecare’s executive officers and directors; and
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●
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all
executive officers and directors of New Sharecare as a group.
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Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days. New Sharecare stock issuable upon exercise of options and warrants currently exercisable within
60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.
The
beneficial ownership of New Sharecare Common Stock is based on 333,900,179 shares of Common Stock issued and outstanding as of the Closing
Date (excluding the Earnout Shares).
Amounts
for each holder in the table below exclude such holder’s pro rata share of the Earnout Shares.
Unless
otherwise indicated, New Sharecare believes that each person named in the table below has sole voting and investment power with respect
to all shares of New Sharecare Common Stock beneficially owned by them.
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Number of
shares of
Common
Stock
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|
|
%
|
|
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Voting
Power
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Directors and Executive Officers
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Alan G. Mnuchin(1)(2)
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4,643,103
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1.4
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%
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1.4
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%
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Jeff Sagansky(2)
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|
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—
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|
|
|
—
|
|
|
|
—
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Jeff Arnold(3)(4)
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|
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40,739,194
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|
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12.2
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%
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|
|
12.0
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%
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John Chadwick(5)
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36,727,887
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|
|
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11.0
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%
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10.8
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%
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Ken Goulet(3)(6)
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|
|
956,699
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|
|
|
*
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|
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|
*
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Rajeev Ronanki(3)
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|
|
—
|
|
|
|
—
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|
|
|
—
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|
Dr. Sandro Galea(3)(7)
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|
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53,660
|
|
|
|
*
|
|
|
|
*
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Jeffrey Allred(3)
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|
|
406,165
|
|
|
|
*
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|
|
|
*
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Dr. Veronica Mallett(3)
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|
|
—
|
|
|
|
—
|
|
|
|
—
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Justin Ferrero(3)(8)
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|
|
12,895,117
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|
|
|
3.9
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%
|
|
|
3.8
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%
|
Dawn Whaley(3)(9)
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|
|
12,895,117
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|
|
|
3.9
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%
|
|
|
3.8
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%
|
All Directors and Executive Officers of New Sharecare as a Group (10 Individuals)(10)
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|
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114,014,987
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|
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34.2
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%
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|
|
33.6
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%
|
|
|
|
|
|
|
|
|
|
|
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5% Beneficial Owners
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|
|
|
|
|
|
|
|
|
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Claritas Capital(5)
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|
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36,727,887
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|
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11.0
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%
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|
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10.8
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%
|
|
**
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Percentage of total voting power represents voting power
with respect to all shares of Common Stock and Series A Preferred Stock (on an as converted basis), as a single class. The Series A Preferred
Stock represent less than 5% of the total voting power of New Sharecare.
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(1)
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Falcon Equity Investors LLC is the record holder of the shares
reported herein. Eagle Falcon JV Co LLC, which is controlled by Mr. Mnuchin, is the managing member of Falcon Equity Investors LLC and
has voting and investment discretion with respect to the New Sharecare Common Stock held of record by Falcon Equity Investors LLC. Eagle
Falcon JV Co LLC and Mr. Mnuchin each disclaims any beneficial ownership of the securities held by Falcon Equity Investors LLC other
than to the extent of any pecuniary interest each may have therein, directly or indirectly.
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|
(2)
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The business address of each of these stockholders is 3 Columbus
Circle, 24th Floor, New York, NY 10019.
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(3)
|
The business address of each of these stockholders is 255
East Paces Ferry Road NE, Suite 700, Atlanta, Georgia 30305.
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|
(4)
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Consists of (i) 5,707,283 shares of Common Stock and (ii)
35,031,911 options to purchase Common Stock currently exercisable or exercisable within 60 days of July 1, 2021.
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|
(5)
|
Consists of (i) 36,692,258 shares of Common Stock and (ii)
35,629 options to purchase Common Stock currently exercisable or exercisable within 60 days of July 1, 2021, held by affiliates of Claritas
Capital (such entities, collectively, “Claritas Capital”). John Chadwick, founder and partner of Claritas Capital, has voting
and investment discretion with respect to the shares held of record by Claritas. Mr. Chadwick disclaims any beneficial ownership of the
securities held by Claritas Capital other than to the extent of any pecuniary interest each may have therein, directly or indirectly.
The principal address for Claritas Capital is 30 Burton Hills Boulevard, Suite 100, Nashville, TN 37215.
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|
(6)
|
Consists of (i) 244,114 shares of Common Stock and (ii) 712,585
options to purchase Common Stock currently exercisable or exercisable within 60 days of July 1, 2021.
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|
(7)
|
Consists of 53,660 options to purchase Common Stock currently
exercisable or exercisable within 60 days of July 1, 2021.
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(8)
|
Consists of (i) 1,013,029 shares of Common Stock and (ii)
11,882,148 options to purchase Common Stock currently exercisable or exercisable within 60 days of July 1, 2021.
|
|
(9)
|
Consists of (i) 1,013,029 shares of Common Stock and (ii)
11,882,148 options to purchase Common Stock currently exercisable or exercisable within 60 days of July 1, 2021.
|
|
(10)
|
Consists of an aggregate (i) 54,025,259 shares of Common
Stock and (ii) 59,989,728 options to purchase Common Stock currently exercisable or exercisable within 60 days of July 1, 2021.
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Directors and Executive Officers
New Sharecare’s directors
and executive officers after the consummation of the Business Combination are described in the Proxy in the section titled “New
Sharecare Management After the Business Combination” and that information is incorporated herein by reference. In addition,
on the Closing Date, each of Dr. Veronica Mallett and Jeffrey Allred were appointed to the Board. See the information provided in Item 5.02
of this Current Report on Form 8-K, which is incorporated by reference into this Item 2.01.
Director Independence
Information with respect to
the independence of New Sharecare’s directors is set forth in the Proxy in the section titled “New Sharecare Management
After the Business Combination” and that information is incorporated herein by reference. In addition, see the information provided
in Item 5.02 of this Current Report on Form 8-K, which is incorporated by reference into this Item 2.01.
Committees of the Board of Directors
Information with respect to
the composition of the committees of the Board immediately after the consummation of the Business Combination is set forth in the Proxy
in the section titled “New Sharecare Management After the Business Combination” and that information is incorporated
herein by reference. In addition, see the information provided in Item 5.02 of this Current Report on Form 8-K, which is incorporated
by reference into this Item 2.01.
Executive Compensation
A description of the compensation
of the named executive officers of FCAC and Legacy Sharecare before the consummation of the Business Combination is set forth in the Proxy
in the sections titled “Other Information Related to FCAC—Executive Compensation and Director Compensation” and
“Executive Compensation,” respectively, and that information is incorporated herein by reference.
At the Special Meeting, the
FCAC stockholders approved the Incentive Plan. The description of the Incentive Plan is set forth in the Proxy section titled “The
Incentive Plan Proposal,” which is incorporated herein by reference. A copy of the Incentive Plan is attached as Exhibit 10.1
to this Current Report on Form 8-K and is incorporated herein by reference. Following the consummation of the Business Combination, New
Sharecare expects that the Compensation and Human Capital Committee will make grants of awards under the Incentive Plan to eligible participants.
Director Compensation
A description of the compensation
of the directors of FCAC and of Legacy Sharecare before the consummation of the Business Combination is set forth in the Proxy in the
section titled “Other Information Related to FCAC—Executive Compensation and Director Compensation” and “Executive
Compensation,” respectively, and that information is incorporated herein by reference. In addition, see the information provided
in Item 5.02 of this Current Report on Form 8-K, which is incorporated by reference into this Item 2.01.
Certain Relationships and Related Party Transactions
Certain relationships and
related party transactions of New Sharecare are described in the Proxy in the section titled “Certain Relationships and Related
Person Transactions” and that information is incorporated herein by reference.
Legal Proceedings
Reference is made to the disclosure
regarding legal proceedings in the section of the Proxy titled “Other Information Related to FCAC—Legal Proceedings”
and “Business of New Sharecare—Legal Proceedings” and that information is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common
Equity and Related Stockholder Matters
Information about the ticker
symbol, number of stockholders and dividends for FCAC securities is set forth in the Proxy in the section titled “Market Price,
Ticker Symbol and Dividend Information” and such information is incorporated herein by reference.
As of the Closing Date, there
were approximately 450 holders of record of New Sharecare’s Common Stock, one holder of record of New Sharecare’s Series
A Preferred Stock and approximately 25 holders of record of New Sharecare’s warrants to purchase Common Stock.
New Sharecare’s Common
Stock and warrants began trading on Nasdaq under the symbols “SHCR” and “SHCRW,” respectively, on July 2, 2021.
FCAC’s public units automatically separated into their component securities upon consummation of the Business Combination and, as
a result, no longer trade as a separate security and were delisted from Nasdaq.
New Sharecare has not paid
any cash dividends on shares of its Common Stock to date. The payment of cash dividends in the future will be dependent upon our revenues
and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion
of the Board.
Recent Sales of Unregistered Securities
Reference is made to the disclosure
set forth below under Item 3.02 of this Current Report on Form 8-K concerning the issuance and sale by New Sharecare of certain unregistered
securities, which is incorporated herein by reference.
Description of Registrant’s Securities to Be Registered
The description of New Sharecare’s
securities is contained in the Proxy in the section titled “Description of New Sharecare Securities” and that information
is incorporated herein by reference.
Immediately following the
Closing, there were 333,900,179 shares of New Sharecare Common Stock issued and outstanding (excluding the Earnout Shares), held of record
by approximately 450 holders, 5,000,000 shares of Series A Preferred Stock, held of record by one holder, and 18,323,648 warrants outstanding
held of record by approximately 25 holders. Such amounts do not include DTC participants or beneficial owners holding shares through
nominee names.
Indemnification of Directors and Officers
New Sharecare has entered
into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification
and advancements by New Sharecare of certain expenses and costs relating to claims, suits or proceedings arising from his or her service
to New Sharecare or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable
law.
Further information about
the indemnification of New Sharecare’s directors and officers is set forth in the Proxy in the section titled “Indemnification
of Directors and Officers” and that information is incorporated herein by reference.