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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

Information Required in Proxy Statement

Schedule 14A Information

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 3)

 

 

Filed by the Registrant   ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

dMY Technology Group, Inc. II

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

     

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)  

Total fee paid:

 

     

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

$77,140.90

  (2)  

Form, Schedule or Registration Statement No.:

 

Form F-4 Reg. No.: 333-252179

  (3)  

Filing Party:

 

Galileo NewCo Limited

  (4)  

Date Filed:

 

January 15, 2021

 

 

 


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DMY TECHNOLOGY GROUP, INC. II

1180 North Town Center Drive, Suite 100

Las Vegas, Nevada 89144

NOTICE OF SPECIAL MEETING

OF STOCKHOLDERS OF

DMY TECHNOLOGY GROUP, INC. II

To Be Held On April 16, 2021

To the Stockholders of dMY Technology Group, Inc. II:

NOTICE IS HEREBY GIVEN that a special meeting (the “special meeting”) of stockholders of dMY Technology Group, Inc. II, a Delaware corporation (“dMY,” the “Company,” “we,” “us” or “our”), will be held at 10:00 AM, Eastern Time, on April 16, 2021, at http://www.cstproxy.com/dmytechnologyii/sm2021 (the “special meeting”). In light of ongoing developments related to the novel coronavirus (“COVID-19”), after careful consideration, we have determined that the special meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance while safeguarding the health and safety of our stockholders, directors and management team. You are cordially invited to attend the special meeting online by visiting https://www.cstproxy.com/dmytechnologyii/sm2021 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement.

At the special meeting, you will be asked to consider and vote on proposals to:

 

  (a)

Proposal No. 1 — the Business Combination Proposal — to approve and adopt the Business Combination Agreement (the “Business Combination Agreement”), dated as of October 27, 2020, by and among dMY, Maven TopCo Limited, a company incorporated under the laws of Guernsey (“TopCo”), Maven Midco Limited, a private limited company incorporated under the laws of England and Wales (“MidCo”), Galileo NewCo Limited, a company incorporated under the laws of Guernsey (“NewCo”), Genius Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of NewCo (“Merger Sub”), and dMY Sponsor II, LLC, a Delaware limited liability company (the “Sponsor”), pursuant to which, subject to the satisfaction or waiver of certain conditions set forth therein, the following shall occur: (i) effective as of immediately prior to the closing of the Business Combination (the “Closing”), dMY’s issued and outstanding shares of dMY Class B common stock (the “Class B Shares”) will convert automatically on a one-for-one basis into shares of dMY Class A common stock (the “Class A Shares,” and, together with the Class B Shares, the “common stock”); and (ii) on the date of Closing, Merger Sub will merge with and into dMY, with dMY continuing as the surviving company, as a result of which (A) dMY will become a wholly-owned subsidiary of NewCo; (B) each issued and outstanding unit of dMY, consisting of one Class A Share and one-third of one warrant (the “dMY warrants”), shall be automatically detached; (C) in consideration for the acquisition of all of the issued and outstanding Class A Shares of dMY (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A Share acquired by virtue of the Business Combination; (D) each issued and outstanding dMY warrant to purchase a Class A Share will be assumed by NewCo and become exercisable for one NewCo ordinary share; and (E) NewCo will change its name to Genius Sports Limited.

The Business Combination Agreement provides, among other things, that TopCo will undergo a pre-closing reorganization (the “Reorganization”), wherein all existing classes of shares of TopCo (except for (i) certain preference shares of TopCo which will be redeemed and cancelled as part of the Reorganization (the “TopCo Redemption”) and (ii) certain shares of TopCo which will be contributed to NewCo in exchange for certain preference share payments (the “Catch-Up Payment”)) will be contributed to NewCo in exchange for newly issued ordinary shares of NewCo (“NewCo ordinary shares”). As described in the Business Combination Agreement, solely with respect to the shares of


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TopCo that remain unvested immediately prior to such reorganization and provided that the holders of such shares have executed and delivered support agreements agreeing to the vesting and restriction provisions therein, such shares shall be exchanged for NewCo ordinary shares but shall be subject to the vesting and restriction summarized therein (the “Restricted Shares”). Following the Reorganization, upon the Closing, the shareholders of TopCo will hold: (1) that number of NewCo ordinary shares equal to the quotient obtained by dividing (i) $1,400,000,000, less the amount needed to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco, less the amount used to pay for the TopCo Redemption, less an amount equal to the Catch-Up Payment and less the amount, if any, to repurchase certain NewCo ordinary shares, in each case, in accordance with the terms of the Business Combination Agreement, by (ii) $10.00; and (2) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement. The transactions contemplated by the Business Combination Agreement are referred to herein as the “Business Combination.”

The Closing is subject to certain customary conditions, including, among other things, that we have Minimum Cash equaling at least $315 million (where Minimum Cash means the cash in dMY’s trust account (“trust account”) established in connection with the Company’s initial public offering (“IPO”), less amounts required for the dMY Share Redemptions (as defined in the Business Combination Agreement), less 33% of the aggregate amount of transaction expenses incurred by the parties to the Business Combination Agreement, and plus the aggregate proceeds received by NewCo from the PIPE Investment (as defined below)) (the foregoing, the “Minimum Cash Condition”).

In order to meet the Closing conditions, NewCo and dMY entered into certain subscription agreements, each dated October 27, 2020 (the “Subscription Agreements”), with certain accredited and institutional investors, pursuant to which such investors have subscribed to purchase an aggregate of 33,000,000 NewCo ordinary shares (together, the “Subscriptions”), for a purchase price of $10.00 per share, for an aggregate purchase price of $330,000,000, to be issued immediately prior to or substantially concurrently with the Closing (the “PIPE Investment”); and

 

  (b)

Proposal No. 2 — the Adjournment Proposal — to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal.

The above matters are more fully described in the accompanying proxy statement/prospectus, which also includes, as Annex A, a copy of the Business Combination Agreement and the exhibits attached thereto. We urge you to read carefully the accompanying proxy statement/prospectus in its entirety, including the Annexes and accompanying financial statements.

Our units, Class A Shares and warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “DMYD.U,” “DMYD” and “DMYD WS,” respectively. NewCo intends to apply for listing, to be effective at Closing, of the NewCo ordinary shares and warrants on the NYSE under the symbols “GENI” and “GENI WS,” respectively. NewCo will not have units traded following the consummation of the Business Combination. It is a condition to the consummation of the Business Combination that the NewCo ordinary shares and warrants are approved for listing on the NYSE, but there can be no assurance such listing condition will be met. If such listing condition is not met, the Business Combination may not be consummated unless such condition is waived by the parties.

Only holders of record of Class A Shares and Class B Shares at the close of business on March 12, 2021 (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the Special Meeting at http://www.cstproxy.com/dmytechnologyii/sm2021.


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We are providing the accompanying proxy statement/prospectus and proxy card to our stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Whether or not you plan to attend the special meeting, we urge you to read the accompanying proxy statement/prospectus carefully and submit your proxy to vote on the Business Combination. Please pay particular attention to the section entitled “Risk Factors” beginning on page 29 of the accompanying proxy statement/prospectus.

After careful consideration, our board of directors has unanimously approved the Business Combination Agreement and the transactions contemplated thereby and determined that each of the Business Combination Proposal and the Adjournment Proposal is in the best interests of the Company and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of the Company and its stockholders and what may be best for a director’s personal interests when determining to recommend that stockholders vote for the proposals. See the sections entitled “The Business Combination Proposal — Interests of dMY’s Directors and Officers in the Business Combination” and “Beneficial Ownership of Securities” in the accompanying proxy statement/prospectus for a further discussion.

Our “initial stockholders” (consisting of the Sponsor, Darla Anderson, Francesca Luthi and Charles E. Wert) and our other officers and directors entered into a letter agreement at the time of the IPO, pursuant to which they agreed to vote the Class B Shares purchased by them, as well as any Class A Shares included in the units sold by the Company in the IPO (the “public shares”) purchased by them during or after the IPO, in favor of the Business Combination Proposal. As of the date hereof, our initial stockholders own 20% of our total outstanding shares of common stock.

Pursuant to the Current Charter, a holder of public shares (a “public stockholder”) may request that dMY redeem all or a portion of his, her or its public shares for cash if the Business Combination is consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:

(i) (A) hold public shares or (B) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

(ii) prior to 10:00 AM, Eastern Time, on April 14, 2021 (two business days prior to the vote at the special meeting), (A) submit a written request to Continental Stock Transfer & Trust Company, dMY’s transfer agent (the “transfer agent”), that dMY redeem your public shares for cash and (B) deliver your public shares to the transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders of units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public stockholders may elect to redeem all or a portion of their public shares even if they vote against the Business Combination Proposal. If the Business Combination is not consummated, the public shares will not be redeemed for cash. If a public stockholder properly exercises his, her or its right to redeem his, her or its public shares and timely delivers its shares to the transfer agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the trust account (net of taxes payable), divided by the number of then-outstanding public shares. For illustrative purposes, as of March 22, 2021, this would have amounted to approximately $10.00 per public share. If a public stockholder exercises its redemption


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rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its certificate in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that we instruct our transfer agent to return the certificate (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in the accompanying proxy statement/prospectus. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting of dMY Stockholders — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the U.S. Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its public shares with respect to more than an aggregate of 20% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash, without our prior consent.

The Closing is subject to certain customary conditions, including, among other things, that (i) the Minimum Cash Condition has been satisfied and (ii) dMY’s stockholders approve the Business Combination Proposal. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. See “The Business Combination Agreement.”

Under the Business Combination Agreement, the approval of the Business Combination Proposal is a condition to the consummation of the Business Combination. The Adjournment Proposal is not conditioned on the approval of any other proposal. If our stockholders do not approve the Business Combination Proposal, the Business Combination may not be consummated.

Approval of the Business Combination Proposal requires the affirmative vote of holders of a majority of the outstanding votes cast by holders of Class A Shares and Class B Shares present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of at least a majority of the votes cast by holders of Class A Shares and Class B Shares present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

All our stockholders are cordially invited to attend the virtual special meeting, which includes presence at the virtual special meeting. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible.

If you are a stockholder of record holding shares of common stock, you may also cast your vote in person (which would include voting at the virtual special meeting). If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote in person (which would include voting at the virtual special meeting), obtain a proxy from your broker or bank.

If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting in person (which would include presence at the virtual special meeting), your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have no effect on the outcome of any proposal in the accompanying proxy statement/prospectus.


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Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that your shares are represented and voted at the special meeting.

On behalf of our board of directors, I would like to thank you for your support of dMY Technology Group, Inc. II and look forward to a successful completion of the Business Combination.

 

    By Order of the Board of Directors,
      /s/ Harry L. You
      Harry L. You

March 26, 2021

      Chairman

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be held on April 16, 2021: This notice of special meeting and the related proxy statement will be available at https://www.cstproxy.com/dmytechnologyii/sm2021.

IF YOU RETURN YOUR PROXY CARD SIGNED AND WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (1) IF YOU HOLD CLASS A SHARES THROUGH UNITS, ELECT TO SEPARATE YOUR UNITS INTO THE UNDERLYING PUBLIC SHARES AND PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE PUBLIC SHARES, (2) SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING, THAT YOUR PUBLIC SHARES BE REDEEMED FOR CASH, AND (3) DELIVER YOUR CLASS A SHARES TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT/WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE, IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “SPECIAL MEETING OF DMY STOCKHOLDERS — REDEMPTION RIGHTS” IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS FOR MORE SPECIFIC INSTRUCTIONS.

Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement/prospectus, passed upon the merits or fairness of the Business Combination Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of the accompanying proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated March 26, 2021 and is first being mailed to dMY stockholders on or about March 26, 2021.


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PROXY STATEMENT FOR SPECIAL MEETING

OF STOCKHOLDERS OF

DMY TECHNOLOGY GROUP, INC. II

 

 

PROSPECTUS FOR UP TO 34,500,000 ORDINARY SHARES

AND 9,200,000 ORDINARY SHARES ISSUABLE UPON THE EXERCISE OF WARRANTS OF

GALILEO NEWCO LIMITED

 

 

The board of directors of dMY Technology Group, Inc. II, a Delaware corporation (“dMY,” “we,” “us,” and “our”), has unanimously approved the Business Combination Agreement, dated as of October 27, 2020 (the “Business Combination Agreement”), by and among dMY, Maven TopCo Limited, a company incorporated under the laws of Guernsey (“TopCo”), Maven Midco Limited, a private limited company incorporated under the laws of England and Wales (“MidCo”), Galileo NewCo Limited, a company incorporated under the laws of Guernsey (“NewCo”), Genius Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of NewCo (“Merger Sub”), and dMY Sponsor II, LLC, a Delaware limited liability company (the “Sponsor”), pursuant to which, subject to the satisfaction or waiver of certain conditions set forth therein, the following shall occur: (i) effective as of immediately prior to the closing of the Business Combination (the “Closing”), dMY’s issued and outstanding shares of dMY Class B common stock (the “Class B Shares”) will convert automatically on a one-for-one basis into shares of dMY Class A common stock (the “Class A Shares,” and, together with the Class B Shares, the “common stock”); and (ii) on the date of Closing, Merger Sub will merge with and into dMY, with dMY continuing as the surviving company, as a result of which (A) dMY will become a wholly-owned subsidiary of NewCo; (B) each issued and outstanding unit of dMY, consisting of one Class A Share and one-third of one warrant (the “dMY warrants”), shall be automatically detached; (C) in consideration for the acquisition of all of the issued and outstanding Class A Shares of dMY (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A Share acquired by virtue of the Business Combination; (D) each issued and outstanding dMY warrant to purchase a Class A Share will be assumed by NewCo and become exercisable for one NewCo ordinary share; and (E) NewCo will change its name to Genius Sports Limited.

The Business Combination Agreement provides, among other things, that TopCo will undergo a pre-closing reorganization (the “Reorganization”) wherein all existing classes of shares of TopCo (except for (i) certain preference shares of TopCo which will be redeemed and cancelled as part of the Reorganization (the “TopCo Redemption”) and (ii) certain shares of TopCo which will be contributed to NewCo in exchange for certain preference share payments (the “Catch-Up Payment”)) will be contributed to NewCo in exchange for newly issued ordinary shares of NewCo (“NewCo ordinary shares”). As described in the Business Combination Agreement, solely with respect to the shares of TopCo that are unvested prior to the Reorganization and provided that the holders of such shares have executed and delivered support agreements agreeing to the vesting and restriction provisions therein, such shares shall be exchanged for NewCo ordinary shares but shall be subject to the vesting and restrictions as set forth therein (the “Restricted Shares”). Following the Reorganization, upon the Closing, the shareholders of TopCo will hold: (1) that number of NewCo ordinary shares equal to the quotient obtained by dividing (i) $1,400,000,000, less the amount needed to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco, less the amount used to pay for the TopCo Redemption, less an amount equal to the Catch-Up Payment and less the amount, if any, to repurchase certain NewCo ordinary shares, in each case, in accordance with the terms of the Business Combination Agreement, by (ii) $10.00, and (2) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement. The transactions contemplated by the Business Combination Agreement are referred to herein as the “Business Combination.”

Immediately following the Closing, it is expected that the dMY public stockholders will own approximately 16.5% of NewCo ordinary shares outstanding at that time, assuming no redemption of public shares and without giving effect to any dilutive instruments, such as the exercise of the dMY warrants.

Proposals to approve the Business Combination Agreement and the other matters discussed in this proxy statement/prospectus will be presented at the special meeting of stockholders of dMY scheduled to be held at 10:00 AM, Eastern Time, on April 16, 2021, at http://www.cstproxy.com/dmytechnologyii/sm2021 (the “special meeting”). In light of ongoing developments related to the novel coronavirus (“COVID-19”), after careful consideration, we have determined that the special meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance while safeguarding the health and safety of our stockholders, directors and management team. You are cordially invited to attend the special meeting online by visiting https://www.cstproxy.com/dmytechnologyii/sm2021 and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement/prospectus.

Our units, Class A Shares and warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “DMYD.U,” “DMYD” and “DMYD WS,” respectively. NewCo intends to apply for listing, to be effective at Closing, of the NewCo ordinary shares and warrants on the NYSE under the symbols “GENI” and “GENI WS,” respectively. NewCo will not have units traded following the consummation of the Business Combination. It is a condition to the consummation of the Business Combination that the NewCo ordinary shares and warrants are approved for listing on the NYSE, but there can be no assurance such listing condition will be met. If such listing condition is not met, the Business Combination may not be consummated unless such condition is waived by the parties.

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

This proxy statement/prospectus provides you with detailed information about the Business Combination and other matters to be considered at the special meeting of dMY’s stockholders. dMY encourages you to carefully read this entire document. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 30.

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

This proxy statement/prospectus is dated March 26, 2021, and is first being mailed to dMY stockholders on or about March 26, 2021.


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TABLE OF CONTENTS

 

     PAGE  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     ii  

FINANCIAL STATEMENT PRESENTATION

     iii  

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS AND EXCHANGE RATE PRESENTATION

     iv  

INDUSTRY AND MARKET DATA

     v  

FREQUENTLY USED TERMS

     vi  

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

     ix  

SUMMARY OF THE MATERIAL TERMS OF THE BUSINESS COMBINATION

     1  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

     3  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     11  

COMPARATIVE PER SHARE INFORMATION

     28  

RISK FACTORS

     30  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     69  

SPECIAL MEETING OF DMY STOCKHOLDERS

     70  

THE BUSINESS COMBINATION PROPOSAL

     77  

THE BUSINESS COMBINATION AGREEMENT

     118  

THE ADJOURNMENT PROPOSAL

     133  

SELECTED HISTORICAL FINANCIAL INFORMATION OF DMY

     134  

SELECTED HISTORICAL FINANCIAL AND OPERATING DATA OF TOPCO

     135  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION

     137  

INFORMATION ABOUT MANAGEMENT, DIRECTORS AND NOMINEES

     139  

OTHER INFORMATION RELATED TO DMY

     148  

BUSINESS OF GENIUS

     160  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     183  

TOPCO’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

     197  

BENEFICIAL OWNERSHIP OF SECURITIES

     217  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     221  

DESCRIPTION OF NEWCO’S SECURITIES

     225  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     242  

COMPARISON OF SHAREHOLDER RIGHTS

     243  

APPRAISAL RIGHTS

     255  

SUBMISSION OF STOCKHOLDER PROPOSALS

     256  

OTHER STOCKHOLDER COMMUNICATIONS

     257  

EXPERTS

     258  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     259  

WHERE YOU CAN FIND MORE INFORMATION

     259  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEX A — BUSINESS COMBINATION AGREEMENT

     A-1  

ANNEX B — AMENDED AND RESTATED MEMORANDUM OF INCORPORATION OF NEWCO

     B-1  

ANNEX C — AMENDED AND RESTATED ARTICLES OF INCORPORATION OF NEWCO

     C-1  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission, or the “SEC,” constitutes a prospectus of NewCo under Section 5 of the U.S. Securities Act of 1933, as amended, or the “Securities Act,” with respect to the NewCo ordinary shares to be issued to dMY stockholders and the NewCo ordinary shares underlying the dMY warrants being assumed by NewCo as part of the Business Combination, if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended, or the “Exchange Act,” with respect to the Special Meeting of dMY stockholders at which dMY stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the adoption of the Business Combination Agreement, among other matters.

 

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FINANCIAL STATEMENT PRESENTATION

NewCo was incorporated on October 21, 2020 for the purpose of effectuating the Business Combination described herein. NewCo has no material assets and does not operate any businesses. Accordingly, no financial statements of NewCo have been included in this proxy statement/prospectus. The Business Combination will first be accounted for as a capital reorganization whereby NewCo is the successor to its predecessor TopCo. As a result of the first step described above, the existing shareholders of TopCo will continue to retain control through ownership of NewCo. The capital reorganization will be immediately followed by the acquisition of dMY, which is accounted for within the scope of ASC 805, Business Combinations (“ASC 805”). Under this method of accounting, dMY will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of NewCo issuing NewCo ordinary shares for the net assets of dMY, accompanied by a recapitalization.

 

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CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS AND EXCHANGE RATE PRESENTATION

In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:

 

   

“$,” “USD” and “U.S. dollar” each refer to the United States dollar;

 

   

“£,” “GBP” and “pounds” each refer to the British pound sterling; and

 

   

“€,” “EUR” and “Euro” each refer to the Euro.

Certain amounts described herein have been expressed in U.S. dollars for convenience, and when expressed in U.S. dollars in the future, such amounts may be different from those set forth herein due to intervening exchange rate fluctuations. The exchange rate used for conversion between U.S. dollars and pounds is based on the historical exchange rate of the pound released by the Federal Reserve, the central bank of the United States.

 

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INDUSTRY AND MARKET DATA

In this proxy statement/prospectus, we present industry data, information and statistics regarding the markets in which Genius competes, as well as Genius’ statistics, data and other information provided by third parties relating to markets, market sizes, market shares, market positions and other industry data pertaining to Genius’ business and markets, including information obtained from Ellers & Krejcik Gaming (collectively, “Industry Analysis”). Such information is supplemented where necessary with Genius’ own internal estimates and information obtained from H2 Gambling Capital, taking into account publicly available information about other industry participants and the judgment of Genius’ management where information is not publicly available. This information appears in “Business of Genius” and other sections of this proxy statement/prospectus.

Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this proxy statement/prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

 

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FREQUENTLY USED TERMS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

Adjournment Proposal” means the proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if dMY is unable to consummate the Business Combination.

Apax Funds” means certain funds the ultimate general partners of which are advised by Apax Partners LLP.

Board” means the board of directors of dMY.

Business Combination” means the transactions contemplated by the Business Combination Agreement.

Business Combination Agreement” means the Business Combination Agreement, dated as of October 27, 2020, by and among dMY, TopCo, MidCo, NewCo, Merger Sub and Sponsor, which is attached hereto as Annex A, and as may be amended from time to time.

Business Combination Proposal” means the proposal to approve the Business Combination described in this proxy statement/prospectus.

Class A Shares” means dMY’s Class A common stock, par value $0.0001.

Class B Shares” means dMY’s Class B common stock, par value $0.0001.

Closing” means the closing of the Business Combination.

common stock” means the Class A Shares together with the Class B Shares of dMY.

Continental” means Continental Stock Transfer & Trust Company.

Current Charter” means dMY’s current amended and restated certificate of incorporation.

DGCL” means the Delaware General Corporation Law as the same may be amended from time to time.

dMY Merger” means the merger of dMY into the Merger Sub pursuant to the Business Combination Agreement.

dMY unit” means a unit of dMY consisting of (a) one Class A Share and (b) one-third of one dMY public warrant.

dMY warrant” means, collectively, the private and public warrants of dMY, each entitling the holder to purchase one Class A Share per warrant at a price of $11.50 per share.

DTC” means the Depository Trust Company.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Founders” means the Sponsor and the following independent directors of dMY: Darla Anderson, Francesca Luthi and Charles E. Wert.

Founder Shares” means the Class B Shares purchased by the Sponsor and the following independent directors of dMY: Darla Anderson, Francesca Luthi and Charles E. Wert.

Genius” means Genius Sports Group Limited.

 

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Guernsey Companies Law” means the Companies (Guernsey) Law, 2008 (as amended).

Investment Company Act” means the Investment Company Act of 1940, as amended.

IPO” means dMY’s August 18, 2020 initial public offering of units, with each unit consisting of one Class A Share and one-third of one warrant, raising total gross proceeds of approximately $276,000,000.

JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

Merger Sub” means Genius Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of NewCo.

MidCo” means Maven Midco Limited, a private limited company incorporated under the laws of England and Wales.

NewCo” means Galileo NewCo Limited, a company incorporated under the laws of Guernsey, and its subsidiaries when the context requires, that will change its name to Genius Sports Limited in connection with the Business Combination.

NewCo Board” means the board of directors of Newco, upon the consummation of the Business Combination.

NewCo Governing Documents” means the NewCo Amended and Restated Memorandum of Incorporation and the NewCo Amended and Restated Articles of Incorporation.

NewCo ordinary shares” means the ordinary shares of NewCo, par value $0.01.

NYSE” means the New York Stock Exchange.

Ordinary Resolution” means a resolution passed as an ordinary resolution in accordance with the Guernsey Companies Law by a simple majority of the votes of the shareholders entitled to vote and voting in person or by attorney or by proxy at a meeting or by a simple majority of the total voting rights of eligible shareholders (being the shareholders entitled to vote on the circulation of the written resolution) by written resolution.

private placement warrants” means the warrants issued to the Sponsor in a private placement simultaneously with the closing of the IPO, with each such warrant entitling the holder thereof to purchase one Class A Share at a price of $11.50 per share.

public shares” means the Class A Shares issued in the IPO held by public shareholders other than the Founders.

public warrants” means the 9,200,000 redeemable warrants sold as part of the units in the IPO.

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

SEC” means the United States Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended.

special meeting” means the special meeting of dMY stockholders, called for the purpose of approving the Business Combination and the other proposals set forth herein.

 

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Special Resolution” means a resolution passed as a special resolution in accordance with the Guernsey Companies Law by a majority of not less than seventy five percent of the votes of the shareholders entitled to vote and voting in person or by attorney or by proxy at a meeting or by seventy five percent of the total voting rights of eligible shareholders (being the shareholders entitled to vote on the circulation of the written resolution) by written resolution.

Sponsor” means dMY Sponsor II, LLC, a Delaware limited liability company.

Target Companies” means, collectively, TopCo, MidCo, NewCo, Merger Sub and all direct and indirect subsidiaries of TopCo.

TopCo” means Maven Topco Limited, a company incorporated under the laws of Guernsey.

TopCo Redemption” means the redemption and cancellation of certain preference shares of TopCo as part of the Reorganization.

Transfer Agent” means Continental Stock Transfer & Trust Company.

warrants” means the private placement warrants and public warrants.

 

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TRADEMARKS, TRADE NAMES AND SERVICE MARKS

TopCo, MidCo, NewCo, Merger Sub, dMY and their respective subsidiaries own or have rights to trademarks, trade names and service marks that they use in connection with the operation of their businesses. In addition, their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks appearing in this proxy statement/prospectus are the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this proxy statement/prospectus are listed without the applicable ®, and SM symbols, but such references are not intended to indicate, in any way, that we or the owners thereof will not assert, to the fullest extent under applicable law, our or their rights to these trademarks, trade names and service marks.

 

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SUMMARY OF THE MATERIAL TERMS OF THE BUSINESS COMBINATION

Pursuant to the Business Combination Agreement, (i) effective as of immediately prior to the Closing, each issued and outstanding Class B Share will convert automatically on a one-for-one basis into a Class A Share; and (ii) on the date of Closing, Merger Sub will merge with and into dMY, with dMY continuing as the surviving company, as a result of which (A) dMY will become a wholly-owned subsidiary of NewCo; (B) each issued and outstanding unit of dMY, consisting of one Class A Share and one-third of one dMY warrant, shall be automatically detached; (C) in consideration for the acquisition of all of the issued and outstanding Class A shares of dMY (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A Share acquired by virtue of the Business Combination; (D) each issued and outstanding dMY warrant to purchase a Class A Share will be assumed by NewCo and become exercisable for one NewCo ordinary share; and (E) NewCo will change its name to Genius Sports Limited. Accordingly, at the Closing, the dMY public shareholders will hold approximately 16.5% of the issued and outstanding NewCo ordinary shares, the Founders will hold approximately 4.1% of the issued and outstanding NewCo ordinary shares and the Sellers (as defined below) will hold approximately 59.7% of the issued and outstanding NewCo ordinary shares (assuming no public shares are redeemed as described in this proxy statement/prospectus).

In addition, prior to the Closing, TopCo will undergo the Reorganization wherein all existing classes of shares of TopCo (except for (i) certain preference shares of TopCo which will be redeemed in the TopCo Redemption and (ii) certain shares of TopCo which will be contributed to NewCo in exchange for an amount equal to the Catch-Up Payment) will be contributed to NewCo in exchange for newly issued NewCo ordinary shares. As described in the Business Combination Agreement, solely with respect to the shares of TopCo that are unvested prior to the Reorganization and provided that the holders of such shares have executed and delivered support agreements agreeing to the vesting and restriction provisions therein, such shares shall be exchanged for NewCo ordinary shares but shall be subject to the vesting and restrictions as set forth therein. Following the Reorganization, upon the Closing, the shareholders of TopCo will hold: (1) that number of NewCo ordinary shares equal to the quotient obtained by dividing (i) $1,400,000,000, less the amount needed to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco, less the amount used to pay for the TopCo Redemption, less an amount equal to the Catch-Up Payment and less the amount, if any, to repurchase certain NewCo ordinary shares, in each case, in accordance with the terms of the Business Combination Agreement, by (ii) $10.00; and (2) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement. See the section entitled “The Business Combination Agreement.”

The Closing is subject to certain customary conditions, including, among other things, that (i) the Minimum Cash Condition has been satisfied and (ii) dMY’s stockholders approve the Business Combination Proposal.

The Business Combination Agreement also contemplates the execution by the parties of various agreements at the Closing, including, among others, the below.

Founder Holders Forfeiture Agreement

Concurrently with the execution of the Business Combination Agreement, the Founders, NewCo and dMY entered into the Founder Holders Forfeiture Agreement, pursuant to which, among other things, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash (as defined in the Business Combination Agreement) is less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

Founder Holders Consent Letter

Concurrently with the execution of the Business Combination Agreement, the Founders, NewCo and dMY entered into the Founder Holders Consent Letter, pursuant to which, among other things, the Founders have

 

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agreed to waive any and all anti-dilution rights described in the Current Charter with respect to Class A Shares held by the Founders (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), as more fully described in the Founder Holders Consent Letter.

Investor Rights Agreement

At the Closing, dMY, the Founders, Maven TopHoldings SARL (“Maven”), certain shareholders who are officers and employees of the Target Companies (“Management”), certain other existing shareholders of TopCo (the “Co-Investors” and, together with Maven and Management, the “Sellers”) and NewCo will enter into an Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, among other things, (i) dMY and the Founders will agree to terminate the Registration Rights Agreement, dated as of August 13, 2020, entered into in connection with the IPO; (ii) NewCo will provide certain registration rights for the NewCo ordinary shares and warrants held by the parties to the Investor Rights Agreement; (iii) at the Closing, the Sponsor will be entitled to designate two directors of NewCo, the Sellers will be entitled to designate six directors of NewCo, and the Chief Executive Officer of NewCo will be a director of NewCo; and (iv) Management, the Founders, Maven and the Co-Investors will agree not to transfer, sell, assign or otherwise dispose of the NewCo ordinary shares held by such person as of the Closing Date for 12 months following the Closing (with respect to Management and the Founders) and 6 months following the Closing (with respect to Maven and the Co-Investors), in each case, subject to certain exceptions and as more fully described in the Investor Rights Agreement.

Transaction Support Agreements

Concurrently with the execution of the Business Combination Agreement, NewCo, TopCo, dMY and the TopCo shareholders party thereto (the “TSA Shareholders”) entered into Transaction Support Agreements (the “TSAs”), pursuant to which, among other things, the TSA Shareholders agreed to vote their outstanding shares of TopCo at any meeting of TopCo’s shareholders in favor of the transactions contemplated by the Business Combination Agreement and provided a power of attorney to Maven to take certain actions in connection with the transactions contemplated by the Business Combination Agreement on behalf of such shareholders. The TSAs also set out a summary of the terms on which the holders of Restricted Shares will hold such Restricted Shares, which will be set out more fully in the Galileo NewCo Limited 2021 Restricted Share Plan and the Form of Restricted Share Agreement under the Galileo NewCo Limited 2021 Restricted Share Plan.

Subscription Agreements

Concurrently with the execution of the Business Combination Agreement, NewCo and dMY entered into certain subscription agreements, each dated October 27, 2020 (the “Subscription Agreements”), with a number of accredited and institutional investors (the “PIPE Investors”), pursuant to which such PIPE Investors have subscribed to purchase an aggregate of 33,000,000 NewCo ordinary shares (together, the “Subscriptions”), for a purchase price of $10.00 per share, for an aggregate purchase price of $330,000,000, to be issued immediately prior to or substantially concurrently with the Closing (the “PIPE Investment”). The obligations of each party to the Subscription Agreements to consummate the Subscriptions are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement. The NewCo ordinary shares to be issued in connection with the Subscription Agreements and the transactions contemplated thereby will not be registered under the Securities Act and will be issued in reliance upon the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the Business Combination. The following questions and answers do not include all the information that is important to dMY stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the Business Combination and the voting procedures for the special meeting.

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

dMY and the Sellers have agreed to a business combination under the terms of the Business Combination Agreement that is described in this proxy statement/prospectus. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A, and dMY encourages its stockholders to read it in its entirety. dMY’s stockholders are being asked to consider and vote upon a proposal to adopt the Business Combination Agreement. See the sections entitled “The Business Combination Proposal” and “The Business Combination Agreement.”

Consummation of the Business Combination Proposal requires the approval of holders of at least a majority of the Class A Shares and Class B Shares that are voted in person (which would include presence at the virtual special meeting) or by proxy at the special meeting. Additionally, dMY must provide all holders of public shares with the opportunity to have their public shares redeemed in connection with its initial business combination. Holders who wish to exercise their redemption rights must, prior to 10:00 AM, Eastern Time, on April 14, 2021 (two business days prior to the vote at the special meeting): (i) submit a written request to the Transfer Agent that dMY redeem their public shares for cash and (ii) deliver their public shares to the Transfer Agent physically or electronically using the Depository Trust Company’s (“DTC”) Deposit and Withdrawal at Custodian (“DWAC”) system.

YOUR VOTE IS IMPORTANT. STOCKHOLDERS ARE URGED TO SUBMIT THEIR PROXIES AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.

 

Q.

Are there any other matters being presented to stockholders at the special meeting?

 

A.

In addition to voting on the Business Combination, the stockholders of dMY will vote to adjourn the special meeting to a later date or dates to permit further solicitation and vote of proxies if dMY is unable to consummate the Business Combination. See the section entitled “The Adjournment Proposal.”

dMY will hold the special meeting to consider and vote upon this proposal. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the special meeting. Stockholders should read it carefully.

Consummation of the Business Combination is conditional on approval of the Business Combination Proposal.

 

Q.

I am a holder of dMY public shares. Why am I receiving this proxy statement/prospectus?

 

A.

Upon consummation of the Business Combination, and without any action on the part of any party or any other person, in consideration for the acquisition of all of the issued and outstanding dMY Class A Shares (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A Share acquired by virtue of the Business Combination (the “Merger Consideration”). Immediately following the Closing, it is expected that the dMY public shareholders will own approximately 16.5% of NewCo’s ordinary shares outstanding at that time, without giving effect to any dilutive instruments, such as the exercise of the dMY Warrants. This proxy statement/prospectus includes important information about

 

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  NewCo and the business of NewCo and its subsidiaries following consummation of the Business Combination. dMY urges you to read the information contained in this proxy statement/prospectus carefully.

 

Q.

I am a dMY warrant holder. Why am I receiving this proxy statement/prospectus?

 

A.

Upon consummation of the Business Combination, the dMY warrants will, by their terms, be assumed by NewCo and thereby entitle the holders to purchase NewCo ordinary shares (and not dMY) at a purchase price of $11.50 per share. This proxy statement/prospectus includes important information about NewCo and the business of NewCo and its subsidiaries following consummation of the Business Combination. dMY urges you to read the information contained in this proxy statement/prospectus carefully.

 

Q.

Why is dMY proposing the Business Combination?

 

A.

dMY is a blank check company formed to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

On August 18, 2020, dMY completed its IPO of units, with each unit consisting of one Class A Share and one-third of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one Class A Share at a price of $11.50 per share, raising total gross proceeds of approximately $276,000,000. Since the IPO, dMY’s activity has been limited to the evaluation of business combination target companies.

The prospectus for dMY’s IPO provided the general criteria and guidelines that dMY intended to use to evaluate potential acquisition targets. Based on its due diligence investigations of NewCo and the industry in which it operates, dMY believes that NewCo generally meets such criteria and guidelines. For more information, see the section entitled “The Business Combination Proposal — The Board’s Reasons for the Approval of the Business Combination.”

 

Q.

Did the Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.

The Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. The officers and directors of dMY and dMY’s advisors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of dMY’s financial advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, dMY’s officers and directors and dMY’s advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the Board and dMY’s advisors in valuing TopCo’s business.

 

Q.

Do I have redemption rights?

 

A.

If you are a holder of public shares, you have the right to demand that dMY redeem such shares for a pro rata portion of the cash held in dMY’s trust account, including interest earned on the trust account. dMY sometimes refers to these rights to demand redemption of the public shares as “redemption rights.” dMY’s initial stockholders entered into a letter agreement, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of a business combination.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate or any other person with whom he, she or it is acting in concert or as a partnership, syndicate or other group, will be restricted from seeking redemption with respect to more than 20% of the issued and outstanding public shares. Accordingly,

 

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all public shares in excess of 20% held by a stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as contemplated under Section 13 of the Exchange Act), will not be redeemed.

Additionally, dMY’s Current Charter provides that dMY may not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 (such that dMY is not subject to the SEC’s “penny stock” rules). The Closing is subject to certain customary conditions, including, among other things, that (i) the Minimum Cash Condition has been satisfied and (ii) dMY’s stockholders approve the Business Combination Proposal. Consequently, if accepting all properly submitted redemption requests would cause dMY’s net tangible assets to be less than $5,000,0001 as described above or make dMY unable to satisfy the Minimum Cash Condition, the Business Combination may not be consummated.

 

Q.

Will my ability to exercise redemption rights be impacted by how I vote on the Business Combination Proposal?

 

A.

No. You may exercise your redemption rights irrespective of whether you vote your public shares for or against the Business Combination Proposal or any other proposal described by this proxy statement/prospectus. As a result, the Business Combination Agreement can be approved by stockholders who will redeem their public shares and no longer remain stockholders, leaving stockholders who choose not to redeem their public shares holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of NYSE.

 

Q.

How do I exercise my redemption rights?

 

A.

If you are a holder of public shares or units and wish to exercise your redemption rights, you must, (i) if you hold your public shares through units, elect to separate your units into the underlying public shares and warrants and (ii) prior to 10:00 AM, Eastern Time, on April 14, 2021, (A) submit a written request to the Transfer Agent that dMY redeem your public shares for cash and (B) deliver your public shares to the Transfer Agent physically or electronically using the DTC’s DWAC System. Any holder of public shares will be entitled to demand that such holder’s public shares be redeemed for a full pro rata portion of the amount then in the trust account, including interest earned on the trust account (which, for illustrative purposes, was approximately $276,127,156, or $10.00 per public share, as of March 22, 2021). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the deadline for submitting redemption requests and thereafter, with dMY’s consent, until the Closing. If you deliver your public shares for redemption to the Transfer Agent and later decide to withdraw such request prior to the deadline for submitting redemption requests, you may request that the Transfer Agent return the shares (physically or electronically). You may make such request by contacting the Transfer Agent at the address listed at the end of this section.

Any corrected or changed proxy card or written demand of redemption rights must be received by the Transfer Agent prior to the vote taken on the Business Combination Proposal at the special meeting. No demand for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to the Transfer Agent prior to the deadline for submitting redemption requests.

If the redemption demand is properly made as described above, then, if the Business Combination is consummated, dMY will redeem these public shares for a pro rata portion of funds deposited in the trust account. If you exercise your redemption rights, then you will be exchanging your public shares for cash and will not be entitled to NewCo ordinary shares upon consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, it will not result in the loss of any warrants that you may hold. Your warrants will become exercisable to purchase NewCo ordinary shares in lieu of Class A Shares for a purchase price of $11.50 per share upon consummation of the Business Combination.

 

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Q.

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

 

A.

Whether the redemption is subject to U.S. federal income tax depends on the particular facts and circumstances. Please see the section entitled “The Business Combination Proposal — Material Tax Consideration — Material U.S. Federal Income Tax Considerations.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

 

Q.

What are the U.S. federal income tax consequences as a result of the Business Combination?

 

A.

Subject to the limitations and qualifications described in “The Business Combination Proposal — Material Tax Consideration — Material U.S. Federal Income Tax Considerations —U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of the dMY Merger” below, the Business Combination is generally intended to be tax-deferred to U.S. Holders and Non-U.S. Holders (as defined in “The Business Combination Proposal — Material Tax Considerations — Material U.S. Federal Income Tax Considerations”) of Class A Shares and public warrants for U.S. federal income tax purposes, except to the extent that such U.S. Holders and Non-U.S. Holders of Class A Shares receive cash pursuant to the exercise of redemption rights.

Section 367(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, in certain circumstances, may impose additional requirements for certain U.S. Holders to qualify for tax-deferred treatment with respect to the exchange of Class A Shares and/or the assumption of public warrants by NewCo in the Business Combination.

The tax consequences of the Business Combination are complex and will depend on your particular circumstances. For a more complete discussion of the U.S. federal income tax considerations of the Business Combination, including the application of Section 367(a) of the U.S. Tax Code, see the sections entitled “The Business Combination Proposal — Material Tax Consideration — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of the dMY Merger”, “The Business Combination Proposal Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Additional Requirements for Tax Deferral” and “The Business Combination Proposal — Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of Non-U.S. Holders — Tax Consequences to Non-U.S. Holders of the dMY Merger.” If you are a U.S. Holder whose Class A Shares are exchanged, or whose public warrants are assumed by NewCo, in the Business Combination, you are urged to consult your tax advisor to determine the tax consequences thereof.

The summary above is qualified in its entirety by the more detailed discussion provided in the section entitled “The Business Combination Proposal Material Tax Considerations — Material U.S. Federal Income Tax Considerations.”

 

Q.

Do I have appraisal rights if I object to the proposed Business Combination?

 

A.

No. Neither our stockholders nor our warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

 

Q.

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A.

Upon consummation of the IPO, dMY deposited $276,000,000 in the trust account. Upon consummation of the Business Combination, the funds in the trust account will be used to pay holders of the public shares who properly exercise redemption rights or to fund NewCo’s or its subsidiaries’ working capital, growth and general corporate purposes, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of $9,660,000 as deferred underwriting commissions), to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco, to make certain preference share payments to certain TopCo shareholders and to pay for the TopCo Redemption.

 

Q.

What happens if the Business Combination is not consummated?

 

A.

If dMY does not complete the Business Combination for whatever reason, dMY would search for another target business with which to complete a Business Combination. If dMY does not complete an initial

 

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  business combination by August 18, 2022, dMY must redeem 100% of the outstanding public shares, at a per share price, payable in cash, equal to the amount then held in the trust account, including interest earned on the funds held in the trust account and not previously released to dMY (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of outstanding public shares. The Founders have no redemption rights in respect of their Class A Shares contained in the private placement warrants or their Class B Shares in the event a business combination is not effected in the required time period, and, accordingly, such shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to dMY’s outstanding warrants. Accordingly, the warrants will expire worthless.

 

Q.

How do the Founders intend to vote on the proposals?

 

A.

Pursuant to the terms of the letter agreement entered into at the time of the IPO, the Founders agreed to vote their Founder Shares, and any public shares purchased by them, in favor of the Business Combination Proposal. As of the date of this proxy statement/prospectus, the Founders own an aggregate of 6,900,000 shares of dMY common stock, which, in the aggregate, represents 20% of dMY’s total outstanding shares on the date of this proxy statement/prospectus.

 

Q.

When do you expect the Business Combination to be completed?

 

A.

It is currently anticipated that the Business Combination will be consummated as soon as practicable following the special meeting which is set for 10:00 AM, Eastern Time, on April 16, 2021; however, such meeting could be adjourned, as described above. For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement — Conditions to the Closing of the Business Combination.

 

Q:

Can dMY waive the conditions to the consummation of the Business Combination?

 

A:

dMY may agree to waive, in whole or in part, one or more of the conditions to dMY’s obligations to complete the Business Combination, to the extent permitted by dMY’s Current Charter and bylaws and applicable laws. dMY may not waive the condition that dMY public stockholders approve the Business Combination Proposal. See the section entitled “The Business Combination Agreement — Conditions to the Closing of the Business Combination.”

 

Q:

Following the Business Combination, will dMY’s securities continue to trade on a stock exchange?

 

A:

No. dMY anticipates that, following consummation of the Business Combination, the dMY units will automatically separate into their component parts, the Class A Shares will be delisted from the NYSE, the dMY warrants will automatically convert into warrants exercisable for an equivalent number of NewCo ordinary shares and dMY will deregister its Class A Shares under the Exchange Act. However, NewCo intends to apply to list the NewCo ordinary shares and warrants on the NYSE under the symbols “GENI” and “GENI WS,” respectively, upon the Closing.

 

Q.

What impact will the COVID-19 pandemic have on the Business Combination?

 

A.

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on the businesses of dMY, TopCo and NewCo, and there is no guarantee that efforts by dMY, TopCo and NewCo to address the adverse impacts of COVID-19 will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and actions taken to contain COVID-19 or its impact, among others. In the event of any business disruption, if dMY or the Target Companies are unable to recover on a timely basis, the Business Combination and NewCo’s

 

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  business, financial condition and results of operations following the completion of the Business Combination may be adversely affected. The Business Combination may also be delayed and adversely affected by COVID-19 and become more costly. Each of dMY, TopCo and NewCo may also incur additional costs to remedy damages caused by any disruptions, which could adversely affect their respective financial condition and results of operations.

 

Q.

What do I need to do now?

 

A.

dMY urges you to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder and/or warrant holder of dMY. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q.

How do I vote?

 

A.

The special meeting will be held via live webcast at 10:00 AM, Eastern Time, on April 16, 2021. The special meeting can be accessed by visiting https://www.cstproxy.com/dmytechnologyii/sm2021, where you will be able to listen to the special meeting live and vote during the special meeting. Please note that you will only be able to access the special meeting by means of remote communication.

If you are a holder of record of shares of common stock on the record date, you may vote at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. Any stockholder wishing to attend the virtual meeting should register for the special meeting by April 13, 2021. To register for the special meeting, please follow these instructions as applicable to the nature of your ownership of common stock:

 

   

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the virtual meeting, go to https://www.cstproxy.com/dmytechnologyii/sm2021, enter the 12-digit control number included on your proxy card or notice of the special meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the special meeting you will need to log back into the special meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

   

Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the virtual meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the special meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the special meeting date in order to ensure access.

 

Q.

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

 

A.

No. Your broker, bank or nominee cannot vote your shares unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.

 

Q.

What constitutes a quorum?

 

A.

A quorum of our stockholders is necessary to hold a valid meeting. The presence, in person (which would include presence at the virtual special meeting) or by proxy, of stockholders holding a majority of the voting

 

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  power of all outstanding shares of capital stock of the company entitled to vote at such meeting constitutes a quorum at the special meeting. In the absence of a quorum, the chairperson of the special meeting has the power to adjourn the special meeting. There are currently 34,500,000 shares of common stock outstanding, and therefore, as of the record date for the special meeting, 17,250,001 shares of dMY common stock would be required to achieve a quorum.

 

Q.

What vote is required to approve each proposal at the special meeting?

 

A.

The following votes are required for each proposal at the special meeting:

 

   

Business Combination Proposal: Approval of the Business Combination Proposal requires the affirmative vote of holders of a majority of the outstanding votes cast by holders of the shares of Class A common stock and Class B common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

 

   

Adjournment Proposal: Approval of the Adjournment Proposal requires the affirmative vote of the holders of at least a majority of the votes cast by holders of the shares of Class A common stock and Class B common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

 

Q.

What happens if I sell my dMY Class A Shares before the special meeting?

 

A.

The record date for the special meeting is earlier than the date of the special meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your dMY Class A Shares after the applicable record date, but before the special meeting, unless you grant a proxy to the transferee, you will retain your right to vote at the special meeting.

 

Q.

May I change my vote after I have mailed my signed proxy card?

 

A.

Yes. Stockholders may send a later-dated, signed proxy card to the Transfer Agent at the address set forth at the end of this section, so that it is received prior to the vote at the special meeting, or attend the special meeting in person (which would include presence at the virtual special meeting) and vote. Stockholders also may revoke their proxy by sending a notice of revocation to dMY’s Chief Executive Officer, which must be received prior to the vote at the special meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q.

What happens if I fail to take any action with respect to the special meeting?

 

A.

If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and consummated, you will become a shareholder of NewCo and/or your dMY warrants will be assumed by NewCo and will entitle you to purchase NewCo ordinary shares on the same terms as your dMY warrants. However, if you fail to take any action with respect to the special meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination, provided you follow the instructions in this proxy statement for redeeming your shares. If you fail to take any action with respect to the special meeting and the Business Combination Proposal is not approved, you will continue to be a stockholder and/or warrant holder of dMY.

 

Q.

What should I do with my share and/or warrants certificates?

 

A.

Those stockholders who do not elect to have their Class A Shares redeemed for their pro rata share of the funds in the trust account should not submit their share certificates now. After the consummation of the Business Combination, NewCo will send instructions to dMY stockholders regarding the exchange of their

 

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  Class A Shares for NewCo ordinary shares. dMY stockholders who exercise their redemption rights must deliver their share certificates to the Transfer Agent (either physically or electronically) prior to the deadline for submitting redemption requests described above.

Upon consummation of the Business Combination, the dMY warrants, by their terms, will be assumed by NewCo and thereby entitle holders to purchase NewCo ordinary shares (and not dMY common stock) on the same terms as your dMY warrants. Therefore, warrant holders need not deliver their dMY warrants to dMY or NewCo at that time.

 

Q.

What should I do if I receive more than one set of voting materials?

 

A.

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares of common stock.

 

Q.    Who

can help answer my questions?

 

A.

If you have questions about the Business Combination or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

dMY Technology Group, Inc. II

1180 North Town Center Drive, Suite 100

Las Vegas, Nevada 89144

Tel: (702) 781-4313

Email: IR@dmytechnology.com

or:

Morrow Sodali LLC

470 West Avenue, Suite 3000

Stamford, Connecticut 06902

Tel: (800) 662-5200

Banks and brokers call collect: (203) 658-9400

E-mail: DMYD.info@investor.morrowsodali.com

You may also obtain additional information about dMY from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (either physically or electronically) to the Transfer Agent at the address below prior to the vote at the special meeting. If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Tel: (212) 509-4000

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the special meeting, including the business combination, you should read this entire document carefully, including the Business Combination Agreement attached as Annex A to this proxy statement/prospectus. The Business Combination Agreement is the legal document that governs the Business Combination and is also described in detail in this proxy statement/prospectus in the section entitled “The Business Combination Agreement.”

The Parties

dMY

dMY is a blank check company incorporated to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. dMY was incorporated on June 18, 2020 as a Delaware corporation.

On August 18, 2020, dMY closed its IPO of 27,600,000 units, including the exercise of the over-allotment option to the extent of 3,600,000 units. Each unit consists of one Class A Share and one-third of one redeemable warrant, with each warrant entitling the holder thereof to purchase one Class A Share at a purchase price of $11.50 per share commencing upon the later of (i) 30 days after dMY’s completion of a business combination and (ii) August 18, 2021. The units in the IPO were sold at an offering price of $10.00 per unit, generating total gross proceeds of $276,000,000. Simultaneously with the consummation of the IPO, dMY consummated the private placement of the private placement warrants, generating total gross proceeds of $7,520,000. A total of $276,000,000 was deposited into the trust account and the remaining net proceeds of the offerings became available to be used as working capital to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The IPO was conducted pursuant to a registration statement on Form S-l (Reg. No. 333-239508) that became effective on August 13, 2020. As of March 22, 2021, there was $276,127,156 held in the trust account.

dMY’s units, Class A Shares and warrants are currently listed on the NYSE under the symbols “DMYD.U,” “DMYD” and “DMYD WS,” respectively.

The mailing address of dMY’s principal executive offices is 1180 North Town Center Drive, Suite 100, Las Vegas, Nevada 89144. After the consummation of the Business Combination, its principal executive offices will be that of NewCo.

Genius Sports Group Limited

Genius is a B2B provider of scalable, technology-led products and services to the sports, sports betting and sports media industries. Genius is a fast-growing business with significant scale, distribution and an expanding addressable market and opportunity.

Genius’ mission is to be the official data, technology and commercial partner that powers the global ecosystem connecting sports, betting and media. In doing so, the Company creates engaging and immersive fan experiences while simultaneously providing sports leagues with reliable and sustainable revenue streams. See “Business of Genius — Products and Business Model.”

Genius was co-founded by the current Chief Executive Officer, Mark Locke, as a software company which specialized in aggregating sports betting data. It then evolved into providing outsourced oddsmaking solutions to



 

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sportsbooks. The Company then expanded into a software provider to sports and media technology companies and, in 2015, Genius Sports Group was formed.

The mailing address of Genius’ principal executive officers is 9th Floor, 10 Bloomsbury Way, London, WC1A 2SL

Sponsor

The Sponsor is a Delaware limited liability company that is owned and controlled by members of our management team. The Sponsor owns 6,825,000 Class B Shares and 5,013,333 warrants to purchase our Class A Shares. For a description of our Sponsor’s interests in the business combination, see “— Interests of dMY’s Directors and Officers in the Business Combination.”

NewCo

NewCo was formed solely for the purpose of effectuating the Business Combination. NewCo was incorporated on October 21, 2020 under the laws of Guernsey as a non-cellular company limited by shares. NewCo owns no material assets and does not operate any business.

The mailing address of NewCo’s principal executive office is 33 Jermyn Street, St. James’s, London SW1Y 6DN, United Kingdom. After the consummation of the Business Combination, its principal executive offices will be Genius Sports Group, 9th Floor, 10 Bloomsbury Way, London, WC1A 2SL.

TopCo

TopCo was formed on July 18, 2018 as a non-cellular company limited by shares under the laws of Guernsey in connection with the investment by the Apax Funds in Genius Sports Group Limited (the “Apax Investment”).

The mailing address of TopCo’s principal executive offices is 33 Jermyn Street, St. James’s, London SW1Y 6DN, United Kingdom. After the consummation of the Business Combination, its principal executive offices will be that of NewCo.

MidCo

MidCo is a wholly owned subsidiary of TopCo and was formed on July 18, 2018 as a private company limited by shares under the laws of England and Wales in connection with the Apax Investment.

The mailing address of MidCo’s principal executive offices is 33 Jermyn Street, St. James’s, London SW1Y 6DN, United Kingdom. After the consummation of the Business Combination, its principal executive offices will be that of NewCo.

Merger Sub

Merger Sub is a wholly owned subsidiary of NewCo and was formed solely for the purpose of effectuating the Business Combination. Merger Sub was incorporated on October 20, 2020 under the laws of Delaware as a corporation. Merger Sub owns no material assets and does not operate any business.

The mailing address of Merger Sub’s principal executive offices is 33 Jermyn Street, St. James’s, London SW1Y 6DN, United Kingdom. After the consummation of the Business Combination, Merger Sub will cease to exist as a separate legal entity.



 

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Emerging Growth Company

Each of dMY and NewCo is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, each of dMY and NewCo is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved (to the extent applicable to a foreign private issuer in NewCo’s case). If some investors find NewCo’s securities less attractive as a result, there may be a less active trading market for NewCo’s securities and the prices of NewCo’s securities may be more volatile.

NewCo will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (i) following the fifth anniversary of the closing of dMY’s IPO, (ii) in which it has total annual gross revenues of at least $1.07 billion or (iii) in which it is deemed to be a large accelerated filer, which means the market value of its ordinary shares that are held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which it has issued more than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

The Business Combination Proposal

Overview of the Business Combination Agreement

Pursuant to the Business Combination Agreement, prior to the Closing, TopCo will undergo the Reorganization wherein all existing classes of shares of TopCo (except for (i) certain preference shares of TopCo which will be redeemed in the TopCo Redemption and (ii) certain shares of TopCo, which will be contributed to NewCo in exchange for an amount equal to the Catch-Up Payment) will be contributed to NewCo in exchange for newly issued NewCo ordinary shares. As described in the Business Combination Agreement, solely with respect to the shares of TopCo that are unvested prior to the Reorganization and provided that the holders of such shares have executed and delivered support agreements agreeing to the vesting and restriction provisions therein, such shares shall be exchanged for NewCo ordinary shares but shall be subject to the vesting and restrictions as set forth therein. Following the Reorganization, upon the Closing, the shareholders of TopCo will hold: (1) that number of NewCo ordinary shares equal to the quotient obtained by dividing (i) $1,400,000,000, less the amount needed to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco, less the amount used to pay for the TopCo Redemption, less an amount equal to the Catch-Up Payment and less the amount, if any, to repurchase certain NewCo ordinary shares, in each case, in accordance with the terms of the Business Combination Agreement, by (ii) $10.00, and (2) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement. See the section entitled “The Business Combination Agreement.”

In addition, (a) effective as of immediately prior to the Closing, each issued and outstanding Class B Share will convert automatically on a one-for-one basis into a Class A Share; and (b) on the date of Closing, Merger Sub will merge with and into dMY, with dMY continuing as the surviving company, as a result of which (i) dMY will become a wholly-owned subsidiary of NewCo; (ii) each issued and outstanding unit of dMY, consisting of one Class A Share and one-third of one dMY Warrant, shall be automatically detached; (iii) in consideration for the acquisition of all of the issued and outstanding Class A Shares of dMY (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A Share acquired by virtue of the Business Combination; (iv) each issued and outstanding dMY warrant to purchase a Class A Share will



 

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become exercisable for one NewCo ordinary share; and (v) NewCo will change its name to Genius Sports Limited. Accordingly, at the Closing, the dMY public shareholders will hold approximately 16.5% of the issued and outstanding NewCo ordinary shares, the Founders will hold approximately 4.1% of the issued and outstanding NewCo ordinary shares and the Sellers will hold approximately 59.7% of the issued and outstanding NewCo ordinary shares (assuming no public shares are redeemed as described in this proxy statement/prospectus). For more information about the Business Combination, please see the sections titled “The Business Combination Proposal” and “The Business Combination Agreement.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

Consideration to be Received in the Business Combination

The aggregate consideration to be received by the Pre-Closing Holders at the Closing (after implementing the steps set forth below in the subsection titled “—Closing Date Cash Payments and Uses,” including in exchange of all debt and equity securities of TopCo (including pursuant to the TopCo Redemption) will consist of: (i) one billion four hundred million dollars ($1,400,000,000) (the “TopCo Equity Value”) apportioned in the following manner between cash and ordinary shares of NewCo, par value $0.01 (the ordinary shares of NewCo excluding the Restricted Shares, the “NewCo Common Shares”): (x) cash in an amount equal to the sum of (I) the Shareholder Debt and Preference Share Repayments (as defined in the Business Combination Agreement) to be distributed per the steps set forth in the section titled The Business Combination Agreement—Consideration to be Received in the Business Combination—Closing Date Cash Payments and Uses and (II) cash in an amount, if any, used to repurchase NewCo Common Shares in accordance with the steps set forth in the section titled The Business Combination Agreement—Consideration to be Received in the Business Combination—Closing Date Cash Payments and Uses (the foregoing amount under this clause (x), the “Aggregate Cash Consideration”) and (y) a number of NewCo Common Shares equal to the quotient obtained by dividing (1) the TopCo Equity Value minus the Aggregate Cash Consideration by (2) $10.00 and (ii) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement.

Management and Board of Directors Following the Business Combination

Effective as of the Closing, the board of directors of NewCo will consist of seven members, including Mark Locke, Albert Costa Centena, Gabriele Cipparrone, Niccolo de Massi, Harry L. You, Daniel Burns, and Roxana Mirica. NewCo expects to add two additional members to the board prior to, at or following the Closing. See the section titled “Information About Management, Directors and Nominees” for additional information.

Founder Holders Forfeiture Agreement

Concurrently with the execution of the Business Combination Agreement, the Founders, NewCo and dMY entered into the Founder Holders Forfeiture Agreement, pursuant to which, among other things, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash (as defined in the Business Combination Agreement) will be less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

Founder Holders Consent Letter

Concurrently with the execution of the Business Combination Agreement, the Founders, NewCo and dMY entered into the Founder Holders Consent Letter, pursuant to which, among other things, the Founders have agreed to waive any and all anti-dilution rights described in the Current Charter with respect to Class A Shares



 

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held by the Founders (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), as more fully described in the Founder Holders Consent Letter.

Investor Rights Agreement

At the Closing, dMY, the Founders, the Sellers and NewCo will enter into an Investor Rights Agreement, pursuant to which, among other things, (i) dMY and the Founders will agree to terminate the Registration Rights Agreement, dated as of August 13, 2020, entered into in connection with the IPO; (ii) NewCo will provide certain registration rights for the NewCo ordinary shares and warrants held by the parties to the Investor Rights Agreement; (iii) at the Closing, the Sponsor will be entitled to designate two directors of NewCo, the Sellers will be entitled to designate six directors of NewCo, and the Chief Executive Officer of NewCo will be a director of NewCo; and (iv) Management, the Founders, Maven and the Co-Investors will agree not to transfer, sell, assign or otherwise dispose of the NewCo ordinary shares held by such person as of the Closing Date for 12 months following the Closing (with respect to Management and the Founders) and 6 months following the Closing (with respect to Maven and the Co-Investors), in each case subject to certain exceptions and as more fully described in the Investor Rights Agreement.

Transaction Support Agreements

Concurrently with the execution of the Business Combination Agreement, NewCo, TopCo, dMY and the TSA Shareholders entered into the Transaction Support Agreements, pursuant to which, among other things, the TSA Shareholders agreed to vote their outstanding shares of TopCo at any meeting of TopCo in favor of the transactions contemplated by the Business Combination Agreement and provided a power of attorney to Maven to take certain actions in connection with the transactions contemplated by the Business Combination Agreement on behalf of such shareholders. The TSAs also set out a summary of the terms on which the holders of Restricted Shares will hold such Restricted Shares, which will be set out more fully in the Galileo NewCo Limited 2021 Restricted Share Plan and the Form of Restricted Share Agreement under the Galileo NewCo Limited 2021 Restricted Share Plan.

Subscription Agreements

Concurrently with the execution of the Business Combination Agreement, NewCo and dMY entered into the Subscription Agreements, with certain accredited and institutional investors, pursuant to which such investors have subscribed to purchase an aggregate of 33,000,000 NewCo ordinary shares, for a purchase price of $10.00 per share, for an aggregate purchase price of $330,000,000, to be issued immediately prior to or substantially concurrently with the Closing. The obligations of each party to the Subscription Agreements to consummate the Subscriptions are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement. The NewCo ordinary shares to be issued in connection with the Subscription Agreements and the transactions contemplated thereby will not be registered under the Securities Act and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.

Additional Matters Being Voted On

The Adjournment Proposal

If dMY is unable to consummate the Business Combination, the Board may submit a proposal to adjourn the special meeting to a later date or dates, if necessary. See the section entitled “The Adjournment Proposal.”



 

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Equity Ownership Upon Closing

As of the date of this proxy statement/prospectus, there are 34,500,000 shares of dMY common stock outstanding, comprised of 27,600,000 Class A Shares and 6,900,000 Class B Shares, of which our Sponsor owns 6,825,000 Class B Shares and each of Darla Anderson, Francesca Luthi and Charles E. Wert owns 25,000 Class B Shares. At Closing, each currently issued and outstanding Class B Share will convert into a Class A Share in accordance with the terms of the Current Charter and the Founder Holders Consent Letter.

We anticipate that, upon completion of the Business Combination, the voting interests in NewCo will be as set forth in the table below.

 

     Assuming No
Redemptions
of
Public Shares
    Assuming
Maximum
Redemptions
of
Public
Shares(1)
 

dMY’s Public Stockholders

     16.5     —  

Founders

     4.1     3.7

Sellers

     59.7     75.8

PIPE Investors

     19.7     20.6

 

(1)

Pursuant to the Founder Holders Forfeiture Agreement, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash will be less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

The voting percentages set forth above were calculated based on the amounts set forth in the sources and uses table in “— Sources and Uses of Proceeds for the Business Combination” and do not take into account (i) warrants that will remain outstanding immediately following the Business Combination and may be exercised thereafter (commencing upon the later to occur of 12 months from the closing of the IPO (i.e., August 18, 2021) and 30 days after the Closing) or (ii) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement, but does include the Class B Shares, which at Closing will convert on a one-for-one basis into 6,900,000 Class A Shares. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.”

If the actual facts are different than the assumptions set forth above, the voting percentages set forth above will be different. For example, there are currently outstanding an aggregate of 14,213,333 warrants to acquire Class A Shares, which are comprised of 5,013,333 private placement warrants held by our initial stockholders and 9,200,000 public warrants. Each of the dMY warrants is exercisable commencing upon the later to occur of 12 months from the IPO and 30 days after the Closing for one Class A Share and, following the consummation of the Business Combination, will entitle the holder thereof to purchase one NewCo ordinary share in accordance with its terms. Therefore, as of the date of this proxy statement/prospectus, if we assume that each outstanding warrant is exercised and a NewCo ordinary share is issued as a result of such exercise, with payment to NewCo of the warrant exercise price of $11.50 per share, NewCo’s fully-diluted share capital would increase by a total of 14,213,333 shares, with approximately $163,453,330 paid to NewCo to exercise the warrants.

Organizational Structure

The following diagram illustrates the ownership structure of NewCo immediately following the Closing. The equity interests shown in the diagram were calculated based on the amounts set forth in the sources and uses table in “— Sources and Uses of Proceeds for the Business Combination” and are based on the assumptions that



 

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(i) no stockholders exercise their redemption rights to receive cash from the trust account in exchange for their Class A Shares; (ii) none of the parties set forth in the chart below purchases Class A Shares in the open market; (iii) the Class B Shares convert on a one for one basis into an aggregate of 6,900,000 Class A Shares; (iv) the PIPE Investment is consummated in full; and (v) there are no other issuances of equity interests of dMY or NewCo or their subsidiaries prior to or in connection with the Closing. Notwithstanding the foregoing, the percentages set forth below do not take into account (i) the warrants that may be exercised commencing upon the later to occur of 12 months from the IPO and 30 days after the Closing and (ii) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement. Certain amounts that appear in this section may not sum due to rounding.

 

 

LOGO

Date, Time and Place of Special Meeting of dMY’s stockholders

The special meeting of dMY will be held at 10:00 AM, Eastern Time, on April 16, 2021, at http://www.cstproxy.com/dmytechnologyii/sm2021, to consider and vote upon the Business Combination Proposal and, if necessary, the Adjournment Proposal to permit further solicitation and vote of proxies if dMY is not able to consummate the Business Combination. The special meeting will be conducted via live webcast and so stockholders will not be able to attend the special meeting in person. Stockholders may attend the special meeting online and vote at the special meeting by visiting https://www.cstproxy.com/dmytechnologyii/sm2021 and entering your 12-digit control number, which is either included on the proxy card you received or obtained through Continental Stock Transfer & Trust Company.



 

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Registering for the Special Meeting

Any stockholder wishing to attend the virtual meeting should register for the special meeting by April 13, 2021 at https://www.cstproxy.com/dmytechnologyii/sm2021. To register for the special meeting, please follow these instructions as applicable to the nature of your ownership of dMY common stock:

 

   

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the online-only meeting, go to https://www.cstproxy.com/dmytechnologyii/sm2021, enter the 12-digit control number included on your proxy card or notice of the special meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the special meeting you will need to log back into the special meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

   

Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the special meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the special meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the special meeting date in order to ensure access.

Voting Power; Record Date

Stockholders will be entitled to vote or direct votes to be cast at the virtual meeting if they owned shares of common stock of dMY at the close of business on March 12, 2021, which is the record date for the special meeting. Stockholders will have one vote for each share of common stock owned at the close of business on the record date. If your shares of common stock are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. dMY warrants do not have voting rights. On the record date, there were 34,500,000 shares of dMY common stock outstanding, of which 27,600,000 were public shares, with the rest being held by the Founders.

Quorum and Vote of dMY Stockholders

A quorum of dMY stockholders is necessary to hold a valid meeting. A quorum will be present at the dMY meeting if the holders of a majority of the shares entitled to vote at the special meeting are represented in person or by proxy (which would include presence at the virtual meeting). In the absence of a quorum, the chairperson of the special meeting has the power to adjourn the special meeting. As of the record date for the special meeting,                  shares of common stock would be required to achieve a quorum. The proposals presented at the special meeting will require the following votes:

 

   

Approval of the Business Combination Proposal will require approval by the affirmative vote of holders of a majority of the outstanding Class A Shares and Class B Shares entitled to vote on such matter, voting as a single class. There are currently 34,500,000 shares of common stock outstanding, so at least 17,250,001 shares must be voted in favor to pass the proposal. The Founders own of record and are entitled to vote an aggregate of 6,900,000 Founder Shares and have agreed to vote in favor of the proposal; as a result, only 10,350,001 public shares are required to be voted in favor of the proposal for it to be approved.

 

   

Approval of the Adjournment Proposal will require approval by the affirmative vote for the proposal by the holders of at least a majority of the votes cast by holders of Class A Shares and Class B Shares



 

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present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

With respect to each proposal in this proxy statement/prospectus, you may vote “FOR,” “AGAINST” or “ABSTAIN.”

If a stockholder fails to return a proxy card or fails to instruct a broker or other nominee how to vote, and does not attend the special meeting in person, then the stockholder’s shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have no effect on the outcome of any proposal in this proxy statement/prospectus.

Abstentions will have no effect on any of the proposals.

Redemption Rights

Pursuant to the Current Charter, a holder of public shares may demand that dMY redeem such public shares for cash if the Business Combination is consummated. Holders of public shares or units who wish to exercise their redemption rights must, (i) if they hold their public shares through units, elect to separate their units into the underlying public shares and warrants and (ii) prior to 10:00 AM, Eastern Time, on April 14, 2021, (A) submit a written request to the Transfer Agent that dMY redeem their public shares for cash and (B) deliver their public shares to the Transfer Agent physically or electronically using the DTC’s DWAC (Deposit and Withdrawal at Custodian) system. Any holder of public shares will be entitled to demand that such holder’s public shares be redeemed for a full pro rata portion of the amount then in the trust account, including interest earned on the trust account (which, for illustrative purposes, was approximately $276,127,156, or $10.00 per public share, as of March 22, 2021). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the deadline to submitting redemption requests and thereafter, with dMY’s consent, until the Closing. If a holder delivers their public shares for redemption to the Transfer Agent and later decides to withdraw such request prior to the deadline for submitting redemption requests, the holder may request that the Transfer Agent return the shares (physically or electronically).

Any corrected or changed written demand of redemption rights must be received by the Transfer Agent prior to the vote taken on the Business Combination Proposal at the special meeting. No demand for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to the Transfer Agent prior to the deadline for submitting redemption requests.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate or any other person with whom he, she or it is acting in concert or as a partnership, syndicate or other group, will be restricted from seeking redemption rights with respect to more than 20% of the issued and outstanding public shares. Accordingly, all public shares in excess of 20% held by a stockholder, together with any affiliate or any other person with whom he, she or it is acting in concert or as a partnership, syndicate or other group, will not be redeemed for cash.

See the section entitled “Special Meeting of dMY Stockholders — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

If the number of redemptions exceeds the maximum redemption scenario described herein, dMY may need to obtain additional debt or equity financing to the complete the Business Combination.



 

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Appraisal Rights

Neither the stockholders nor the warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone, on the Internet or in person. dMY has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies. If a stockholder grants a proxy, he, she or it may still vote his, her or its shares at the virtual meeting if he, she or it revokes his, her or its proxy before the special meeting. A stockholder may also change his, her or its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of dMY Stockholders — Revoking Your Proxy.”

Interests of dMY’s Directors, Officers and Advisors in the Business Combination

In considering the recommendation of the Board to vote in favor of approval of the Business Combination Proposal and the Adjournment Proposal, stockholders should keep in mind that dMY’s directors and executive officers, advisors and entities affiliated with them, have interests in such proposals that are different from, or in addition to, those of dMY stockholders generally. In particular:

 

   

the continued indemnification of former and current directors and officers of dMY and the continuation of directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Founders have waived their right to redeem any of their Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Founders beneficially own or have an economic interest in Founder Shares and private placement warrants that they purchased prior to, or simultaneously with, the IPO for which they have no redemption rights in the event an initial business combination is not effected in the required time period;

 

   

the fact that the Founders paid an aggregate of $25,000 for the Class B Shares, which will convert into 6,900,000 Class A Shares in accordance with the terms of the Current Charter and the Founder Holders Consent Letter, and such securities will have a significantly higher value at the time of the Business Combination, estimated at approximately $116,058,000 based on the closing price of $16.82 per Class A Share on NYSE on March 22, 2021;

 

   

the fact that the Sponsor paid approximately $7,520,000 for 5,013,333 private placement warrants, each such private placement warrant is exercisable commencing upon the later of 12 months following the IPO and 30 days following the Closing for one NewCo ordinary share at $11.50 per share;

 

   

the fact that Goldman Sachs & Co. LLC (“GS”), as one of dMY’s underwriters in the IPO and one of the financial advisors in connection with the Business Combination, will be entitled to receive a deferred underwriting commission and financial advisory fee upon completion of the Business Combination; and Needham & Company, LLC (“Needham”) as one of the underwriters in the IPO who also performed certain financial advisory services in connection with the Business Combination, will be entitled to receive a deferred underwriting commission upon completion of the Business Combination; and

 

   

if the trust account is liquidated, including in the event dMY is unable to complete an initial business combination within the required time period, the Sponsor has agreed that it will be liable to dMY if and to the extent any claims by a third party for services rendered or products sold to it, or a prospective target business with which it has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the



 

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trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under the indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

At any time prior to the record date for the special meeting, during a period when they are not then aware of any material nonpublic information regarding dMY or its securities, the Founders, the Sellers and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of common stock or vote their shares in favor of the proposals. The purpose of such purchases and other transactions would be to increase the likelihood that the Business Combination Proposal is approved. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with dMY’s consent, the transfer to such investors or holders of shares or warrants owned by the Founders for nominal value.

Entering into any such arrangements may have a depressive effect on the Class A Shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase Class A Shares at a price lower than market and may therefore be more likely to sell the Class A Shares he, she or it owns, either prior to or immediately after the special meeting.

If such transactions are effected, the consequence could be to cause the Business Combination Proposal to be approved in circumstances where such approval could not otherwise be obtained. Purchases of Class A Shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals to be presented at the special meeting and would likely increase the chances that such proposals would be approved.

As of the date of this proxy statement/prospectus, no agreements dealing with the above have been entered into by the Founders, the Sellers or any of their respective affiliates. dMY will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

Recommendation to Stockholders

The Board believes that the Business Combination Proposal and the other proposals to be presented at the special meeting are fair to and in the best interests of dMY’s stockholders and unanimously recommends that its stockholders vote “FOR” the Business Combination Proposal and “FOR” the Adjournment Proposal, if presented.



 

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Conditions to the Closing of the Business Combination

Conditions to Each Party’s Obligation

The respective obligation of each party to consummate the transactions to be performed by it in connection with the Closing is subject to the satisfaction or written waiver (if legally permitted), as of the Closing Date, of each of the following conditions:

 

   

there shall be no applicable law in effect that makes the consummation of the Business Combination illegal or any order in effect preventing the consummation of the Business Combination;

 

   

the affirmative vote of dMY’s stockholders required to approve the proposals set forth in this proxy statement/prospectus, as determined in accordance with applicable law and dMY’s governing documents, must be obtained;

 

   

the registration statement on Form F-4 to be filed with the SEC by NewCo, which registration statement contains the proxy statement on Schedule 14A to be filed in connection with the dMY stockholder meeting, must be effective, and no stop order must be outstanding and no proceeding seeking such a stop order has been threatened or initiated by the SEC with respect to such registration statement which remains pending; and

 

   

the NewCo ordinary shares to be issued in connection with the Business Combination and the NewCo warrants must be approved for listing on the NYSE, subject only to official notice of issuance.

Conditions to dMY’s Obligations

The obligation of dMY to consummate the transactions to be performed by dMY in connection with the Closing is subject to the satisfaction or written waiver, at or prior to the Closing Date, of each of the following conditions:

 

   

the representations and warranties of NewCo, TopCo, MidCo and Merger Sub:

 

   

regarding the non-existence of a Material Adverse Effect (as defined in the Business Combination Agreement) must be true and correct in all respects as of the date of the Business Combination Agreement and as of the Closing Date;

 

   

regarding organization, authority, enforceability, capitalization and brokerage, in each case disregarding qualifications relating to materiality, Material Adverse Effect or similar qualifiers, must be true and correct in all material respects as of the date of the Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct in all material respects as of such date);

 

   

regarding affiliate transactions must be true and correct in all respects as of the date of the Business Combination Agreement and as of the Closing Date; provided that for purposes of this sub bullet, any failure of such representations and warranties to be so true and correct that does not involve a transaction in excess of four million dollars ($4,000,000), individually or in the aggregate, will not be considered material; and

 

   

other than those described in the foregoing sub bullets, must be true and correct as of the date of the Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct as of such date), except in each case to the extent any failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.



 

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each of NewCo, TopCo, MidCo and Merger Sub must perform or comply in all material respects with all of its respective covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Closing Date;

 

   

NewCo and Topco must jointly deliver a customary closing certificate certifying that the conditions in the first and second bullet points above have been satisfied;

 

   

NewCo and TopCo must deliver, among other things, (i) evidence that the Reorganization has been completed, (ii) the Investor Rights Agreement duly executed by NewCo and Maven among others, (iii) copies of all cancelled original Loan Notes, and (iv) evidence that the TopCo Redemption has been completed;

 

   

NewCo’s Memorandum of Incorporation and Articles of Incorporation must be amended and restated in accordance with the Business Combination Agreement; and

 

   

the TSAs and each additional support agreement delivered after the date of the Business Combination Agreement must be in full force and effect.

Conditions to NewCo’s and TopCo’s Obligations

 

   

The representations and warranties of dMY:

 

   

regarding organization, authority, enforceability, capitalization, brokerage, trust account and investment company, in each case disregarding qualifications relating to materiality, dMY Material Adverse Effect (as defined in the Business Combination Agreement) or similar qualifiers, must be true and correct in all material respects as of the date of the Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct in all material respects as of such date); and

 

   

other than those described in the foregoing sub bullet, must be true and correct as of the date of the Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct as of such date), except in each case to the extent any failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a dMY Material Adverse Effect.

 

   

dMY must perform or comply in all material respects with all of its covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Closing Date;

 

   

dMY must deliver a customary closing certificate certifying that the conditions in the first and second bullet points above have been satisfied;

 

   

the Minimum Cash (as defined in the Business Combination Agreement) must not be less than three hundred fifteen million dollars ($315,000,000);

 

   

dMY must deliver to NewCo the Investor Rights Agreement, duly executed by dMY and the Founders; and

 

   

the Founder Holders Forfeiture Agreement and the Founder Holders Consent Letter, must each be in full force and effect.



 

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Sources and Uses of Proceeds for the Business Combination

The following table summarizes the sources and uses of proceeds from the Business Combination. Where actual amounts are not known or knowable, the figures below represent good faith estimates of such amounts.

No Redemption

 

Sources of Funds
(in millions)
          Uses of Funds
(in millions)
      

Cash from dMY’s trust account(1)

   $ 276      Cash consideration to Existing TopCo Shareholders(2)    $ 398  

PIPE Investment

     330      Transaction fees and expenses and affiliate loan repayment      56  

TopCo Equity Roll-Over

     1,002      Incremental Cash on Balance Sheet      152  
      TopCo Equity Roll-Over      1,002  
  

 

 

       

 

 

 

Total Sources

   $ 1,608      Total Uses    $ 1,608  
  

 

 

       

 

 

 

Maximum Redemption

 

Sources of Funds
(in millions)
          Uses of Funds(3)
(in millions)
      

Cash from dMY’s trust account(1)

   $ 276      Redemptions of dMY Common Stock(4)    $ 276  

PIPE Investment

     330      Cash consideration to Existing TopCo Shareholders(2)      185  

TopCo Equity Roll-Over

     1,215      Transaction fees and expenses and affiliate loan repayment      45  
      Incremental Cash on Balance Sheet      100  
      TopCo Equity Roll-Over      1,215  
  

 

 

       

 

 

 

Total Sources

   $ 1,821      Total Uses    $ 1,821  
  

 

 

       

 

 

 

 

(1)

Excludes interest earned on cash in trust.

(2)

Includes TopCo Redemption and repayments in full of the Loan Notes (as defined below) balance expected at the Closing.

(3)

Pursuant to the Founder Holders Forfeiture Agreement, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash is less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

(4)

Assumes that 27,600,000 shares of dMY Class A common stock are redeemed in connection with the Business Combination, while satisfying the Minimum Cash Condition.

Tax Consequences of the Business Combination

For a description of certain tax consequences of the Business Combination and the exercise of redemption rights, please see the information set forth in “Material Tax Considerations.”

Anticipated Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America. The Business Combination will first be accounted for as a capital reorganization whereby NewCo is the successor to its predecessor TopCo. As a result of the first step described above, the existing shareholders of TopCo will continue to retain control through ownership of NewCo.



 

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The capital reorganization will be immediately followed by the acquisition of dMY, which is accounted for within the scope of ASC 805. Under this method of accounting, dMY will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of NewCo issuing NewCo ordinary shares for the net assets of dMY, accompanied by a recapitalization. The NewCo ordinary shares issued are recognized at fair value and recorded as consideration for the acquisition of the public shell company, dMY. Under this method of accounting, there is no acquisition accounting and no recognition of goodwill or other intangible assets, as dMY is not recognized as a business as defined under ASC 805, given it consists predominantly of cash or other marketable securities in the dMY trust account.

TopCo has been determined to be the accounting acquirer and predecessor in the Business Combination based on evaluation of the following facts and circumstances:

 

   

TopCo’s shareholders will have the largest voting interest in NewCo under both the no redemption and maximum redemption scenarios;

 

   

NewCo’s board of directors will initially consist of seven directors, and NewCo expects to add two additional directors to the board prior to, at or following the Closing: TopCo’s shareholders will be initially entitled to appoint six directors, dMY will be initially entitled to appoint two directors and the Chief Executive Officer of NewCo will be a director of NewCo;

 

   

the business of TopCo will comprise the ongoing operations of Genius; and

 

   

TopCo is the larger entity, in terms of both revenues and total assets.

Other factors were considered, including composition of management, purpose and intent of the Business Combination and the location of NewCo’s headquarters, noting that the preponderance of evidence as described above is indicative that TopCo is the accounting acquirer and predecessor in the Business Combination.

Summary of Risk Factors

In evaluating the proposals to be presented at the special meeting, a stockholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related to Genius, dMY, the Business Combination and NewCo ordinary shares are summarized below.

 

   

COVID-19 has adversely affected our business, financial condition, results of operations and prospects, including as a result of the reduction in the quantity of global sporting events, closures or restrictions on business operations of our customers and sports organizations and a decrease in consumer spending, and it may continue to do so in the future.

 

   

We rely on relationships with sports organizations from which we acquire sports data, including, among other things, via arrangements for exclusive rights for such data. Loss of existing relationships or failure to renew or expand existing relationships may cause loss of competitive advantage or require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition and results of operations.

 

   

Fraud, corruption or negligence related to sports events, or by our employees or contracted statisticians collecting data on behalf of the Company, may adversely affect our business, financial condition and results of operations and negatively impact our reputation.

 

   

We and our customers and suppliers are subject to a variety of domestic and foreign laws and regulations, which are subject to change and interpretation and which could subject us to claims or otherwise harm our and our customers’ and suppliers’ respective businesses. Any change in existing regulations or their interpretation, or the regulatory climate and requirements applicable to our or our customers’ and suppliers’ products and services, or changes in tax rules and regulations or interpretation thereof related to our or our customers’ and suppliers’ products and services, could



 

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adversely impact our or our customers’ and suppliers’ ability to operate our or their respective businesses as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.

 

   

Our collection, storage and use of personal data are subject to applicable data protection and privacy laws, and any failure to comply with such laws may harm our reputation and business or expose us to fines and other enforcement action.

 

   

We are party to pending litigation and investigations in various jurisdictions and with various plaintiffs and we may be subject to future litigation or investigations in the operation of our business. An adverse outcome in one or more proceedings could adversely affect our business.

 

   

Failure to protect or enforce our proprietary and intellectual property rights, including our unregistered intellectual property, and the costs involved in such protection and enforcement could harm our business, financial condition, results of operations and prospects.

 

   

We may face claims for intellectual property infringement, which could subject us to monetary damages or limit us in using some of our technologies or providing certain solutions.

 

   

We rely on information technology and other systems and platforms, including our data center and Amazon Web Services and certain other third-party platforms, and failures, errors, defects or disruptions therein could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects. Our product offerings and other software applications and systems, and certain third-party platforms that we use could contain undetected errors or errors that we fail to identify as material.

 

   

We have a history of losses and may not be able to achieve or sustain profitability in the future.

 

   

If we are unable to increase our revenues or our operating costs are higher than expected, our profitability may decline and our operating results may fluctuate significantly.

 

   

The international scope of our operations may expose us to increased risk, and our international operations and corporate and financing structure may expose us to potentially adverse tax consequences.

 

   

Risks related to the U.K.’s exit from the European Union (“Brexit”) may have a negative effect on global economic conditions, financial markets and our business.

 

   

Directors of dMY have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other proposals described in this proxy statement/prospectus.

 

   

Following the completion of the Business Combination, Founders and Sellers, whose interests may differ from those of other holders of NewCo ordinary shares following the Business Combination, will have the ability to significantly influence NewCo’s business and management.

 

   

Subsequent to the consummation of the Business Combination, NewCo may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

 

   

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what the combined company’s actual financial position or results of operations would have been.

 

   

The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.



 

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The Board did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination.

 

   

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of dMY’s and/or NewCo’s securities may decline.

 

   

Because NewCo is incorporated under the laws of the Island of Guernsey, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.

 

   

It may be difficult to enforce a U.S. judgment against NewCo or its directors and officers outside the United States, or to assert U.S. securities law claims outside of the United States.

 

   

As a company incorporated in the Island of Guernsey, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from NYSE corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with NYSE corporate governance listing standards.



 

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COMPARATIVE PER SHARE INFORMATION

The following table sets forth summary historical comparative share information for TopCo and dMY and unaudited pro forma condensed combined per share information after giving effect to the Business Combination, assuming two redemption scenarios as follows:

 

   

Assuming No Redemptions: This presentation assumes that no public shareholders of dMY exercise redemption rights with respect to their public shares for a pro rata share of cash in the dMY trust account. Under this scenario, proceeds from the Business Combination will be used to pay down $76.6 million of the Loan Notes, $299.9 million for the TopCo Redemption, and $18.0 million for the Catch Up Payment.

 

   

Assuming Maximum Redemptions: This presentation assumes that 27,600,000 of the dMY public shares are redeemed for their pro rata share of the cash in the dMY trust account in connection with the dMY Share Redemptions. This scenario gives effect to dMY Share Redemptions of 27,600,000 shares for aggregate redemption payments of $276.0 million. The Business Combination Agreement, includes as a condition to closing the Business Combination that, at Closing, dMY will have Minimum Cash of $315.0 million comprising cash held in the dMY trust account, less amounts required for the dMY Share Redemptions, less 33% of the aggregate amount of transaction expenses incurred by the parties to the Business Combination, and aggregate proceeds received by NewCo from the PIPE Investment. As the proceeds from the PIPE Investment are expected to satisfy the Minimum Cash Condition, the total dMY trust account balance of $276.0 million (as of September 30, 2020) is reflected as being redeemed. Under this scenario, proceeds available for the TopCo Redemption will be reduced by $195.0 million, resulting in an expected $104.9 million payment for the TopCo Redemption, and no Catch Up Payment; repayment of the Loan Notes is still expected to occur in the maximum redemption scenario.

The pro forma book value information reflects the Business Combination as if it had occurred on September 30, 2020. The weighted average shares outstanding and net earnings per share information reflect the Business Combination as if it had occurred on January 1, 2019.

This information is only a summary and should be read in conjunction with the historical financial statements of TopCo and dMY and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information of TopCo and dMY is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus.



 

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The unaudited pro forma combined earnings (loss) per share information below does not purport to represent the earnings (loss) per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of TopCo and dMY would have been had the companies been combined during the periods presented.

 

                Combined Pro Forma     TopCo Equivalent Per Share Pro
Forma (4)
 
    TopCo
(Historical)
    DMY
(Historical)
    No
Redemptions
    Maximum
Redemptions
    No
Redemptions
    Maximum
Redemptions
 

As of and for the Nine Months Ended September 30, 2020 (1)

           

Book value per share (2)

  $ (68.61   $ 0.14     $ 2.59     $ 2.38     $ 100.80     $ 92.73  

Weighted average number of shares outstanding — basic and diluted

    1,873,423       34,500,000       167,698,105       160,365,000       100,198,105       121,500,000  

Net income (loss) per share — basic and diluted

  $ (8.99   $ —       $ (0.14   $ (0.15   $ (5.50   $ (5.75

As of and For the year Ended December 31, 2019 (3)

           

Weighted average number of shares outstanding — basic and diluted

    1,829,947       N/A       167,698,105       160,365,000       100,198,105       121,500,000  

Net income (loss) per share, basic and diluted

  $ (21.97     N/A     $ (2.00   $ (2.03   $ (77.81   $ (79.20

 

(1)

Information for dMY is included from June 18, 2020 onward.

(2)

Book value per share is calculated as total equity, excluding temporary equity (Class A Shares subject to redemption for dMY and preference shares for TopCo) divided by the weighted average shares outstanding.

(3)

A pro forma balance sheet for year ended December 31, 2019 is not required to be included herein and as such, no such calculation is included in this table.

(4)

The equivalent pro forma basic and diluted per share data for TopCo is calculated by multiplying the combined pro forma per share data by the exchange ratio set forth in the Business Combination Agreement.

 

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RISK FACTORS

Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus. Unless the context otherwise suggests, in this section, “we,” “us,” “our” and the “Company” refer to the business and operations of Genius prior to the Business Combination and to the business and operations of NewCo following the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, including those related to COVID-19, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, may heighten the effects of the other risk factors described below and may have a material adverse effect on the business, cash flows, financial condition and results of operations of NewCo following the Business Combination. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by Genius, TopCo, NewCo and dMY, which later may prove to be incorrect or incomplete. Genius, TopCo, NewCo and dMY may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair their business or financial condition. This proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties and actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this proxy statement/prospectus. See “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Genius Sports Group’s Business

COVID-19 has adversely affected our business, financial condition, results of operations and prospects, including as a result of the reduction in the quantity of global sporting events, closures or restrictions on business operations of our customers and sports organizations and a decrease in consumer spending, and it may continue to do so in the future.

The recent outbreak of COVID-19 has negatively affected economic conditions regionally as well as globally, and has caused a reduction in consumer spending. Efforts to contain the effect of the virus have included business closures, travel restrictions and restrictions on public gatherings and events. Many businesses have eliminated non-essential travel and canceled in-person events to reduce instances of employees and others being exposed to public gatherings. Governments around the world, including governments in Europe and state and local governments in the U.S., have restricted business activities and strongly encouraged, instituted orders or otherwise restricted individuals from leaving their home. To date, governmental authorities have imposed or have recommended various measures, including social distancing, quarantine and stay-at-home or shelter-in-place directives, limitations on the size of gatherings, closures of work facilities, schools, public buildings and businesses, and cancellation of events, including sporting events, concerts, conferences and meetings.

The direct impact on our business and the business of our customers, including sports organizations and bookmakers, beyond disruptions in normal business operations in several of our and their offices and business establishments, has been primarily through the suspension, postponement and cancellation of sports and sporting events. The suspension, postponement and cancellation of sporting events affected by COVID-19 has reduced the volume of sporting events on which we can collect data and has had an adverse impact on our revenue and the revenue of our customers and sports organizations.

Additionally, as a result of the cancellation of major and professional sporting events, bookmakers have increased demand for lower-tier events. Providing data for such lower-tier and amateur events to meet this demand exposes our business to additional risk, including risks related to fraud, corruption or negligence, reputational harm, regulatory risk, privacy risk and certain other risks related to our international operations. Although many sports seasons and sporting events have recommenced in recent months, the rapid development

 

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and fluidity of this situation precludes any prediction as to the ultimate impact of COVID-19, which remains a material uncertainty and risk with respect to us, our performance, and our financial results. The revenue of our customers and sports organizations and our revenue continues to depend on sports events taking place, and we may not generate as much revenue as we would have without the cancellation or postponements in the wake of COVID-19.

Moreover, as a result of orders issued by governmental authorities around the world, a number of our customers’ operations have been restricted and certain of their properties have been closed. While some of these operations have resumed and properties have reopened, demand for our products and services may continue to be adversely impacted by such closures and restrictions in the future.

COVID-19 could continue to have a material adverse impact on economic and market conditions and trigger a period of continued global economic slowdown. Our business and the businesses of our customers and sports organizations are particularly sensitive to reductions in discretionary consumer spending. Demand for entertainment and leisure activities, including sporting events, sports betting and online gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce consumers’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as sporting events, sports betting and online gaming. In particular, the effects of COVID-19 have reduced the coverage we are able to offer to our customers and required us to amend payment terms to reflect this.

If a large number of our employees and/or a subset of our key employees and executives are impacted by COVID-19, our ability to continue to operate effectively may be negatively impacted. We have taken precautionary measures intended to help minimize the risk of the virus to our staff which may disrupt our operations, including limiting access to our physical offices worldwide, requiring employees to work remotely (unless they perform critical functions that cannot be undertaken remotely or have otherwise opted to work from the office as a result of personal circumstances, in each case to the extent possible under relevant government guidelines), and suspending all travel worldwide for our employees pursuant to relevant government restrictions. An extended period of remote-work arrangements could strain our business continuity plans, introduce operational risk, including, but not limited to, cybersecurity risks and risks related to unauthorized access to confidential information, the reduction of our ability to effectively recruit, train and retain employees and the impairment of our ability to effectively manage our business, which may negatively impact our business, results of operations, and financial condition.

The ultimate severity of COVID-19 is uncertain at this time and therefore we cannot predict the full impact it may have on our end markets and our operations; however, the effect on our results has been material and adverse, and it may continue to be material and adverse in the future. Any significant or prolonged decrease in sporting events and in consumer spending on entertainment or leisure activities could adversely affect the demand for offerings of our customers and sports organizations and, in turn, our offerings, reducing our cash flows and revenues, and thereby materially harm our business, financial condition, results of operations and prospects.

We rely on relationships with sports organizations from which we acquire sports data, including, among other things, via arrangements for exclusive rights for such data. Loss of existing relationships or failure to renew or expand existing relationships may cause loss of competitive advantage or require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition and results of operations.

We rely on relationships with sports organizations from which we acquire rights to collect and supply sports data that we provide to our customers. Substantially all of our offerings and services use sports data acquired

 

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from sports organizations. The future success of our business may depend, in part, on our ability to obtain, retain and expand relationships with sports organizations. We have arrangements with sports organizations for rights to their sports data, including, in certain cases, exclusive rights for such data. Our arrangements with sports organizations, including exclusive arrangements, may not continue to be available to us on commercially reasonable terms or at all. In the event that we lose exclusive existing arrangements or cannot renew and expand existing arrangements, we may lose our competitive advantage or be required to discontinue or limit our offerings or services. Additionally, our competitors may choose to infringe on our exclusive stadium rights by collecting data on events on which we have exclusive rights. In these instances, our rights may be devalued and litigation to enforce our rights or recover damages incurred by such infringement may be costly, ineffective and time consuming.

Our exclusivity arrangements with certain sports organizations are subject to short and medium term contracts, which may not be renewed on favorable terms or at all. Additionally, we are party to litigation regarding whether entering into arrangements with sports organizations to be the exclusive acquirer and provider of sports data for such sports organizations violates competition laws. The loss of such exclusive arrangements with one or more sports organizations, whether due to a judicial judgment, order or settlement, or otherwise, including as a result of the expiration or termination of our exclusivity arrangements, may cause loss of competitive advantage and could materially adversely affect our financial condition and business operation.

Fraud, corruption or negligence related to sports events, or by our employees or contracted statisticians collecting data on behalf of the Company, may adversely affect our business, financial condition and results of operations and negatively impact our reputation.

Our reputation and the strength of our brand are key competitive strengths. To the extent that the sports and sports betting industry as a whole or the Company, relative to its competitors, suffers a loss in credibility, our business will be significantly impacted. Factors that could potentially have an impact in this regard include fraud, corruption or negligence related to sports events, including as a result of match fixing, or by our employees or contracted statisticians collecting data on behalf of the Company or third parties. Operational errors, whether by us or our competitors, could also harm the reputation of the Company or the sports data, sports betting, online gaming and sports marketing industries. Damage to reputation and credibility could have a material adverse impact on our business, financial condition and results of operations.

Our business depends on a strong brand, and if we are not able to develop, maintain and enhance our brand and reputation, including as a result of negative publicity, our business and operating results may be harmed.

We believe that developing, maintaining and enhancing our brand is critical to achieving widespread acceptance of our products and services, attracting new customers, retaining existing customers, persuading existing customers to adopt additional products and services and hiring and retaining our employees. We believe that the importance of our brand will increase as competition in our markets further intensifies. Successful promotion of our brand will depend on a number of factors, including the effectiveness of our marketing efforts, including thought leadership, our ability to provide high-quality, reliable and cost-effective products and services, the perceived value of our products and services and our ability to provide quality customer success and support experience. Brand promotion activities require us to make substantial expenditures. To date, we have made significant investments in the promotion of our brand. The promotion of our brand, however, may not generate customer awareness or increase revenue, and any increase in revenue may not offset the expenses we incur in building and maintaining our brand.

We operate in a public-facing industry where negative publicity, whether or not justified, can spread rapidly through, among other things, social media. To the extent that we are unable to respond timely and appropriately to negative publicity, our reputation and brand could be harmed. Moreover, even if we are able to respond in a timely and appropriate manner, we cannot predict how negative publicity may affect our reputation and business.

 

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We and our employees also use social media to communicate externally. There is risk that the use of social media by us or our employees to communicate about our business may give rise to liability or result in public exposure of personal information of our employees or customers, each of which could affect our revenue, business, results of operations and financial condition.

We operate in a competitive market and we may lose customers and relationships to both existing and future competitors.

The markets for sports data and sports data technology services and solutions and marketing services are competitive and rapidly changing. The sports media industry is particularly competitive and fast growing. Competition in these markets may increase further if economic conditions or other circumstances, including as a result of COVID-19, cause customer bases and customer spending to decrease and service providers to compete for fewer customer resources. Our existing competitors, or future competitors, may have or obtain greater name recognition, larger customer bases, better technology or data, lower prices, exclusive or better access to data, greater user traffic or greater financial, technical or marketing resources than we have. Our competitors may be able to undertake more effective marketing campaigns, obtain more data, adopt more aggressive pricing policies, make more attractive offers to potential employees, subscribers, sports betting operators, sports organizations, distribution partners and content providers or may be able to respond more quickly to new or emerging technologies or changes in user requirements. We currently rely on scouts to attend events to collect data. If our competitors develop technology before we do, whether through artificial intelligence or otherwise, that makes scouts obsolete, our business could be materially harmed, and our profitability would be reduced. Further, if competitors gain access to faster visual feeds from stadiums, our exclusive in-stadium rights would have reduced value and our revenues could decline. If we are unable to retain customers or obtain new customers or maintain or develop relationships with sports organizations, our revenues could decline. Increased competition for exclusive league partnerships could result in lower revenues and higher expenses, which would reduce our profitability.

Our business may be materially adversely affected if our existing and future products, technology, services and solutions do not achieve and maintain broad market acceptance, if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards and changing regulatory requirements, or if we do not invest in product development and provide services that are attractive to our customers.

Our future business and financial success will depend on our ability to continue to anticipate the needs of customers and potential customers, to achieve and maintain broad market acceptance for our existing and future products and services, to successfully introduce new and upgraded products and services and to successfully implement our current and future geographic expansion plans. To be successful, we must be able to quickly adapt to changes in technology, industry standards and regulatory requirements by continually enhancing our technology, services and solutions. Developing new services and upgrades to services, as well as integrating and coordinating current services, imposes burdens on our product development team, management and researchers. These processes are costly, and our efforts to develop, integrate and enhance our services may not be successful. In addition, successfully launching and selling a new or upgraded service puts additional strain on our sales and marketing resources. Expanding into new markets and investing resources towards increasing the depth of our coverage within existing markets impose additional burdens on our research, systems development, sales, marketing and general managerial resources. If we are unable to manage our expansion efforts effectively, in obtaining greater market share or in obtaining widespread adoption of new or upgraded products and services, we may not be able to offset the expenses associated with the launch and marketing of the new or upgraded service, which could have a material adverse effect on our financial results. If we introduce new or expand existing offerings for our business, we may incur losses or otherwise fail to enter these markets successfully. Our expansion into these markets will place us in competitive and regulatory environments with which we are unfamiliar and involve various risks, including the need to invest significant resources and the possibility that returns on such investments will not be achieved for several years, if at all.

 

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If we are unable to develop new or upgraded services or decide to combine, shift focus from, or phase out a service, then our customers may choose a competitive service over ours and our revenues may decline and our profitability may be reduced. If we incur significant costs in developing new or upgraded services or combining and coordinating existing services, if we are not successful in marketing and selling these new services or upgrades, or if our customers fail to accept these new or combined and coordinating services, then there could be a material adverse effect on our results of operations due to a decrease of our revenues and a reduction of our profitability. If we eliminate or phase out a service and are not able to offer and successfully market and sell an alternative service, our revenue may decrease, which could have a material adverse effect on our results of operations.

If we lose any official accreditation from one of our league or federation partners, we could lose our exclusive rights to collect certain data and our services would be less attractive to customers. Our revenue may decrease as a result, which could have a material adverse effect on the results of our operations.

Further, increased competition for skilled staff in locations where we are based could have a material adverse effect on our business operations.

Our success depends on our continued improvements to provide products and services that are attractive to our customers. As a result, we must continually invest resources in product development and successfully incorporate and develop new technology. We must use all efforts to retain and acquire sports data rights and to protect and enforce our data rights. If we are unable to do so or otherwise provide products and services that customers want, then customers may become dissatisfied and use competitors’ services. If we are unable to continue offering innovative services, we may be unable to attract additional customers or retain our customers, which could harm our business, results of operations and financial condition.

The loss or significant reduction in business from one or more of our large customers could materially adversely affect our business, financial condition and results of operations.

A material portion of our revenues is concentrated in some of our largest customers. For the fiscal year ended December 31, 2019, our largest customer and five largest customers by revenue, accounted for approximately 4% and 16% of our total revenues, respectively. For the nine months ended September 30, 2020, our largest customer and five largest customers by revenue, accounted for approximately 4% and 17% of our total revenues, respectively. Our revenue growth depends on our ability to obtain new clients and achieve and sustain a high level of renewal rates with respect to our existing customers. Failure to achieve one or more of these objectives could have a material adverse effect on our business, financial condition and operating results. If we lose one or more of our large customers or have significant reduction in business from such customers, our business, financial condition or results of operations could be materially adversely affected. In addition, our customers’ losses in the betting market may adversely affect our financial condition if we are participating in a profit sharing arrangement with that customer.

We have historically achieved growth organically, but have supplemented such growth via strategic acquisitions of key targets. We may undertake acquisitions or divestitures in the future, which may not be successful, and which could materially adversely affect our business, financial condition and results of operations. Our business may suffer if we are unable to successfully integrate acquired businesses into the Company or otherwise manage the growth associated with such acquisitions.

As part of our business strategy, we have made, and we intend to continue to make, acquisitions as opportunities arise to add new or complementary businesses, products, brands or technologies. From time to time, we may enter into letters of intent, agreements, agreements in principle or memoranda of understanding or similar documents or commitments related to acquisitions of a new or complementary business. In some cases, the costs of such acquisitions may be substantial, including as a result of professional fees and due diligence efforts. There is no assurance that the time and resources expended on pursuing a particular acquisition will result

 

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in a completed transaction, or that any completed transaction will ultimately be successful. In addition, we may be unable to identify suitable acquisition or strategic investment opportunities, or may be unable to obtain any required financing or regulatory approvals, and therefore may be unable to complete such acquisitions or strategic investments on favorable terms, if at all. We may decide to pursue acquisitions with which our investors may not agree and we cannot assure investors that any acquisition or investment will be successful or otherwise provide a favorable return on investment. In addition, acquisitions and the integration thereof require significant time and resources and place significant demands on our management, as well as on our operational and financial infrastructure. In addition, if we fail to successfully close transactions or integrate new teams, or integrate the products and technologies associated with these acquisitions into our company, our business could be seriously harmed. Acquisitions may expose us to operational challenges and risks, including:

 

   

the ability to profitably manage acquired businesses or successfully integrate the acquired businesses’ operations, culture, personnel, financial reporting, accounting and internal controls, technologies and products into our business;

 

   

increased indebtedness and the expense of integrating acquired businesses, including significant administrative, operational, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations;

 

   

entry into jurisdictions or acquisition of products or technologies with which we have limited or no prior experience, and the potential of increased competition with new or existing competitors as a result of such acquisitions;

 

   

exposure to compliance, intellectual property or other issues, not uncovered by a limited due diligence review of the target or otherwise;

 

   

diversion of management’s attention and the over-extension of our operating infrastructure and our management systems, information technology systems, and internal controls and procedures, which may be inadequate to support growth;

 

   

the ability to fund our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; and

 

   

the ability to retain or hire qualified personnel required for expanded operations.

Our acquisition strategy may not succeed if we are unable to remain attractive to target companies or expeditiously close transactions. Issuing additional equity to fund an acquisition would cause economic dilution to existing stockholders. If we develop a reputation for being a difficult acquirer or having an unfavorable work environment, or target companies view our equity unfavorably, we may be unable to consummate key acquisition transactions essential to our corporate strategy and our business may be seriously harmed.

Our operations are subject to seasonal fluctuations that may impact our cash flows.

Although the sporting calendar is year round, there is seasonality in sporting events that may impact our operations and operations of our customers and sports organizations. The broad geographical mix of our customer base also impacts the effect of seasonality as customers in different territories will place differing importance on different sporting competitions and those competitions will often have different sporting calendars. Sports organizations have their own significant sporting events such as the playoffs and championship games, which may cause increases in our revenues and revenues of our customers and such sports organizations, and their own respective off-seasons, which may cause decreases in our revenues and revenues of our customers and such sports organizations. Certain sports only hold events during portions of the calendar year. For example, our revenues are significantly impacted by the European football season calendars and the top tier professional tennis calendar. Our revenues and revenues of our customers and sports organizations may also be affected by the scheduling of major sporting events that do not occur annually, such as the World Cup, or the cancellation or

 

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postponement of sporting events and races, such as the postponement of the 2020 Summer Olympic Games that were supposed to take place this past summer. Such fluctuations and uncertainties may negatively impact our cash flows.

Indemnity provisions in customer and other third-party agreements potentially expose us to substantial liability for intellectual property infringement and other losses.

Our agreements with customers and other third parties may include indemnification or other provisions under which we agree to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our products or other acts or omissions. The term of these contractual provisions often survives termination or expiration of the applicable agreement. Large indemnity payments of damage claims from contractual breach could harm our business, results of operations and financial condition. Although we generally contractually limit our liability with respect to such obligations, we may still incur substantial liability related to them. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other current and prospective customers, reduce demand for our products and services, damage our reputation and harm our business, results of operations and financial condition.

Our business and operating results and the business and operating results of our customers, suppliers and vendors may be significantly impacted by general economic, political and social conditions, pandemics, wars or terrorist activity, severe weather events and other natural disasters, and the health of the sports, entertainment and sports betting industries.

Our business and operating results and the business and operating results of our customers, suppliers and vendors are subject to global economic conditions and their impact on levels of consumer spending. Economic recessions have had, and may continue to have, far reaching adverse consequences across many industries, including the global sports, entertainment and sports betting industries, which may adversely affect our business and financial condition and the business and financial condition of our customers, suppliers and vendors. In the past decade, global, U.S. and U.K. economies have experienced tepid growth following the financial crisis in 2008 – 2009 and there appears to be an increasing risk of a recession due to international trade and monetary policy, COVID-19 and other changes. If the national and international economic recovery slows or stalls, these economies experience another recession or any of the relevant regional or local economies suffers a downturn, we and our customers, suppliers and vendors may experience a material adverse effect on our and their business, financial condition, results of operations and prospects.

Adverse developments affecting financial markets and economies throughout the world, including fluctuation in stock markets resulting from, among other things, trends in the economy as a whole, a general tightening of availability of credit, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, increased energy costs, acts of war or terrorism, transportation disruptions, severe weather events and other natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines or volatility in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, may further reduce spending on sporting events, sports betting and marketing services and may negatively affect the sports, entertainment and sports betting industries. Any one of these developments could have a material adverse effect on our and our customers’, suppliers and vendors’ business, financial condition, results of operations and prospects.

 

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Risks Related to Legal Matters and Regulations

We and our customers and suppliers are subject to a variety of domestic and foreign laws and regulations, which are subject to change and interpretation and which could subject us to claims or otherwise harm our and our customers’ and suppliers’ respective businesses. Any change in existing regulations or their interpretation, or the regulatory climate and requirements applicable to our or our customers’ and suppliers’ products and services, or changes in tax rules and regulations or interpretation thereof related to our or our customers’ and suppliers’ products and services, could adversely impact our or our customers’ and suppliers’ ability to operate our or their respective businesses as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.

We and our customers and suppliers are generally subject to laws and regulations relating to sports, sports betting, online gaming, marketing and advertising in the jurisdictions in which we and they conduct our and their businesses or in some circumstances, of those jurisdictions in which we and they offer services or those are available, as well as the general laws and regulations that apply to all e-commerce and online businesses, such as those related to privacy and personal information, tax, anti-money laundering, advertising, competition and consumer protection. These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, and changes in legislative or governmental priorities, may have a material impact on our operations and financial results. In particular, some jurisdictions have introduced regulations attempting to restrict or prohibit sports betting, online gaming and advertising, while others have taken the position that sports betting or online gaming should be licensed and regulated and have adopted or are in the process of considering legislation and regulations to enable sports betting or online gaming in their jurisdictions. In some jurisdictions, additional requirements and restrictions may continue to develop. For example, recently, the Committees of Advertising Practice in the U.K. recommended new rules which ban sports betting advertisements if they are likely to appeal to minors, which evidences a trend in Europe for an increasingly restrictive approach to gambling advertising more generally. Additionally, some jurisdictions in which we may operate could presently be unregulated or partially regulated and therefore more susceptible to the enactment or change of laws and regulations. Some jurisdictions do not have laws that grant us rights in the data we collect. Any enactment of laws in these jurisdictions would require a change in how we conduct business in such jurisdictions.

We operate in 13 countries and 10 states in the U.S. that have adopted legislation permitting online sports betting. We offer our services to customers in many more countries, however, and we do not always have visibility of where our customers use our products and services to offer their services to their customers. Out of 22 states in the U.S. that currently require a license or registration, we have obtained the appropriate license or registration in 9 states, have submitted applications for license or registration in two states and have begun the pre-application process in seven states, and in one state our services do not require a license. We also have two foreign licenses and operate under those licenses in two countries. Any of our licenses could be revoked, suspended or conditioned at any time. Our license applications may also be denied or conditioned. The loss of a license in one jurisdiction could trigger the loss of a license or affect our eligibility for such a license in another jurisdiction, and any of such losses, or potential for such loss, could cause us to cease offering some or all of our offerings in the impacted jurisdictions. As laws and regulations change, we may need to obtain and maintain licenses or registrations in additional jurisdictions. In addition, once licensed, we may be subject to various ongoing requirements, including supervision by the respective governmental agency of certain transfers of ownership and acquisitions.

In May 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) as unconstitutional. This decision has the effect of lifting federal restrictions on sports betting and thus allows states to determine by themselves the legality of sports betting. Since the repeal of PASPA, several states have legalized online sports betting. To the extent new real money gaming or sports betting jurisdictions are established or expanded, we cannot guarantee that we will be successful in penetrating such new jurisdictions or expanding our business or customer base in line with the growth of existing jurisdictions. If we are unable to effectively develop and operate directly or indirectly within these new jurisdictions or if our

 

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competitors are able to successfully penetrate geographic jurisdictions that we cannot access or where we face other restrictions, there could be a material adverse effect on our business, operating results and financial condition. Our failure to obtain or maintain the necessary regulatory approvals and licenses in jurisdictions, whether individually or collectively, could have a material adverse effect on our business. See “Business of Genius —  Government Regulations.” To expand into new jurisdictions, we may need to be licensed and obtain approvals of our product offerings. This is a time-consuming process that can be extremely costly. Any delays in obtaining or difficulty in maintaining regulatory approvals or licenses needed for expansion within existing jurisdictions or into new jurisdictions can negatively affect our opportunities for growth, including the growth of our customer base, or delay our ability to recognize revenue from our offerings in any such jurisdictions.

Future legislative and regulatory action, and court decisions or other governmental action, may have a material impact on our and our customers’ operations and financial results. Governmental authorities could view us or our customers as having violated applicable laws or regulations, despite our or their efforts to obtain and maintain all applicable licenses or approvals. There is also a risk that civil and criminal proceedings, including class actions brought by or on behalf of prosecutors or public entities or incumbent providers, or private individuals, could be initiated against us, Internet service providers, credit card and other payment processors, advertisers and others involved in sports betting and online gaming industries. Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon us or our customers or other business partners, while diverting the attention of key executives. Such proceedings could have a material adverse effect on our and our customers’ businesses, financial condition, results of operations and prospects, as well as impact our and our customers’ reputation.

There can be no assurance that legally enforceable legislation will not be proposed and passed in jurisdictions relevant or potentially relevant to our business to prohibit, legislate or regulate various aspects of sports betting and online gaming industries (or that existing laws in those jurisdictions will not be interpreted negatively). Compliance with any such legislation may have a material adverse effect on our and our customers’ businesses, financial condition and results of operations, either as a result of our determination that a jurisdiction should be blocked, or because a local license or approval may be costly for us or our customers to obtain and/or such licenses or approvals may contain other commercially undesirable conditions.

Our collection, storage and use of personal data are subject to applicable data protection and privacy laws, and any failure to comply with such laws may harm our reputation and business or expose us to fines and other enforcement action.

In the ordinary course of business, we collect, store, use and transmit certain types of information that are subject to different laws and regulations. In particular, data security and data protection laws and regulations relating to personal and consumer information that we are subject to often vary significantly by jurisdiction. Our media business is particularly impacted by such data security and data protection laws and regulations as the business targets end consumers of gambling services.

For example, the new EU-wide General Data Protection Regulation (“GDPR”) became applicable on May 25, 2018, replacing the data protection laws of each EU member state. The GDPR implemented more stringent operational requirements for processors and controllers of personal data, including, for example, expanded disclosures about what and how personal information is to be used, limitations on retention of information, increased requirements to erase an individual’s information upon request, mandatory data breach notification requirements and higher standards for data controllers to demonstrate that they have obtained valid consent from individuals to process their personal data (or reliance on another appropriate legal basis) for certain data processing activities. It also significantly increased penalties for noncompliance, including where we act as a data processor. We have executed (other than for transfer to the U.S.) intracompany Standard Contractual Clauses (“SCCs”) which are currently in compliance with the GDPR to allow for the transfer of personal data from the EU to other jurisdictions. With regard to U.S. transfers, we previously relied on the now invalid EU-U.S. Privacy Shield in the U.S., but, given that SCCs still remain a valid mechanism for personal data

 

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transfers to the U.S., we are now in the process of implementing SCCs for such U.S. transfers (while following ICO and EU guidance and directions to assess the adequacy of such transfers, including ensuring that the guarantees provided in the SCCs can be complied with in practice). Data security and data protection laws and regulations are continuously evolving. There are currently a number of legal challenges to the validity of EU mechanisms for adequate data transfers such as the SCCs, and our work could be impacted by changes in law as a result of a future review of these transfer mechanisms by European regulators under the GDPR, as well as current challenges to these mechanisms in the European courts. Brexit may also mean that we are required to take additional steps to ensure that data flows from EU members states to the U.K. are not disrupted and remain permissible after the exit date. We are also subject to the Data Protection (Bailiwick of Guernsey) Law, 2017 (as amended) (the “Guernsey DP Law”), which largely follows GDPR and requires us to control and process personal data only for proper purposes and in accordance with statutory data protection principals, and the Data Protection Law of Colombia, which requires the consent of the user to their data being transmitted outside of Colombia.

In recent years, U.S. and European lawmakers and regulators have expressed concern over electronic marketing and the use of third-party cookies, web beacons and similar technology for online behavioral advertising. In the EU, marketing is defined broadly to include any promotional material and the rules specifically on e-marketing are currently set out in the ePrivacy Directive which will be replaced by a new ePrivacy Regulation. While no official time frame has been given for the ePrivacy Regulation, there will be a transition period after the ePrivacy Regulation is agreed for compliance, and commentators consider it unlikely to come into force before 2021. On June 20, 2020, the U.K.’s Information Commissioner (the “ICO”) published a report setting out its views on advertising technology, specifically the use of personal data in “real time bidding” (i.e. in-play betting), and the key privacy compliance challenges arising from it. In its report, which is a status update rather than formal guidance, several key deficiencies are noted and marked for formal regulatory action in December 2020. We are likely to be required to expend further capital and other resources to ensure compliance with these changing laws and regulations. While we have numerous mitigation controls in place, advertisements produced by us may be erroneously served on websites that are not suitable for the advertising content of gambling (e.g. websites predominantly aimed at children). There is also a risk that gambling advertisements are viewed by people who do not want to view them, or who have taken measures not to receive them (for example, individuals on “self-exclusion” lists). In each case this may have adverse legal and reputational effects on our business. Our media customers may also use our services to target jurisdictions where they are not permitted to advertise, that our risk mitigation controls fail to identify and/or prevent this and our business suffers adverse legal and reputational effects as a result

Because our products and services rely on the movement of data across national boundaries, global privacy and data security concerns could result in additional costs and liabilities to us or inhibit sales of our products globally. European data protection laws, including the GDPR and the Guernsey DP Law, generally restrict the transfer of personal information from Europe, including the European Economic Area, U.K. and Switzerland, to the U.S. and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information. As noted above, one of the primary safeguards allowing importation of personal information from Europe to the U.S. has been certification to the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield frameworks administered by the U.S. Department of Commerce. However, the Court of Justice of the EU recently invalidated the EU-U.S. Privacy Shield. The same decision also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the SCCs, can lawfully be used for personal information transfers from Europe to the U.S. or most other countries. At present, there are few, if any, viable alternatives to the EU-U.S. Privacy Shield and the SCCs. Although we rely primarily on individuals’ explicit consent to transfer their personal information from Europe to the U.S. and other countries, in certain cases we have relied or may rely on the SCCs (although, as noted above, we are following ICO and EU guidance and directions to assess the adequacy of such transfers, including ensuring that the guarantees provided in the SCCs can be complied with in practice). Authorities in the U.K. and Switzerland, whose data protection laws are similar to those of the EU, may similarly invalidate use of the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield, respectively, as mechanisms for lawful personal information transfers from those countries to the

 

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U.S. As such, if we are unable to rely on explicit consent to transfer individuals’ personal information from Europe, which can be revoked, or implement another valid compliance solution, we will face increased exposure to substantial fines under European data protection laws as well as injunctions against processing personal information from Europe. Inability to import personal information from the European Economic Area, U.K. or Switzerland may also restrict our operations in Europe, limit our ability to collaborate with our customers, sports organizations, service providers, contractors and other companies subject to European data protection laws and require us to increase our data processing capabilities in Europe at significant expense. Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business.

In order to diversify our data transfer strategy, we will continue to explore other options managing data from Europe, including without limitation, amending SCCs where required and considering suppliers that house data in Europe, which may involve substantial expense and distraction from other aspects of our business. We may, however, be unsuccessful in establishing an adequate mechanism for data transfer, and will be at risk of enforcement actions taken by a European Union data protection authority until such point in time that we ensure an adequate mechanism for European data transfers, which could damage our reputation, inhibit sales and harm our business. Despite actions we have taken or will be taking to diversify our data transfer strategies, we may be unsuccessful in establishing a conforming means of transferring data due to ongoing legislative activity that could vary the current data transfer landscape. As we expand into new markets and grow our customer base, we will need to comply with any new requirements. If we cannot comply with, or if we incur a violation of one or more of these requirements, some customers may be limited in their ability to purchase our products, particularly our cloud products. Growth could be harmed, and we could incur significant liabilities.

The ePrivacy Regulation will be directly implemented into the laws of each of the EU Member States, without the need for further enactment. When implemented, the ePrivacy Regulation is expected to alter rules on third-party cookies, web beacons and similar technology for online behavioral advertising and to impose stricter requirements on companies using these tools. Regulation of cookies and web beacons may lead to broader restrictions on our online activities, including efforts to understand followers’ Internet usage and promote ourselves to them. The current draft of the ePrivacy Regulation significantly increases fining powers to the same levels as the GDPR. Given the delay in finalizing the ePrivacy Regulation, certain EU regulators have issued guidance (including U.K. and French data protection regulators) on the requirement to seek strict opt-in, unbundled consent to use all nonessential cookies. We may need to make changes to our cookies notice to meet these requirements.

In addition, California has enacted the California Consumer Privacy Act, or CCPA, which became effective on January 1, 2020. The CCPA requires new disclosures to California consumers, imposes new rules for collecting or using information, requires companies to comply with data subject access and deletion requests, and affords California consumers new abilities to opt out of certain disclosures of personal information. It remains unclear what, if any, regulations will be implemented pursuant to the law or how it will be interpreted. The Stop Hacks and Improve Electronic Data Security Act, otherwise known as the SHIELD Act, is a New York State bill, the data protection portions of which became effective on March 23, 2020. The SHIELD Act requires companies to adopt reasonable safeguards to protect the security, confidentiality, and integrity of private information. A company should implement a data security program containing specific measures, including risk assessments, employee training, vendor contracts, and timely data disposal. The effects of the CCPA and the SHIELD Act potentially are significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply.

Although we have implemented certain policies and procedures, and continue to review and improve such policies and procedures, that are designed to ensure compliance with applicable laws, rules and regulations, if our privacy or data security measures fail to comply with applicable current or future laws and regulations, we may be subject to fines, litigation, regulatory investigations, enforcement notices requiring us to change the way we

 

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use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business. Fines are significant in some countries (e.g., the GDPR introduced fines of up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year (whichever is higher)) as well as litigation, compensation claims by affected individuals (including class action type litigation where individuals suffer harm), regulatory investigations and enforcement notices requiring us to change the way we use personal data. Recently, a group of U.K. football players issued a data subject access request under the GDPR to various participants in the sports data and sports betting industries. If the request (named “Project Red Card”) develops into legal action, it could significantly alter the way we collect and use sports data relating to players, and could materially affect the sports data industry as whole.

We may face claims for data rights infringement, which could subject us to monetary damages.

Although we have generally adopted measures to avoid potential infringement of third-party data rights in the course of our operations, ownership of certain data rights is not always clear in certain jurisdictions we may operate in, particularly in “gray” jurisdictions which are presently unregulated or partially regulated. Should we face claims for illegal data rights sources or should we inadvertently infringe on another company’s data rights in any jurisdistion, we could be subject to claims of infringement, which could be time consuming and expensive to litigate or settle, divert the attention of management and materially disrupt the conduct of our business, and we may not prevail. Any such clams, which could include a claim for injunctive relief and damages, if successful, could have a material adverse effect on our business, results of operations and financial position.

We are party to pending litigation and investigations in various jurisdictions and with various plaintiffs and we may be subject to future litigation or investigations in the operation of our business. An adverse outcome in one or more proceedings could adversely affect our business.

We are and have been party to, and we may in the future increasingly face the risk of, claims, lawsuits, investigations, and other proceedings, including those which may involve competition and anti-trust, anti-money laundering, OFAC, gaming, intellectual property, privacy, consumer protection, accessibility claims, securities, tax, labor and employment, commercial disputes, services and other matters. We have in the past employed third party contractors that may operate in countries under U.S. sanctions and, as a result, have been and may continue to be subject to legal proceedings regarding compliance with U.S. sanctions laws. Litigation to defend us against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could result in substantial costs, fines or penalties and diversion of our resources, causing a material adverse effect on our business, financial condition, results of operations and prospects. For additional information regarding legal proceedings to which we are subject see “Business of Genius — Legal Proceedings.

Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or in payments of substantial monetary damages or fines, the posting of bonds requiring significant collateral, letters of credit or similar instruments, or we may decide to settle lawsuits on similarly unfavorable terms. These proceedings could also result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain products or requiring a change in our business practices in costly ways or requiring development of non-infringing or otherwise altered products or technologies. Litigation and other claims and regulatory proceedings against us could result in unexpected disciplinary actions, expenses and liabilities, which could have a material adverse effect on our business, financial condition, results of operations and prospects. For example, Project Red Card, if it develops into a legal claim, could significantly alter the way we collect and use personal data, and could materially affect the sports data industry as whole. Under the terms of our existing contractual arrangements, any adverse judgements could impact the validity of such contractual arrangements and/or our ability to rely on intellectual property rights to prevent third party infringement, which may force us to alter our business strategy and have an adverse effect on our business.

Litigation between third parties may also result in changes in (or interpretation of) law that materially adversely impact our existing business and strategy.

 

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Our failure to comply with the anti-corruption, anti-bribery, anti-money laundering and similar laws of the U.S. and various international jurisdictions could negatively impact our reputation and results of operations.

Doing business on a worldwide basis requires us to comply with anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, which may include the U.S. Foreign Corrupt Practices Act (“FCPA”), the Prevention of Corruption (Bailiwick of Guernsey) Law, 2003 (as amended) (the “Guernsey Bribery Law”) and the U.K. Bribery Act 2010 (“U.K. Bribery Act”), as well as the laws of the other countries where we do business. These laws and regulations may restrict our operations, trade practices, investment decisions and partnering activities. The FCPA, the Guernsey Bribery Law, the U.K. Bribery Act and other applicable laws prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to “foreign officials” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and accepting bribes. We are subject to the jurisdiction of various governments and regulatory agencies around the world, which may bring our personnel and representatives into contact with “foreign officials” responsible for issuing or renewing permits, licenses or approvals or for enforcing other governmental regulations.

In addition, some of the international locations in which we operate lack a developed legal system and have elevated levels of corruption. Our international operations expose us to the risk of violating, or being accused of violating, anti-corruption laws and regulations. Our failure to successfully comply with these laws and regulations may expose us to reputational harm, as well as significant sanctions, including criminal fines, imprisonment, civil penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. We are continuously developing and maintaining policies and procedures designed to comply with applicable anti-corruption laws and regulations. However, there can be no guarantee that our policies and procedures will effectively prevent violations by our employees or business partners acting on our behalf, including statisticians who attend events on our behalf, for which we may be held responsible, and any such violation could adversely affect our reputation, business, financial condition and results of operations.

Risks Related to Genius Sports Group’s Technology, Intellectual Property and Infrastructure

Failure to protect or enforce our proprietary and intellectual property rights, including our unregistered intellectual property, and the costs involved in such protection and enforcement could harm our business, financial condition, results of operations and prospects.

We rely on database, trademark, trade secret, confidentiality and other intellectual property protection laws to protect our rights. In certain foreign jurisdictions and in the U.S., we have filed applications to protect aspects of our intellectual property, currently hold several trademarks and domain names in multiple jurisdictions and in the future we may acquire patents, additional trademarks and domain names, which could require significant cash expenditures.

However, circumstances outside our control could pose a threat to our intellectual property rights. For example, effective intellectual property protection may not be available in the U.S. or other countries in which we operate or intend to operate our business. Also, the efforts we have taken to protect our intellectual property rights may not be sufficient or effective, and any significant impairment of our intellectual property rights could harm our business or our ability to compete. For example, it may not always have been possible or commercially desirable to obtain registered protection for our products, software, databases or other technology and, in such situations, we rely on laws governing protection of unregistered intellectual property rights, confidentiality and/or contractual exclusivity of and to underlying data and technology to prevent unauthorized use by third parties. As such, if we are unable to protect our proprietary offerings via relevant laws or contractual exclusivity, technology and features, competitors may copy them. In particular, the EU database right protection we enjoy in the EU does not apply outside the EU and, as such, we cannot be certain that we can rely on existing statutes,

 

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regulations and/or case law (including in the U.S.) to protect our unregistered intellectual property in the future or prevent third parties from making unauthorized uses of our data and other unregistered intellectual property. The position regarding the U.K. and the EU database right following Brexit also remains unclear. The loss of EU database right protection could materially adversely affect our business. Additionally, protecting our intellectual property rights is costly and time-consuming. Any unauthorized use of our intellectual property or disclosure of our confidential information or trade secrets could make it more expensive to do business, thereby harming our operating results. Furthermore, if we are unable to protect our intellectual property rights or prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished, and competitors may be able to more effectively mimic our product offerings and services. Any of these events could seriously harm our business, financial condition, results of operations and prospects.

Further, third parties may knowingly or unknowingly infringe our proprietary and intellectual property rights (including by purposefully breaching our exclusive contractual arrangements with third parties, for example, by entering stadiums without the owner’s consent to collect data at events where we hold exclusive data collection rights) or challenge proprietary and intellectual property rights held by us. We currently do not hold any patents, which means our technology, products and services are susceptible to copying. The fact that we currently do not hold any patents also means third parties may claim patent rights over our technology, products and services and may bring infringement proceedings in respect of the same. Any pending and future trademark or patent applications may not be approved. In any of these cases, we may be required to expend significant time and expense to prevent infringement of or to enforce our rights, and we may fail to enforce our rights which may have a material adverse effect on our business. Notwithstanding our intellectual property rights, there can be no assurance that others will not offer products or services that are substantially similar to ours and compete with our business.

We may face claims for intellectual property infringement, which could subject us to monetary damages or limit us in using some of our technologies or providing certain solutions.

Although we have generally adopted measures to avoid potential infringement of third-party intellectual property rights in the course of our operations, we may not be successful in ensuring all components of our platform have proper authorization. Additionally, the legal position in all jurisdictions in relation to the ownership and permitted use of sports data and databases is subject to change. This area may receive focus in the U.S. following the lifting of the PASPA ban. As such, we cannot be certain that our current uses of data from publicly available sources (including third party websites) or otherwise, which are not known to infringe or misappropriate third party intellectual property today, will not result in claims for infringement or misappropriation of third party intellectual property in the future. Intellectual property infringement claims or claims of misappropriation against us could subject us to liability for damages and restrict us from providing solutions or require changes to certain solutions and technologies. Claims of infringement or misappropriation of a competitor’s or other third party’s intellectual property rights, regardless of merit, could be time consuming and expensive to litigate or settle, divert the attention of management and materially disrupt the conduct of our business, and we may not prevail. Any such clams, which could include a claim for injunctive relief and damages, if successful, could have a material adverse effect on our business, results of operations and financial position.

We rely on information technology and other systems and platforms, including our data center and Amazon Web Services and certain other third-party platforms, and failures, errors, defects or disruptions therein could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects. Our product offerings and other software applications and systems, and certain third-party platforms that we use could contain undetected errors or errors that we fail to identify as material.

Our technology infrastructure, including Amazon Web Services and certain other third party platforms, is critical to the performance of our services and product offerings and to user satisfaction. Consequently, we may

 

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be subject to service disruptions as well as failures to provide adequate support for reasons that are outside of our direct control. The performance and availability of Amazon Web Services with the necessary speed, data capacity and security for providing reliable access and services can affect the delivery, availability and performance of our services. Decisions by the owners and operators of the data centers where our cloud infrastructure, Amazon Web Services, is deployed to terminate our contracts, discontinue services to us, shut down operations or facilities, increase prices, change service levels, limit bandwidth or prioritize the traffic of other parties could also affect the delivery, availability and performance of our services. Third parties may also conduct attacks designed to temporarily deny customers access to our cloud services.

We devote significant resources to network and data security to protect our systems and data. However, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that absolute security will be provided by the measures we take to: prevent or hinder cyber-attacks and protect our systems, data and user information; to prevent outages, data or information loss and fraud; and to prevent or detect security breaches. Such measures include a disaster recovery strategy for server and equipment failure, back-office systems and the use of third parties for certain cybersecurity services. We have experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. To date, such disruptions have not had a material impact on us, individually or in the aggregate; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects.

We are reliant on our data center in London, which could also be a target of cyber-attacks, experience outages or data or information loss and security breaches. We have in the past experienced minor outage-related incidents in the data center and any future disruptions could materially adversely affect our business, financial condition, results of operations and prospects.

Additionally, our services and product offerings, including our user interface, may contain errors, bugs, flaws or corrupted data that we have not detected, and these defects may become apparent only after their launch and could result in a vulnerability that could compromise the security of our systems. Additionally, we have detected certain errors, bugs and flaws in our service and product offerings, and have judged them to be immaterial. If we have misjudged the materiality of such errors, bugs and flaws, our business could be harmed. If a particular product offering is slower than they expect, customers may be unable to use our services and product offerings as desired and may be less likely to continue to use our services and product offerings, if at all. Furthermore, programming errors, defects and data corruption could disrupt our operations, adversely affect the experience of our customers, harm our reputation, cause our customers to stop utilizing our services and product offerings, divert our resources or delay market acceptance of our services and product offerings, any of which could result in legal liability to us or harm our business, financial condition, results of operations and prospects. Insufficient business continuity management could diminish our brand and reputation, subject us to liability, disrupt our business and adversely affect our operating results and growth prospects, and failure of planned availability and continuity solutions and disaster recovery when activated in response to an incident could result in system interruptions and degradation of service.

If our customer base and engagement continue to grow, and the amount and types of services and product offerings continue to grow and evolve, we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy our users’ needs. Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the quality of our services or product offerings. In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, which may become evident only after we have started to fully use the underlying equipment or software, that could further degrade the user experience or

 

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increase our costs. As such, we could fail to continue to effectively scale and grow our technical infrastructure to accommodate increased demands. In addition, a lack of resources (e.g., hardware, software, personnel, and service providers) could result in an inability to scale our services to meet business needs, system interruptions, degradation of service, or operational mistakes. Our business also may be subject to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss, terrorism, cyber-attacks, public health emergencies (such as COVID-19) or other catastrophic events.

We believe that if our customers have a negative experience with our services and product offerings, or if our brand or reputation is negatively affected, customers may be less inclined to continue or resume utilizing our services and product offerings or to recommend our services and product offerings to other potential customers. As such, a failure or significant interruption in our service could harm our reputation, our business, financial condition, results of operations and prospects.

Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure, other loss or theft of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disruption of our operations and the services we provide to users, damage to our reputation, and a loss of confidence in our products and services, each of which could adversely affect our business, financial condition, results of operations and prospects.

The secure maintenance and transmission of information is a critical element of our operations. Our information technology and other systems that maintain and transmit information, or the systems of third-party service providers and business partners, may be compromised by a malicious third-party penetration of our network security, or the network security of a third-party service provider or business partner, or impacted by intentional or unintentional actions or inactions by our employees, or the actions or inactions of a third-party service provider or business partner. As a result, our information may be lost, disclosed, accessed or taken without consent. We have experienced attempts to breach our systems and other similar incidents in the past. The data industry is a particularly popular target for malware attacks, and a company in the sports data industry was recently targeted by a ransomware attack. We have also been and expect that we will continue to be subject to attempts to gain unauthorized access to or through our information systems or those we develop for our customers, whether by our employees or third parties, including phishing attacks by computer programmers and hackers who may develop and deploy viruses, worms or other malicious software programs. To date these attacks have not had a material impact on our operations or financial results, but we cannot provide assurance that they will not have a material impact in the future, including by overloading our systems and network and preventing our product offering from being accessed by legitimate users through the use of ransomware or other malware.

We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction data or other confidential and sensitive information from being breached or compromised. In addition, websites are often attacked through compromised credentials, including those obtained through phishing and credential stuffing. Our security measures, and those of our third-party service providers, may not detect or prevent all attempts to breach our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our websites, networks and systems or that we or such third parties otherwise maintain, including certain confidential information, which may subject us to fines or higher transaction fees or limit or terminate our access to such confidential information. We and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers.

 

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Furthermore, security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by third parties. In addition, any party who is able to illicitly obtain a user’s password could access the user’s transaction data or personal information, resulting in the perception that our systems are insecure. These risks may increase over time as our user number increases and the complexity and number of technical systems and applications we use and employees we have also increases. Breaches of our security measures or those of our third-party service providers or cybersecurity incidents have resulted in and may in the future result in: unauthorized access to our sites, networks and systems; unauthorized access to and misappropriation of information, including personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware, ransomware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action and other potential liabilities. In addition, the sports betting and online gaming industries have experienced and may continue to experience social engineering, phishing, malware and similar attacks and threats of denial-of-service attacks. To date, we have not experienced a security breach material to our business; however, such breaches could in the future have a material adverse effect on our operations. If any of these breaches of security should occur and be material, our reputation and brand could be damaged, our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such breaches, and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.

Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We continue to devote significant resources to protect against security breaches or we may need to in the future to address problems caused by breaches, including notifying affected users and responding to any resulting litigation, which in turn, diverts resources from the growth and expansion of our business.

We use third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our product offerings.

We use software components licensed to us by third-party authors under “open source” licenses (“Open Source Software”). Use and distribution of Open Source Software may entail greater risks than use of third-party commercial software, as licensors of Open Source Software generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the licensed code. In addition, the public availability of Open Source Software may make it easier for others to compromise our services or product offerings.

Some licenses for Open Source Software contain requirements that we make available source code for modifications or derivative works we create, or grant other licenses to our intellectual property, if we use such Open Source Software in certain ways. If we combine our proprietary software with Open Source Software in a certain manner, we could, under certain licenses for Open Source Software, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of our competitive advantages. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all of our proprietary software.

Although we periodically review our use of Open Source Software to avoid subjecting our services and product offerings to conditions we do not intend, the terms of many licenses for Open Source Software have not

 

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been interpreted by U.S., U.K. or foreign courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to provide or distribute our services or product offerings. From time to time, there have been claims challenging the ownership of Open Source Software against companies that incorporate Open Source Software into their solutions. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be Open Source Software. Moreover, we cannot assure you that our processes for controlling our use of Open Source Software in our services and product offerings will be effective. If we are held to have breached or failed to fully comply with all the terms and conditions of an Open Source Software license, we could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing our services and product offerings on terms that are not economically feasible, to find replacement software, to discontinue or delay the provision of our services or product offerings if replacement cannot be accomplished on a timely basis or to make generally available, in source code form, our proprietary software, any of which could adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Genius Sports Group’s Financial Conditions

We have a history of losses and may not be able to achieve or sustain profitability in the future.

We have a history of incurring net losses, and we may not achieve or maintain profitability in the future. We experienced net losses of $40.2 million, $9.8 million and $15.5 million for the year ended December 31, 2019 (Successor), the period from September 8, 2018 through December 31, 2018 (Successor) and the period from January 1, 2018 through September 7, 2018 (Predecessor), respectively. As of December 31, 2019, we had an accumulated deficit of $91.0 million. While we have experienced significant growth in revenue in recent periods, we cannot predict when or whether we will reach or maintain profitability. We also expect our operating expenses to increase in the future as we continue to invest for our future growth, which will negatively affect our results of operations if our total revenue does not increase. We cannot assure you that these investments will result in substantial increases in our total revenue or improvements in our results of operations. In addition to the anticipated costs to grow our business, we also expect to incur significant additional legal, accounting, and other expenses as a newly public company. Any failure to increase our revenue as we invest in our business or to manage our costs could prevent us from achieving or maintaining profitability or positive cash flow.

If we are unable to increase our revenues or our operating costs are higher than expected, our profitability may decline and our operating results may fluctuate significantly.

We may not be able to accurately forecast our revenues or future revenue growth rate. Many of our expenses, particularly personnel costs, occupancy costs and sports rights costs, are relatively fixed, but we may experience higher than expected operating costs, including increased personnel costs, selling and marketing costs, investments in geographic expansion, acquisition costs, communications costs, travel costs, software development costs, professional fees and other costs. As a result, we may not be able to adjust spending quickly enough to offset any unexpected increase in expenses or revenue shortfall. Increased competition amongst sports data providers for data collection rights granted by sports organizations could lead to an increase in the cost of those rights, which we may be unable to pass on to our customers. Such competition may also mean we lose access to data on certain events if a third party data provider is granted exclusivity over data on that event. If operating costs exceed our expectations and cannot be adjusted accordingly, our profitability may be reduced, and our results of operations and financial position will be adversely affected. Additionally, historic growth rates may not be reflective of future growth, we may not be able to sustain our revenue growth rates, and our percentage revenue growth rates may decline. Reduced demand, whether due to a weakening of the global economy, reduction in consumer spending, competition or other reasons, may result in decreased revenues and growth, adversely affecting our operating results. Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations, both inside and outside of the U.K. and the U.S. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations.

 

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We may require additional capital to support our growth plans, including in connection with the acquisition of additional data rights, and such capital may not be available on reasonable terms or at all. This could hamper our growth and adversely affect our business.

We intend to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new technology and services or enhance our existing offering, improve our operating infrastructure, enhance our information security systems to combat changing cyber threats or implement more mature corporate processes to support growth, and acquire complementary businesses, personnel and technologies. Our success depends on our ability to retain and acquire sports data rights, which may require significant investments and additional capital. Accordingly, we may need to engage in equity or debt financings to secure additional funds. Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, markets conditions, our credit rating and other factors. If we raise additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing shareholders may experience dilution. If we are unable to obtain additional capital when required, or on reasonable terms, our ability to continue to support our business growth or to respond to business opportunities, challenges or unforeseen circumstances could be adversely affected, and our business may be harmed.

Risks Related to Genius Sports Group’s International Operations

The international scope of our operations may expose us to increased risk, and our international operations and corporate and financing structure may expose us to potentially adverse tax consequences.

We have international operations and, accordingly, our business is subject to risks resulting from differing legal and regulatory requirements, political, social and economic conditions and unforeseeable developments in a variety of jurisdictions. Our international operations are subject to the following risks, among others:

 

   

political instability;

 

   

international hostilities, military actions, terrorist or cyber-terrorist activities, natural disasters, pandemics, and infrastructure disruptions;

 

   

differing economic cycles and adverse economic conditions;

 

   

unexpected changes in regulatory environments and government interference in the economy, including gambling, data privacy and advertising laws and regulations;

 

   

changes to economic and anti-money laundering sanctions, laws and regulations;

 

   

varying tax regimes, including with respect to the imposition of withholding taxes on remittances and other payments by our partnerships or subsidiaries;

 

   

differing labor regulations;

 

   

foreign exchange controls and restrictions on repatriation of funds;

 

   

fluctuations in currency exchange rates;

 

   

inability to collect payments or seek recourse under or comply with ambiguous or vague commercial or other laws;

 

   

insufficient protection against product piracy and rights infringement and differing protections for intellectual property rights;

 

   

varying attitudes towards sports data providers and betting by foreign governments;

 

   

difficulties in attracting and retaining qualified management and employees, or rationalizing our workforce;

 

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differing business practices, which may require us to enter into agreements that include non-standard terms; and

 

   

difficulties in penetrating new markets due to entrenched competitors, lack of recognition of our brands or lack of local acceptance of our products and services.

Our overall success as a global business depends, in part, on our ability to anticipate and effectively manage these risks, and there can be no assurance that we will be able to do so without incurring unexpected costs. If we are not able to manage the risks related to our international operations, our business, financial condition and results of operations may be materially affected.

We have expanded our presence in a number of major regions and any future actions or escalations that affect trade relations may cause global economic turmoil and potentially have a negative impact on our business. In particular, we may have access to fewer business opportunities and our operations in that region may be negatively impacted.

As a result of the international scope of our operations and our corporate and financing structure, we are subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions. We are also subject to intercompany pricing laws, including those relating to the flow of funds between our companies pursuant to, for example, purchase agreements, licensing agreements or other arrangements. Adverse developments in these laws or regulations, or any change in position regarding the application, administration or interpretation of these laws or regulations in any applicable jurisdiction, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, changes in or to the interpretation of the tax laws or tax treaties of the countries in which we operate may adversely affect the manner in which we have structured our business operations and legal entity structure to efficiently realize income or capital gains and mitigate withholding taxes, and may also subject us to tax and return filing obligations in such countries that do not currently apply to us. Such changes may increase our tax burden and/or may cause us to incur additional costs and expenses in compliance with such changes. In addition, the tax authorities in any applicable jurisdiction may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions, including the tax treatment or characterization of our indebtedness. If any applicable tax authorities were to successfully challenge the tax treatment or characterization of any of our transactions, it could result in the disallowance of deductions, the imposition of withholding taxes, the reallocation of income or other consequences that could have a material adverse effect on our business, financial condition and results of operations.

In addition, the U.S. Congress, the U.K. Government, the Organization for Economic Co-operation and Development (the “OECD”), and other government agencies in jurisdictions where we and our affiliates do business have had an extended focus on issues related to the taxation of multinational corporations. Also, within the EU, the European Council Directive 2016/1164 (Anti-Tax Avoidance Directive (“ATAD”)) and Directive 2017/952 (“ATAD II”) required EU member states to transpose certain measures affecting multinational corporations into national legislation by December 31, 2019. Further, the introduction of a digital services tax, such as the U.K. digital services tax introduced with effect from April 1, 2020, may increase our tax burden which and could adversely affect our business, financial condition and results of operations. Finally, the international scope of our business operations subjects us to multiple overlapping tax regimes that can make it difficult to determine what our obligations are in particular situations.

Risks related to the U.K.’s exit from the European Union (“Brexit”) may have a negative effect on global economic conditions, financial markets and our business.

We have significant business operations in Europe, and our headquarters is in the U.K., which is currently undergoing the process of “Brexit,” or withdrawal from the European Union. Although we generated only approximately 9% of our revenues in the U.K. for the year ended December 31, 2019, Brexit-related

 

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developments and the potential consequences of them have had and may continue to have a material adverse effect upon global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Asset valuations, currency exchange rates and credit ratings have been and may continue to be subject to increased market volatility. The intellectual property law regime in the U.K. is subject to change post-Brexit as existing laws substantially implement EU legislation. Existing intellectual property protections enjoyed by the company in EU jurisdictions pre-Brexit may also be lost or reduced post-Brexit. Adapting to a new set of data protection laws could increase costs, risk of litigation and other adverse consequences. Lack of clarity about other future U.K. laws and regulations as the U.K. determines which European Union laws to replace or replicate, including financial laws and regulations, tax and free trade agreements, tax and customs laws, intellectual property rights, environmental, health and safety laws and regulations, immigration laws, employment laws and transport laws could increase costs, depress economic activity, restrict our access to capital, impair our ability to attract and retain qualified personnel and have other adverse consequences. If the U.K. and the European Union are unable to negotiate acceptable withdrawal terms, barrier-free access between the U.K. and other European Union member states or among the European economic area overall could be diminished or eliminated. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.

Fluctuating foreign currency and exchange rates may negatively impact our business, results of operations and financial position.

Due to our international operations, a portion of our business is denominated in foreign currencies. As a result, fluctuations in foreign currency and exchange rates may have an impact on our business, results of operations and financial position. Foreign currency exchange rates have fluctuated and may continue to fluctuate. Significant foreign currency exchange rate fluctuations may negatively impact our international revenue, which in turn affects our consolidated revenue. Currencies may be affected by internal factors, general economic conditions and external developments in other countries, all of which can have an adverse impact on a country’s currency. Currently, we are not party to any hedging transactions intended to reduce our exposure to exchange rate fluctuations. We may seek to enter into hedging transactions in the future, but we may be unable to enter into these transactions successfully, on acceptable terms or at all. We cannot predict whether we will incur foreign exchange losses in the future. Further, significant foreign exchange fluctuations resulting in a decline in the respective local currency may decrease the value of our foreign assets, as well as decrease our revenues and earnings from our foreign subsidiaries, which would reduce our profitability and adversely affect our financial position.

Risks Related to dMY and the Business Combination

Directors of dMY have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other proposals described in this proxy statement/prospectus.

When considering the Board’s recommendation that dMY’s stockholders vote in favor of the approval of the Business Combination, dMY’s stockholders should be aware that dMY’s directors and executive officers, advisors and entities affiliated with them, have interests in the Business Combination that may be different from, or in addition to, the interests of dMY’s stockholders. These interests include:

 

   

the continued indemnification of former and current directors and officers of dMY and the continuation of directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that dMY’s Founders have waived their right to redeem any of their Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Founders beneficially own or have an economic interest in Founder Shares and private placement warrants that they purchased prior to, or simultaneously with, the IPO, for which they have no redemption rights in the event an initial business combination is not effected in the required time period;

 

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the fact that the Founders paid an aggregate of $25,000 for the Class B Shares, which will convert into 6,900,000 Class A Shares in accordance with the terms of the Current Charter, subject to adjustment, and such securities will have a significantly higher value at the time of the Business Combination, estimated at approximately $112,740,000 based on the closing price of $16.82 per Class A Share on NYSE on March 22, 2021;

 

   

the fact that the Sponsor paid approximately $7,520,000 for 5,013,333 private placement warrants, each such private placement warrant is exercisable commencing upon the later of 12 months following the IPO and 30 days following the closing of the Business Combination for one NewCo ordinary share at $11.50 per share;

 

   

the fact that GS, as one of dMY’s underwriters in the IPO and one of the financial advisors in connection with the Business Combination, will be entitled to receive a deferred underwriting commission and financial advisory fee upon completion of the Business Combination; and Needham as one of the underwriters in the IPO who also performed certain financial advisory services in connection with the Business Combination, will be entitled to receive a deferred underwriting commission upon completion of the Business Combination; and

 

   

if the trust account is liquidated, including in the event dMY is unable to complete an initial business combination within the required time period, the Sponsor has agreed that it will be liable to dMY if and to the extent any claims by a third party for services rendered or products sold to it, or a prospective target business with which it has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under the indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

These financial interests of the officers and directors, and entities affiliated with them, may have influenced their decision to approve the Business Combination. You should consider these interests when evaluating the Business Combination and the recommendation of the Proposal to vote in favor of the Business Combination Proposal and other proposals to be presented to the stockholder.

GS and Needham may have a potential conflict of interest regarding the Business Combination.

Each of GS and Needham served as underwriters in the IPO, and, upon consummation of the Business Combination, they will be entitled to receive $9,660,000 of deferred underwriting commission, of which GS is entitled to $9,177,000 and Needham is entitled to $483,000. The underwriters of the IPO have agreed to waive their rights to the deferred underwriting commission held in the trust account in the event dMY does not complete an initial business combination within 24 months of the closing of the IPO. Accordingly, if the Business Combination, or any other initial business combination, is not consummated by that time and dMY is therefore required to be liquidated, GS and Needham will not receive any of the deferred underwriting commission and such funds will be returned to dMY’s public stockholders upon its liquidation.

Furthermore, GS was engaged by dMY as its financial advisor in connection with the Business Combination. dMY decided to retain GS as its financial advisor based primarily on its extensive knowledge of online gaming and the sports betting industry, strong market position, positive reputation as a leading advisor in SPAC business combinations, and their experienced and capable investment banking teams. Needham also provided certain financial advisory services in connection with the Business Combination given its ongoing relationship with the dMY team.

 

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In addition to paying GS a financial advisory fee upon the Closing of the Business Combination for its role as financial advisor, dMY agreed to reimburse GS for reasonable out-of-pocket expenses, including the fees and disbursements of GS’ outside attorneys, and to indemnify GS and certain related parties against liabilities, including liabilities under federal securities laws, in each case, in connection with, as a result of, or relating to its engagement. Needham will not be receiving any advisory fees in connection with their financial advisory services in connection with the Business Combination.

Both GS and Needham have an interest in dMY’s completing a business combination prior to the expiration of the 24 month period following the closing of the IPO, and they both may have a potential conflict of interest given that they are entitled to the deferred portion of their underwriting compensation, and GS’ financial advisory fee is payable, only if an initial business combination is completed within the specified timeframe. In considering approval of the Business Combination, dMY’s stockholders should consider the roles of GS and Needham in light of this potential conflict.

Following the completion of the Business Combination, Founders and Sellers, whose interests may differ from those of other holders of NewCo ordinary shares following the Business Combination, will have the ability to significantly influence NewCo’s business and management.

It is anticipated that, upon completion of the Business Combination: (i) dMY’s public stockholders will own approximately 16.5% of NewCo; (ii) the PIPE Investors will own approximately 19.7% of NewCo; (iii) the Sponsor and current dMY directors will own approximately 4.1% of NewCo; and (iv) Sellers will own approximately 59.7% of NewCo (excluding the Restricted Shares). These levels of ownership interest: (a) exclude the impact of the warrants to purchase NewCo ordinary shares that will remain outstanding immediately following the Business Combination and (b) assume that no dMY public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in dMY’s trust account. See “The Business Combination Proposal — General — Equity Ownership Upon Closing.” In addition, at the Closing, dMY, the Founders, the Sellers and NewCo will enter into an Investor Rights Agreement, pursuant to which, among other things, at the Closing, the Sponsor will be entitled to designate two directors of NewCo, the Sellers will be entitled to designate six directors of NewCo, and the Chief Executive Officer of NewCo will be a director of NewCo. Accordingly, the Sponsor and the Sellers will be able to significantly influence the approval of actions requiring approval of the board of directors of NewCo through their voting power. As a result, the Founders and Sellers will retain significant influence with respect to NewCo’s management, business plans and policies, including the appointment and removal of its officers.

Further, certain Founders and Sellers are each in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with NewCo. Certain Founders and Sellers, and their respective affiliates, may also pursue acquisition opportunities that may be complementary to NewCo’s business and, as a result, those acquisition opportunities may not be available to NewCo. NewCo’s Amended and Restated Articles of Incorporation will provide that NewCo renounces and waives any interest, expectancy or right to any business or corporate opportunity presented to Founders, Maven and certain shareholders and their respective affiliates. Prospective investors in NewCo ordinary shares should consider that the interests of Founders and Sellers may differ from their interests in material respects.

Subsequent to the consummation of the Business Combination, NewCo may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

Although dMY has conducted due diligence on NewCo, dMY cannot assure you that this diligence revealed all material issues that may be present in its businesses, that it would be possible to uncover all material issues through a customary amount of due diligence or that factors outside of dMY’s or NewCo’s control will not later arise. As a result, NewCo may be forced to later write-down or write-off assets, restructure its operations or incur

 

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impairment or other charges that could result in losses. Even if the due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with dMY’s preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on dMY’s liquidity, the fact that NewCo reports charges of this nature could contribute to negative market perceptions about NewCo or its securities. In addition, charges of this nature may cause NewCo to violate net worth or other covenants to which it may be subject. Accordingly, any stockholders who choose to remain shareholders following the Business Combination could suffer a reduction in the value of their NewCo ordinary shares. Such shareholders are unlikely to have a remedy for such reduction in value, unless they are able to successfully claim that the reduction was due to the breach by dMY’s officers or directors of a fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation materials, relating to the Business Combination contained an actionable material misstatement or material omission.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what NewCo’s actual financial position or results of operations would have been.

NewCo has been recently incorporated and has no operating history and no revenues. This document includes unaudited pro forma condensed combined financial statements for NewCo. The unaudited pro forma condensed combined financial information in this proxy statement/prospectus is presented for illustrative purposes only, is based on certain assumptions, addresses a hypothetical situation, and is not necessarily indicative of what NewCo’s actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated, or the future consolidated results of operations or financial position of NewCo. Accordingly, NewCo’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this document. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements” for more information.

The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.

The completion of the Business Combination is subject to a number of conditions. The completion of the Business Combination is not assured and is subject to risks, including the risk that approval of the Business Combination by dMY’s stockholders is not obtained or that there are not sufficient funds in the trust account, in each case, subject to certain terms specified in the Business Combination Agreement (as described under “The Business Combination Agreement — Conditions to the Closing of the Business Combination”), or that other closing conditions are not satisfied. If dMY does not complete the Business Combination, it could be subject to several risks, including:

 

   

the parties may be liable for damages to one another under the terms and conditions of the Business Combination Agreement;

 

   

negative reactions from the financial markets, including declines in the price of dMY’s Class A Shares due to the fact that current prices may reflect a market assumption that the Business Combination will be completed; and

 

   

the attention of its management will have been diverted to the Business Combination rather than its own operations and pursuit of other opportunities that could have been beneficial to dMY.

The Board did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination.

The Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination with NewCo. In analyzing the Business Combination, the Board and

 

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management conducted due diligence on NewCo and researched the industry in which NewCo operates and concluded that the Business Combination was in the best interests of dMY’s stockholders. Accordingly, investors will be relying solely on the judgment of the Board in valuing the NewCo’s businesses, and the Board may not have properly valued such businesses. The lack of a third-party valuation or fairness opinion may also lead an increased number of shareholders to vote against the Business Combination or demand redemption of their public shares for cash, which could potentially impact dMY’s ability to consummate the Business Combination.

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

NewCo will have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of its ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) on each of 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption, and provided further that there is an effective registration statement covering the ordinary shares issuable upon exercise of the warrants, and a current prospectus relating thereto, available throughout the 30-day redemption period, or NewCo has elected to require the exercise of the warrants on a “cashless basis,” and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by NewCo, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force holders (i) to exercise the warrants and pay the exercise price therefor at a time when it may be disadvantageous to do so, (ii) to sell the warrants at the then-current market price when the holder might otherwise wish to hold its warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of the warrants. The private placement warrants are not redeemable by NewCo so long as they are held by the Sponsor or its permitted transferees.

The only principal asset of NewCo following the Business Combination will be its interest in Genius, and accordingly, it will depend on distributions from Genius to pay taxes and expenses.

Upon consummation of the Business Combination, NewCo will be a holding company and will have no material assets other than its interests in Genius. NewCo is not expected to have independent means of generating revenue or cash flow, and its ability to pay taxes and operating expenses, as well as dividends in the future, if any, will be dependent upon the financial results and cash flows of Genius. There can be no assurance that Genius will generate sufficient cash flow to distribute funds to NewCo, or that applicable law and contractual restrictions, including negative covenants under any debt instruments, if applicable, will permit such distributions. If Genius does not distribute sufficient funds to NewCo to pay its taxes or other liabilities, NewCo may default on contractual obligations or have to borrow additional funds. In the event that NewCo is required to borrow additional funds, it could adversely affect NewCo’s liquidity and subject it to additional restrictions imposed by lenders.

The Business Combination may give rise to a taxable event for U.S. Holders of Class A Shares and Public Warrants

Subject to the limitations and qualifications described in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations” below, the Business Combination is generally intended to be tax-deferred to U.S. Holders and Non-U.S. Holders (as defined in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations”) of Class A Shares and public warrants for U.S. federal income tax purposes, except to the extent that U.S. Holders and Non-U.S. Holders of Class A Shares receive cash pursuant to the exercise of redemption rights. However, the failure of a U.S. Holder to meet certain requirements could result in the exchange of Class A Shares for NewCo ordinary shares and/or the assumption by NewCo of public warrants being a taxable event to such U.S. Holder.

 

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Section 367(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, in certain circumstances, may impose additional requirements for a U.S. Holder to qualify for tax-deferred treatment with respect to the exchange of Class A Shares and/or the assumption by NewCo of public warrants in the Business Combination.

The requirements for tax-deferred treatment, including Section 367(a) of the U.S. Tax Code, and the U.S. federal income tax consequences to U.S. Holders if such requirements are not met are discussed in more detail under the sections entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of the dMY Merger” and “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Additional Requirements for Tax Deferral.” If you are a U.S. Holder exchanging Class A Shares in the Business Combination or holding public warrants at the time of the consummation of the Business Combination, you are urged to consult your tax advisor to determine the tax consequences thereof.

Furthermore, if a U.S. Holder or Non-U.S. Holder exercises its redemption rights to receive cash from the trust account in exchange for a portion or, if such U.S. Holder or Non-U.S. Holder maintains its ownership of public warrants, all of its Class A Shares, such redemption may be treated as integrated with the dMY Merger rather than as a separate transaction. In such case, cash received by such U.S. Holder or Non-U.S. Holder in the redemption may also be treated as taxable boot received in a “reorganization” which, depending on the circumstances applicable to such U.S. Holder or Non-U.S. Holder, may be treated as capital gain (but not loss) or dividend income. If the Internal Revenue Service (“IRS”) were to assert, and a court were to sustain such a contrary position, such U.S. Holder or Non-U.S. Holder may be required to recognize more gain or income than if the redemption of Class A Shares was treated as a separate transaction from the exchanges pursuant to the dMY Merger. For further discussion on the tax implications of such treatment, please see the discussion under the headings “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. HoldersTax Consequences to U.S. Holders of Exercising Redemption Rights” and “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of Non-U.S. HoldersTax Consequences to Non-U.S. Holders of Exercising Redemption Rights.” If you are a U.S. Holder or Non-U.S. Holder exercising your redemption rights with respect to the Class A Shares, you are urged to consult your tax advisor to determine the tax consequences if the dMY Merger and the redemption of Class A Shares are to be treated as an integrated transaction.

The IRS may not agree that NewCo should be treated as a non-U.S. corporation for U.S. federal income tax purposes.

Under current U.S. federal income tax law, a corporation generally will be considered to be a U.S. corporation for U.S. federal income tax purposes only if it is created or organized in the United States or under the law of the United States or of any State. Accordingly, under generally applicable U.S. federal income tax rules, NewCo, which is not created or organized in the United States or under the law of the United States or of any State but is instead a Guernsey incorporated entity and tax resident of the U.K., would generally be classified as a non-U.S. corporation. Section 7874 of the U.S. Tax Code and the Treasury regulations promulgated thereunder, however, contain specific rules that may cause a non-U.S. corporation to be treated as a U.S. corporation for U.S. federal income tax purposes. If it were determined that NewCo is treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the U.S. Tax Code and the Treasury regulations promulgated thereunder, NewCo would be liable for U.S. federal income tax on its income just like any other U.S. corporation and certain distributions made by NewCo to Non-U.S. Holders (as defined in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations”) of NewCo would be subject to U.S. withholding tax. As more fully described in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — Treatment of NewCo as a non-U.S. Corporation for U.S. Federal Income Tax Purposes,” NewCo believes it should not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the U.S. Tax Code. However, whether the requirements for such treatment have

 

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been satisfied must be finally determined after the completion of the Business Combination, by which time there could be adverse changes to the relevant facts and circumstances. Furthermore, the interpretation of Treasury Regulations relating to the required ownership of NewCo is subject to uncertainty and there is limited guidance regarding their application. Accordingly, there can be no assurance that the IRS will not take a contrary position to those described above or that a court will not agree with a contrary position of the IRS in the event of litigation. You are urged to consult your tax advisor to determine the tax consequences if the classification of NewCo as a non-U.S. corporation is not respected.

dMY’s Founders, directors, officers, advisors and their affiliates may elect to purchase Class A Shares or warrants from public stockholders, which may influence a vote on the Business Combination and reduce the public “float” of the Class A Shares.

dMY’s Founders, directors, officers, advisors or their affiliates may purchase Class A Shares or warrants in privately negotiated transactions or in the open market either before or following the completion of the Business Combination, although they are under no obligation to do so. There is no limit on the number of securities dMY’s Founders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of NYSE. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase Class A Shares or warrants in such transactions.

In the event that dMY’s Founders, directors, executive officers, advisors, or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their public shares. The purpose of any such purchases of Class A Shares could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination or to satisfy a closing condition in the Business Combination Agreement that requires dMY to have a certain amount of cash at the consummation of the Business Combination, where it appears that such requirement would otherwise not be met. In addition, the purpose of any such purchases of warrants could be to reduce the number of warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the initial business combination. Any such purchases of dMY’s securities may result in the completion of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of the Class A Shares and the number of beneficial holders of dMY’s securities may be reduced, possibly making it difficult to maintain the quotation, listing or trading of dMY’s securities on NYSE.

The Founders have agreed to vote in favor of the Business Combination, regardless of how dMY’s public stockholders vote.

The Founders have agreed to vote their Founder Shares in favor of the Business Combination. The Founders own 20% of dMY’s outstanding shares of common stock prior to the Business Combination. Accordingly, it is more likely that the necessary stockholder approval for the Business Combination will be received than would be the case if the Founders agreed to vote their Founder Shares in accordance with the majority of the votes cast by dMY’s public stockholders.

Even if dMY consummates the Business Combination, there can be no assurance that the warrants will be in the money at the time they become exercisable, and they may expire worthless.

The exercise price for the outstanding warrants is $11.50 per Class A Share. There can be no assurance that the warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless.

 

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If dMY is unable to complete the Business Combination with NewCo or another business combination by August 18, 2022 (or such later date as dMY’s stockholders may approve), dMY will cease all operations except for the purpose of winding up, dissolving and liquidating. In such event, third-parties may bring claims against dMY, and, as a result, the proceeds held in the trust account could be reduced and the per share liquidation price received by stockholders could be less than $10.00 per share.

Under the terms of the Current Charter, dMY must complete the Business Combination or another business combination by August 18, 2022, or dMY must: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the trust account deposits (which interest will be net of taxes payable and less up to $100,000 to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish its public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and the Board, dissolve and liquidate, subject, in the case of clauses (i) and (ii), to its obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no liquidating distributions with respect to dMY’s warrants, which will expire worthless. In such event, third-parties may bring claims against dMY. Although dMY has obtained waiver agreements from certain vendors and service providers (other than its independent auditors) it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims that could take priority over those of dMY’s public stockholders.

The Sponsor has agreed that it will be liable to dMY if and to the extent any claims by a third party for services rendered or products sold to it, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under dMY’s indemnity of the underwriters in the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. dMY has not asked the Sponsor to reserve for its indemnification obligations, it has not independently verified whether the Sponsor has sufficient funds to satisfy such obligations, and it believes that the Sponsor’s only assets are securities of dMY. As a result, if any such claims were successfully made against the trust account, the funds available for dMY’s initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, dMY may not be able to complete its initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares.

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

In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case, less taxes payable, and dMY’s Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification

 

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obligations related to a particular claim, dMY’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations.

While dMY currently expects that its independent directors would take legal action on its behalf against the Sponsor to enforce its indemnification obligations to dMY, it is possible that dMY’s independent directors. in exercising their business judgment and subject to their fiduciary duties, may choose not to do so in any particular instance. If dMY’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to dMY’s public stockholders may be reduced below $10.00 per share.

If, before distributing the proceeds in the trust account to dMY’s public stockholders, dMY files a bankruptcy petition or an involuntary bankruptcy petition is filed against it that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of dMY’s stockholders and the per share amount that would otherwise be received by its stockholders in connection with its liquidation may be reduced.

If, before distributing the proceeds in the trust account to its public stockholders, dMY files a bankruptcy petition or an involuntary bankruptcy petition is filed against it that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in dMY’s bankruptcy estate and subject to the claims of third-parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by dMY’s stockholders in connection with dMY’s liquidation may be reduced.

dMY’s stockholders may be held liable for claims by third-parties against dMY to the extent of distributions received by them.

If dMY is unable to complete the Business Combination with NewCo or another business combination within the required time period, dMY will cease all operations, except for the purpose of winding up, liquidating and dissolving, subject to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. dMY cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, dMY’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more), and any liability of dMY’s stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, dMY cannot assure you that third parties will not seek to recover from dMY’s stockholders amounts owed to them by dMY.

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

During the Pre-Closing period, dMY and the Target Companies are prohibited from entering into certain transactions that might otherwise be beneficial to dMY, the Target Companies or their respective shareholders.

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businesses, each as summarized under the “The Business Combination Agreement — Interim Operations Pending the Closing.” The limitations on dMY’s and the Target Companies’ conduct of their businesses during this period could have the effect of delaying or preventing other strategic transactions and may, in some cases, make it impossible to pursue business opportunities that are available only for a limited time.

Uncertainties about the Business Combination during the Pre-Closing period may cause third parties to delay or defer decisions concerning the Target Companies or seek to change existing arrangements.

There may be uncertainty regarding whether the Business Combination will occur. This uncertainty may cause third parties to delay or defer decisions concerning the Target Companies, which could negatively affect the Target Companies’ business. Third parties may seek to change existing agreements with the Target Companies as a result of the Business Combination or other reasons.

If dMY is not able to complete the Business Combination with NewCo or another business combination by August 18, 2022, dMY would cease all operations except for the purpose of winding up, and dMY would redeem its public shares and liquidate the trust account, in which case its public stockholders may only receive approximately $10.00 per share and its warrants will expire worthless.

The Current Charter states that dMY must complete its initial business combination by August 18, 2022. If dMY has not completed either the Business Combination with NewCo or another business combination by August 18, 2022, dMY will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the trust account deposits (which interest will be net of taxes payable and less up to $100,000 to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish its public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and its board of directors, dissolve and liquidate, subject in the case of clauses (i) and (ii), to its obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no liquidating distributions with respect to dMY’s warrants, which will expire worthless.

The exercise of dMY’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the Business Combination Agreement or waivers of conditions are appropriate and in dMY’s stockholders’ best interests.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require dMY to agree to amend the Business Combination Agreement, to consent to certain actions taken by NewCo or to waive rights that dMY is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of NewCo’s businesses, a request by NewCo to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on the NewCo’s business and would entitle dMY to terminate the Business Combination Agreement. In any of such circumstances, it would be at dMY’s discretion, acting through the Board, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is best for dMY and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, dMY does not believe there will be any material changes or waivers that dMY’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. dMY will circulate a new or amended proxy statement/prospectus if changes to the terms of the Business Combination Agreement would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

 

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Risks Related to NewCo Ordinary Shares

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of dMY’s and/or NewCo’s securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of the Class A Shares prior to the consummation of the Business Combination may decline. The market values of the Class A Shares at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus or the date on which dMY’s stockholders vote on the Business Combination. Because the number of NewCo ordinary shares to be issued pursuant to the Business Combination Agreement will not be adjusted to reflect any changes in the market price of the Class A Shares, the market value of NewCo ordinary shares issued in the Business Combination may be higher or lower than the values of these shares on earlier dates.

In addition, following the Business Combination, fluctuations in the price of NewCo ordinary shares could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for NewCo ordinary shares. Accordingly, the valuation ascribed to NewCo in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for NewCo’s securities develops and continues, the trading price of NewCo ordinary shares following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond NewCo’s control. Any of the factors listed below could have a material adverse effect on your investment in NewCo ordinary shares, and NewCo ordinary shares may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of NewCo ordinary shares may not recover and may experience a further decline.

Factors affecting the trading price of NewCo ordinary shares may include:

 

   

actual or anticipated fluctuations in NewCo’s quarterly financial results or the quarterly financial results of companies perceived to be similar to NewCo;

 

   

changes in the market’s expectations about NewCo’s operating results;

 

   

success of competitors;

 

   

NewCo’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning NewCo or the industries in which NewCo operates in general;

 

   

operating and share price performance of other companies that investors deem comparable to NewCo;

 

   

NewCo’s ability to market new and enhanced products on a timely basis;

 

   

changes in laws and regulations affecting NewCo’s business;

 

   

commencement of, or involvement in, litigation involving NewCo;

 

   

changes in NewCo’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of NewCo ordinary shares available for public sale;

 

   

any major change in NewCo’s board or management;

 

   

sales of substantial amounts of NewCo ordinary shares by NewCo’s directors, executive officers or significant shareholders or the perception that such sales could occur; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

 

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Broad market and industry factors may materially harm the market price of NewCo ordinary shares irrespective of NewCo’s operating performance. The stock market in general, and NYSE, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of NewCo ordinary shares, may not be predictable. A loss of investor confidence in the market for the stocks of other companies that investors perceive to be similar to NewCo could depress its share price, regardless of its business, prospects, financial conditions or results of operations. A decline in the market price of NewCo ordinary shares also could adversely affect NewCo’s ability to issue additional securities and its ability to obtain additional financing in the future.

Because NewCo is incorporated under the laws of the Island of Guernsey, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.

NewCo is a limited company incorporated under the laws of the Island of Guernsey. As a result, it may be difficult for investors to effect service of process within the United States upon NewCo’s directors or officers, or enforce judgments obtained in the United States courts against NewCo’s directors or officers.

We have been advised that there is doubt as to the enforceability in Guernsey of judgments of the United States courts of civil liabilities predicated solely upon the laws of the United States, including the federal securities laws.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a corporation incorporated in the United States.

It may be difficult to enforce a U.S. judgment against NewCo or its directors and officers outside the United States, or to assert U.S. securities law claims outside of the United States.

A number of NewCo directors and executive officers are not residents of the United States, and the majority of NewCo’s assets and the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for investors to effect service of process upon NewCo within the United States or other jurisdictions, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the United States. Foreign courts may refuse to hear a U.S. securities law claim, because foreign courts may not be the most appropriate forum in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides. See “Description of NewCo’s Securities — Enforceability of Civil Liabilities.

As a company incorporated in the Island of Guernsey, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from NYSE corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with NYSE corporate governance listing standards.

We are a company incorporated in the Island of Guernsey, and we intend to apply for listing of the NewCo ordinary shares and warrants on the NYSE. NYSE market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Island of Guernsey, which is our home country, may differ significantly from NYSE corporate governance listing standards.

 

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Among others, we are not required to:

(a) have a majority of the members of our board of directors who are independent;

(b) hold regular meetings of our non-executive directors without the executive directors;

(c) have a nominating and/or corporate governance committee composed of entirely independent directors;

(d) have a remuneration committee composed of entirely independent directors; or

(e) adopt a code of business conduct and ethics, which we intend to do.

Provisions in the NewCo Governance Documents may inhibit a takeover of NewCo, which could limit the price investors might be willing to pay in the future for NewCo ordinary shares and could entrench management.

The NewCo Governance Documents will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include that the NewCo Board will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of the board only by successfully engaging in a proxy contest at two or more annual general meetings. NewCo may issue additional shares without shareholder approval and such additional shares could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The ability for NewCo to issue additional shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise that could involve the payment of a premium over prevailing market prices for NewCo ordinary shares.

If a U.S. Holder is treated as owning at least 10% of NewCo ordinary shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences.

If a U.S. Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of NewCo ordinary shares, such U.S. Holder may be treated as a “United States shareholder” with respect to NewCo, or to any of our subsidiaries, if NewCo or such subsidiary constitutes a “controlled foreign corporation” (in each case, as such terms are defined under the U.S. Tax Code). Certain United States shareholders of a controlled foreign corporation may be required to annually report and include in their U.S. taxable income, as ordinary income, their pro rata share of “Subpart F income,” “global intangible low-taxed income” and certain investments in U.S. property by controlled foreign corporations, whether or not such controlled foreign corporation make any distributions to such United States shareholder. A failure by a United States shareholder to comply with its reporting obligations may subject the United States shareholder to significant monetary penalties and other adverse tax consequences, and may extend the statute of limitations with respect to the United States shareholder’s U.S. federal income tax return for the year for which such reporting was due. NewCo cannot provide any assurances that it will assist investors in determining whether NewCo or any of its non-U.S. subsidiaries are treated as controlled foreign corporations or whether any investor is a United States shareholder with respect to any such controlled foreign corporations. NewCo also cannot guarantee that it will furnish to any United States shareholders information that may be necessary for them to comply with the aforementioned obligations. United States investors should consult their own advisors regarding the potential application of these rules to their investments in NewCo. The risk of being subject to increased taxation may deter our current shareholders from increasing their investment in us and others from investing in us, which could impact the demand for, and value of, our Class A Shares or NewCo ordinary shares.

If NewCo or any of its subsidiaries is characterized as a passive foreign investment company for U.S. federal income tax purposes, U.S. Holders may suffer adverse tax consequences.

If NewCo or any of its subsidiaries is or becomes a “passive foreign investment company,” or a PFIC, within the meaning of Section 1297 of the U.S. Tax Code for any taxable year (or portion thereof) during which a

 

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U.S. Holder (as defined in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations”) holds NewCo ordinary shares or public warrants, certain adverse U.S. federal income tax consequences may apply to such U.S. Holder and such U.S. Holder might be subject to additional reporting requirements.

We do not believe NewCo will be treated as a PFIC for its current taxable year and do not expect NewCo to become one in the near future. Nevertheless, whether NewCo is treated as a PFIC for U.S. federal income tax purposes is a factual determination that must be made annually at the close of each taxable year and, thus, is subject to significant uncertainty. Accordingly, we are unable to determine whether NewCo will be treated as a PFIC for the taxable year of the Business Combination or for future taxable years, and there can be no assurance that NewCo will not be treated as a PFIC for any taxable year. If NewCo determines that it is a PFIC for any taxable year, NewCo intends to, upon written request from a U.S. Holder of NewCo ordinary shares, provide a PFIC Annual Information Statement for 2021 or going forward, as applicable. Please see the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. HoldersTax Consequences to U.S. Holders of Ownership and Disposition of NewCo Ordinary Shares and Public Warrants — Passive Foreign Investment Company Rules” for a more detailed discussion with respect to NewCo’s potential PFIC status. U.S. Holders (as defined in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations”) are urged to consult their tax advisors regarding the possible application of the PFIC rules to holders of the NewCo ordinary shares or public warrants.

Future resales of NewCo ordinary shares and/or warrants may cause the market price of such securities to drop significantly, even if its business is doing well.

The Founders and the Sellers will be granted certain rights, pursuant to the Investor Rights Agreement, to require NewCo to register, in certain circumstances, the resale under the Securities Act of their NewCo ordinary shares or warrants held by them, subject to certain conditions, and to certain demand, piggy-back and shelf registration rights. The sale or possibility of sale of these NewCo ordinary shares and/or warrants could have the effect of increasing the volatility in NewCo ordinary share price or putting significant downward pressure on the price of NewCo ordinary shares and/or warrants.

Additionally, a significant portion of NewCo’s ordinary shares will be subject to a lock-up and restricted from immediate resale, however, upon expiration of their respective lock-up periods, the sale of shares of NewCo’s ordinary shares or the perception that such sales may occur, could cause the market price of NewCo’s ordinary shares to drop significantly.

NewCo may issue additional NewCo ordinary shares or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of NewCo ordinary shares. Additionally, activities taken by existing dMY stockholders to increase the likelihood of approval of the Business Combination Proposal and other proposals could have a depressive effect on NewCo Ordinary Shares.

dMY may need to obtain additional financing to complete the Business Combination, either because the transaction requires more cash than is available from the proceeds held in its trust account or because it becomes obligated to redeem a significant number of public shares upon completion of the Business Combination, in which case NewCo may issue additional NewCo ordinary shares or other equity securities or incur debt in connection with the Business Combination. NewCo may also issue additional NewCo ordinary shares or other equity securities in the future in connection with, among other things, future capital raising and transactions and future acquisitions, without your approval in many circumstances.

NewCo’s issuance of additional NewCo ordinary shares or other equity securities would have the following effects:

 

   

NewCo’s existing shareholders’ proportionate ownership interest in NewCo may decrease;

 

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the amount of cash available per share, including for payment of dividends in the future, may decrease;

 

   

the relative voting strength of each previously outstanding NewCo ordinary share may be diminished; and

 

   

the market price of NewCo ordinary shares may decline.

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding dMY or its securities, the Founders and/or their affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such NewCo ordinary shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire or vote their shares in favor of the Business Combination Proposal. The purpose of such purchases and other transactions would be to increase the likelihood that the Business Combination Proposal is approved. Entering into any such arrangements may have a depressive effect on the NewCo ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase NewCo ordinary shares at a price lower than market and may therefore be more likely to sell the NewCo ordinary shares he, she or it owns, either prior to or immediately after the special meeting.

NYSE may not list NewCo’s securities, which could limit investors’ ability to make transactions in NewCo’s securities and subject NewCo to additional trading restrictions.

NewCo intends to apply to have its securities listed on NYSE upon consummation of the Business Combination. NewCo will be required to meet the initial listing requirements to be listed. NewCo may not be able to meet those initial listing requirements. Even if NewCo’s securities are so listed, it may be unable to maintain the listing of its securities in the future.

If NewCo fails to meet the initial listing requirements and NYSE does not list its securities and the related closing condition is waived by the parties, NewCo could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for its securities;

 

   

a limited amount of news and analyst coverage on it; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such, we are exempt from certain provisions applicable to U.S. domestic public companies.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the U.S. that are applicable to U.S. domestic issuers, including: (i) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (iii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iv) the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

 

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We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.

We are a “foreign private issuer,” as such term is defined in Rule 405 under the Securities Act; however, under Rule 405, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2021.

In the future, we would lose our foreign private issuer status if a majority of our shareholders are U.S. residents or if a majority of our directors or management are U.S. citizens or residents, and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, the annual report on Form 10-K requires domestic issuers to disclose executive compensation information on an individual basis with specific disclosure regarding the domestic compensation philosophy, objectives, annual total compensation (base salary, bonus and equity compensation) and potential payments in connection with change in control, retirement, death or disability, while the annual report on Form 20-F permits foreign private issuers to disclose compensation information on an aggregate basis. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. We may also be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on NYSE that are available to foreign private issuers.

NewCo is an “emerging growth company,” and it cannot be certain if the reduced SEC reporting requirements applicable to emerging growth companies will make NewCo’s ordinary shares less attractive to investors, which could have a material and adverse effect on NewCo, including its growth prospects.

NewCo is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). NewCo will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following August 18, 2025, the fifth anniversary of dMY’s initial public offering, (b) in which NewCo has total annual gross revenue of at least $1.0 billion or (c) in which NewCo is deemed to be a large accelerated filer, which means the market value of our NewCo ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which NewCo has issued more than $1.0 billion in non-convertible debt during the prior three-year period. NewCo intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requiring that NewCo’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. The JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. NewCo has not chosen to “opt out” of this extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, NewCo, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of NewCo’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has

 

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opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used. NewCo cannot predict if investors will find NewCo ordinary shares less attractive because NewCo intends to rely on certain of these exemptions and benefits under the JOBS Act. If some investors find NewCo ordinary shares less attractive as a result, there may be a less active, liquid and/or orderly trading market for NewCo ordinary shares and the market price and trading volume of NewCo ordinary shares may be more volatile and decline significantly.

If NewCo fails to maintain an effective system of internal control over financial reporting, NewCo may not be able to accurately report its financial results or prevent fraud. As a result, shareholders could lose confidence in NewCo’s financial and other public reporting, which is likely to negatively affect NewCo’s business and the market price of NewCo ordinary shares.

Effective internal control over financial reporting is necessary for NewCo to provide reliable financial reports and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in NewCo’s implementation could cause NewCo to fail to meet its reporting obligations. In addition, any testing conducted by NewCo, or by NewCo’s independent registered public accounting firm, may reveal deficiencies in NewCo’s internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to NewCo’s financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in NewCo’s reported financial information, which is likely to negatively affect NewCo’s business and the market price of NewCo ordinary shares.

NewCo will be required to disclose changes made in its internal controls and procedures and its management will be required to assess the effectiveness of these controls annually. However, for as long as NewCo is an “emerging growth company” under the JOBS Act, its independent registered public accounting firm will not be required to attest to the effectiveness of NewCo’s internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. NewCo could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of NewCo’s internal controls could detect problems that NewCo’s management’s assessment might not. Undetected material weaknesses in NewCo’s internal controls could lead to financial statement restatements and require NewCo to incur the expense of remediation.

Risks Related to Redemption

The ability of stockholders to exercise redemption rights with respect to a large number of dMY’s outstanding shares of common stock could increase the probability that the Business Combination would be unsuccessful and that stockholders would have to wait for liquidation to redeem their public shares.

At the time dMY entered into the agreements for the Business Combination, it did not know how many stockholders will exercise their redemption rights, and therefore, it structured the Business Combination based on its expectations as to the number of public shares that will be submitted for redemption. If a larger number of public shares are submitted for redemption than it initially expected, this could lead to a failure to consummate the Business Combination, a failure to maintain the listing of its securities on NYSE or another national securities exchange or a lack of liquidity, which could impair dMY’s ability to fund its operations and adversely affect its business, financial condition and results of operations.

If dMY’s stockholders fail to properly demand redemption rights, they will not be entitled to redeem their public shares for a pro rata portion of the trust account.

Stockholders holding public shares may demand that dMY redeem their public shares for a pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. Stockholders who seek to exercise this redemption right must deliver their Class A Shares (either physically or electronically) to the Transfer Agent prior to the vote at the special meeting. Any stockholder who fails to

 

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properly demand redemption rights will not be entitled to redeem his, her or its public shares for a pro rata portion of the trust account. See the section entitled “Special Meeting of dMY stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your public shares for cash.

Stockholders, together with any affiliate or any other person with whom he, she or it is acting in concert or as a partnership, syndicate or other group, will be restricted from seeking redemption rights with respect to more than 20% of the issued and outstanding public shares.

A stockholder, together with any affiliate or any other person with whom he, or she is acting in concert or as a partnership, syndicate, or other group, will be restricted from seeking redemption rights with respect to more than 20% of the issued and outstanding public shares. Accordingly, if you hold more than 20% of the public shares and the Business Combination Proposal is approved, you will not be able to seek redemption rights with respect to the full amount of your public shares and may be forced to hold the public shares in excess of 20% or sell them in the open market. dMY cannot assure you that the value of such excess public shares will appreciate over time following the Business Combination or that the market price of the Class A Shares will exceed the per-share redemption price.

Risks If the Adjournment Proposal Is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, the Board will not have the ability to adjourn the special meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved.

The Board is seeking approval to adjourn the special meeting to a later date or dates if, at the special meeting, the Business Combination Proposal is not approved. If the Adjournment Proposal is not approved, the Board will not have the ability to adjourn the special meeting to a later date, and, therefore, the Business Combination would not be completed.

General Risk Factors

Recruitment and retention of qualified personnel and key employees, including members of our senior management team, are vital to growing our business and meeting our business plans. The loss of any of our key executives or other key employees could harm our business.

We depend on a limited number of key employees to manage and operate our business. We believe a significant portion of our success is owed to our CEO and founder, Mark Locke. The leadership of Mr. Locke and our current executive officers has been critical and the departure, death or disability of Mr. Locke, or any one of our executive officers, or other extended or permanent loss of any of their services, or any negative market or industry perception with respect to any of them or their loss, could have a material adverse effect on our business. We may not be able to attract or retain such highly qualified personnel in the future. In addition, the loss of employees or the inability to hire qualified personnel that are knowledgeable regarding the sports data industry could result in significant disruptions to our business, and the integration of replacement personnel could be time-consuming and expensive and cause additional disruptions to our business. The sports data industry requires specific knowledge that is not easily transferable from other industries, and finding suitable replacements for specialized roles can be challenging in a limited talent pool. If we do not succeed in attracting, hiring, and integrating qualified personnel, or retaining and motivating existing personnel, we may be unable to grow effectively and our business, financial condition, results of operations and prospects could be adversely affected.

 

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The requirements of being a public company, including compliance with the reporting requirements of the SEC and the requirements of the Sarbanes-Oxley Act and any applicable stock exchange, may strain our resources, increase our costs and divert management’s attention, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a public company, we will incur significant legal, accounting, insurance and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We have incurred and will incur costs associated with the Sarbanes-Oxley Act and related rules implemented by the SEC. The expenses incurred by public companies for reporting and corporate governance purposes generally have been increasing. Our management team has limited experience related to managing a public company and SEC and NYSE compliance and will not be immediately familiar with the increased regulations and controls to which public companies are subject. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. In estimating these costs, we took into account expenses related to investor relations, insurance, legal, accounting and compliance activities, as well as other expenses not currently incurred. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to the delisting of our common stock and warrants, fines, sanctions and other regulatory action and potentially civil litigation.

The terms of future indebtedness may contain restrictions on our business and operations. Our inability to comply with the terms of any of our existing or future indebtedness may adversely affect our business.

The terms of our future indebtedness may contain covenants that could, among other things, restrict our business and operations, our ability to incur additional indebtedness, pay dividends or make other distributions or repurchase stock, make certain investments, create liens on certain of our corporate assets, enter into affiliate transactions, merge, consolidate or sell all or substantially all of our assets. If we breach any of these covenants, our lenders and holders of other indebtedness may be entitled to accelerate our debt obligations. Any default could require that we repay outstanding indebtedness prior to maturity or that a lender could enforce a lien on our assets, as well as limit our ability to obtain additional financing, which in turn may have a material adverse effect on our cash flow and liquidity.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus includes statements that express dMY’s and NewCo’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement/prospectus and include statements regarding dMY’s and NewCo’s intentions, beliefs or current expectations concerning, among other things, the ability to close the Business Combination, the benefits and synergies of the Business Combination, including anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which TopCo operates. The forward-looking statements contained in this proxy statement/prospectus are based on dMY’s and NewCo’s current expectations and beliefs concerning future developments and their potential effects on the Business Combination and NewCo. There can be no assurance that future developments affecting dMY and NewCo will be those that dMY and NewCo have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond dMY’s and NewCo’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to

 

   

Those described in the section entitled “Risk Factors”;

 

   

other factors disclosed in this proxy statement/prospectus; and

 

   

other factors beyond NewCo’s control.

Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. dMY and NewCo will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before a stockholder grants his, her or its proxy or instructs how his, her or its vote should be cast or vote on the Business Combination Proposal or the Adjournment Proposal, he, she or it should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect dMY, Genius, NewCo, TopCo and the Sellers.

 

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SPECIAL MEETING OF DMY STOCKHOLDERS

General

dMY is furnishing this proxy statement/prospectus to dMY’s stockholders as part of the solicitation of proxies by the Board for use at the special meeting of dMY’s stockholders to be held on April 16, 2021, and at any adjournment or postponement thereof. This proxy statement/prospectus provides dMY’s stockholders with information they need to know to be able to vote or instruct their vote to be cast at the special meeting.

Date, Time and Place

The special meeting of dMY will be held at 10:00 AM, Eastern Time, on April 16, 2021, at http://www.cstproxy.com/dmytechnologyii/sm2021. The special meeting can be accessed by visiting http:/www.cstproxy.com/dmytechnologyii/sm2021, where you will be able to listen to the meeting live and vote during the meeting. Please note that you will not be able to access the special meeting by means of remote communication. Please have your Control Number, which can be found on your proxy card, to join the special meeting. If you do not have a Control Number, please contact the Continental Stock Transfer & Trust Company, the transfer agent.

Registering for the Special Meeting

Pre-registration at http://www.cstproxy.com/dmytechnologyii/sm2021 is recommended but is not required in order to attend.

Any stockholder wishing to attend the virtual meeting should register for the meeting by April 13, 2021. To register for the special meeting, please follow these instructions as applicable to the nature of your ownership of our common stock:

 

   

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the online-only special meeting, go to http://www.cstproxy.com/dmytechnologyii/sm2021, enter the 12-digit control number included on your proxy card or notice of the meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the meeting, you will need to log back into the meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

   

Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the special meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the meeting date in order to ensure access.

Purpose of the Special Meeting

At the special meeting, dMY is asking holders of shares of common stock to consider and vote upon:

 

  (1)

a proposal to approve the Business Combination described in this proxy statement/prospectus, including the Business Combination Agreement;

 

  (2)

separate non-binding proposals to approve the following material differences between the NewCo Governing Documents that will be in effect upon the closing of the Business Combination and the Current Charter: (i) the name of the new public entity will be “Genius Sports Limited” as opposed to “Galileo NewCo Limited”; and (ii) the NewCo Governance Documents will not include the various

 

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  provisions applicable only to special purpose acquisition companies that the Current Charter contains (such as the obligation to dissolve and liquidate if a business combination is not consummated in a certain period of time); and

 

  (3)

a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if dMY is unable to consummate the Business Combination.

Recommendation of the Board

The Board has unanimously determined that the Business Combination is fair to and in the best interests of dMY and its stockholders; has unanimously approved the proposals to be submitted for stockholder approval at the special meeting; and unanimously recommends that stockholders vote “FOR” the Business Combination proposal and the Adjournment Proposal, if the Adjournment Proposal is presented to the special meeting.

The existence of financial and personal interests of dMY’s directors and officers may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is in the best interests of dMY and its stockholders and what he, she or they may believe is best for themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “The Business Combination Proposal—Interests of dMY’s Directors and Officers in the Business Combination” for a further discussion.

Record Date; Persons Entitled to Vote

dMY has fixed the close of business on March 12, 2021, as the “record date” for determining dMY stockholders entitled to notice of and to attend and vote at the special meeting. As of the close of business on March 22, 2021, there were 34,500,000 shares of dMY common stock outstanding and entitled to vote. Each share is entitled to one vote per share at the special meeting.

As of March 22, 2021, the Founders held of record and were entitled to vote an aggregate of 6,900,000 Founder Shares. The Founder Shares currently constitute 20% of the outstanding shares of common stock. The Founders have agreed to vote any Founder Shares held by them as of the record date in favor of the Business Combination. As a result, in addition to the shares held by the Founders, dMY needs 10,350,001 or approximately 38% of the 27,600,000 outstanding public shares to be voted in favor of the Business Combination (assuming all outstanding public shares are voted) in order to have it approved.

Quorum

The presence, in person or by proxy (which would include presence at the virtual meeting), of the holders of a majority of all the shares of common stock entitled to vote constitutes a quorum at the special meeting.

Abstentions

With respect to each proposal in this proxy statement/prospectus, you may vote “FOR,” “AGAINST” or “ABSTAIN.”

If a stockholder fails to return a proxy card or fails to instruct a broker or other nominee how to vote, and does not attend the special meeting in person, then the stockholder’s shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have no effect on the outcome of any other proposal in this proxy statement.

Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on any of the proposals.

 

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Required Vote

Approval of the Business Combination Proposal requires the affirmative vote of holders of a majority of the outstanding votes cast by holders of Class A Shares and Class B Shares present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of at least a majority of the votes cast by holders of Class A Shares and Class B Shares present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class.

Voting Your Shares

Each share of common stock that you own in your name entitles you to one vote. Your proxy card shows the number of shares that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

There are two ways to vote your shares at the special meeting:

 

   

You Can Vote By Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by the Board “FOR” the Business Combination Proposal and the Adjournment Proposal, if presented. Votes received after a matter has been voted upon at the special meeting will not be counted.

 

   

You Can Attend the Special Meeting and Vote in Person (which would include presence at the virtual special meeting).

 

   

If your shares are registered in your name with Continental Stock Transfer & Trust Company and you wish to attend the virtual meeting, go to https://www.cstproxy.com/dmytechnologyii/sm2021, enter the 12-digit control number included on your proxy card or notice of the special meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Just prior to the start of the special meeting, you will need to log back into the special meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

   

Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the virtual meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the special meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the special meeting date in order to ensure access.

Revoking Your Proxy

If you are a stockholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

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you may notify dMY’s Chief Executive Officer in writing before the special meeting that you have revoked your proxy; or

 

   

you may attend the virtual meeting, revoke your proxy and vote (which would include presence at the virtual special meeting), as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you are a stockholder and have any questions about how to vote or to direct a vote in respect of your shares, you may call Morrow, dMY’s proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing DMYD.info@investor.morrowsodali.com.

Redemption Rights

Any holder of public shares as of the record date may demand that dMY redeem such public shares for a full pro rata portion of the trust account (which, for illustrative purposes, was $16.82 per public share as of March 22, 2021), calculated as of two business days prior to the consummation of the Business Combination. If a holder properly seeks redemption as described in this section and the Business Combination with NewCo is consummated, dMY will redeem these public shares for a pro rata portion of funds deposited in the trust account, and the holder will no longer own these public shares following the Business Combination.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate or any other person with whom he, she or it is acting in concert or as a partnership, syndicate or other group, will be restricted from seeking redemption rights with respect to more than 20% of the issued and outstanding public shares. Accordingly, all public shares in excess of 20% held by a stockholder, together with any affiliate or any other person with whom he, she or it is acting in concert or as a partnership, syndicate or other group, will not be redeemed for cash.

The Founders will not have redemption rights with respect to any Founder Shares owned by them, directly or indirectly, in connection with the Business Combination.

Holders of public shares or units who wish to exercise their redemption rights must, (i) if they hold their public shares through units, elect to separate their units into the underlying public shares and warrants and (ii) prior to 10:00 AM, Eastern Time, on April 14, 2021, (a) submit a written request to the Transfer Agent that dMY redeem their public shares for cash and (b) deliver their public shares to the Transfer Agent physically or electronically using the DTC’s DWAC (Deposit and Withdrawal at Custodian).

If the stockholder holds his, her or its public shares in “street name,” they will have to coordinate with their broker to have their public shares certificated or delivered electronically. Public shares that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the public shares or delivering them through the DWAC system. The Transfer Agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder. In the event the proposed Business Combination is not consummated, this may result in an additional cost to stockholders for the return of their public shares.

Any request to redeem such public shares, once made, may be withdrawn at any time up to the deadline for submitting redemption requests and thereafter, with dMY’s consent, until the Closing. A stockholder that has delivered his, her or its public shares to the Transfer Agent in connection with a redemption request who subsequently decides not to exercise redemption rights may withdraw the redemption request any time prior to the deadline for submitting redemption requests and thereafter, with our consent, until the Closing, by contacting the Transfer Agent and requesting that it return the public shares (physically or electronically) to such stockholder.

 

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If the Business Combination is not approved or completed for any reason, then stockholders who elected to exercise their redemption rights will not be entitled to redeem their public shares for a pro rata portion of the trust account. In such case, dMY will promptly return any public shares delivered by such holders.

The closing price of a Class A Share on March 22, 2021, was $16.82. The cash held in the trust account on such date was approximately $276,127,156 ($10.00 per public share). Prior to exercising redemption rights, stockholders should verify the market price of the Class A Shares as they may receive higher proceeds from the sale of their Class A Shares in the public market than from exercising their redemption rights if the market price per Class A Share is higher than the redemption price. dMY cannot assure its stockholders that they will be able to sell their Class A Shares in the open market, even if the market price per Class A Share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their Class A Shares.

If a holder of public shares exercises his, her or its redemption rights, then he, he or it will be exchanging its public shares for cash and will no longer own those public shares. A redeeming stockholder will be entitled to receive cash for these public shares only if, prior to the deadline for submitting redemption requests, he, she or it (i) properly demands redemption and (ii) delivers his, her or its public shares (either physically or electronically) to the Transfer Agent, and the Business Combination is consummated.

If the number of redemptions exceeds the maximum redemption scenario described herein, dMY may need to obtain additional debt or equity financing to the complete the Business Combination.

Appraisal Rights

Neither dMY stockholders nor dMY warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

Proxy Solicitation Costs

dMY is soliciting proxies on behalf of the Board. This solicitation is being made by mail but also may be made by telephone, on the Internet or in person. dMY and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. dMY will bear the cost of the solicitation.

dMY has hired Morrow to assist in the proxy solicitation process. dMY has agreed to pay Morrow a fee of $                .

dMY will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. dMY will reimburse them for their reasonable expenses.

Founders

As of March 22, 2021, the Founders held of record, and were entitled to vote an aggregate of, 6,900,000 Founder Shares. The Founder Shares currently constitute 20% of the outstanding shares. The Founders have agreed to vote any shares held by them as of the record date in favor of the Business Combination. As a result, in addition to the shares held by the Founders, dMY needs 10,350,001 or approximately 38% of the 27,600,000 outstanding public shares to be voted in favor of the Business Combination (assuming all outstanding public shares are voted) in order to have it approved.

The Founders have agreed to (i) waive their redemption rights with respect to their shares in connection with the completion of dMY’s initial business combination, (ii) waive their redemption rights with respect to their shares in connection with a stockholder vote to approve an amendment to the Current Charter to modify the

 

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substance or timing of dMY’s obligation to provide for the redemption of the public shares in connection with an initial business combination or to redeem 100% of the public shares if dMY has not consummated an initial business combination by August 18, 2022 and (iii) waive their rights to liquidating distributions from the trust account with respect to their Class B Shares if dMY fails to complete its initial business combination by August 18, 2022, although they will be entitled to liquidating distributions from the trust account with respect to any Class A Shares sold in the IPO they hold if dMY fails to complete its initial business combination within the prescribed time frame. If dMY does not complete its initial business combination within such applicable time period, the private placement warrants will expire worthless.

The issued and outstanding Class B Shares will automatically convert into Class A Shares immediately prior to the Closing on a one-for-one basis. Thereafter, in connection with the Business Combination and in consideration for the acquisition of all of the issued and outstanding equity interests of dMY representing the Founder Shares (via the Business Combination), Newco shall issue an equivalent number of NewCo ordinary shares, and such shares will not be transferable, assignable or saleable (subject to certain exceptions contained in the Investor Rights Agreement) until the earlier of (i) the date that is 12 months after the date of Closing, (ii) the date on which the closing share price of the NewCo ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing or (iii) the date NewCo completes (A) the sale of all or substantially all of the assets (in one transaction or a series of related transactions) of NewCo to any person (or group of persons acting in concert) or (B) a liquidation, merger, stock exchange, recapitalization or other similar transaction of NewCo, or other sale (in one transaction or a series of related transactions) of equity interests or voting power of NewCo to a person (or group of persons acting in concert), in each case, that results in any person (or group of persons acting in concert) owning more than 50% of the equity interests or voting power of NewCo (or any resulting entity after such merger or recapitalization). The private placement warrants (including the Class A Shares issuable upon the exercise of the private placement warrants) are not transferable, assignable or saleable until the earlier of, 12 months after the IPO (i.e., August 18, 2021) and 30 days after the Business Combination, subject to certain exceptions.

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding dMY or its securities, the Founders and/or their affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares or vote their shares in favor of the Business Combination Proposal. The purpose of such purchases and other transactions would be to increase the likelihood that the Business Combination Proposal is approved. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with the dMY’s consent, the transfer to such investors or holders of shares or warrants owned by the Founders for nominal value.

Entering into any such arrangements may have a depressive effect on the Class A Shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase Class A Shares at a price lower than market and may therefore be more likely to sell the Class A Shares he, she or it owns, either prior to or immediately after the special meeting.

If such transactions are effected, the consequence could be to cause the Business Combination Proposal to be approved in circumstances where such approval could not otherwise be obtained. Purchases of Class A Shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals to be presented at the special meeting and would likely increase the chances that such proposals would be approved.

 

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As of the date of this proxy statement/prospectus, no agreements dealing with the above have been entered into by the Founders or any of their affiliates. dMY will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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THE BUSINESS COMBINATION PROPOSAL

The discussion in this proxy statement/prospectus of the Business Combination and the principal terms of the Business Combination Agreement is subject to, and is qualified in its entirety by reference to, the Business Combination Agreement. A copy of the Business Combination Agreement is attached as Annex A to this proxy statement/prospectus.

General

Structure of the Business Combination

The Business Combination Agreement was entered into by and among dMY, TopCo, MidCo, NewCo, Merger Sub and the Sponsor on October 27, 2020.

Pursuant to the Business Combination Agreement, prior to the Closing, TopCo will undergo the Reorganization wherein all existing classes of shares of TopCo (except for (i) certain preference shares of TopCo which will be redeemed in the TopCo Redemption and (ii) certain shares of TopCo which will be contributed to NewCo in exchange for an amount equal to the Catch-Up Payment) will be contributed to NewCo in exchange for newly issued NewCo ordinary shares. As described in the Business Combination Agreement, solely with respect to the shares of TopCo that are unvested prior to the Reorganization and provided that the holders of such shares have executed and delivered support agreements agreeing to the vesting and restriction provisions therein, such shares shall be exchanged for NewCo ordinary shares but shall be subject to the vesting and restrictions as set forth therein. Following the Reorganization, upon the Closing, the shareholders of TopCo will hold: (1) that number of NewCo ordinary shares equal to the quotient obtained by dividing (i) $1,400,000,000, less the amount needed to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco, less the amount used to pay for the TopCo Redemption, less an amount equal to the Catch-Up Payment and less the amount, if any, to repurchase certain NewCo ordinary shares, in each case, in accordance with the terms of the Business Combination Agreement, by (ii) $10.00, and (2) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement. See the section entitled “The Business Combination Agreement.”

In addition, (i) effective as of immediately prior to the Closing, each issued and outstanding Class B Share will convert automatically on a one-for-one basis into a Class A Share; and (ii) on the date of Closing, Merger Sub will merge with and into dMY, with dMY continuing as the surviving company, as a result of which (A) dMY will become a wholly-owned subsidiary of NewCo; (B) each issued and outstanding unit of dMY, consisting of one Class A Share and one-third of one dMY Warrant, shall be automatically detached; (C) in consideration for the acquisition of all of the issued and outstanding Class A shares of dMY (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A share acquired by virtue of the Business Combination; (D) each issued and outstanding dMY warrant to purchase a Class A Share will exercisable for one NewCo ordinary share; and (E) NewCo will change its name to Genius Sports Limited. Accordingly, at the Closing, the dMY public stockholders will hold approximately 16.5% of the issued and outstanding NewCo ordinary shares, the Founders will hold approximately 4.1% of the issued and outstanding NewCo ordinary shares and the Sellers will hold approximately 59.7% of the issued and outstanding NewCo ordinary shares (assuming no public shares are redeemed as described in this proxy statement/prospectus). The Business Combination Agreement also contemplates the execution by the parties of various agreements at the Closing, including, among others, the below.

For more information about the Business Combination, please see the section titled “The Business Combination Agreement.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

Following the Reorganization, upon the Closing, the consideration to be received by shareholders of TopCo in connection with the Business Combination will be equal to: (1) that number of NewCo ordinary shares equal

 

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to the quotient obtained by dividing (i) $1,400,000,000 less the amount needed to repay certain loans granted by Topco, Midco and other direct and indirect subsidiaries of Topco and any other permitted indebtedness, less the amount used to pay for the TopCo Redemption, less an amount equal to the Catch-up Payment, and less the amount, if any, to repurchase certain NewCo ordinary shares, in each case, in accordance with the terms of the Business Combination Agreement, by (ii) $10.00, and (2) up to 11,618,401 Restricted Shares.

Consideration to be Received in the Business Combination

The aggregate consideration to be received by the Pre-Closing Holders at the Closing (after implementing the steps set forth below in the subsection titled “—Closing Date Cash Payments and Uses”, including in exchange of all debt and equity securities of TopCo (including pursuant to the TopCo Redemption)) will consist of: (i) the TopCo Equity Value apportioned in the following manner between cash and NewCo Common Shares: (x) the Aggregate Cash Consideration and (y) a number of NewCo Common Shares equal to the quotient obtained by dividing (1) the TopCo Equity Value minus the Aggregate Cash Consideration by (2) $10.00 and (ii) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement.

Pursuant to the Business Combination Agreement, the TopCo Equity Value is subject to adjustment following the Closing in the event that the transaction expenses attributable to TopCo and NewCo, on the one hand, or the Sponsor and dMY, on the other hand, exceed such party’s transaction expense cap as follows:

 

   

If, following the final determination of the transaction expenses attributable to the TopCo and NewCo, on the one hand, and the Sponsor and dMY, on the other hand, (1) the amount by which the transaction expenses attributable to the Sponsor and dMY exceeds the transaction expense cap with respect to the Sponsor and dMY is greater than (2) the amount by which the transaction expenses attributable to TopCo and NewCo exceeds the transaction expense cap with respect to the TopCo and NewCo (the positive result of (1) and (2), the “Net Company Equity Value Upward Adjustment Amount”), then the Company Enterprise Value will be adjusted upward following the Closing and NewCo will issue additional NewCo ordinary shares to the Sellers, on a pro rata basis, in the aggregate amount equal to the quotient of the Net Company Value Upward Adjustment Amount divided by $10.

 

   

If, following the final determination of the transaction expenses attributable to TopCo and NewCo, on the one hand, and the Sponsor and dMY, on the other hand, (1) the amount by which the transaction expenses attributable to TopCo and NewCo exceeds the transaction expense cap with respect to TopCo and NewCo is greater than (2) the amount by which the transaction expenses attributable to the Sponsor and dMY exceeds the transaction expense cap with respect to the Sponsor and dMY (the positive result of (1) and (2), the “Net Company Equity Value Downward Adjustment Amount”), then the Company Enterprise Value will be adjusted downward following the Closing and Maven will pay the Net Company Equity Value Downward Adjustment Amount to NewCo.

Equity Ownership Upon Closing

It is anticipated that, upon completion of the Business Combination: (i) dMY’s public stockholders will own approximately 16.5% of NewCo; (ii) the PIPE Investors will own approximately 19.7% of NewCo; (iii) the Sponsor and current dMY directors will own approximately 4.1% of NewCo; and (iv) the Sellers will own approximately 59.7% of NewCo (excluding the Restricted Shares). These levels of ownership interest: (a) exclude the impact of the warrants to purchase NewCo ordinary shares that will remain outstanding immediately following the Business Combination and (b) assume that no dMY public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in dMY’s trust account.

The Minimum Cash Condition must be satisfied even in the event holders of dMY’s public shares (other than the Sponsor and current dMY directors) exercise their redemption rights in connection with the Business Combination. In the event of such redemptions, the Minimum Cash Condition could still be satisfied using the

 

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proceeds from the PIPE Investment. Assuming the maximum redemption of dMY’s public shares: (i) dMY’s public stockholders will own no interest in NewCo; (ii) the PIPE Investors will own approximately 20.6% of NewCo; (iii) the Sponsor and current dMY directors will own approximately 3.7% of NewCo; and (iv) the Sellers will own approximately 75.8% of NewCo (excluding the Restricted Shares).

The following table illustrates varying ownership levels in NewCo, (i) assuming no redemptions by dMY’s public stockholders and the maximum redemptions by dMY’s public stockholders as described above and (ii) excluding (x) the warrants that may be exercised commencing upon the later to occur of 12 months from the IPO and 30 days after the Closing and (y) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement:

 

     Assuming No
Redemptions
of
Public Shares
    Assuming
Maximum
Redemptions
of
Public Shares(1)
 

dMY’s Public Stockholders

     16.5    

Founders

     4.1     3.7

Sellers

     59.7     75.8

PIPE Investors

     19.7     20.6

 

(1)

Pursuant to the Founder Holders Forfeiture Agreement, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash will be less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

Related Agreements

Founder Holders Forfeiture Agreement

Concurrently with the execution of the Business Combination Agreement, the Founders, NewCo and dMY entered into the Founder Holders Forfeiture Agreement, pursuant to which, among other things, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash (as defined in the Business Combination Agreement) is less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

Founder Holders Consent Letter

Concurrently with the execution of the Business Combination Agreement, the Founders, NewCo and dMY entered into the Founder Holders Consent Letter, pursuant to which, among other things, the Founders have agreed to waive any and all anti-dilution rights described in the Current Charter with respect to Class A Shares held by the Founders (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), as more fully described in the Founder Holders Consent Letter.

Investor Rights Agreement

At the Closing, dMY, the Founders, the Sellers and NewCo will enter into an Investor Rights Agreement, pursuant to which, among other things, (i) dMY and the Founders will agree to terminate the Registration Rights Agreement, dated as of August 13, 2020, entered into in connection with the IPO; (ii) NewCo will provide certain registration rights for the NewCo ordinary shares and warrants held by the parties to the Investor Rights Agreement; (iii) at the Closing, the Sponsor will be entitled to designate two directors of NewCo, the Sellers will

 

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be entitled to designate six directors of NewCo, and the Chief Executive Officer of NewCo will be a director of NewCo; and (iv) Management, the Founders, Maven and the Co-Investors will agree not to transfer, sell, assign or otherwise dispose of the NewCo ordinary shares held by such person as of the Closing Date for 12 months following the Closing (with respect to Management and the Founders) and 6 months following the Closing (with respect to Maven and the Co-Investors), in each case, subject to certain exceptions and as more fully described in the Investor Rights Agreement.

Transaction Support Agreements

Concurrently with the execution of the Business Combination Agreement, NewCo, TopCo, dMY and the TSA shareholders entered into the Transaction Support Agreements, pursuant to which, among other things, the TSA Shareholders agreed to vote their outstanding shares of TopCo at any meeting of TopCo in favor of the transactions contemplated by the Business Combination Agreement and provided a power of attorney to Maven to take certain actions in connection with the transactions contemplated by the Business Combination Agreement on behalf of such shareholders. The TSAs also set out a summary of the terms on which the holders of Restricted Shares will hold such Restricted Shares, which will be set out more fully in the Galileo NewCo Limited 2021 Restricted Share Plan and the Form of Restricted Share Agreement under the Galileo NewCo Limited 2021 Restricted Share Plan.

Subscription Agreements

Concurrently with the execution of the Business Combination Agreement, NewCo and dMY entered into the Subscription Agreements, each dated October 27, 2020, with certain accredited and institutional investors, pursuant to which such investors made the Subscriptions, for a purchase price of $10.00 per share, for an aggregate purchase price of $330,000,000, to be issued immediately prior to or substantially concurrently with the Closing. The obligations of each party to the Subscription Agreements to consummate the Subscriptions are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement. The NewCo ordinary shares to be issued in connection with the Subscription Agreements and the transactions contemplated thereby will not be registered under the Securities Act of 1933 and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.

Headquarters; Share Symbols

After completion of the Business Combination:

 

   

the corporate headquarters and principal executive offices of NewCo will be Genius Sports Group, 9th Floor, 10 Bloomsbury Way, London, WC1A 2SL; and

 

   

if the parties’ application for listing is approved, NewCo ordinary shares and warrants are expected to be listed for trading on NYSE under the symbols “GENI” and “GENI WS,” respectively.

Background of the Business Combination

We are a blank check company that was incorporated in Delaware on June 18, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Business Combination was the result of an extensive search for a potential transaction utilizing the global network and investing and operating experience of our management team and the Board. The terms of the Business Combination were the result of extensive negotiations between our independent directors, our management team, our Sponsor, the Company, in consultation with its financial and legal advisors, and representatives of Genius, in consultation with its financial and legal advisors. The following is a brief description of the background of these negotiations, the Business Combination and related transactions.

 

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Prior to the consummation of our IPO, neither we, nor anyone on our behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a transaction with us.

The prospectus for our IPO states that we intended to use the following general criteria and guidelines to evaluate potential acquisition opportunities:

 

   

whether the target had an enterprise value in between $1.0 billion and $3.0 billion;

 

   

whether the target was in the mobile app industry and consumer internet sectors;

 

   

whether the target had a proven and accomplished management team;

 

   

whether the target had the requisite compliance, financial controls and reporting processes in place and was ready for the regulatory requirements of a public entity;

 

   

whether the target had a promising growth path, driven by a sustainable competitive advantage, with opportunities for acceleration by a partnership with us;

 

   

whether the target had a management team with the interest and ability to execute on strategic opportunities, including accretive acquisitions of companies that have the potential to enhance shareholder value;

 

   

whether the target had management and stakeholders who aspire to have their company become a public entity and generate substantial growth;

 

   

whether the target had a sizable market share in their segment and the opportunity to achieve market leadership; and

 

   

whether the target had defensible proprietary technology and intellectual property rights.

Following our IPO, we searched for business combination candidates. As part of the search process, our representatives contacted and were contacted by a number of individuals and entities with respect to business combination opportunities and engaged with several possible target businesses in discussions with respect to potential transactions.

During that period, Niccolo de Masi and Harry You:

 

   

developed a list of approximately ten of the most attractive potential companies in the mobile app and consumer internet sectors fitting our criteria;

 

   

had in person, telephonic or email discussions with approximately six of those companies (collectively, the “Potential Targets”), of which approximately two were actively pursued (including Genius); and

 

   

submitted non-binding Indications of Intent to Genius.

Prior to entering into exclusive negotiations with Genius, between August 18, 2020 and September 12, 2020, we conducted preliminary due diligence with a number of Potential Targets. Our preliminary due diligence review of these other Potential Targets progressed to various stages, which included, but was not limited to, the review of their respective operations, financial forecasts, and management teams, depending in each case on the outcome of earlier discussions with each such Potential Target and the earlier diligence findings. The Board believes that Genius provided dMY with the most attractive potential business combination because, among other things, Genius (i) is a fast-growing business with significant scale and distribution, operating in an expanding addressable market, (ii) has established long-term, mutually beneficial relationships with sports leagues and federations and has acquired the rights to collect and monetize their data and (iii) is led by an experienced management team with a depth of experience and strong track record of success. For the reasons discussed above, and dMY management’s experience in the sports betting and online gaming sector from the business combination transaction of dMY Technology Group, Inc. (“dMY I”) with Rush Street Interactive, LP (“RSI”), dMY focused its resources on the diligence of the business of Genius. On September 12, 2020, we

 

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entered into exclusive negotiations with Genius generally as a result of one or more of (i) dMY’s determination that the other Potential Targets did not represent as attractive a business combination partner as Genius due to a combination of business prospects, strategy, management teams and structure; (ii) differences in valuation expectations between dMY, on the one hand, and the Potential Targets, on the other hand; and (iii) other macroeconomic and industry considerations.

Timeline of the Negotiations

Messrs. De Masi and You completed the initial public offering of dMY I, also a blank check company formed for the purposes of effecting a merger or similar business combination, in February 21, 2020. Due to a pending business combination transaction with dMY I and RSI), Mr. de Masi was familiar with Oakvale Capital LLP, a London-based boutique investment bank (“Oakvale”). Oakvale served as financial advisor to RSI and supported a portion of the private capital fundraising process in connection with the RSI transaction during the period from May through July 2020.

On August 16, 2020, Sandford Loudon (an Oakvale partner who had worked on the RSI transaction) connected Mr. de Masi with Daniel Burns, founder of Oakvale. White & Case LLP (“W&C”), counsel to dMY, prepared a non-disclosure agreement regarding a potential transaction with Genius (“NDA”), which was sent to Daniel Burns. The NDA was negotiated and ultimately executed on August 17, 2020.

On August 22, 2020, dMY received a confidential information memorandum compiled by Genius and Oakvale. dMY then began working with GS to diligence the Genius valuation and anticipate the public markets’ reaction to a business combination with Genius.

Concurrently, Mr. You requested valuation work on a number of leading Potential Targets for dMY from Needham on August 24, 2020. Mr. de Masi continued pursuing other targets in the mobile app and gaming sectors.

On August 24, 2020, Mr. Mark Locke, Genius’ founder and Chief Executive Officer, and Mr. Burns gave an informational presentation to Messrs. You and de Masi on Genius and its business and strategic prospects. Messrs. You and de Masi expressed interest in further exploring a possible business combination between dMY and Genius and scheduled a follow-up meeting for the next day.

On August 25, 2020, representatives of dMY met with the Genius management team and Mr. Gabriele Cipparrone, a partner at Apax Partners LLP (“Apax Partners”), the investment advisor to the ultimate general partners of the Apax Funds, which are the controlling shareholders of Genius. The parties further discussed the business and strategic prospects of Genius and the rationale for a possible business combination. After this meeting, dMY sent written diligence questions to Genius and Oakvale, and responses to such questions were provided on August 26, 2020. After receiving these responses, dMY started working with W&C on preparing a draft letter of intent (“LOI”) for Genius setting forth the key terms of a possible business combination between dMY and Genius. Due to COVID-19, all meetings were held virtually.

On August 27, 2020, Messrs. de Masi and Burns exchanged a series of emails and continued discussions on the terms of a possible business combination.

On August 28, 2020, dMY submitted a letter of intent to Genius, following a discussion by Mr. You with GS about valuation methodology.

On August 31, 2020, dMY received a presentation from Needham, which assisted in the validation of dMY management’s valuation of Genius, including through the use of public company comparables, such as gambling technology providers and mission critical data providers, and the materials provided by Genius.

From August 30, 2020 onwards, dMY received certain financial information and forecasts with respect to Genius from Oakvale via email and an online data room. On September 18, 2020, a diligence call took place among GS, dMY and Oakvale to discuss the financial model and forecasts provided by Oakvale.

 

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On September 1, 2020, dMY held a diligence call with the management team of Genius. Following this meeting, representatives of Genius and Messrs. You and de Masi continued to engage in periodic discussions regarding key diligence matters. During this period, dMY prioritized discussion of a possible business combination with Genius, but also continued their dialogues with other Potential Targets.

On September 2, 2020, dMY conducted a financial diligence call with Nick Taylor, the Chief Financial Officer of Genius. At that time, dMY also retained Chord Advisors, LLC (“Chord”) to perform financial diligence on behalf of dMY.

On September 3, 2020, dMY presented its perspective to Mr. Cipparrone on a possible business combination transaction with Genius. Francesca Luthi, one of dMY’s independent directors, attended. Apax Partners, Oakvale and Messrs. Locke and Taylor attended the meeting as well.

Between August 31, 2020 and September 4, 2020, Apax Partners and Oakvale reviewed the LOI with Kirkland & Ellis LLP (“K&E”), who were engaged as legal counsel to Genius and Apax Partners in connection with a possible business combination transaction, and on September 4, 2020, Oakvale sent dMY a revised draft of the LOI.

On September 5, 2020, Dave Horin of Chord was introduced to Genius as an advisor to dMY, and a Chord-Genius diligence call was held on the following day.

On September 7, 2020, dMY sent a revised draft of the LOI to Oakvale and introduced W&C to K&E. Between September 7, 2020 and September 16, 2020, representatives of dMY, on the one hand, and representatives of Genius and Apax Partners, on the other hand, held multiple calls regarding, and exchanged multiple revised drafts of, the LOI. The various revised drafts reflected divergent views on, among other things, the equity value ascribed to Genius (and any adjustments thereto), the waterfall for allocating transaction consideration to Genius shareholders, closing conditionality, quantum of the proposed PIPE Financing, scope of the forfeiture of Sponsor’s dMY shares and matters related to Genius’ post-closing corporate governance. Over the same period of time, the representatives and advisors for dMY, Genius and Apax Partners held numerous conference calls and came to agreement on various outstanding business issues, including, among other things: (i) the agreed equity valuation; (ii) the allocation of transaction consideration among Genius shareholders and related mechanics (including a fixed equity value with no adjustments, other than to the extent the transaction expenses of each party exceed certain agreed upon thresholds); and (iii) key closing conditions (including the thresholds for the “minimum proceeds” condition).

On September 10, 2020, Marc Silverman of Withum Smith+Brown, PC (“Withum”), dMY’s independent public auditor, was introduced by Mr. You to Genius and a diligence call was held that day between Withum and Genius.

On September 12, 2020, following several discussions among representatives of both parties and receipt of a revised draft of the LOI from Genius, and based upon dMY’s due diligence on, and discussions with, other Potential Targets to date, as described above, dMY decided to discontinue discussions with Potential Targets other than Genius.

On September 12, 2020, dMY also held a Board meeting to discuss entering into exclusivity with Genius with respect to a possible business combination. A detailed discussion of the terms and Genius’ business ensued, including Genius’ long-term contracts, highly diversified geographic customer base, pipeline, financial plan and data, projections and capital structure as well as public company comparables and expected market reaction. Following this discussion, the Board unanimously determined to proceed with pursuing a business combination transaction with Genius on an exclusive basis.

On September 16, 2020, following further negotiations, the parties reached an agreement on the final terms of the LOI, including the period of mutual exclusivity.

 

 

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On September 17, 2020, dMY and Genius executed the LOI, which provided for, among other things, an agreed equity value of $1.4 billion for Genius based on an approximately seven times multiple of Genius’ projected revenues in 2021 and a binding exclusivity period that, subject to certain customary exceptions, ended on the later of (i) October 17, 2020 and (ii) completion of certain “testing the waters” meetings between dMY and Genius, on the one hand, and potential PIPE investors, on the other hand, unless such period was mutually extended by the parties.

On September 22, 2020, dMY began work on a tentative PIPE roadshow deck with GS, Credit Suisse Securities (USA) LLC (“CS”), Oakvale and Genius’ executive management team.

Between September 18, 2020 and October 1, 2020, dMY, on the one hand, and GS and CS, on the other hand, engaged in negotiations regarding the terms of engagement of GS and CS by dMY. On September 29, 2020, dMY and GS executed an engagement letter with respect to the PIPE Investment. On October 1, 2020, dMY executed an engagement letter with GS with respect to financial advisory services in connection with a potential business combination transaction and an engagement letter with CS with respect to the PIPE Investment. CS participated in many PIPE investor calls where they had a particularly strong relationship with the potential investor.

On September 23, 2020, representatives of dMY, Apax Partners, Genius and their respective advisors held a telephonic meeting regarding next steps for the diligence process.

Between September 23, 2020 and October 27, 2020, representatives and advisors of dMY conducted further business and financial due diligence with respect to Genius and, between October 1, 2020 and October 27, 2020, dMY’s legal, tax and other advisors conducted due diligence with respect to Genius, in each case, based on information available in an online data room (the “Data Room”), written responses from the management team of Genius and due diligence calls with the Genius management team and pertinent representatives and advisors of Genius.

On October 1, 2020, Genius provided dMY and its advisors with access to the Data Room for purposes of conducting further business, financial, legal, tax, intellectual property and other due diligence with respect to Genius.

Between October 1, 2020 and October 8, 2020, representatives and advisors of dMY, Genius and Apax Partners exchanged numerous drafts of, and held various calls and meetings to discuss, the PIPE roadshow presentation.

Beginning on October 5, 2020, GS, in its capacity as the private placement agent to dMY, began conversations with prospective investors with respect to the PIPE Investment. dMY, Genius and Apax Partners came to agreement on the proposed size and terms of the PIPE Investment and W&C and K&E exchanged drafts of the form Subscription Agreement to be used in the PIPE Investment, including the terms of the closing process, the conditions to closing the PIPE Investment, the representations and warranties of NewCo and the prospective PIPE Investor, the registration rights to be granted to the prospective PIPE Investor and provisions related to the termination of the Subscription Agreements. Between October 8, 2020 and October 26, 2020, dMY, Genius, Apax Partners and their respective representatives and advisors collectively negotiated the terms and exchanged drafts of the Subscription Agreement with the prospective PIPE Investors and their respective representatives and advisors. During this period of time, the prospective PIPE Investors conveyed to GS their initial proposed subscription amounts. On October 26, 2020, a final version of the Subscription Agreement was distributed to the prospective PIPE Investors, which reflected the outcome of negotiations among dMY, Genius, Apax Partners and the prospective PIPE Investors and responded to follow up questions and comments related thereto. Later that day, the prospective PIPE Investors that had chosen to participate in the PIPE Investment

indicated their final subscription amounts and delivered executed Subscription Agreements to GS and W&C in escrow.

 

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On October 9, 2020, K&E sent an initial draft of the Business Combination Agreement to W&C.

Between October 9, 2020 and October 27, 2020, K&E, on the one hand, and W&C, on the other hand, exchanged numerous revised drafts of the Business Combination Agreement and the related ancillary documents, and participated in a number of conference calls to negotiate such documents and agreements. The various revised drafts reflected divergent views on, among other things, certain risk allocation points, interim operating covenants, closing conditionality and deal certainty provisions, certain reorganization steps to be undertaken by Genius and its shareholders prior to the closing of the Business Combination, and allocation of transaction consideration and PIPE proceeds among the Genius shareholders. Over the same period of time, the representatives and advisors for dMY, Genius and Apax Partners held numerous conference calls and came to agreement on various outstanding business issues, including, among others: (i) the domicile of NewCo; (ii) certain reorganization steps to be undertaken by Genius and its shareholders prior to the closing of the business combination transaction; (iii) closing conditionality and deal certainty provisions; and (iv) the overall suite of representations, warranties and covenants to be provided by each party under the Business Combination Agreement and the related ancillary documents.

During the same period, Oakvale, K&E, representatives of Apax Partners, Macfarlanes LLP (“Macfarlanes”), counsel to Mr. Locke and certain other members of the Genius management team, and Mr. Locke, engaged in a number of discussions and negotiations concerning the terms of the Genius management team’s participation in the Transaction, the terms of the Restricted Shares and their vesting conditions, the Investor Rights Agreement and the Transaction Support Agreement to be executed by Mr. Locke and all other Genius shareholders in support of the various reorganization steps and the transactions contemplated by the Business Combination Agreement. During the same period, dMY and its representatives and advisors engaged in meetings and communications with Genius, Apax Partners and their respective representatives and advisors regarding these documents and their terms.

On October 19, 2020, Mr. de Masi presented the diligence findings of W&C and other dMY advisors to the full Board.

On October 22, 2020, Mr. de Masi shared with the Board the working draft of the Business Combination Agreement and diligence findings prepared by GS.

On October 24, 2020, Genius distributed a form of the Transaction Support Agreement, along with the working drafts of the Business Combination Agreement and Investor Rights Agreement, to all the shareholders of TopCo. During the period from October 24, 2020 and October 26, 2020, Genius communicated with substantially all the shareholders of TopCo, who executed and returned Transaction Support Agreements in support of the transactions contemplated by the Business Combination Agreement.

On October 25, 2020, Mr. de Masi shared structuring materials prepared by Ernst & Young LLP, tax and accounting advisor to Genius, with the full Board.

On October 25, 2020, dMY held a telephonic Board meeting to discuss the Genius transaction structure, the PIPE Investment and Business Combination Agreement. GS gave a presentation to the Board to assist in analyzing management’s valuation of Genius. The Board reviewed and discussed the Business Combination, including a detailed review and discussion of the form of the Business Combination Agreement and the related transaction documents, and also discussed diligence findings. Certain representatives of W&C. The Board then discussed other factors, including those described below under the caption “—The Boards Reasons for the Approval of the Business Combination.” At the end of the meeting, the Board (i) determined that the Business Combination Agreement and related transaction agreements, were fair, advisable and in the best interests of dMY and its stockholders, (ii) adopted and approved the Business Combination Agreement and the related transaction agreements, (iii) recommended that dMY’s stockholders adopt and approve the Business Combination Agreement, the related transaction agreements and such other proposals that are required for the consummation of the transactions

 

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contemplated by the Business Combination Agreement and (iv) directed the officers of dMY to submit the Business Combination and related transaction agreements to the dMY’s stockholders for adoption and approval.

On October 26, 2020, dMY held a Board meeting to discuss the substantially final draft of the Business Combination Agreement and the ancillary documents. Certain representatives of W&C also attended the meeting. After review of the changes to the transaction documents, the Board unanimously agreed to proceed with finalizing negotiations and executing the Business Combination Agreement for announcement the morning of October 27, 2020.

On October 27, 2020, the parties executed the Business Combination Agreement and Maven and each other shareholder of TopCo executed and delivered Transaction Support Agreements (see “—Related Agreements — Transaction Support Agreement”). On the same day, dMY and Genius issued a joint press release announcing the execution of the Business Combination Agreement. Thereafter, dMY filed on Current Reports on Form 8-K with the SEC the Business Combination Agreement, forms of the Transaction Support Agreements, other related transaction agreements, the press release and the investor presentation. The parties have continued and expect to continue regular discussions in connection with, and to facilitate, the consummation of the Business Combination.

The Board’s Reasons for the Approval of the Business Combination

The Board considered a wide variety of factors in connection with its evaluation of the Business Combination. In light of the complexity of those factors, the Board, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching its decision. Individual members of the Board may have given different weight to different factors. This explanation of the reasons for the Board’s approval of the Business Combination, and all other information presented in this section, is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Note Regarding Forward-Looking Statements.”

Before reaching its decision, the Board reviewed the results of the due diligence conducted by our management, which included:

 

   

extensive meetings with Oakvale and Genius’ management team to understand and analyze Genius’ business and prospects;

 

   

extensive calls with executives of leading regulated gaming businesses in the US and Europe, the majority of whom are clients of Genius;

 

   

legal due diligence conducted by W&C;

 

   

financial and accounting due diligence conducted by Chord and Withum;

 

   

regulatory and gaming commission due diligence conducted by Greenberg;

 

   

discussions with customers of Genius as well as market participants who are knowledgeable about the sports betting and online gaming industry;

 

   

review of Genius’ financial statements and certain projections provided by Genius;

 

   

review by Needham, GS and dMY’s management of valuation materials and analysis produced by GS; and

 

   

research on comparable public companies and precedent transactions.

 

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The factors considered by our Board included, but were not limited to, the following:

 

   

Large Total Addressable Market (TAM) with Significant Growth Opportunity. The Board believes that Genius is uniquely positioned to capture significant TAM in both the United States and internationally. According to H2 Gambling Capital, the global sports betting industry will generate approximately $59 billion in gross gaming revenue (“GGR”) by 2025. The Board believes that Genius is well positioned to capitalize on the sports betting growth markets, including the U.S. and certain parts of Europe and Latin America. The Board also believes that in the U.S. market specifically, Genius’ strong partnerships with sports leagues, data-driven marketing products, existing relationships with B2B providers and robust licensing regime give Genius a competitive advantage.

 

   

Market Leadership Position and Deep Relationships with Leagues and Sportsbooks. The Board believes that Genius offers a critical mass of sport events, which makes it important to sportsbooks, and that Genius’ integration with sports leagues and human infrastructure create a highly diversified, defensible portfolio.

 

   

Reliable Revenue and Good Earnings Visibility. The Board believes that Genius holds long-term contracts with sportsbooks and sports rights holders and has historically experienced very low churn. Approximately 60% of Genius’ revenue is recurring, which the Board believes will allow for good earnings visibility. In addition, Genius’ contracts are structured with upside levers through revenue share components, which the Board believes will allow Genius to to benefit as its partners grow through increased GGR, expansion into new markets and/or utilization of more events.

 

   

Scaled Cost Structure with High Operating Leverage. The Board believes that Genius benefits from significant economies of scale driven by highly scalable technology and software. The Board also believes that the majority of Genius’ costs are expected to grow slower than expected revenue growth.

 

   

Market-Leading Software and Technology. The Board believes that Genius possesses robust technology and that Genius’ core systems can be scaled out to support ongoing sustained growth in customers, sports event coverage and volume of bet types.

 

   

Experienced Management Team. The Board believes that Genius is led by an experienced management team with a depth of experience and strong track record of success. The team has extensive experience in the global sports, wagering and iGaming sectors and, having led the business to growth as the regulatory landscape matured in Europe over the past decade, is well positioned to capitalize on developing markets around the globe. The management team is led by Mark Locke (CEO and co-Founder), who is recognized as a global expert on sports technology, integrity and sports betting regulation.

 

   

No Termination Fee. The Business Combination Agreement does not include a provision contemplating the payment by dMY of a termination fee in the event of termination of the Business Combination Agreement.

In the course of its deliberations, our Board considered a variety of uncertainties, risks and other potentially negative reasons relevant to the Business Combination, including the below:

 

   

Benefits Not Achieved. The risk that the potential benefits of the Business Combination may not be fully achieved, or may not be achieved within the expected timeframe.

 

   

Liquidation of dMY. The risks and costs to dMY if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in dMY being unable to effect a business combination by August 14, 2022 and force dMY to liquidate.

 

   

Exclusivity. The fact that the Business Combination Agreement includes a provision that generally restricts dMY from soliciting other business combination proposals, which limits dMY’s ability, so long as the Business Combination Agreement is in effect, to consider other potential business

 

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combinations. In addition, under the Business Combination Agreement, unless required by applicable law, the Board may not change or withdraw its recommendation to the dMY stockholders to vote in favor of the Business Combination Proposal and any other proposals required to consummate the transactions contemplated by the Business Combination Agreement that are submitted to, and require the vote of, the dMY stockholders.

 

   

Shareholder Vote. The risk that the dMY stockholders may fail to provide the votes necessary to effect the Business Combination.

 

   

Post-Business Combination Corporate Governance; Terms of the Investor Rights Agreement. The Board considered the corporate governance provisions of the Business Combination Agreement and the Investor Rights Agreement and the material provisions of the NewCo Governing Documents. In particular, they considered the nomination rights that certain stockholders would have in NewCo and that these rights are not generally available to public stockholders, including stockholders that may hold a large number of shares. See “—Related Agreements—Investor Rights Agreement” for detailed discussions of the terms and conditions of these documents.

 

   

Limitations of Review. The Board considered that they were not obtaining an opinion from a financial advisor or accounting firm that the consideration to be received by the dMY stockholders is fair to dMY or its stockholders from a financial point of view.

 

   

Closing Conditions. The fact that completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within dMY’s control, including approval by dMY stockholders of the Business Combination and approval by NYSE of the initial listing application in connection with the Business Combination.

 

   

Litigation. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

 

   

External Risks. Economic downturns and political and market conditions beyond Genius’ control, including a reduction in consumer discretionary spending and sports leagues shortening, delaying or canceling their seasons due to COVID-19, could adversely affect its business, financial condition, results of operations and prospects.

 

   

Reliance on Projections. Genius’ projections, including for revenues and profitability, are subject to significant risks, assumptions, estimates and uncertainties and Genius’ operating results may vary, which may make future results difficult to predict with certainty.

 

   

Fees and Expenses. The fees and expenses associated with completing the Business Combination.

 

   

Inability to Evolve. Genius’ growth prospects may suffer if it is unable to develop successful product offerings, if it fails to pursue additional product offerings or if it loses any of its key executives or other key employees. In addition, if Genius fails to make the optimal investment decisions in its product offerings and technology platform, it may not attract and retain key customers and its revenue and results of operations may decline.

 

   

Other Risks. Various other risks associated with the Business Combination, the business of dMY and the business of Genius described under the section entitled “Risk Factors.”

In addition to considering the factors described above, the Board also considered that certain of the officers and directors of dMY may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of dMY stockholders, which are described in more detail under the section entitled “Certain Relationships and Related Person Transactions,” dMY’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the Board, the Business Combination Agreement and the transactions contemplated therein, including the Business Combination.

 

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Although the Board did not seek a third party valuation, and did not receive a valuation opinion from any third party in connection with the Business Combination, the Board relied on dMY’s management team’s collective experience in public market transactions in constructing and evaluating financial models and projections and conducting valuations of businesses as assisted by its financial advisors. dMY’s management also considered a comparable company analysis to assess the potential value that the public markets would likely ascribe to Genius, and this analysis was provided to dMY’ board of directors. The comparable companies were considered, in certain respects, to be similar to the Genius’ business due to one or more similar operating and financial characteristics, and included gambling technology providers and mission critical data providers. Although none of the selected companies reviewed in the analysis were directly comparable to Genius, the companies had one or more similar operating and financial characteristics as Genius. dMY’s board of directors considered this analysis and viewed Genius to favorably compare to such other companies. Based on these various factors, the Board concluded that an equity value of $1.4 billion is a fair and reasonable valuation given (a) Genius’ long-term contracts and its highly diversified geographic customer base, pipeline, financial plan and data, projections, its capital structure, and valuations of precedent combination transactions and targets in similar and adjacent sector, and (b) Genius’ growth prospects, business strategy, market-leading position and deep relationships with leagues and sportsbooks, reliable revenue and good earnings visibility, among other compelling aspects.

After considering the foregoing potentially negative and potentially positive reasons, the Board concluded, in its business judgment, that the potentially positive reasons relating to the Business Combination and the other related transactions outweighed the potentially negative reasons. Accordingly, the Board unanimously determined that the Business Combination Agreement and the Business Combination were advisable, fair to, and in the best interests of, dMY and its stockholders.

Certain Forecasted Financial Information for the Company

TopCo does not as a matter of course make public projections as to earnings or other results. However, in connection with its consideration of the potential combination, the Board was provided with prospective financial information prepared by management of TopCo (collectively, the “Projections”).

The Projections are included in this proxy statement/prospectus solely to provide our stockholders access to information made available in connection with the Board’s consideration of the Business Combination. The Projections should not be viewed as public guidance. Furthermore, the Projections do not take into account any circumstances or events occurring after the date on which the Projections were presented to the Board, which was August 22, 2020.

The Projections were not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information. The Projections have not been audited. None of the independent registered public accounting firms of TopCo, NewCo or dMY, or any other independent accountants, have compiled, examined or performed any procedures with respect to the Projections contained herein, nor have they expressed any opinion or any other form of assurance on such information or their achievability, and the independent accounting firms of TopCo, NewCo and dMY assume no responsibility for, and disclaim any association with, the Projections.

In the view of TopCo’s management team, the Projections were prepared on a reasonable basis, reflected the best currently available estimates and judgments of TopCo and presented, to the best of their knowledge and belief, the expected course of action and the expected future financial performance of TopCo and its subsidiaries. In particular, TopCo’s management team has made assumptions relating to general business, economic, market, regulatory and financial conditions and various other factors. The Projections do not reflect the additional capital expected to be received by NewCo, nor the impact of any subsequent investment in connection with the Business Combination.

 

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The Projections are subjective in many respects. As a result, there can be no assurance that the Projections will be realized or that actual results will not be significantly higher or lower than estimated. Since the Projections cover multiple years, that information by its nature becomes less predictive with each successive year.

While presented with numerical specificity, the Projections are forward-looking and reflect numerous estimates and assumptions with respect to future industry performance under various industry scenarios, as well as assumptions for competition, general business, economic, market and financial conditions and matters specific to the businesses of TopCo, all of which are difficult to predict and many of which are beyond the preparing parties’ control, including, among other things, the matters described in the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”

The most significant assumptions upon which the Company’s management based its forecasts and the reasonable and supportable basis for those assumptions are, among other things, betting, content & services revenue growth through execution of our official data strategy to drive increased utilization with existing customers, contractual price increases on renewals and renegotiations, expansion of value-add services and new customer wins and service offerings achieved through liberalization of sports betting markets globally. Sports, technology & services revenue is projected to grow with contractual price inflation and expanded service offerings to existing and new sporting leagues and federations. Media, content & services revenue is projected to increase at the existing growth trajectory.

Group Adjusted EBITDA is driven by revenue growth per above, offset by the continued acquisition of targeted data and streaming rights, in line with our official rights strategy. Cost of revenue margins are forecast to decrease with economies of scale achieved as revenues outgrow number of events offered. Operating expenses are projected to grow in line with inflation and modest headcount growth.

The Company believes that the assumptions used to derive its forecasts are both reasonable and supportable. The Company’s management derived its forecasts based on modelling revenue growth assumptions and estimates of controllable expenditure. In preparing the models, the Company’s management relied on a number of factors, including the executive team’s significant experience in the market and the actual historical performance of the Company.

The Projections were prepared solely for internal use to assist us in our evaluation of TopCo and the Business Combination. NewCo has not warranted the accuracy, reliability, appropriateness or completeness of the projections to anyone, including dMY. Neither NewCo’s or TopCo’s management nor their respective representatives have made or make any representations to any person regarding the ultimate performance of NewCo or Topco relative to the Projections.

The Projections are not fact. The Projections are not a guarantee of actual future performance. The future financial results of NewCo and TopCo may differ materially from those expressed in the Projections due to factors beyond NewCo’s and TopCo’s ability to control or predict.

The Projections are not included in this proxy statement/prospectus in order to induce any stockholders to vote in favor of any of the proposals at the special meeting and should not be looked upon as “guidance” of any sort.

Total Group Revenue, which is included in the Projections reflected below, was prepared in accordance with U.K. generally accepted accounting principles (“GAAP”). Such information has not been presented in accordance with U.S. GAAP or audited in accordance with either Public Company Oversight Board (“PCAOB”) standards or generally accepted auditing standards in the U.S. U.K. GAAP differs in certain respects from U.S. GAAP.

Group Adjusted EBITDA and Total Adjusted EBITDA Margin, which is derived therefrom, are not presented in accordance with U.S. or U.K. GAAP and may exclude items that are significant in understanding

 

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and assessing the Company’s financial results. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by TopCo are not reported by all of its competitors and may not be comparable to similarly titled amounts used by other companies.

The non-GAAP financial measures reflected below are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, TopCo is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.

We encourage you to review the financial statements of TopCo included in this proxy statement/prospectus, as well as the financial information in the sections entitled “Selected Historical Financial Information” and “Unaudited Pro Forma Condensed Combined Financial Statements” in this proxy statement/prospectus, and not rely on any single financial measure.

None of TopCo, NewCo or any of their respective affiliates intends to, and, each of them expressly disclaims any obligation to, update, revise or correct the Projections to reflect circumstances existing or arising after the date such Projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Projections are shown to be in error or any of the Projections otherwise would not be realized.

The key elements of the Projections provided to dMY are summarized below, which were prepared in reliance upon TopCo’s historical financial statements prepared in accordance with U.K. GAAP (assuming an exchange rate of 1.30 GBP per U.S. dollar, which was the exchange rate used for the preparation of the Projections as of September 9, 2020):

Total Group Revenue

 

(U.S. dollars in millions, prepared in accordance with
U.K. GAAP)
   For the year
ended
December 31,
2020
     For the year
ending
December 31,
2021
     For the year
ending
December 31,
2022
 

Total Group Revenue(1)

   $ 145      $ 190      $ 238  

The average Compound Annual Growth Rate over the years 2018 through 2022 is expected to be 29%.

Group Adjusted EBITDA and Total Adjusted EBITDA Margin

 

(U.S. dollars in millions, Total Group Revenue
prepared in accordance with U.K. GAAP)
   For the year
ended
December 31,
2020
     For the year
ending
December 31,
2021
     For the year
ending
December 31,
2022
 

Group Adjusted EBITDA(2)

   $ 14      $ 35      $ 68  

Total Adjusted EBITDA Margin (% of Total Revenues)(3)

     10        18        29  

 

(1)

Total Group Revenue is the total revenue of TopCo and its subsidiaries.

(2)

Group Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, tax, depreciation, amortization, restructuring costs and any share based payment charges. For the years ending December 31, 2021 and 2022, such figures exclude additional U.S. listing and domicility costs. Group Adjusted EBITDA is the total Adjusted EBITDA of TopCo and its subsidiaries.

 

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(3)

Total Adjusted EBITDA margin is a non-GAAP financial measure, calculated as Group Adjusted EBITDA divided by Total Group Revenue.

Comparable Public Companies

During the course of valuing Genius, dMY’s management through its financial advisors also identified several comparable public companies in each of the info and data analytics, online gaming and online B2B sectors. Specifically, dMY’s management determined that the most relevant publicly traded companies in the info & data analytics sector were ZoomInfo Technologies Inc., MSCI, Inc., CoStar Group, Inc., Tradeweb Markets Inc. S&P Global Inc., Verisk Analytics, Inc., Moody’s Corp., Clarivate PLC, Fair Isaac Corporation and Factset Research Systems Inc., the most relevant online gaming companies were DraftKings Inc., Golden Nugget Onling Gaming, Inc. (f/k/a Landcadia Holdings II, Inc.), Rush Street Interactive, Inc. (f/k/a Rush Street Interactive, Inc.) and PointsBet Holdings Limited, and the most relevant online B2B company was Evolution Gaming Group AB. dMY’s management believes that the combined company is likely to be considered to be in one or more of these categories by potential investors based on its business and financial model.

The following is the financial information of these companies and Genius that was considered by dMY’s board of directors:

 

                   Enterprise Value Multiples(2)                     
                   Revenue      EBITDA                     
     Equity
Market
Cap(1)
     Adjusted
Enterprise
Value(1)
     2021F      2022F      2021F      2022F      2021F
YoY
Revenue
Growth
    2022F
YoY
Revenue
Growth
    2022F
EBITDA
Margin
 

Genius(3)

     NA      $ 1,400        7.4x        5.9x        18.4x        14.7x        31     25     29

Info and Data Analytics

   $ 22,701      $ 23,731        11.7x        11.0x        27.1x        24.7x        7     7     49

Onling Gaming

   $ 2,072      $ 1,786        8.3x        11.8x        NA        NA        42     47     NA  

Online B2B

   $ 11,474      $ 11,233        14.8x        12.2x        25.2x        21.2x        25     21     58

(U.S. dollars in millions)

Source: Public filings, CapIQ and IBES estimates as of September 25, 2020.

Note: The comparable company figures represent the medians for each peer group.

 

(1)

Equity market cap based on diluted shares outstanding.

(2)

Projected revenue and EBITDA are based on IBES median estimates, unless otherwise stated.

(3)

EBITDA multiples based on 2021F and 2022F revenue, respectively, multiplied by illustrative steady-state EBITDA margin of 40%

Satisfaction of 80% Test

It is a requirement under NYSE rules that we complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.

As of the date of the execution of the Business Combination Agreement, the balance of funds in the trust account was approximately $276,000,000, and dMY had $9,660,000 of deferred underwriting commissions, plus taxes payable on the income earned on the trust account. In reaching its conclusion that the Business Combination meets the 80% test, the Board looked at the aggregate purchase price to be paid in the Business Combination of approximately $1,400,000,000. In determining whether the purchase price represents the fair market value of the businesses acquired, the Board considered all of the factors described in the section entitled “The Business Combination Proposal—The Board’s Reasons for the Approval of the Business Combination,” and

 

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the Board concluded that the fair market value of the businesses acquired was significantly in excess of 80% of the assets held in the trust account. In light of the financial background and experience of the members of dMY’s management team and the Board, the Board believes that the members of dMY’s management team and the Board are qualified to determine whether the Business Combination meets the 80% test. The Board did not seek or obtain an opinion of an outside fairness or valuation advisor as to whether the 80% test has been met.

Sources and Uses of Proceeds for the Business Combination

The following table summarizes the sources and uses of proceeds from the Business Combination. Where actual amounts are not known or knowable, the figures below represent good faith estimates of such amounts.

No Redemption

 

Sources of Funds           Uses of Funds       
(in millions)           (in millions)       

Cash from dMY’s trust account(1)

   $ 276      Cash consideration to Existing TopCo Shareholders(2)    $ 398  

PIPE Investment

     330      Transaction fees and expenses and affiliate loan repayment      56  

TopCo Equity Roll-Over

     1,002      Incremental Cash on Balance Sheet      152  
      TopCo Equity Roll-Over      1,002  
  

 

 

       

 

 

 

Total Sources

   $ 1,608      Total Uses    $ 1,608  
  

 

 

       

 

 

 

Maximum Redemption

 

Sources of Funds
(in millions)
         

Uses of Funds(3)

(in millions)

      

Cash from dMY’s trust account

   $ 276      Redemptions of dMY Common Stock(4)    $ 276  

PIPE Investment

     330      Cash consideration to Existing TopCo Shareholders(2)      185  

TopCo Equity Roll-Over

     1,215      Transaction fees and expenses and affiliate loan repayment      45  
      Incremental Cash on Balance Sheet      100  
            TopCo Equity Roll-Over    1,215  
  

 

 

       

 

 

 

Total Sources

   $ 1,821      Total Uses    $ 1,821  
  

 

 

       

 

 

 

 

(1)

Excludes interest earned on cash in trust.

(2)

Includes TopCo Redemption and repayments in full of the Loan Notes (as defined herein) balance expected at the Closing.

(3)

Pursuant to the Founder Holders Forfeiture Agreement, the Founders have agreed to forfeit for no consideration up to 1,035,000 Class A Shares (which Class A Shares are issued immediately prior to the Closing upon the automatic conversion of the Class B Shares held by the Founders), in the aggregate, to the extent that the Minimum Cash is less than $415,000,000, as more fully described in the Founder Holders Forfeiture Agreement.

(4)

Assumes that 27,600,000 shares of dMY Class A common stock are redeemed in connection with the Business Combination, while satisfying the Minimum Cash Condition.

Interests of dMY’s Directors and Officers in the Business Combination

In considering the recommendation of the Board to vote in favor of approval of the Business Combination Proposal and the Adjournment Proposal, stockholders should keep in mind that dMY’s directors and executive

 

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officers, advisors and entities affiliated with them, have interests in such proposals that are different from, or in addition to, those of dMY stockholders generally. In particular:

 

   

the continued indemnification of former and current directors and officers of dMY and the continuation of directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that the Founders have waived their right to redeem any of their Founder Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that the Founders beneficially own or have an economic interest in Founder Shares and private placement warrants that they purchased prior to, or simultaneously with, the IPO for which they have no redemption rights in the event an initial business combination is not effected in the required time period;

 

   

the fact that the Founders paid an aggregate of $25,000 for the Class B Shares, which will convert into 6,900,000 Class A Shares in accordance with the terms of the Current Charter and the Founder Holders Consent Letter, and such securities will have a significantly higher value at the time of the Business Combination, estimated at approximately $116,058,000 based on the closing price of $16.82 per Class A Share on NYSE on March 22, 2021;

 

   

the fact that the Sponsor paid approximately $7,520,000 for 5,013,333 private placement warrants, each such private placement warrant is exercisable commencing upon the later of 12 months following the IPO and 30 days following the Closing, at an exercise price of $11.50 per NewCo ordinary share;

 

   

the fact that GS, as one of dMY’s underwriters in the IPO and one of the financial advisors in connection with the Business Combination, will be entitled to receive a deferred underwriting commission and financial advisory fee upon completion of the Business Combination; and Needham as one of the underwriters in the IPO who also performed certain financial advisory services in connection with the Business Combination, will be entitled to receive a deferred underwriting commission upon completion of the Business Combination; and

 

   

if the trust account is liquidated, including in the event dMY is unable to complete an initial business combination within the required time period, the Sponsor has agreed that it will be liable to dMY if and to the extent any claims by a third party for services rendered or products sold to it, or a prospective target business with which it has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under the indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Recommendation of dMY’s Board of Directors

After careful consideration of the matters described above, particularly Genius’ position as a B2B provider of technology-led products to sports, sports wagering and sports media industries, and its expected ability to significantly scale to service an expanding addressable market with an experienced management team, the Board determined unanimously that each of the Business Combination Proposal and the Adjournment Proposal, if presented, is fair to and in the best interests of dMY and its stockholders. The Board has approved and declared advisable and unanimously recommend that you vote or give instructions to vote “FOR” each of these proposals.

The foregoing discussion of the information and factors considered by the Board is not meant to be exhaustive, but includes the material information and factors considered by the Board.

 

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Material Tax Considerations

Material U.S. Federal Income Tax Considerations

The following discussion is a summary of material U.S. federal income tax considerations applicable to you if you are a holder of Class A Shares or public warrants (other than the Sponsor or any of its affiliates), as a consequence of (i) electing to have your Class A Shares redeemed for cash if the Business Combination is completed, (ii) the dMY Merger, and/or (iii) the ownership and disposition of NewCo ordinary shares and public warrants after the Business Combination. This discussion addresses only those holders that hold Class A Shares and/or public warrants (and that will hold NewCo ordinary shares and/or public warrants after the dMY Merger) as a capital asset (generally property held for investment). This summary does not discuss all aspects of U.S. federal income taxation that may be relevant to particular investors in light of their particular circumstances, or to investors subject to special tax rules, such as:

 

   

financial institutions or financial services entities;

 

   

insurance companies;

 

   

mutual funds;

 

   

pension plans;

 

   

S corporations;

 

   

broker-dealers;

 

   

traders in securities that elect mark-to-market treatment;

 

   

regulated investment companies;

 

   

real estate investment trusts;

 

   

trusts and estates;

 

   

tax-exempt organizations (including private foundations);

 

   

passive foreign investment companies;

 

   

controlled foreign corporations;

 

   

governments or agencies or instrumentalities thereof;

 

   

investors that hold Class A Shares or public warrants or who will hold NewCo ordinary shares or public warrants as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive ownership transaction,” “constructive sale” or other integrated transaction for U.S. federal income tax purposes;

 

   

investors subject to the alternative minimum tax provisions of the Internal Revenue Code of 1986, as amended (the “U.S. Tax Code”);

 

   

U.S. Holders (as defined below) that have a functional currency other than the U.S. dollar;

 

   

accrual method taxpayers that file applicable financial statements as described in Section 451(b) of the U.S. Tax Code;

 

   

U.S. expatriates;

 

   

investors subject to the U.S. “inversion” rules;

 

   

holders owning or considered as owning (directly, indirectly, or through attribution) 5 percent (measured by vote or value) or more of our Class A Shares, or, following the Business Combination, NewCo ordinary shares;

 

   

persons who purchase shares in NewCo as part of the PIPE Investment or the Reorganization; and

 

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persons who received any Class A Shares or, following the Business Combination, NewCo ordinary shares pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation.

This summary does not discuss any state, local, or non-U.S. tax considerations, any non-income tax (such as gift or estate tax) considerations, the alternative minimum tax or the Medicare tax on net investment income. In addition, this summary does not address any tax consequences to investors that directly or indirectly hold equity interests in NewCo or TopCo prior to the Business Combination, including holders of Class A Shares or public warrants that also hold, directly or indirectly, equity interests in NewCo or TopCo. With respect to the consequences of holding NewCo ordinary shares, this discussion is limited to holders who acquire such NewCo ordinary shares in connection with the Business Combination or as a result of the exercise of a public warrant, and with respect to public warrants, this discussion is limited to holders who held such public warrants prior to and through the Business Combination.

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of Class A Shares, NewCo ordinary shares or public warrants, the tax treatment of a partner in such partnership will generally depend upon the status of the partner, the activities of the partnership and the partner and certain determinations made at the partner level. If you are a partner of a partnership holding Class A Shares, NewCo ordinary shares or public warrants, you are urged to consult your tax advisor regarding the tax consequences to you of a redemption, the Business Combination and/or the ownership and disposition of NewCo ordinary shares and public warrants by the partnership.

This summary is based upon the U.S. Tax Code, the regulations promulgated by the U.S. Treasury Department, current administrative interpretations and practices of the U.S. Internal Revenue Service (“IRS”), and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. We have not sought, and do not intend to seek, a ruling from the IRS as to any U.S. federal income tax consideration described herein. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax considerations described below.

THE FOLLOWING IS FOR INFORMATIONAL PURPOSES ONLY. EACH HOLDER SHOULD CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE EXERCISE OF REDEMPTION RIGHTS, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX LAWS, AND OWNERSHIP AND DISPOSITION OF NEWCO ORDINARY SHARES AND PUBLIC WARRANTS.

For purposes of this discussion, because any dMY unit consisting of one Class A Share and one-third of one public warrant is separable at the option of the holder, dMY is treating any Class A Shares and one-third of one public warrant held by a U.S. Holder in the form of a single unit as separate instruments and is assuming that the unit itself will not be treated as an integrated instrument. Accordingly, the separation of a dMY unit in connection with the consummation of the Business Combination generally should not be a taxable event for U.S. federal income tax purposes. This position is not free from doubt, and no assurance can be given that the IRS would not assert, or that a court would not sustain, a contrary position. Holders of Class A Shares or public warrants are urged to consult their tax advisors concerning the U.S. federal, state, local and any foreign tax consequences of the transactions contemplated by the Business Combination (including any Redemption (as defined below)) with respect to any Class A Shares and public warrants held through a dMY unit (including alternative characterizations of a dMY unit).

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Class A Shares, NewCo ordinary shares or public warrants, as the case may be, that is:

 

   

an individual who is a U.S. citizen or resident of the United States;

 

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a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;

 

   

an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

 

   

a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons (within the meaning of the U.S. Tax Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury Regulations to be treated as a U.S. person.

Treatment of NewCo as a non-U.S. Corporation for U.S. Federal Income Tax Purposes

Under current U.S. federal income tax law, a corporation generally will be considered to be a U.S. corporation for U.S. federal income tax purposes only if it is created or organized in the United States or under the law of the United States or of any State. Accordingly, under generally applicable U.S. federal income tax rules, NewCo, which is not created or organized in the United States or under the law of the United States or of any State but is instead a Guernsey incorporated entity and tax resident of the U.K., would generally be classified as a non-U.S. corporation. Section 7874 of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, however, contain specific rules (more fully discussed below) that may cause a non-U.S. corporation to be treated as a U.S. corporation for U.S. federal income tax purposes.

The Section 7874 rules are complex and require analysis of all relevant facts, and there is limited guidance as to their application. Under Section 7874 of the U.S. Tax Code, a corporation created or organized outside the United States (i.e., a non-U.S. corporation) will nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes (and, therefore, be subject to U.S. federal income tax on its worldwide income) if (1) the non-U.S. corporation directly or indirectly acquires substantially all of the assets held directly or indirectly by a U.S. corporation (including through the acquisition of all of the outstanding stock of the U.S. corporation), (2) the non-U.S. corporation’s “expanded affiliated group” does not have substantial business activities in the non-U.S. corporation’s country of organization or incorporation relative to the expanded affiliated group’s worldwide activities, and (3) the shareholders of the acquired U.S. corporation before the acquisition hold at least 80% (by either vote or value) of the shares of the non-U.S. acquiring corporation after the acquisition by reason of holding shares in the acquired U.S. corporation (the “Ownership Test”).

Based on the complex rules for determining share ownership under Section 7874 of the Code and certain factual assumptions, former dMY stockholders are expected to be treated as holding less than 80% (by both vote and value) of NewCo by reason of their former ownership of dMY common stock, and therefore NewCo is not expected to satisfy the Ownership Test. As a result, NewCo believes, and the remainder of this discussion assumes that, it will not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the U.S. Tax Code. However, whether the Ownership Test has been satisfied must be finally determined after the completion of the Business Combination, by which time there could be adverse changes to the relevant facts and circumstances. Furthermore, the interpretation of Treasury Regulations relating to the Ownership Test is subject to uncertainty, and there is limited guidance regarding their application. In addition, changes to the rules in Section 7874 of the U.S. Tax Code or the Treasury Regulations promulgated thereunder, or other changes in law, could adversely affect NewCo’s status as a non-U.S. entity for U.S. federal income tax purposes. Accordingly, there can be no assurance that the IRS will not take a contrary position to those described above or that a court will not agree with a contrary position of the IRS in the event of litigation. Because of these uncertainties regarding the relevant facts and circumstances and the interpretation of Treasury Regulations relating to the Ownership Test, Kirkland & Ellis LLP is unable to opine as to the application of Section 7874 of the U.S. Tax Code to NewCo.

 

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If it were determined that NewCo is treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, NewCo would be liable for U.S. federal income tax on its income just like any other U.S. corporation, and U.S. Holders and Non-U.S. Holders (as defined below) of NewCo ordinary shares and public warrants would be treated as holders of stock and warrants of a U.S. corporation.

U.S. Federal Income Taxation of U.S. Holders

Based upon and subject to the assumptions, qualifications and limitations set forth herein and in the opinion filed as Exhibit 8.1 to this Registration Statement, the statements set forth under this heading, to the extent that they address the material U.S. federal income tax considerations for U.S. Holders of the Class A Shares or the dMY warrants, and discuss matters of U.S. federal income tax law and regulations or legal conclusions with respect thereto, except to the extent stated herein, are the opinion of Kirkland & Ellis LLP.

Tax Consequences to U.S. Holders of Exercising Redemption Rights

Subject to the discussion below under the heading “— Tax Consequences to U.S. Holders of the dMY Merger,” the U.S. federal income tax consequences to a U.S. Holder of Class A Shares that exercises its redemption rights to receive cash from the trust account in exchange for all or a portion of its Class A Shares will depend on whether the redemption qualifies as a sale of the Class A Shares redeemed under Section 302 of the U.S. Tax Code or is treated as a distribution under Section 301 of the U.S. Tax Code.

Treatment of Redemptions. The redemption of Class A Shares generally will qualify as a sale of the Class A Shares redeemed if such redemption either (i) is “substantially disproportionate” with respect to the redeeming U.S. Holder, (ii) results in a “complete termination” of such U.S. Holder’s interest in dMY or (iii) is “not essentially equivalent to a dividend” with respect to such U.S. Holder. These tests are explained more fully below.

For purposes of such tests, a U.S. Holder takes into account not only shares of dMY’s common stock actually owned by such U.S. Holder, but also shares of dMY’s common stock that are constructively owned by such U.S. Holder. A redeeming U.S. Holder may constructively own, in addition to Class A Shares owned directly, dMY’s common stock owned by certain related individuals and entities in which such U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any Class A Shares such U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A Shares which could be acquired pursuant to the exercise of the public warrants.

The redemption of Class A Shares generally will be “substantially disproportionate” with respect to a redeeming U.S. Holder if the percentage of dMY’s outstanding voting shares that such U.S. Holder actually or constructively owns immediately after the redemption is less than 80 percent of the percentage of dMY’s outstanding voting shares that such U.S. Holder actually or constructively owned immediately before the redemption, and such U.S. Holder immediately after the redemption actually and constructively owned less than 50 percent of the total combined voting power of dMY’s common stock. There will be a complete termination of such U.S. Holder’s interest if either (i) all of the shares of dMY’s common stock actually or constructively owned by such U.S. Holder are redeemed or (ii) all of the shares of dMY’s common stock actually owned by such U.S. Holder are redeemed and such U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of the shares of dMY’s common stock owned by certain family members and such U.S. Holder does not constructively own any other shares of dMY’s common stock (including any stock constructively owned by the U.S. Holder as a result of owning warrants). The redemption of Class A Shares will not be essentially equivalent to a dividend if it results in a “meaningful reduction” of such U.S. Holder’s proportionate interest in dMY. Whether the redemption will result in a “meaningful reduction” in such U.S. Holder’s proportionate interest in dMY will depend on the particular facts and circumstances applicable to it. The IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small

 

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minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.”

If none of the above tests is satisfied, a redemption will be treated as a distribution and the tax effects will be as described under “— Taxation of Redemptions Treated as Distributions” below.

Taxation of Redemptions Treated as Distributions. A redemption treated as a distribution generally will be taxable as a dividend for U.S. federal income tax purposes to the extent paid from dMY’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of dMY’s current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its Class A Shares. Any remaining excess will be treated as gain realized on the sale or other disposition of the Class A Shares and will be treated as described under “— Taxation of Gain or Loss on Redemptions Treated as a Sale or Exchange of Class A Shares” below. Amounts treated as dividends that dMY pays to a U.S. Holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, amounts treated as dividends that dMY pays to a non-corporate U.S. Holder may be taxed as “qualified dividend income” at the preferential tax rate accorded to long-term capital gains. It is unclear whether the redemption rights described herein with respect to the Class A Shares may have suspended the running of the applicable holding period for these purposes, and accordingly Kirkland & Ellis LLP is unable to opine as to whether the holding period of Class A Shares has been suspended by virtue of the redemption rights described herein. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate U.S. Holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to “qualified dividend income.”

After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A Shares will be added to the U.S. Holder’s adjusted tax basis in its remaining Class A Shares, or, if it has none, to the U.S. Holder’s adjusted tax basis in its public warrants or possibly in other shares of common stock constructively owned by it.

Taxation of Gain or Loss on Redemptions Treated as a Sale or Exchange of Class A Shares. If a redemption qualifies as a sale of such U.S. Holder’s Class A Shares redeemed, such U.S. Holder generally will recognize capital gain or loss. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the Class A Shares so redeemed exceeds one year. It is unclear, however, whether the redemption rights described herein with respect to the Class A Shares may have suspended the running of the applicable holding period for this purpose, and accordingly Kirkland & Ellis LLP is unable to opine as to whether the holding period of Class A Shares has been suspended by virtue of the redemption rights described herein. Long-term capital gains recognized by non-corporate U.S. Holders generally will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations. Generally, the amount of gain or loss recognized by a U.S. Holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the U.S. Holder’s adjusted tax basis in its Class A Shares so redeemed. See “—Exercise, Lapse or Redemption of Public Warrants” below for a discussion regarding a U.S. Holder’s tax basis in NewCo ordinary shares acquired pursuant to the exercise of a public warrant.

IF YOU ARE A U.S. HOLDER OF CLASS A SHARES CONTEMPLATING EXERCISE OF YOUR REDEMPTION RIGHTS, WE URGE YOU TO CONSULT YOUR TAX ADVISOR CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.

 

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Tax Consequences to U.S. Holders of the dMY Merger

It is the opinion of Kirkland & Ellis LLP that the exchange by U.S. Holders of Class A Shares for NewCo ordinary shares pursuant to the dMY Merger should constitute a tax-deferred transaction in which no gain or loss is recognized by the U.S. Holders of Class A Shares because the dMY Merger is expected to qualify as a tax-deferred “reorganization” under Section 368 of the U.S. Tax Code, or, alternatively, as part of a tax-deferred transaction pursuant to Section 351 of the U.S. Tax Code. Although this disclosure assumes that the dMY Merger will so qualify, this treatment is not entirely free from doubt, and the IRS or a court could take a different position. U.S. Holders of Class A Shares and public warrants are urged to consult their tax advisors regarding the proper U.S. federal income tax treatment of the dMY Merger, including with respect to its qualification as a “reorganization” under Section 368 of the U.S. Tax Code, or, alternatively, as part of a tax-deferred transaction pursuant to Section 351 of the U.S. Tax Code. The parties to the Business Combination Agreement have agreed to report the dMY Merger for all applicable tax purposes in a manner consistent with such tax treatment.

Accordingly, subject to the discussion in “—Additional Requirements for Tax Deferral” below, (i) no gain or loss should be recognized by a U.S. Holder of Class A Shares who exchanges such Class A Shares solely for NewCo ordinary shares pursuant to the dMY Merger, and, in such case, the U.S. Holder should have an adjusted tax basis of the NewCo ordinary shares received in the dMY Merger equal to the adjusted tax basis of the Class A Shares surrendered in exchange therefor, and (ii) the holding period of the NewCo ordinary shares received in the dMY Merger by such a U.S. Holder of Class A Shares should include the period during which such Class A Shares were held on the date of the dMY Merger. It is unclear whether the redemption rights with respect to the Class A Shares have suspended the running of the applicable holding period for this purpose, and accordingly Kirkland & Ellis LLP is unable to opine as to whether the holding period of Class A Shares has been suspended by virtue of the redemption rights described herein.

Every “significant transferor” pursuant to the exchange must include a statement on or with such transferor’s income tax return for the taxable year of the exchange. For this purpose, a significant transferor is generally a person that transferred property to a corporation and received stock of the transferee corporation if, immediately after the exchange, such person—(i) owned at least five percent (by vote or value) of the total outstanding stock of the transferee corporation if the stock owned by such person is publicly traded, or (ii) owned at least one percent (by vote or value) of the total outstanding stock of the transferee corporation if the stock owned by such person is not publicly traded. We expect that NewCo ordinary shares will be treated as publicly traded for this purpose.

Notwithstanding the foregoing, if a U.S. Holder exercises its redemption rights to receive cash from the trust account in exchange for a portion of its Class A Shares, such redemption may be treated as integrated with the dMY Merger rather than as a separate transaction, and accordingly Kirkland & Ellis LLP is unable to opine on whether any such U.S. Holder’s redemption would be treated as integrated with the dMY Merger rather than as a separate transaction. In such case, cash received by such U.S. Holder in the redemption may also be treated as taxable boot received in a “reorganization” (which, depending on the circumstances applicable to such U.S. Holder, may be treated as capital gain or dividend income to the extent of dMY’s accumulated earnings and profits, in each case, taxable as described above under the heading “— Tax Consequences to U.S. Holders of Exercising Redemption Rights”). Under this characterization, such U.S. Holder may be required to recognize more gain or income than if the redemption of Class A Shares was treated as a separate transaction from the exchange pursuant to the dMY Merger, and would not be entitled to recognize any loss with respect to its redeemed Class A Shares. In addition, if a U.S. Holder that elects to participate in a redemption with respect to all its Class A Shares maintains its ownership of public warrants, such redemption also may be treated as integrated with the dMY Merger rather than as a separate transaction (with the same taxation effects described above)), and accordingly Kirkland & Ellis LLP is unable to opine on whether any such U.S. Holder’s redemption would be treated as integrated with the dMY Merger rather than as a separate transaction. Under this characterization, such U.S. Holder generally is expected to recognize capital gain (but not loss) on such exchange in an amount equal to the difference between the amount of cash received and such U.S. Holder’s adjusted basis

 

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in the Class A Shares exchanged therefor. If the IRS were to assert, and a court were to sustain such a contrary position, such U.S. Holder may be required to recognize more gain or income than if the redemption of Class A Shares was treated as a separate transaction from the exchanges pursuant to the dMY Merger.

It is the opinion of Kirkland & Ellis LLP that the public warrants becoming exercisable for NewCo ordinary shares, and the dMY warrant agreements being assigned to, and assumed by, NewCo, should also constitute a tax-deferred transaction in which no gain or loss is recognized by the U.S. Holders of public warrants. The basis for this position is that the terms of the public warrants are not otherwise being changed pursuant to the dMY Merger and because the terms of the public warrants, when originally issued, contemplated, among other things, the public warrants becoming exercisable into shares of another corporation under circumstances similar to the dMY Merger or, alternatively, that the dMY Merger constitutes a tax-deferred “reorganization” under Section 368 of the U.S. Tax Code. Accordingly, the adjusted tax basis of the public warrants of such a U.S. Holder immediately after the dMY Merger should be the same as the adjusted tax basis of such U.S. Holder’s public warrants immediately prior to the dMY Merger. In addition, the holding period of the public warrants of such a U.S. Holder immediately after the dMY Merger should include the period during which such U.S. Holder held such U.S. Holder’s public warrants immediately prior to the dMY Merger. However, due to a lack of clear authority, the issue is not free from doubt, and there is a risk that the warrant exchange transaction would be treated as a taxable exchange of public warrants of dMY for public warrants of NewCo, and no assurance can be given that the IRS would not assert, or that a court would not sustain, such a contrary position. In that case, a U.S. Holder of public warrants would recognize gain, but not loss, equal to the lesser of (i) such U.S. Holder’s “realized gain” from the exchange (generally the excess of the sum of the fair market value of the NewCo ordinary shares received and public warrants of NewCo treated as having been received over such stockholder’s aggregate tax basis in the Class A Shares exchanged and public warrants of dMY treated as having been exchanged), or (ii) the fair market value of the public warrants of NewCo treated as having been received by such U.S. Holder. Any such gain would generally be long-term capital gain if the U.S. Holder’s holding period in the public warrants of dMY is more than one year at the time of the dMY Merger. In that case, the U.S. Holder’s tax basis in the public warrants after the dMY Merger would be equal to the fair market value of such public warrants at the time of the dMY Merger and the U.S. Holder would start a new holding period in the public warrants at such time.

Additional Requirements for Tax Deferral

Section 367(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, in certain circumstances described below, impose additional requirements for a U.S. Holder to qualify for tax-deferred treatment under Section 368 of the U.S. Tax Code and Section 351 of the U.S. Tax Code with respect to the exchange of Class A Shares and/or public warrants in the dMY Merger.

Section 367(a) of the U.S. Tax Code potentially may apply to the exchange by a U.S. Holder of Class A Shares for NewCo ordinary shares pursuant to the dMY Merger. Section 367(a) of the U.S. Tax Code generally requires a U.S. Holder of stock in a U.S. corporation to recognize gain (but not loss) when such stock is exchanged for stock of a non-U.S. corporation in an exchange that would otherwise qualify for tax-deferred treatment (such as pursuant to a reorganization under Section 368 of the U.S. Tax Code or an exchange under Section 351 of the U.S. Tax Code) and any of the following is true: (i) the U.S. corporation fails to comply with certain reporting requirements; (ii) U.S. Holders of stock of the acquired U.S. corporation receive more than 50% (by vote or value) of the stock of the non-U.S. corporation; (iii) U.S. persons that are officers, directors, or 5% or greater shareholders of the acquired U.S. corporation own more than 50% (by vote or value) of the stock of the non-U.S. corporation immediately after the acquisition; (iv) such U.S. Holder is a 5% or greater shareholder of the acquired U.S. corporation and fails to enter into a 5-year gain recognition agreement with the IRS to recognize gain with respect to the acquired U.S. corporation stock exchanged in the acquisition; or (v) the U.S. and non-U.S. corporations (and other relevant parties) fail to meet the “active trade or business test.” A holder of an acquired U.S. corporation is presumed to be a U.S. person unless that person signs an ownership statement certifying certain information, including its residency. The “active trade or business test” generally requires

 

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(A) that the non-U.S. corporation (and its qualified subsidiaries, including for this purpose TopCo and its subsidiaries) be engaged in an “active trade or business” outside of the U.S. for the 36 month period immediately before the exchange and that neither the transferors nor the non-U.S. corporation has an intention to substantially dispose of or discontinue such trade or business, and (B) that the fair market value of the non-U.S. corporation be at least equal to the fair market value of the U.S. corporation, as specifically determined for purposes of Section 367 of the U.S. Tax Code, as of the closing of the exchange (the “substantiality test”). For purposes of applying the substantiality test to the dMY Merger, the fair market value of dMY generally will be deemed to include the value of any non-ordinary course distributions, as determined under applicable Treasury Regulations, made by dMY during the 36-month period ending on the closing of the dMY Merger. Because of the inherently factual nature of these tests under the applicable Treasury Regulations, and the fact that these tests are generally applied based on the relevant facts at the time of, and following, the completion of the dMY Merger, Kirkland & Ellis LLP is unable to opine on the application of Section 367(a) of the U.S. Tax Code to the exchange by a U.S. Holder of Class A Shares and/or public warrants in the dMY Merger.

To the extent that U.S. Holders of Class A Shares and/or public warrants are required to recognize gain under Section 367(a) of the U.S. Tax Code for any of the foregoing reasons, a U.S. Holder generally would recognize gain, if any, in an amount equal to the excess of (i) the sum of the fair market value of the NewCo ordinary shares received and/or public warrants deemed received by such U.S. Holder, over (ii) such U.S. Holder’s adjusted tax basis in the Class A Shares exchanged and/or public warrants deemed exchanged therefor. Any such gain would generally be capital gain, and would be long-term capital gain if the U.S. Holder’s holding period for the Class A Shares and/or public warrants was more than one year at the time of the dMY Merger. In either case described in the previous sentence, the U.S. Holder’s tax basis in the NewCo ordinary shares and/or public warrants received in the exchange would be equal to the fair market value of such NewCo ordinary shares and/or public warrants at the time of the dMY Merger (determined in U.S. dollars at the spot rate in effect at the time of the dMY Merger).

The rules dealing with Section 367(a) of the U.S. Tax Code discussed above are very complex and are affected by various factors in addition to those described above. Accordingly, you are strongly urged to consult your tax advisor concerning the application of the these rules to your exchange of Class A Shares and/or deemed exchange of public warrants under your particular circumstances, including, if you believe you will be a 5% or greater shareholder, the possibility of entering into a “gain recognition agreement” under applicable Treasury Regulations.

Tax Consequences to U.S. Holders of Ownership and Disposition of NewCo Ordinary Shares and Public Warrants

Dividends and Other Distributions on NewCo Ordinary Shares

Subject to the PFIC rules discussed below under the heading “— Passive Foreign Investment Company Rules,” distributions (including, for the avoidance of doubt and for the purpose of the balance of this discussion, deemed distributions) on NewCo ordinary shares will generally be taxable as a dividend for U.S. federal income tax purposes to the extent paid from NewCo’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of NewCo’s current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its NewCo ordinary shares. Any remaining excess will be treated as gain realized on the sale or other disposition of the NewCo ordinary shares and will be treated as described below under the heading “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of NewCo Ordinary Shares and Public Warrants.” The amount of any such distribution will include any amounts withheld by us (or another applicable withholding agent). Amounts treated as dividends that NewCo pays to a U.S. Holder that is a taxable corporation generally will be taxed at regular tax rates and will not qualify for the dividends received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. With respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions

 

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(including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed at the lower applicable long-term capital gains rate only if NewCo ordinary shares are readily tradable on an established securities market in the United States or NewCo is eligible for benefits under an applicable tax treaty with the United States, and, in each case, NewCo is not treated as a PFIC with respect to such U.S. Holder at the time the dividend was paid or in the preceding year and provided certain holding period requirements are met. The amount of any dividend distribution paid in foreign currency will be the U.S. dollar amount calculated by reference to the applicable exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

Amounts taxable as dividends generally will be treated as income from sources outside the U.S. and will, depending on the circumstances of the U.S. Holder, be “passive” or “general” category income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to such U.S. Holder. The rules governing foreign tax credits are complex and U.S. Holders are urged to consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, a U.S. Holder may, in certain circumstances, deduct foreign taxes in computing their taxable income, subject to generally applicable limitations under U.S. law. Generally, an election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

Notwithstanding the foregoing, if (a) NewCo is 50% or more owned, by vote or value, by U.S. persons and (b) at least 10% of NewCo’s earnings and profits are attributable to sources within the U.S., then for foreign tax credit purposes, a portion of NewCo’s dividends would be treated as derived from sources within the U.S. In such case, with respect to any dividend paid for any taxable year, the U.S.-source ratio of such dividends for foreign tax credit purposes would be equal to the portion of NewCo’s earnings and profits from sources within the U.S. for such taxable year, divided by the total amount of NewCo’s earnings and profits for such taxable year.

Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of NewCo Ordinary Shares and Public Warrants.

Subject to the PFIC rules discussed below under the heading “— Passive Foreign Investment Company Rules,” upon any sale, exchange or other taxable disposition of NewCo ordinary shares or public warrants, a U.S. Holder generally will recognize gain or loss in an amount equal to the difference between (i) the sum of (x) the amount cash and (y) the fair market value of any other property, received in such sale, exchange or other taxable disposition and (ii) the U.S. Holder’s adjusted tax basis in such NewCo ordinary share or public warrant (determined as described above or below), in each case as calculated in U.S. dollars. Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder’s holding period for such NewCo ordinary share or public warrant exceeds one year. Long-term capital gain realized by a non-corporate U.S. Holder generally will be taxable at a reduced rate. The deduction of capital losses is subject to limitations.

Any gain or loss recognized on the sale, exchange or other taxable disposition of NewCo ordinary shares or public warrants generally will be U.S.-source income or loss for purposes of computing the foreign tax credit allowable to a U.S. Holder. Consequently, a U.S. Holder may not be able to claim a credit for any non-U.S. tax imposed upon a disposition of NewCo ordinary shares or public warrants unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources. Prospective U.S. Holders should consult their tax advisors as to the foreign tax credit implications of such sale, exchange or other taxable disposition of NewCo ordinary shares or public warrants.

Exercise, Lapse or Redemption of Public Warrants

Subject to the PFIC rules discussed below and except as discussed below with respect to the cashless exercise of a public warrant, a U.S. Holder generally will not recognize taxable gain or loss on the exercise of a

 

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public warrant. The U.S. Holder’s tax basis in the NewCo ordinary share received upon exercise of a public warrant generally will be an amount equal to the sum of the U.S. Holder’s initial investment in the public warrant in respect of which the exercised public warrant was received and the exercise price of such public warrant. It is unclear whether the U.S. Holder’s holding period for the NewCo ordinary shares received upon exercise of the public warrants will begin on the date following the date of exercise or on the date of exercise of the public warrants; in either case, the holding period will not include the period during which the U.S. Holder held the public warrants. If a public warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such U.S. Holder’s tax basis in the public warrant.

The tax consequences of a cashless exercise of a public warrant are not clear under current tax law, and accordingly Kirkland & Ellis LLP is unable to opine on the tax consequences of a cashless exercise of a public warrant. Subject to the PFIC rules discussed below, a cashless exercise may be tax-free, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-free situation, a U.S. Holder’s basis in the NewCo ordinary shares received generally should equal the U.S. Holder’s basis in the public warrants exercised therefor. If the cashless exercise were treated as not being a realization event (and not a recapitalization), it is unclear whether a U.S. Holder’s holding period in the NewCo ordinary shares would be treated as commencing on the date following the date of exercise or on the date of exercise of the public warrant; in either case, the holding period would not include the period during which the U.S. Holder held the public warrants. If the cashless exercise were treated as a recapitalization, the holding period of the NewCo ordinary shares would include the holding period of the public warrants exercised therefor.

It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder could be deemed to have surrendered public warrants with an aggregate fair market value equal to the exercise price for the total number of public warrants to be exercised. The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the public warrants deemed surrendered and the U.S. Holder’s adjusted tax basis in such public warrants. In this case, a U.S. Holder’s tax basis in the NewCo ordinary shares received would equal the sum of the U.S. Holder’s tax basis in the public warrants exercised and the exercise price of such public warrants. It is unclear whether a U.S. Holder’s holding period for NewCo ordinary shares would commence on the date following the date of exercise or on the date of exercise of the public warrants; in either case, the holding period would not include the period during which the U.S. Holder held the public warrants.

Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with respect to the NewCo ordinary shares received, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise.

If we redeem public warrants for cash pursuant to the redemption provisions described in the section of this proxy statement/prospectus entitled “Description of NewCo’s Securities —Warrants — Public Shareholders’ Warrants — Redemption of warrants when the price per NewCo ordinary share equals or exceeds $18.00” or the redemption provisions described in the section of this proxy statement/prospectus entitled “Description of NewCo’s Securities —Warrants — Redemption of warrants when the price per NewCo ordinary share equals or exceeds $10.00” or if we purchase public warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under “ — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of NewCo Ordinary Shares and Public Warrants.” The tax consequences of a cashless exercise of a public warrant occurring after our giving notice of an intention to redeem the public warrant for $0.01 as described in the section of this proxy statement/prospectus entitled “Description of NewCo’s Securities —Warrants — Public Shareholder’s Warrants — Redemption of warrants when the price per NewCo ordinary share equals or exceeds $18.00” or for $0.10 as described in the section of this proxy statement/prospectus entitled “Description of NewCo’s Securities —Warrants — Public Shareholder’s

 

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Warrants — Redemption of warrants when the price per NewCo ordinary share equals or exceeds $10.00” are unclear under current law, and accordingly Kirkland & Ellis LLP is unable to opine on the tax consequences of a cashless exercise of a public warrant occurring after our giving notice of an intention to redeem the public warrants for $0.01 or $0.10. Such cashless exercise may be treated either as if we redeemed such public warrant for NewCo ordinary shares or as an exercise of the public warrant. If the cashless exercise of a public warrant for NewCo ordinary shares is treated as a redemption, then such redemption generally should be treated as a tax-deferred recapitalization for U.S. federal income tax purposes, in which case a U.S. Holder should not recognize any gain or loss on such redemption, and accordingly, a U.S. Holder’s basis in the NewCo ordinary shares received should equal the U.S. Holder’s basis in the public warrant and the holding period of the NewCo ordinary shares would include the holding period of the public warrant. If the cashless exercise of a public warrant is treated as such, the tax consequences generally should be as described under the heading “— U.S. Federal Income Taxation of U.S. Holders—Exercise, Lapse or Redemption of a Public Warrant.” Due to the lack of clarity under current law regarding the treatment of a cashless exercise of a public warrant after our giving notice of an intention to redeem the public warrant for $0.01 or $0.10, there can be no assurance as to which, if any, of the alternative tax consequences described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of the exercise of a public warrant occurring after our giving notice of an intention to redeem the public warrant as described above.

Possible Constructive Distributions

The terms of each public warrant provide for an adjustment to the number of NewCo ordinary shares for which the public warrant may be exercised or to the exercise price of the public warrant in certain events, as discussed in the section of this proxy statement/prospectus entitled “Description of NewCo’s Securities —Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. Holders of the public warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment to the number of such NewCo ordinary shares received upon exercise of the public warrants or to the exercise price of the public warrants increases the proportionate interest of the U.S. Holder of public warrants in our assets or earnings and profits (e.g., through an increase in the number of NewCo ordinary shares that would be obtained upon exercise or through a decrease in the exercise price of a public warrant) as a result of a distribution (or a transaction treated as a distribution) of cash or other property, such as other securities, to the holders of NewCo ordinary shares, which is taxable to the holders of such shares as a distribution. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holders of the public warrants received a cash distribution from us equal to the fair market value of such increased interest.

Passive Foreign Investment Company Rules

The treatment of U.S. Holders of NewCo ordinary shares and public warrants could be materially different from that described above if NewCo is treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.

A foreign (i.e., non-U.S.) corporation will be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes, among other things, dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.

We do not believe NewCo will be treated as a PFIC for its current taxable year and do not expect NewCo to become one in the near future. Nevertheless, PFIC status is determined annually and depends on the composition

 

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of a company’s income and assets and the fair market value of its assets and no assurance can be given as to whether NewCo will be a PFIC for any taxable year, in particular because NewCo’s PFIC status for any taxable year will generally be determined in part by reference to the value of NewCo’s assets and NewCo’s revenues. Because of the inherently factual nature of the determination, and because the determination is an annual one based on income and assets of NewCo in each year, Kirkland & Ellis LLP is unable to opine on NewCo’s PFIC status for any taxable year.

Although NewCo’s PFIC status is determined annually, an initial determination that NewCo is a PFIC will generally apply for subsequent years to a U.S. Holder who held NewCo ordinary shares or public warrants while NewCo was a PFIC, whether or not NewCo meets the test for PFIC status in those subsequent years.

If NewCo is determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of NewCo ordinary shares or public warrants and, in the case of NewCo ordinary shares, the U.S. Holder did not make either an applicable PFIC election (or elections), as further described below under the heading “ — PFIC Elections,” for the first taxable year of NewCo in which it was treated as a PFIC, and in which the U.S. Holder held (or was deemed to hold) such NewCo ordinary shares or otherwise, such U.S. Holder generally will be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its NewCo ordinary shares or public warrants (which may include gain realized by reason of transfers of NewCo ordinary shares or warrants that would otherwise qualify as nonrecognition transactions for U.S. federal income tax purposes) and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the NewCo ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the NewCo ordinary shares).

Under these rules:

 

   

the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the NewCo ordinary shares or public warrants;

 

   

the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of NewCo’s first taxable year in which NewCo is a PFIC, will be taxed as ordinary income;

 

   

the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder without regard to the U.S. Holder’s other items of income and loss for such year; and

 

   

an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.

PFIC Elections. In general, if NewCo is determined to be a PFIC, a U.S. Holder may avoid the adverse PFIC tax consequences described above in respect of NewCo ordinary shares (but not public warrants) by making and maintaining a timely and valid qualified electing fund (“QEF”) election (if eligible to do so) to include in income its pro rata share of NewCo’s net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the first taxable year of the U.S. Holder in which or with which NewCo’s taxable year ends and each subsequent taxable year. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.

It is not entirely clear how various aspects of the PFIC rules apply to the warrants. However, a U.S. Holder may not make a QEF election with respect to its public warrants. As a result, if a U.S. Holder sells or otherwise disposes of such public warrants (other than upon exercise of such public warrants for cash) and NewCo was a

 

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PFIC at any time during the U.S. Holder’s holding period of such public warrants, any gain recognized generally will be treated as an excess distribution, taxed as described above. If a U.S. Holder that exercises such public warrants properly makes and maintains a QEF election with respect to the newly acquired NewCo ordinary shares (or has previously made a QEF election with respect to NewCo ordinary shares), the QEF election will apply to the newly acquired NewCo ordinary shares. Notwithstanding such QEF election, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired NewCo ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder held the public warrants), unless the U.S. Holder makes a purging election under the PFIC rules. Under one type of purging election, the U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution, as described above. Under another type of purging election, NewCo will be deemed to have made a distribution to the U.S. Holder of such U.S. Holder’s pro rata share of NewCo’s earnings and profits as determined for U.S. federal income tax purposes. In order for the U.S. Holder to make the second election, NewCo must also be determined to be a “controlled foreign corporation” as defined by the U.S. Tax Code (which is not currently expected to be the case). As a result of either purging election, the U.S. Holder will have a new basis and holding period in the NewCo ordinary share acquired upon the exercise of the public warrants solely for purposes of the PFIC rules. The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.

In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from NewCo. If NewCo determines that it is a PFIC for any taxable year, NewCo intends to, upon written request from a U.S. Holder of NewCo ordinary shares, provide the information necessary for such U.S. Holder to make or maintain a QEF election, including information necessary to determine the appropriate income inclusion amounts for purposes of the QEF election. However, there is also no assurance that NewCo will have timely knowledge of its status as a PFIC in the future or of the required information to be provided.

If a U.S. Holder has made a QEF election with respect to its NewCo ordinary shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election for NewCo’s first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of NewCo ordinary shares generally will be taxable as capital gain and no additional interest charge will be imposed under the PFIC rules. As discussed above, if NewCo is a PFIC for any taxable year, a U.S. Holder of NewCo ordinary shares that has made a QEF election will be currently taxed on its pro rata share of NewCo’s earnings and profits, whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income generally may not be treated as dividends when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition, if NewCo is not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion regime with respect to NewCo ordinary shares for such a taxable year.

Alternatively, if NewCo is a PFIC and NewCo ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder makes a mark-to-market election with respect to such shares for the first taxable year in which it holds (or is deemed to hold) NewCo ordinary shares and each subsequent taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its NewCo ordinary shares at the end of

 

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such year over its adjusted basis in its NewCo ordinary shares. These amounts of ordinary income would not be eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its NewCo ordinary shares over the fair market value of its NewCo ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its NewCo ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its NewCo ordinary shares will be treated as ordinary income. Currently, a mark-to-market election may not be made with respect to public warrants.

The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, including the NASDAQ (on which NewCo ordinary shares are intended to be listed), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless the NewCo ordinary shares cease to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consents to the revocation of the election. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to NewCo ordinary shares under their particular circumstances.

Related PFIC Rules. If NewCo is a PFIC and, at any time, has a foreign subsidiary that is classified as a PFIC, a U.S. Holder generally would be deemed to own a proportionate amount of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if NewCo receives a distribution from, or disposes of all or part of its interest in, the lower-tier PFIC, or the U.S. Holder otherwise was deemed to have disposed of an interest in the lower-tier PFIC. Upon written request, NewCo will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that NewCo will have timely knowledge of the status of any such lower-tier PFIC. In addition, NewCo may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance NewCo will be able to cause the lower-tier PFIC to provide such required information. A mark-to-market election generally would not be available with respect to such lower-tier PFIC. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.

A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made) and to provide such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations applicable to such U.S. Holder until such required information is furnished to the IRS.

The rules dealing with PFICs and with the QEF, purging, and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of NewCo ordinary shares and public warrants are urged to consult their own tax advisors concerning the application of the PFIC rules to NewCo securities under their particular circumstances.

Additional Reporting Requirements

Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property to NewCo. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. In addition, certain U.S. Holders (and to the extent provided in IRS guidance, certain individual Non-U.S. Holders) holding specified foreign financial assets with an aggregate value in excess of the applicable dollar thresholds are required to report information to the IRS relating to NewCo ordinary shares, subject to certain exceptions (including an exception for NewCo ordinary shares held in accounts maintained by U.S. financial institutions), by attaching a complete

 

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IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their tax return for each year in which they hold NewCo ordinary shares. Substantial penalties apply to any failure to file IRS Form 8938 and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. U.S. Holders are urged to consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of NewCo ordinary shares.

U.S. Federal Income Taxation of Non-U.S. Holders

As used herein, a “Non-U.S. Holder” is a beneficial owner (other than a partnership or entity treated as a partnership for U.S. federal income tax purposes) of Class A Shares, NewCo ordinary shares or public warrants, as applicable, that is not a U.S. Holder.

The following describes U.S. federal income tax considerations relating to the (i) exercise of redemption rights, (ii) the dMY Merger and (iii) ownership and disposition of NewCo ordinary shares and public warrants by a Non-U.S. Holder after the Business Combination.

Based upon and subject to the assumptions, qualifications and limitations set forth herein and in the opinion filed as Exhibit 8.1 to this Registration Statement, the statements set forth under this heading, to the extent that they address the material U.S. federal income tax considerations for Non-U.S. Holders of the Class A Shares or the dMY warrants, and discuss matters of U.S. federal income tax law and regulations or legal conclusions with respect thereto, except to the extent stated herein, are the opinion of Kirkland & Ellis LLP.

Tax Consequences to Non-U.S. Holders of Exercising Redemption Rights

Treatment of Redemptions. Subject to the discussion above under the heading “ U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of the dMY Merger,” the U.S. federal income tax consequences to a Non-U.S. Holder of Class A Shares that exercises its redemption rights to receive cash from the trust account in exchange for all or a portion of its Class A Shares will depend on whether the redemption qualifies as a sale of the Class A Shares redeemed, as described above under “ — U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of Exercising Redemption Rights.”

Taxation of Redemptions Treated as Distributions. If such a redemption does not qualify as a sale of Class A Shares, the Non-U.S. Holder will be treated as receiving a distribution, which, to the extent of dMY’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute a dividend for U.S. federal income tax purposes and, provided such dividends are not effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the United States, will be subject to withholding tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s adjusted tax basis in its Class A Shares and then, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of such Class A Shares, which will be treated as described in the following paragraph. A redemption treated as a dividend by dMY to a Non-U.S. Holder that is effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the United States (and if an income tax treaty applies, are attributable to a U.S. permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States) will generally not be subject to U.S. withholding tax, provided such Non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends will generally be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders.

Taxation of Redemptions Treated as a Sale or Exchange of Class A Shares. Subject to the discussion below concerning backup withholding, if such a redemption qualifies as a sale of shares of Class A Shares, Non-

 

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U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the redemption of Class A Shares, unless either:

(i) the gain is effectively connected with the conduct of a trade or business of the Non-U.S. Holder in the United States, and, if provided in an applicable income tax treaty, is attributable to a “permanent establishment” or a “fixed base” maintained by the Non-U.S. Holder in the United States;

(ii) the Non-U.S. Holder is an individual who is treated as present in the U.S. for 183 days or more during the taxable year of disposition and certain other conditions are met, in which case such gain (which gain may be offset by certain U.S.-source losses) generally will be taxed at a 30% rate (or lower applicable treaty rate); or

(iii) dMY is or has been a “U.S. real property holding corporation” for U.S. federal income tax purposes (a “USRPHC”) at any time during the shorter of the five-year period ending on the date of the redemption or the Non-U.S. Holder’s holding period for the Class A Shares and either (A) the Class A Shares has ceased to be regularly traded on an established securities market or (B) such Non-U.S. Holder has owned or is deemed to have owned, at any time during the shorter of the five-year period preceding such redemption and such Non-U.S. Holder’s holding period of the Class A Shares, more than 5% of outstanding Class A Shares.

A Non-U.S. Holder described in the first bullet point above will be subject to regular U.S. federal income tax on the net gain derived from the redemption generally in the same manner as discussed in the section above under “ — U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of Ownership and Disposition of NewCo Ordinary Shares and Public Warrants — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of NewCo Ordinary Shares and Public Warrants,” unless an applicable income tax treaty provides otherwise. In addition, earnings and profits of a corporate Non-U.S. Holder that are attributable to such gain, as determined after allowance for certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty. If the third bullet point above applies to a Non-U.S. Holder, gain recognized by such Non-U.S. Holder on the redemption of Class A Shares will be subject to tax at generally applicable U.S. federal income tax rates. In addition, dMY may be required to withhold U.S. income tax at a rate of 15% of the amount realized upon such redemption. dMY will be classified as a USRPHC if the fair market value of its “United States real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes. We do not believe that dMY is a USRPHC and do not expect dMY to become one. However, such determination is factual in nature and subject to change and no assurance can be provided as to whether dMY will be a USRPHC with respect to a Non-U.S. Holder.

IF YOU ARE A NON-U.S. HOLDER OF CLASS A SHARES CONTEMPLATING EXERCISE OF YOUR REDEMPTION RIGHTS, WE URGE YOU TO CONSULT YOUR TAX ADVISOR CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.

Tax Consequences to Non-U.S. Holders of the dMY Merger

The U.S. federal income tax consequences of the dMY Merger to Non-U.S. Holder generally will correspond to the U.S. federal income tax consequences of the dMY Merger to U.S. Holder, as described under “—U.S. Federal Income Taxation of U.S. Holders—Tax Consequences to U.S. Holders of the dMY Merger” above, although to the extent the dMY Merger results in a taxable exchange of Class A Shares or public warrants, the consequences would be similar to those described above under the heading “—Taxation of Redemptions Treated as a Sale or Exchange of Class A Shares” for a Non-U.S. Holder’s gain on the redemption of NewCo ordinary shares.

 

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Tax Consequences to Non-U.S. Holders of Ownership and Disposition of NewCo Ordinary Shares and Public Warrants

Dividends and Other Distributions on NewCo Ordinary Shares. Subject to the discussion below concerning backup withholding, Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends (including dividends with respect to constructive distributions, as further described under the heading “ — U.S. Federal Income Taxation of U.S. Holders — Possible Constructive Distributions”) received from NewCo on NewCo ordinary shares (or, with respect to constructive distributions, on public warrants) unless the income from such dividends is effectively connected with the conduct of a trade or business of the Non-U.S. Holder in the United States and, if provided under an applicable income tax treaty, is attributable to a permanent establishment or a “fixed base” maintained by the Non-U.S. Holder in the United States), in which case, a Non-U.S. Holder will be subject to regular federal income tax on such dividend generally in the same manner as discussed in the section above under “ — U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of Ownership and Disposition of NewCo Ordinary Shares and Public Warrants — Dividends and Other Distributions on NewCo Ordinary Shares,” unless an applicable income tax treaty provides otherwise. In addition, earnings and profits of a corporate Non-U.S. Holder that are attributable to such dividend, as determined after allowance for certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty.

Gain or Loss on Sale, Taxable Exchange or other Taxable Disposition of NewCo Ordinary Shares and Public Warrants. Subject to the discussion below concerning backup withholding, Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of NewCo ordinary shares or public warrants, unless either:

(i) the gain is effectively connected with the conduct of a trade or business of the Non-U.S. Holder in the United States, and, if provided in an applicable income tax treaty, is attributable to a “permanent establishment” or a “fixed base” maintained by the Non-U.S. Holder in the United States; or

(ii) the Non-U.S. Holder is an individual who is treated as present in the U.S. for 183 days or more during the taxable year of disposition and certain other conditions are met, in which case such gain (which gain may be offset by certain U.S.-source losses) generally will be taxed at a 30% rate (or lower applicable treaty rate).

A Non-U.S. Holder described in the first bullet point above will be subject to regular U.S. federal income tax on the net gain derived from the sale generally in the same manner as discussed in the section above under “ — U.S. Federal Income Taxation of U.S. Holders — Tax Consequences to U.S. Holders of Ownership and Disposition of NewCo Ordinary Shares and Public Warrants — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of NewCo Ordinary Shares and Public Warrants,” unless an applicable income tax treaty provides otherwise. In addition, earnings and profits of a corporate Non-U.S. Holder that are attributable to such gain, as determined after allowance for certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty.

Exercise, Lapse or Redemption of Public Warrants. The U.S. federal income tax treatment of a Non-U.S. Holder’s exercise of a public warrant, or the lapse of a public warrant held by a Non-U.S. Holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a public warrant by a U.S. Holder, as described under “ — U.S. Federal Income Taxation of U.S. Holders—Exercise, Lapse or Redemption of Public Warrants,” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described under the heading “ — Gain or Loss on Sale, Exchange, or other Taxable Disposition of NewCo Ordinary Shares and Public Warrants” for a Non-U.S. Holder’s gain on the sale or other disposition of public warrants.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting, and may be subject to backup withholding.

 

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Backup withholding generally will not apply, however, to a U.S. Holder if (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. A Non-U.S. Holder generally will eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.

Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO YOU DEPENDING UPON YOUR PARTICULAR SITUATION. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO YOU OF THE DISPOSITION OF OUR CLASS A SHARES AND PUBLIC WARRANTS IN CONNECTION WITH THE BUSINESS COMBINATION, AND OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF NEWCO ORDINARY SHARES AND PUBLIC WARRANTS INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, ESTATE, FOREIGN AND OTHER TAX LAWS AND TAX TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. OR OTHER TAX LAWS.

United Kingdom Tax Considerations

The comments below provide a general summary of certain United Kingdom (“U.K.”) tax considerations relating to the holding of ordinary shares and warrants issued by NewCo pursuant to the Business Combination (together, the “NewCo Securities”). They do not address any other matter, such as the tax consequences of the Business Combination itself for NewCo or for holders of NewCo Securities. The comments below are of a general nature and are not intended to be an exhaustive summary of all U.K. tax considerations relating to an investment in the NewCo Securities. The comments below are based on current U.K. tax law as applied in England and Wales and HM Revenue & Customs (“HMRC”) published practice (which may not be binding on HMRC) relating only to certain aspects of U.K. tax, both of which may be subject to change, possibly with retrospective effect. They do not necessarily apply where any income from the NewCo Securities is deemed for tax purposes to be the income of any other person. The U.K. tax treatment of prospective holders of NewCo Securities depends on their individual circumstances and may be subject to change in the future. The comments below relate only to the position of persons who are the absolute beneficial owners of NewCo Securities (and any dividends payable on their NewCo Securities), who hold NewCo Securities as a capital investment and whose NewCo warrants entitle them to acquire less than 10% of the ordinary share capital of NewCo. Certain classes of persons (such as charities, trustees, brokers, dealers, market makers, depositaries, clearance services, certain professional investors, persons connected with NewCo or persons who acquire (or are deemed to acquire) shares by reason of an office or employment) may be subject to special rules and the comments below do not apply to such holders. The comments below do not purport to constitute legal or tax advice. Any holder or prospective holder of NewCo Securities who is in doubt as to their own tax position or who may be subject to tax in a jurisdiction other than the U.K. should consult their professional advisors. The legal statements below as to matters of U.K tax law are, in accordance with Exhibit 8.3 of the Registration Statement of which this prospectus forms a part, the opinion of Kirkland & Ellis International LLP with respect to the matters set out below, U.K. counsel to NewCo.

Tax Residency of NewCo

So far as practicable, NewCo intends to conduct its affairs such that its central management and control is carried on in the U.K. and accordingly it intends to be treated as resident in the U.K. for U.K. tax purposes. The comments below assume that NewCo will be resident solely in the U.K. for U.K. tax purposes.

 

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U.K. Resident Holders of NewCo Ordinary Shares

Taxation of Dividends – Withholding Tax

Payments of dividends on the NewCo ordinary shares may be made by NewCo without withholding or deduction for or on account of U.K. income tax.

Taxation of Dividends – Individual Shareholders

A U.K. resident individual shareholders should not be subject to U.K. income tax on dividends received by such individual shareholder from NewCo if the total amount of dividend income received by the individual in the tax year (including dividends from NewCo) does not exceed the applicable dividend allowance, which is currently £2,000 for the tax year 2020-2021.

In determining the income tax rate or rates applicable to such individual shareholder’s taxable income, dividend income is treated as the highest part of such individual shareholder’s income. Dividend income that falls within the applicable dividend allowance should count towards the basic, higher or additional rate limits (as applicable) which may affect the rate or rates of tax due on any dividend income in excess of the applicable dividend allowance.

To the extent that such individual shareholder’s dividend income for the tax year exceeds the applicable dividend allowance and, when treated as the highest part of such individual shareholder’s income, falls above such individual shareholder’s personal allowance but below the basic rate limit, such an individual shareholder should be subject to tax on that dividend income at the dividend basic rate, currently 7.5%. To the extent that such dividend income falls above the basic rate limit but below the higher rate limit, such an individual shareholder should be subject to tax on that dividend income at the dividend upper rate, currently 32.5%. To the extent that such dividend income falls above the higher rate limit, such an individual shareholder should be subject to tax on that dividend income at the dividend additional rate, currently 38.1%.

Taxation of Dividends – Corporate Shareholders

Shareholders who are within the charge to U.K. corporation tax (including shareholders who are non-U.K. resident companies whose NewCo ordinary shares are used, held or acquired for the purposes of a trade carried on in the U.K. through a permanent establishment) should be subject to corporation tax on dividends paid by NewCo, unless (subject to special rules for such shareholders that are small companies) the dividends fall within an exempt class and certain other conditions are met. Each shareholder’s position will depend on its own individual circumstances, although it would normally be expected that the dividends paid by NewCo would fall within an exempt class.

Taxation of Capital Gains

Shareholders who are resident in the U.K. or, in the case of individuals, who were resident and cease to be resident in the U.K. for a period of five years or less, may (depending on their circumstances and the availability of exemptions or reliefs) be liable to U.K. taxation on chargeable gains in respect of gains arising from a sale or other disposal of NewCo ordinary shares.

In the case of individual shareholders, in calculating any gain or loss on disposal of NewCo ordinary shares, sterling values are compared at acquisition and disposal. Accordingly, a chargeable gain can arise even where the foreign currency amount received on a disposal is less than or the same as the amount paid (or treated as paid) for the NewCo ordinary shares.

Shareholders within the charge to U.K. corporation tax are generally required to compute chargeable gains by reference to acquisition cost and disposal proceeds in such shareholder’s functional currency, unless (in the case of certain companies) they have elected otherwise.

 

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U.K. Resident Holders of NewCo Warrants

Individual Shareholders

Disposals of warrants by warrantholders who are either individuals or trustees and are resident for tax purposes in the U.K. or, in the case of individuals, who were resident and cease to be resident in the U.K. for a period of five years or less, may give rise to chargeable gains or allowable losses for the purposes of taxation of chargeable gains. In calculating any gain or loss on disposal of warrants, sterling values are compared at acquisition and transfer. Accordingly, a chargeable gain can arise even where the foreign currency amount received on a disposal is less than or the same as the amount paid (or treated as paid) for the warrants. The expiry of a warrant which is listed on a recognised stock exchange without it being exercised should be treated as a disposal of the warrant to which the foregoing treatment applies.

An exercise of warrants should not of itself give rise to a charge to U.K. taxation. For the purposes of the taxation of chargeable gains, the acquisition cost of the NewCo ordinary shares acquired pursuant to the exercise will be in principle equal to the acquisition cost of the warrant plus the applicable exercise price.

Corporate Shareholders

Warrantholders within the charge to U.K. corporation tax (including warrantholders who are non-U.K. resident companies whose NewCo warrants are used, held or acquired for the purposes of a trade carried on in the U.K. through a permanent establishment) should generally be subject to tax as income on all profits and gains from the NewCo warrants determined in accordance with their statutory accounting treatment. Such warrantholders will broadly be charged in each accounting period by reference to all amounts which, in accordance with generally accepted accounting practice, are recognised in determining the warrantholder’s profit or loss for that period. Fluctuations in value relating to foreign exchange gains and losses in respect of the NewCo warrants may be brought into account as income in accordance with the foregoing.

Non-U.K. Holders of NewCo Securities

A holder (whether an individual or body corporate) of NewCo Securities which is resident or otherwise subject to tax outside the U.K. may be subject to foreign tax on income and/or capital gains under local law. Holders to whom this may apply should obtain their own tax advice concerning tax liabilities relating to the NewCo Securities.

Taxation of Dividends

Dividends paid by NewCo may be chargeable to U.K. tax by direct assessment (including self-assessment), irrespective of the residence of the holder of the NewCo ordinary shares. However, dividends should not be chargeable to U.K. tax in the hands of shareholders (other than certain trustees) who are not resident for tax purposes in the U.K., except where the shareholder carries on a trade, profession or vocation in the U.K. through a branch or agency, or in the case of a corporate shareholder, carries on a trade through a permanent establishment in the U.K., in connection with which the dividend is received or to which the NewCo ordinary shares are attributable.

Capital Gains

Capital gains on the disposal (or deemed disposal) of the NewCo Securities should not be chargeable to U.K. tax in the hands of holders of NewCo Securities (other than certain trustees) who are not resident for tax purposes in the U.K., except where the holder carries on a trade, profession or vocation in the U.K. through a branch or agency, or in the case of a corporate holder, carries on a trade through a permanent establishment in the U.K., in connection with which the capital gain is realised or to which the NewCo Securities are attributable.

A holder of NewCo Securities who is an individual and who is temporarily resident for tax purposes outside the U.K. at the date of disposal (or deemed disposal) of the NewCo Securities may also be liable, on their return to the U.K., to U.K. tax on chargeable gains (subject to any available exemption or relief).

 

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U.K. Stamp Duty and Stamp Duty Reserve Tax

The comments below summarise certain current law and are intended as a general guide only to stamp duty and stamp duty reserve tax (“SDRT”). Special rules apply to agreements made by broker dealers and market makers in the ordinary course of their business and to transfers, agreements to transfer, or issues to certain categories of person (such as depositaries and clearance services) which may be liable to stamp duty or SDRT at a higher rate.

No U.K. stamp duty or SDRT should be payable on the issue of the NewCo ordinary shares by NewCo. U.K. stamp duty may arise in respect of a written instrument by which the warrants are issued or constituted generally at 0.5% of the amount or value of the consideration given.

As NewCo is not incorporated in the U.K., it is considered that no SDRT should be payable on the transfer of, or an agreement to transfer, the NewCo Securities provided that the NewCo Securities are not registered in a register kept in the U.K. by or on behalf of NewCo. It is not intended that such a register will be kept in the U.K.

No U.K. stamp duty should be payable on the transfer of the NewCo Securities provided that this does not involve a written instrument of transfer. U.K. stamp duty, generally at the rate of 0.5% of the amount or value of the consideration for the transfer, could arise in respect of a written instrument effecting the transfer of the NewCo Securities.

The U.K. tax considerations relating to the Business Combination and the NewCo Securities are complex. the foregoing comments do not address all aspects of the U.K. tax that may be relevant to a particular holder of NewCo Securities. All holders and prospective holders are urged to consult with their own tax advisor with respect to the tax consequences of the Business Combination.

Island of Guernsey Tax Considerations

The following summary of the anticipated tax treatment in Guernsey applies to persons holding NewCo ordinary shares as an investment and the potential tax treatment, depending on the individual status of investors, on NewCo shareholders resident in Guernsey. The summary does not constitute legal or tax advice and is based on taxation law and published Revenue Service practice in Guernsey at the date of this document, which is subject to change, possibly with retroactive effect. Prospective investors should be aware that the level and bases of taxation may change from those described and should consult their own professional advisers on the implications of making an investment in, holding or disposing of NewCo ordinary shares under the laws of the countries in which they are liable to taxation. The statements included in this section are the opinion of Carey Olsen (Guernsey) LLP, Guernsey counsel to NewCo.

Taxation of NewCo

It is the intention of the Directors to conduct the affairs of NewCo so as to ensure that it is U.K. tax resident and not tax resident in any other jurisdiction, including Guernsey. As a company incorporated in Guernsey, NewCo shall be treated as tax resident in Guernsey unless it is proved to the satisfaction of the Director of the Revenue Service in Guernsey that NewCo is (i) tax resident in the United Kingdom as a matter of the law of the United Kingdom, (ii) centrally managed and controlled in the United Kingdom, and (iii) NewCo’s tax residence in the United Kingdom is not motivated by the avoidance, reduction or deferral of Guernsey tax.    

The Directors intend to submit an application to the Director of the Revenue Service in Guernsey requesting non-tax resident status in Guernsey. It is expected that, prior to Closing, NewCo will have received written confirmation from the Director of the Revenue Service in Guernsey that NewCo is not tax resident in Guernsey. It is the intention of the Directors to conduct the affairs of NewCo so as to maintain such non-tax resident status.

As a non-Guernsey resident company, NewCo will be liable to be charged income tax in Guernsey on its income arising or accruing from certain businesses carried on in Guernsey. It is the intention of the Directors to conduct the affairs of NewCo so as to ensure that none of those businesses are or will be conducted in Guernsey.

 

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Guernsey currently does not levy taxes upon capital, inheritances, capital gains, gifts, sales or turnover. No stamp duty or similar tax is chargeable in Guernsey on the issue or redemption of NewCo ordinary shares nor are there any estate duties (save for registration fees and ad valorem duty for a Guernsey Grant of Representation where the deceased dies leaving assets in Guernsey which require presentation of such a Grant).

Taxation of NewCo Shareholders

Dividends paid by NewCo to NewCo shareholders who are not resident in Guernsey (which includes Alderney and Herm) for tax purposes (and do not have a permanent establishment in Guernsey) can be paid to such NewCo shareholders, either directly or indirectly, without the withholding of Guernsey tax and without giving rise to any other liability to Guernsey income tax.

NewCo shareholders who are resident for tax purposes in Guernsey (which includes Alderney or Herm), or who are not so resident but have a permanent establishment in Guernsey to which the holding of their NewCo ordinary shares is related, will incur Guernsey income tax at the applicable rate on a dividend paid to them by NewCo.

Anticipated Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America. The Business Combination will first be accounted for as a capital reorganization whereby NewCo is the successor to its predecessor TopCo. As a result of the first step described above, the existing shareholders of TopCo will continue to retain control through ownership of NewCo.

The capital reorganization will be immediately followed by the acquisition of dMY, which is accounted for within the scope of ASC 805, Business Combinations (“ASC 805”). Under this method of accounting, dMY will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of NewCo issuing NewCo ordinary shares for the net assets of dMY, accompanied by a recapitalization. The NewCo ordinary shares issued are recognized at fair value and recorded as consideration for the acquisition of the public shell company, dMY. Under this method of accounting, there is no acquisition accounting and no recognition of goodwill or other intangible assets, as dMY is not recognized as a business as defined under ASC 805, given it consists predominantly of cash or other marketable securities in the dMY trust account.

TopCo has been determined to be the accounting acquirer and predecessor in the Business Combination based on evaluation of the following facts and circumstances:

 

   

TopCo’s shareholders will have the largest voting interest in NewCo under both the no redemption and maximum redemption scenarios;

 

   

NewCo’s board of directors will initially consist of seven directors, and NewCo expects to add two additional directors to the board prior to, at or following the Closing: TopCo’s shareholders will be initially entitled to appoint six directors, dMY will be initially entitled to appoint two directors and the Chief Executive Officer of NewCo will be a director of NewCo;

 

   

the business of TopCo will comprise the ongoing operations of NewCo; and

 

   

TopCo is the larger entity, in terms of both revenues and total assets.

Other factors were considered, including composition of management, purpose and intent of the Business Combination and the location of NewCo’s headquarters, noting that the preponderance of evidence as described above is indicative that TopCo is the accounting acquirer and predecessor in the Business Combination.

 

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Required Vote

Approval of the Business Combination Proposal (and consequently, the Business Combination Agreement and the Business Combination) requires the affirmative vote of holders of a majority of the outstanding Class A Shares and Class B Shares entitled to vote on such matter, voting as a single class. Failure to vote by proxy or to vote in person (which would include presence at the virtual special meeting) at the special meeting or an abstention from voting will have no effect on the outcome of the vote on the Business Combination Proposal.

As of the record date, our Sponsor, directors and officers have agreed to vote any Class A Shares and Class B Shares owned by them in favor of the Business Combination.

Recommendation of the Board

THE dMY BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE dMY STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.

The existence of financial and personal interests of dMY’s directors and officers may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is in the best interests of dMY and its stockholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “The Business Combination Proposal — Interests of dMY’s Directors and Officers in the Business Combination” for a further discussion.

 

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THE BUSINESS COMBINATION AGREEMENT

For a discussion of the structure of the Business Combination and consideration provisions of the Business Combination Agreement, see the section entitled “The Business Combination Proposal.” Such discussion and the following summary of other material provisions of the Business Combination Agreement is qualified by reference to the complete text of the Business Combination Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus and which is incorporated by reference into this proxy statement/prospectus. All stockholders are encouraged to read the Business Combination Agreement in its entirety for a more complete description of the terms and conditions of the business combination. In particular, the assertions embodied in representations and warranties by the parties contained in the Business Combination Agreement are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Business Combination Agreement. The representations, warranties and covenants in the Business Combination Agreement are also qualified or modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Business Combination Agreement. dMY, TopCo and NewCo do not believe that these schedules contain information that is material to an investment decision. Moreover, certain representations and warranties in the Business Combination Agreement may, may not have been or may not be, as applicable, accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement/prospectus. Accordingly, no person should rely on the representations and warranties in the Business Combination Agreement or the summaries thereof in this proxy statement/prospectus as characterizations of the actual state of facts about TopCo, NewCo, dMY or or any other matter.

General; Structure of the Business Combination

The Business Combination Agreement was entered into by and among dMY, TopCo, MidCo, NewCo, Merger Sub and the Sponsor on October 27, 2020.

The Business Combination Agreement provides that, among other things, on the Closing Date (as defined below in the section entitled “—Closing and Effective Time of the Business Combination”) but prior to the Closing, TopCo will (1) undergo the Reorganization wherein the Pre-Closing Holders (as defined in the Business Combination Agreement) will exchange all existing classes of shares of TopCo (except for (i) certain preference shares of TopCo which will be redeemed in the TopCo Redemption (such preference shares, the “Remaining Preference Shares”) and (ii) certain shares of TopCo which will be contributed to NewCo in exchange for an amount equal to the Catch-Up Payment) for newly issued ordinary shares of NewCo. As described in the Business Combination Agreement, solely with respect to the shares of TopCo that are unvested immediately prior to the Reorganization and with respect to which the holders of such shares have executed support agreements agreeing to the vesting and restriction provisions therein, such shares will be exchanged for the ordinary shares of NewCo but will remain subject to the vesting and restrictions as summarized in such support agreements (such shares subject to such vesting and restrictions, the “Restricted Shares”); and (2) redeem and cancel the Remaining Preference Shares pursuant to the TopCo Redemption.

In addition, (a) effective as of immediately prior to the Closing, each issued and outstanding Class B Share will convert automatically on a one-for-one basis into Class A Shares; and (b) on the date of Closing, Merger Sub will merge with and into dMY, with dMY continuing as the surviving company, as a result of which (i) dMY will become a wholly-owned subsidiary of NewCo, (ii) each issued and outstanding unit of dMY, consisting of one Class A Share and one-third of one dMY Warrant, shall be automatically detached, (iii) in consideration for the acquisition of all of the issued and outstanding Class A shares of dMY (as a result of the Business Combination), NewCo will issue one NewCo ordinary share for each dMY Class A share acquired by virtue of the Business Combination, (iv) each issued and outstanding dMY warrant to purchase a Class A Share will become exercisable for one NewCo ordinary share and (v) NewCo will change its name to Genius Sports Limited.

 

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Consideration to be Received in the Business Combination     

The aggregate consideration to be received by the Pre-Closing Holders at the Closing (after implementing the steps set forth below in the subsection titled “—Closing Date Cash Payments and Uses,” including in exchange of all debt and equity securities of TopCo (including pursuant to the TopCo Redemption) will consist of: (i) the TopCo Equity Value apportioned in the following manner between cash and the NewCo Common Shares: (x) the Aggregate Cash Consideration and (y) a number of NewCo Common Shares equal to the quotient obtained by dividing (1) the TopCo Equity Value minus the Aggregate Cash Consideration by (2) $10.00; and (ii) up to 11,618,401 Restricted Shares issued pursuant to the terms and conditions of the Reorganization as set forth in the Business Combination Agreement.

Closing Date Cash Payments and Uses

Pursuant to the Business Combination Agreement, the “Available Distributable Cash” is, as of immediately prior to the Closing, an aggregate amount equal to the sum of (without duplication) (a) the cash in dMY’s trust account, less amounts required for dMY Share Redemptions (as defined in the Business Combination Agreement) plus (b) the aggregate proceeds received by NewCo from the PIPE investment.    

Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of the closing conditions (other than those conditions which by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), the parties will disburse all Available Distributable Cash at the Closing in the following order of priority:

 

   

first, an amount equal to all transaction expenses incurred by the parties to the Business Combination Agreement will be contributed or loaned to, or remain with, NewCo, and will be used by NewCo to pay all such transaction expenses by wire transfer of immediately available funds on behalf of the persons that incurred such transaction expenses or by whom such transaction expenses are payable;

 

   

second, one hundred million dollars ($100,000,000) will be contributed or loaned to, or remain with, NewCo or its subsidiaries (including for working capital, growth and other general corporate purposes);

 

   

third, the next two hundred million dollars ($200,000,000) (the “Tranche 1 Payment Amount”) will be allocated and used as follows:

 

   

a portion of the Tranche 1 Payment Amount equal to the Loan Note Repayment Amount (as defined in the Business Combination Agreement) and the Excess Debt Obligations (as defined in the subsection below titled “—Interim Operations Pending the Closing”) (if any) will be contributed, on behalf of NewCo, to TopCo, and by TopCo to MidCo, in each case, by way of capital contribution for use in the repayment and forgiveness in full of the Loan Notes (as defined in the Business Combination Agreement) and any Excess Debt Obligations, pro rata among the holders of the Loan Notes and any Excess Debt Obligations; and

 

   

following repayment of the Loan Note Repayment Amount and the Excess Debt Obligations in full, any remaining portion of the Tranche 1 Payment Amount will be contributed, on behalf of NewCo, to TopCo by way of capital contribution to pay the total redemption amount payable in connection with the TopCo Redemption pro rata among the holders of Remaining Preference Shares in accordance with the Articles of Incorporation of TopCo, as may be amended from time to time (“TopCo’s Articles of Incorporation”) and the Guernsey Companies Law.

 

   

fourth, an amount equal to the Catch-Up Payment (as defined in the Business Combination Agreement) will be allocated and paid to the persons set forth in the Target Companies’ Disclosure Letter (as defined below in the section entitled “—Interim Operations of the Target Companies”);

 

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fifth, any remaining amount of Available Distributable Cash up to the next one hundred million dollars ($100,000,000) (the “Tranche 2 Payment Amount”) will be allocated and used as follows:

 

   

35% of the Tranche 2 Payment Amount will be contributed or loaned to, or remain with, NewCo or its subsidiaries (including for working capital, growth and other general corporate purposes); and

 

   

65% of the Tranche 2 Payment Amount will be contributed, on behalf of NewCo, to TopCo by way of capital contribution to pay the total redemption amount pro rata among the holders of Remaining Preference Shares in accordance with TopCo’s Articles of Incorporation and the Guernsey Companies Law;

 

   

sixth, any remaining amount of Available Distributable Cash (up to such amount that would cause the NewCo Balance Sheet Cap (as defined below) to be met) (the “Tranche 3 Payment Amount”), after the contributions and distributions pursuant to the foregoing bullet points, will be allocated as follows:

 

   

ten percent (10%) of the Tranche 3 Payment Amount will be contributed or loaned to, or remain with, NewCo or its subsidiaries (including for working capital, growth and other general corporate purposes) until an aggregate of two hundred million dollars ($200,000,000) has been contributed or loaned to, or remains with, NewCo or its subsidiaries for working capital, growth and other general corporate purposes (taking into account all sums contributed or loaned to, or remaining with, NewCo or its subsidiaries pursuant to the foregoing bullet points) (the “NewCo Balance Sheet Cap”); and

 

   

ninety percent (90%) of the Tranche 3 Payment Amount (the “90% Balance Amount”) will be allocated as follows: (A) the 90% Balance Amount will be contributed, on behalf of NewCo, to TopCo by way of capital contribution to pay the total redemption amount payable in connection with the TopCo Redemption pro rata among the holders of Remaining Preference Shares in accordance with TopCo’s Articles of Incorporation and the Guernsey Companies Law; and (B) if the total redemption amount payable in connection with the TopCo Redemption has been paid in full, any remaining portion of the 90% Balance Amount will be used by NewCo to repurchase NewCo Common Shares from all Pre-Closing Holders based on their Pro Rata Participation Percentage (as defined in the Business Combination Agreement) at a price per share of $10.00 in accordance with NewCo’s Articles of Incorporation and the Guernsey Companies Law; and

 

   

seventh, any remaining amount of Available Distributable Cash (the “Tranche 4 Payment Amount”), after the contributions and distributions pursuant to the foregoing bullet points, will be allocated as follows: (A) the Tranche 4 Payment Amount will be contributed, on behalf of NewCo, to TopCo by way of capital contribution to pay the total redemption amount payable in connection with the TopCo Redemption pro rata among the holders of Remaining Preference Shares in accordance with TopCo’s Articles of Incorporation and the Guernsey Companies Law; and (B) if the total redemption amount has been paid in full, any remaining portion of the Tranche 4 Payment Amount will be used by NewCo to repurchase NewCo Common Shares, in accordance with NewCo’s Articles of Incorporation and the Guernsey Companies Law, from all Pre-Closing Holders based on their Pro Rata Participation Percentage at a price per share of $10.00.

Purchase Price Adjustment

Pursuant to the Business Combination Agreement, no later than thirty (30) days following the Closing Date (as defined below in the section entitled “—Closing and Effective Time of the Business Combination”), (A) the Sponsor will notify NewCo in writing whether it accepts or disputes the accuracy of the calculation set forth in the Company Transaction Expenses Certificate (as defined in the Business Combination Agreement) of the aggregate transaction expenses incurred by, or attributable to, (i) any direct or indirect equityholder of TopCo or NewCo or (ii) the Target Companies, in each case as set forth in the Business Combination Agreement, and only to the extent a Target Company is obligated to pay, has paid or agreed to pay such transaction expense

 

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(collectively, the “TopCo Transaction Expenses”), and (B) NewCo will notify the Sponsor in writing whether it accepts or disputes the accuracy of the calculation set forth in the Sponsor Transaction Expenses Certificate (as defined in the Business Combination Agreement) of the aggregate transaction expenses incurred by, or attributable to, any of the Sponsor or dMY, in each case as set forth in the Business Combination Agreement (the “Sponsor Transaction Expenses”). If the Sponsor accepts the calculation of the TopCo Transaction Expenses, or fails within such thirty (30) day period to notify NewCo of any dispute with respect thereto, then the calculation of the aggregate amount of the TopCo Transaction Expenses set forth in the Company Transaction Expenses Certificate will be deemed final and conclusive and binding upon all parties in all respects. If NewCo accepts the calculation of the Sponsor Transaction Expenses, or fails within such thirty (30) day period to notify the Sponsor of any dispute with respect thereto, then the calculation of the aggregate amount of the Sponsor Transaction Expenses set forth in the Sponsor Transaction Expenses Certificate will be deemed final and conclusive and binding upon all parties in all respects. In the case of an unresolved dispute between the parties regarding the TopCo Transaction Expenses or the Sponsor Transaction Expenses, the parties are to engage an independent accountant to resolve any such dispute.

Following the determination of the Final Sponsor Transaction Expenses and Final Company Transaction Expenses (each as defined in the Business Combination Agreement), the TopCo Equity Value will be recalculated by adding the Net Company Equity Value Adjustment Amount (as defined in the Business Combination Agreement and which, for clarity, may be a negative number) (such recalculated TopCo Equity Value, the “Adjusted Company Equity Value”). If the Adjusted Company Equity Value is greater than the TopCo Equity Value, then NewCo will issue additional NewCo Common Shares to the Pre-Closing Holders based on their Additional Shares Participation Percentage (as defined in the Business Combination Agreement), in an aggregate amount equal to the quotient of (x) the absolute value of the Net Company Equity Value Adjustment Amount divided by (y) $10.00. If the Adjusted Company Equity Value is less than the TopCo Equity Value, Maven will promptly, and in any event no later than five (5) business days following such final determination, pay the full amount of such excess to NewCo (for the avoidance of doubt, such payment by Maven will not come from cash or cash equivalents from any of the Target Companies).

Closing and Effective Time of the Business Combination

The Closing will take place (a) by conference call and by exchange of signature pages by email or other electronic transmission as promptly as practicable (and in any event no later than 9:00 a.m., Eastern Time on the fifth (5th) business day after the conditions set forth below have been satisfied, or, if permissible, waived by the party entitled to the benefit of the same (other than those conditions which by their terms are required to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or (b) such other date and time as the parties mutually agree (the date upon which the Closing occurs, the “Closing Date”).

Conditions to the Closing of the Business Combination

Condition to Each Party’s Obligation

The respective obligation of each party to consummate the transactions to be performed by it in connection with the Closing is subject to the satisfaction or written waiver (if legally permitted), as of the Closing Date, of each of the following conditions:

 

   

there shall be no applicable law in effect that makes the consummation of the Business Combination illegal or any order in effect preventing the consummation of the Business Combination;

 

   

the affirmative vote of dMY’s stockholders required to approve the proposals set forth in this proxy statement/prospectus, as determined in accordance with applicable law and dMY’s governing documents, must be obtained;

 

   

the registration statement on Form F-4 to be filed with the SEC by NewCo, which registration statement contains the proxy statement on Schedule 14A to be filed in connection with the dMY

 

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stockholder meeting, must be effective, and no stop order must be outstanding and no proceeding seeking such a stop order has been threatened or initiated by the SEC with respect to such registration statement which remains pending; and

 

   

the NewCo Ordinary Shares to be issued in connection with the Business Combination and the NewCo warrants must be approved for listing on the NYSE, subject only to official notice of issuance.

Condition to dMY’s Obligations

The obligation of dMY to consummate the transactions to be performed by dMY in connection with the Closing is subject to the satisfaction or written waiver, at or prior to the Closing Date, of each of the following conditions:

 

   

the representations and warranties of NewCo, TopCo, MidCo and Merger Sub:

 

   

regarding the non-existence of a Material Adverse Effect must be true and correct in all respects as of the date of the Business Combination Agreement and as of the Closing Date;

 

   

regarding organization, authority, enforceability, capitalization and brokerage, in each case disregarding qualifications relating to materiality, Material Adverse Effect or similar qualifiers, must be true and correct in all material respects as of the date of Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct in all material respects as of such date);

 

   

regarding affiliate transactions must be true and correct in all material respects as of the date of the Business Combination Agreement and as of the Closing Date; provided that for purposes of this sub-bullet, any failure of such representations and warranties to be so true and correct that does not involve a transaction in excess of four million dollars ($4,000,000), individually or in the aggregate, will not be considered material; and

 

   

other than those described in the foregoing sub bullets, must be true and correct as of the date of the Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct as of such date), except in each case to the extent any failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.

 

   

each of NewCo, TopCo, MidCo and Merger Sub must perform or comply in all material respects with all of its respective covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Closing Date;

 

   

NewCo and Topco must jointly deliver a customary closing certificate certifying that the conditions in the first and second bullet points above have been satisfied;

 

   

NewCo and TopCo must deliver, among other things, (i) evidence that the Reorganization has been completed, (ii) the Investor Rights Agreement duly executed by NewCo and Maven among others, (iii) copies of all cancelled original Loan Notes, and (iv) evidence that the TopCo Redemption has been completed;

 

   

NewCo’s Memorandum of Incorporation and Articles of Incorporation must be amended and restated in accordance with the Business Combination Agreement; and

 

   

the TSAs and each additional support agreement entered into after the date of the Business Combination Agreement must be in full force and effect.

 

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Conditions to NewCo’s and TopCo’s Obligations

 

   

The representations and warranties of dMY:

 

   

regarding organization, authority, enforceability, capitalization, brokerage, trust account and investment company, in each case disregarding qualifications relating to materiality, dMY Material Adverse Effect (as defined in the Business Combination Agreement) or similar qualifiers, must be true and correct in all material respects as of the date of Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct in all material respects as of such date); and

 

   

other than those described in the foregoing sub-bullet, must be true and correct as of the date of the Business Combination Agreement and as of the Closing Date (or if such representations and warranties relate to a specific date, such representations and warranties must be true and correct as of such date), except in each case to the extent any failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a dMY Material Adverse Effect.

 

   

dMY must perform or comply in all material respects with all of its covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Closing Date;

 

   

dMY must deliver a customary closing certificate certifying that the conditions in the first and second bullet points above have been satisfied;

 

   

the Minimum Cash (as defined in the Business Combination Agreement) must not be less than three hundred fifteen million dollars ($315,000,000);

 

   

dMY must deliver to NewCo the Investor Rights Agreement, duly executed by dMY and the Founders; and

 

   

the Founder Holders Forfeiture Agreement and the Founder Holders Consent Letter must each be in full force and effect.

Representations and Warranties

The Business Combination Agreement contains customary representations and warranties by the parties thereto.

In the Business Combination Agreement, dMY makes customary representations and warranties regarding itself, including in relation to: organization, authority, enforceability; capitalization, brokerage; trust account; dMY’s SEC filings; information supplied; this proxy statement/prospectus; litigation; listing; investment company; non-contravention; business activities; tax matters; compliance with laws; and inspections.

In the Business Combination Agreement, NewCo, TopCo, MidCo and Merger Sub make representations and warranties regarding themselves, including without limitation, relating to: organization, authority, enforceability; non-contravention; capitalization; financial statements; no material adverse effect; absence of certain developments; real property; tax matters; contracts; intellectual property; data security and data privacy; information supplied; litigation; brokerage; labor matters; employee benefit plans; insurance; compliance with laws and permits; title to assets; anti-corruption compliance; anti-money laundering compliance; affiliate transactions; compliance with applicable sanctions and embargo laws; gaming laws; and inspections.

Interim Operations Pending the Closing

Interim Operations of the Target Companies

From the date of the Business Combination Agreement until the earlier of: (1) the date the Business Combination Agreement is terminated; and (2) the Closing Date (such period, the “Pre-Closing Period”), unless

 

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dMY otherwise gives prior consent (which consent will not be unreasonably withheld, conditioned or delayed) in writing and except (x) as specifically contemplated by the Business Combination Agreement or the ancillary agreements thereto (including the Reorganization), (y) as disclosed in the Target Companies’ disclosure letter delivered to dMY (the “Target Companies’ Disclosure Letter”) or (z) other than in respect of the restrictions set forth in the first, third, fourth, fifth, tenth or fourteenth bullet points below, to the extent that any action is taken or omitted to be taken in response to or related to the actual or anticipated effect on any of the Target Companies’ businesses of COVID-19 or any COVID-19 Measures (each as defined in the Business Combination Agreement), in each case with respect to this clause (z) in connection with or in response to COVID-19; provided, however, that NewCo or TopCo, as applicable, will notify dMY, when reasonably practicable, prior to taking any actions pursuant to the foregoing (or where such prior notification is not reasonably practicable, as promptly as possible thereafter (in addition to periodically scheduled teleconference meetings for the purpose of keeping dMY reasonably apprised as to these matters)), that are reasonably expected to result in fees, costs, expenses or liabilities incurred or payable by, or decline in revenues of, the Target Companies individually or in the aggregate from the date hereof, in the amount of five million dollars ($5,000,000) or more over the following twelve-month period (such notice to include reasonable details of such action or proposed action), NewCo and TopCo will, and will cause the Target Companies to, conduct and operate their business in all material respects in the ordinary course of business and use its commercially reasonable efforts to preserve their existing relationships with material customers, suppliers and distributors, and NewCo and TopCo will not, and will cause the Target Companies not to:

 

   

amend or otherwise modify any of the governing documents of any of the Target Companies in any manner that would be adverse to the Company or the Sponsor, except as otherwise required by law;

 

   

make any material changes to its accounting policies, methods or practices, other than as required by United Kingdom GAAP or applicable law;

 

   

sell, issue, redeem, assign, transfer, pledge (other than in connection with existing credit facilities), convey or otherwise dispose of (x) any equity interests of any Target Company or (y) any options, warrants, rights of conversion or other rights or agreements, arrangements or commitments obligating any Target Company to issue, deliver or sell any equity interests of any Target Company, in each case, other than pursuant to the Subscription Agreements;

 

   

declare, make or pay any dividend, other distribution or return of capital (whether in cash or in kind) to any equityholder of any Target Company, other than (x) to another Target Company and (y) repayments by TopCo to its affiliates in respect of advances made by such persons or entities as disclosed in the Target Companies’ Disclosure Letter;

 

   

adjust, split, combine or reclassify any of its equity interests;

 

   

(x) incur, assume, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness (other than (A) capital leases entered into in the ordinary course of business, (B) indebtedness for borrowed money (which may be borrowed from, or guaranteed by, a Pre-Closing Holder) not to exceed $10,000,000 in the aggregate solely in connection with actions permitted by the ninth bullet point below, which includes any acquisition disclosed in the Target Companies’ Disclosure Letter (the “M&A Debt Basket”), (C) in addition to (B) above, indebtedness for borrowed money (which may be borrowed from, or guaranteed by, a Pre-Closing Holder) not to exceed $10,000,000 in the aggregate which may be used for any purpose (together with the M&A Debt Basket, the “Initial Debt Basket”) and (D) indebtedness for borrowed money provided by any Pre-Closing Holder in excess of the Initial Debt Basket (“Excess Debt Obligations”) in connection with TopCo’s liquidity requirements on customary terms as reasonably agreed between such Pre-Closing Holder and TopCo, (y) make any advances or capital contributions to, or investments in, any person, other than a Target Company or in the ordinary course of business, or (z) amend or modify in any material respect any indebtedness for borrowed money (other than in connection with the incurrence of indebtedness permitted by subclause (x) in this bullet point);

 

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commit to, authorize or enter into any agreement in respect of, any capital expenditure (or series of commitments or capital expenditures), other than (x) capital expenditures (other than those described in the immediately following clause (y)) made in the ordinary course of business not to exceed £5,000,000 in the aggregate, and (y) internally generated capitalized development costs incurred or payable by the Target Companies in the ordinary course of business;

 

   

enter into any material amendment or termination (other than an expiration in accordance with the terms thereof) of, or waive compliance with, any material term of any material contract or material lease (in each case, as set forth on the Target Companies’ Disclosure Letter) or enter into any contract that if entered into prior to the date of the Business Combination Agreement would be a material contract or material lease that would have been required to be listed on the Target Companies’ Disclosure Letter, in each case other than in the ordinary course of business and solely to the extent such amendment, termination or waiver would not materially and adversely impact the Target Companies, taken as a whole;

 

   

other than inventory and other assets acquired in the ordinary course of business, acquire the business, properties or assets, including equity interests of another person or entity, except, in each case, for acquisitions whose consideration in an aggregate amount (for all such acquisitions) is not greater than $10,000,000 and the consideration for which is payable only in cash, so long as, based upon the advice of the Target Companies’ accountants, such acquisition, individually or in the aggregate, would not require any additional disclosure pursuant to the rules and regulations adopted by Public Company Accounting Oversight Board (whether through merger, consolidation, share exchange, business combination or otherwise);

 

   

propose, adopt or effect any plan of complete or partial liquidation, dissolution, recapitalization or reorganization, or voluntarily subject to any material lien, any of the material rights or material assets owned by, or leased or licensed to, the Target Companies, except for (x) permitted liens, (y) liens under existing credit facilities or other indebtedness permitted pursuant to the fourth bullet point above and (z) as required or contemplated by the Business Combination Agreement;