Delaware |
8000 |
85-1365053 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Keith M. Townsend Michael Hamilton Zachary Davis King & Spalding LLP 1180 Peachtree Street, NE Suite 1600 Atlanta, GA 30309 (404) 572-4600 |
Carrie Ratliff Chief Legal Officer Sharecare, Inc. 255 East Paces Ferry Road NE, Suite 700 Atlanta, GA 30305 (404) 671-4000 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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F-1 |
• | our ability to realize the benefits expected from the Business Combination; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors, including our ability to increase our headcount as we expand our business following the consummation of the Business Combination; |
• | our ability to maintain the listing of our shares of common stock and public warrants on Nasdaq; |
• | our business, operations and financial performance, including: |
• | expectations with respect to our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder; |
• | future business plans and growth opportunities, including revenue opportunity available from new or existing clients and expectations regarding the enhancement of platform capabilities and addition of new solution offerings; |
• | developments and projections relating to our competitors and the digital healthcare industry; |
• | the impact of the COVID-19 pandemic on our business and the actions we may take in response thereto; |
• | expectations regarding future acquisitions, partnerships or other relationships with third parties; |
• | our future capital requirements and sources and uses of cash, including our ability to obtain additional capital in the future and fully access our Revolving Facility (as defined herein); and |
• | our ability to recognize performance-based revenue; |
• | our status as an emerging growth company (“EGC”) and our intention to take advantage of accommodations available to EGCs under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”); and |
• | other factors detailed under the sections entitled “ Risk Factors Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | our ability to adapt in a rapidly evolving industry and to promote and improve the benefits of our platform; |
• | our ability to compete against current and future competitors; |
• | our ability to maintain and expand our relationship with our clients and partners; |
• | risks associated with a decrease in the number of members with access to our offerings; |
• | risk of economic uncertainty or downturns, particularly as it impacts the healthcare industry; |
• | the impact of the COVID-19 pandemic and other catastrophic events; |
• | the failure of our platform and solutions to achieve market acceptance and our ability to develop, or incorporate through acquisition or partnership, new solutions, or enhancements, new features and modifications to existing solutions; |
• | risk of the loss of any of our significant partners; |
• | our ability to recruit, retain, and develop our workforce, and in particular our key personnel and senior management team; |
• | our ability to establish and maintain strategic relationships with third parties; |
• | our ability to successfully identify, consummate and successfully integrate acquisitions and investments; |
• | our ability to maintain our historic growth rates and effectively manage our growth in the future; |
• | rapid technological change in the virtual care market or the inability to develop new solutions, features, and modifications that are adopted; |
• | security breaches, loss of data and other disruptions; |
• | failures of our cyber-security measures that expose the confidential information of us, our enterprise partners, or members; |
• | any failure or interruption in the services of our internet infrastructure, bandwidth providers, and other third party suppliers; |
• | risk that we may be subject to legal proceedings and the insurance we maintain may not fully cover all potential exposures; |
• | our ability to comply with evolving regulations, including healthcare and privacy and security regulations; |
• | our ability to protect or enforce our intellectual property rights; |
• | our level of indebtedness and our ability to fund debt obligations and meet financial covenants in our debt instruments; |
• | our ability to obtain additional capital in the future; |
• | our ability to operate as a public company, including with respect to increased costs and demands on management as a result of complying with additional laws and regulations; |
• | our ability to establish and maintain an effective system of disclosure controls and internal control over financial reporting, including the ability to remediate an identified material weakness in our internal controls over financial reporting; and |
• | the trading price of our common stock has been, and will likely continue to be, volatile and you could lose all or part of your investment. |
Shares of our common stock to be issued upon exercise the warrants |
17,433,334 |
Shares of our common stock outstanding |
348,988,447 (1) |
Exercise price of warrants |
$11.50 per share, subject to adjustment as described herein. |
Use of proceeds |
We will receive up to an aggregate of $200,483,341.00 from the exercise of the warrants assuming the exercise in full of all such warrants for cash. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of such warrants for general corporate purposes which may include acquisitions or other strategic investments. |
Shares of common stock offered by the Selling Securityholders |
87,656,687 (includes (i) 3,728,533 shares of common stock that may be issued upon exercise of certain private placement warrants, (ii) 5,000,000 shares of common stock that may be issued upon conversion of the Series A Preferred Stock and (iii) 1,905,236 Earnout Shares). |
Warrants offered by the Selling Securityholders (representing private placement warrants) |
3,728,533 |
Redemption |
The warrants are redeemable in certain circumstances. See “ Description of Securities — Warrants and Earned Obligations |
Use of proceeds |
We will not receive any proceeds from the sale of the common stock and private placement warrants to be offered by the Selling Securityholders. With respect to shares of common stock underlying |
the warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such warrants to the extent such warrants are exercised for cash. |
Lock-up agreements |
Certain of our stockholders are subject to restrictions on the transfer of the securities held by them until the termination of applicable lock-up periods. See “ Restrictions on Resale of our Common Stock — Lock-up Agreements |
Ticker symbols |
Our common stock and public warrants are listed on Nasdaq under the symbols “SHCR” and “SHCRW,” respectively. |
• | 166,330,107 shares of common stock reserved for issuance under the Sharecare, Inc. 2021 Omnibus Incentive Plan (the “Incentive Plan”), including 123,034,389 shares of common stock issuable upon the exercise of outstanding options to purchase shares of our common stock or settlement of restricted stock units (“RSUs”); |
• | 11,500,000 shares of common stock underlying public warrants and 5,933,334 shares of common stock underlying our private placement warrants; |
• | 890,314 shares of common stock underlying warrants issued at the Closing in exchange for certain existing warrants of Legacy Sharecare (the “Legacy Sharecare warrants”); |
• | 5,000,000 shares of common stock issuable upon conversion of the Series A Preferred Stock; |
• | 7,826,442 shares of common stock issuable upon the achievement of specified milestones (including 3,213,000 Earnout Shares held in escrow (which includes 448,355 Earnout Shares underlying contingent options (as defined herein))) pursuant to agreements outstanding as of December 31, 2021; and |
• | 10,173,582 warrants to purchase shares of common stock issuable upon achievement of specified milestones pursuant to contractual arrangements with certain customers and other parties as of December 31, 2021. |
• | diversion of management time and focus from operating our business to addressing acquisition integration challenges; |
• | loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful; |
• | implementation or remediation of controls, procedures, and policies at the acquired company; |
• | difficulties in integrating and managing the combined operations, technologies, technology platforms, and solutions of the acquired companies and realizing the anticipated economic, operational, and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical, or financial problems; |
• | integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing functions; |
• | failure to successfully further develop the acquired technology or realize our intended business strategy; |
• | our dependence on unfamiliar affiliates and partners of acquired businesses; |
• | uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions; |
• | unanticipated costs associated with pursuing acquisitions; |
• | failure to successfully onboard clients or maintain brand quality of acquired companies; |
• | responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, as well as, without limitation, liabilities arising out of their failure to maintain effective data protection and privacy controls and comply with applicable regulations; |
• | inability to maintain our internal standards, controls, procedures, and policies; |
• | difficulties in complying with antitrust and other government regulations; |
• | challenges in integrating and auditing the financial statements of acquired companies that have not historically prepared financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”); |
• | potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, client relationships, or intellectual property, are later determined to be impaired and written down in value; and |
• | failure to accurately forecast the impact of an acquisition transaction. |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, which impose certain requirements relating to the privacy, security, and transmission of PHI on certain healthcare providers, health plans, and healthcare clearinghouses, and their business associates that access or otherwise process individually identifiable health information |
on their behalf; HIPAA also created criminal liability for knowingly and willfully falsifying or concealing a material fact or making a materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services; |
• | state laws governing the privacy and security of personal information beyond health information, including state breach notification requirements, which differ from each other in significant ways with respect to scope, application, and requirements and which often exceed the standards under HIPAA, thus complicating compliance efforts; |
• | foreign laws governing the privacy and security of personal information, such as the General Data Protection Regulation (EU) 2016/679 (the “GDPR”); |
• | laws that regulate how businesses operate online, including measures relating to privacy and data security and how such information is communicated to customers (i) under the FTC’s unfair and deceptive trade practice authority from the FTC Act and (ii) from state attorneys general under state consumer protection laws and data privacy laws; |
• | state laws governing the corporate practice of medicine and other healthcare professions and related fee-splitting laws; |
• | potential regulation of certain of our solutions and research by the FDA; the federal Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as the Centers for Medicare & Medicaid Services programs; |
• | the federal civil false claims and civil monetary penalties laws, including, without limitation, the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government; |
• | federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; and |
• | state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers. |
• | actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; |
• | changes in the market’s expectations about our operating results; |
• | failure to meet our projections; |
• | success of competitors; |
• | operating results failing to meet the expectations of securities analysts or investors in a particular period; |
• | changes in financial estimates and recommendations by securities analysts concerning us or the industry in which we operate in general; |
• | operating and stock price performance of other companies that investors deem comparable to us; |
• | ability to market new and enhanced products and services on a timely basis; |
• | changes in laws and regulations affecting our business; |
• | commencement of, or involvement in, litigation; |
• | changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of our common stock available for public sale; |
• | any major change in the Sharecare Board; |
• | sales of substantial amounts of Sharecare common stock by our directors, executive officers, or significant stockholders or the perception that such sales could occur; and |
• | general economic and political conditions such as recessions, inflation, interest rates, fuel prices, international currency fluctuations and acts of war (such as the recent Russian invasion of Ukraine) or terrorism. |
• | no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Sharecare Board; |
• | the right of the Sharecare Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on the Sharecare Board; |
• | a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and |
• | the requirement that a meeting of stockholders may only be called by the Chair of the Sharecare Board, our Chief Executive Officer, or the Sharecare Board pursuant to a resolution adopted by a majority of the Sharecare Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors. |
• | the merger of Legacy Sharecare with and into Merger Sub, a wholly owned subsidiary of FCAC, with Legacy Sharecare surviving the merger as a wholly-owned subsidiary of FCAC; and |
• | the issuance and sale of 42,560,000 shares of FCAC Class A common stock for a purchase price of $10.00 per share and an aggregate purchase price of $425.6 million in a private placement immediately prior to the consummation of the Business Combination pursuant to those certain subscription agreements, each dated February 12, 2021 (the “Subscription Agreements”), between FCAC and the investors named therein (the “Private Placement”). |
• | Legacy Sharecare’s existing stockholders have the largest voting interest in the combined company; |
• | Legacy Sharecare appointed a majority of the board of directors of the combined company; |
• | Legacy Sharecare’s senior management will be the senior management of the combined company; and |
• | Legacy Sharecare is the larger entity based on historical revenues and business operations. |
(in thousands) |
Purchase price |
Shares Issued |
||||||
Stock Consideration 1 |
$ | 3,935,347 | 390,827 | |||||
Cash Consideration 2 |
91,779 | |||||||
Debt Paydown 3 |
14,539 | |||||||
|
|
|
|
|||||
Total consideration |
$ | 4,041,665 | 390,827 | |||||
|
|
|
|
(1) | Stock consideration is calculated as the $3.8 billion equity value (consisting of $3.6 billion equity value plus $50.0 million strategic investment plus $192.5 million doc.ai equity value less $25.0 million as defined in the Merger Agreement) plus $209.6 million incremental value assuming cash exercise of options and warrants less cash consideration. Stock consideration is inclusive of Legacy Sharecare common stock, redeemable convertible preferred stock, warrants, options, and doc.ai acquisition. |
(2) | Calculated as the sum of the cash held in the trust account plus the Private Placement and closing cash of Legacy Sharecare less FCAC redemptions, Legacy Sharecare debt pay down and transaction expenses for FCAC and Legacy Sharecare. |
(3) | The total debt paid down was $56.5 million which includes $42.5 million of debt and accrued interest outstanding at June 30, 2021 plus the doc.ai note payable of $14.0 million. At the closing of the Business Combination, FCAC paid down $14.5 million of Legacy Sharecare’s debt and remaining debt was repaid by Legacy Sharecare separately in July 2021 and at the closing of the Business Combination. |
actuals |
Shares |
% |
||||||
FCAC public stockholders |
14,635,970 | 4.4 | % | |||||
FCAC initial stockholders 1 |
4,643,103 | 1.4 | % | |||||
FCAC other stockholders 2 |
924,147 | 0.3 | % | |||||
|
|
|
|
|||||
Total FCAC |
20,263,220 | 6.1 | % | |||||
Legacy Sharecare stockholders 3 |
271,051,959 | 81.2 | % | |||||
Private Placement investors |
42,560,000 | 12.7 | % | |||||
|
|
|
|
|||||
Total Shares at Closing (excluding shares below) |
333,875,179 |
100 |
% | |||||
Shares underlying Legacy Sharecare warrants and options 3 |
114,775,275 | |||||||
Legacy Sharecare strategic investor Series A preferred shares 3 |
5,000,000 | |||||||
|
|
|||||||
Total Shares at Closing (including shares above) |
453,650,454 |
(1) | Represents the 8.6 million shares outstanding immediately prior to Closing less 1.7 million shares placed into escrow subject to earn-out provisions, 1.7 million shares forfeited (of which 1.3 million shares is forfeited and cancelled to provide for the Sharecare earn-out described below and 0.4 million shares transferred from the Sponsor to Legacy Sharecare’s charity) and 0.5 million shares transferred pursuant to certain transactions that were entered into in connection with the Business Combination. Pursuant to the Merger Agreement, half of the Sponsor Earnout Shares shall vest if on or prior to the fifth anniversary of the Closing Date: (x) the VWAP of shares of common stock equals or exceeds $12.50 per share for 20 of any 30 consecutive trading days commencing after the Closing, or (y) if the Company consummates a transaction which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other properties having a value equaling or exceeding $12.50 per share. The other half of the Sponsor Earnout Shares shall vest if on or prior to the fifth anniversary of the Closing Date: (x) the VWAP of shares of common stock equals or exceeds $15.00 per share for 20 of any 30 consecutive trading days commencing after the Closing, or (y) if the Company consummates a transaction which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other properties having a value equaling or exceeding $15.00 per share. |
(2) | Represents the 0.4 million shares transferred from the Sponsor to Legacy Sharecare’s charity and 0.5 million shares transferred pursuant to certain transactions that were entered into in connection with the Business Combination, plus 60 thousand shares for FCAC’s independent directors that converted from FCAC Class B common stock to FCAC Class A common stock at the Closing. |
(3) | The total shares to be issued includes Legacy Sharecare and doc.ai common and preferred stock, convertible notes, and shares underlying options and warrants. Accordingly, the shares outstanding at the closing of the Business Combination has been adjusted to exclude the Series A Preferred Stock and the portion of consideration shares for options and warrants that will be unvested, unissued, and/or unexercised at the closing of the Business Combination. Additionally, excludes 1.5 million Company Earnout Shares issuable to Legacy Sharecare stockholders on a pro rata basis if the VWAP of the shares meet the thresholds noted in (1) above within the fifth anniversary of the closing. |
From January 1, 2021 to July 1, 2021 |
For the year ended December 31, 2021 |
For the year ended December 31, 2021 |
||||||||||||||||||
|
FCAC (Historical) |
Legacy Sharecare (Historical) |
Transaction Accounting Adjustments |
Pro Forma Combined |
||||||||||||||||
Revenue |
$ | — | $ | 412,815 | $ | 412,815 | ||||||||||||||
Costs and Operating expenses: |
||||||||||||||||||||
Costs of revenue (exclusive of depreciation and amortization below) |
— | 203,218 | 203,218 | |||||||||||||||||
Sales and marketing |
— | 51,407 | 51,407 | |||||||||||||||||
Product and technology |
— | 74,438 | 74,438 | |||||||||||||||||
General and administrative |
1,741 | 136,594 | (90 | ) | (aa) | 138,245 | ||||||||||||||
Franchise tax expenses |
64 | — | 64 | |||||||||||||||||
Depreciation and amortization |
— | 32,601 | 32,601 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total costs and operating expenses |
1,805 |
498,258 |
(90 |
) |
499,973 |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(1,805 |
) |
(85,443 |
) |
90 |
(87,158 |
) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other income (expense): |
||||||||||||||||||||
Change in fair market value of derivative warrant liabilities |
8,946 | — | 8,946 | |||||||||||||||||
Interest income |
74 | 96 | (74 | ) | (bb) | 96 | ||||||||||||||
Interest expense |
— | (27,662 | ) | 13,264 | (cc) | (14,398 | ) | |||||||||||||
Loss on extinguishment of debt |
(1,148 | ) | (1,148 | ) | ||||||||||||||||
Other income (expense) |
— | 27,007 | 27,007 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total other income (expense) |
9,020 |
(1,707 |
) |
13,190 |
20,503 |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income (Loss) before income tax expense |
7,215 |
(87,150 |
) |
13,280 |
(66,655 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income tax benefit (expense) |
— | 2,021 | (308 | ) | (dd) | 1,713 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
7,215 |
(85,129 |
) |
12,972 |
(64,942 |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to non-controlling interest in subsidiaries |
— | (129 | ) | — | (129 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to stockholders |
$ |
7,215 |
$ |
(85,000 |
) |
$ |
12,972 |
$ |
(64,813 |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average Class A common stock outstanding |
34,500,000 | 281,026,365 | ||||||||||||||||||
Net income (loss) per common stock, Class A—basic and diluted |
$ | — | $ | (0.23 | ) | |||||||||||||||
Weighted average Class B common stock outstanding |
8,625,000 | — | ||||||||||||||||||
Net income (loss) per common stock, Class B—basic and diluted |
$ | 0.84 | — |
• | FCAC’s unaudited consolidated statement of operations for the six months ended June 30, 2021 and the related notes; and |
• | Sharecare’s audited consolidated statement of operations for the year ended December 31, 2021 and the related notes included elsewhere in this prospectus. |
aa | Reflects the elimination of the FCAC administrative service fee paid to the Sponsor that ceased upon the close of the Business Combination. |
bb | Reflects the elimination of interest income earned on the FCAC Trust Account. |
cc | Reflects the elimination of the interest expense associated with the Second Lien Credit Agreement, Note Payable, Series B-3 Convertible Notes, Series B-4 Convertible Notes, and Series B Convertible promissory note that were repaid in cash at or prior to closing or were settled as part of consideration at the closing of the Business Combination. |
dd | Reflects income tax effect of pro forma adjustments using the effective tax rate of 2.32% for the year ended December 31, 2021. |
(in thousands, except share and per share data) |
Year Ended December 31, 2021 |
|||
Weighted-average common stock outstanding—basic and diluted |
281,026,365 | |||
Net income (loss) per common stock, Class A—basic and diluted |
$ | (0.23 | ) | |
Numerator: |
||||
Pro forma net loss attributable to stockholders |
$ | (64,813 | ) |
• | increasing engagement and enrollment of eligible members at our existing enterprise clients; |
• | promoting our marketplace of existing targeted digital therapeutics to close gaps in care in high-cost areas (with incremental fee per enrollee); and |
• | expanding our relationships with our top provider clients. |
• | Health Information Management |
• | Value-Based Care |
• | Payment Integrity |
• | Chronic Condition Intervention: |
• | Digital Patient Platform: |
• | Wellness/Well-being |
• | Benefits Navigation |
• | Health Navigation |
• | Enterprise |
• | Provider |
• | Life Sciences |
• | Expanding our Footprint |
• | Expanding our Existing Client Relationships |
• | increasing engagement and enrollment of eligible members with our existing enterprise clients through continued sales and marketing efforts, including targeted next-generation digital modeling and marketing, and capitalizing on insights from claims ingestion (the process by which we receive and process information from our clients), population risk stratification and incentives management; |
• | promoting our marketplace of existing targeted digital therapeutics to close gaps in care in high-cost areas (with incremental fee per enrollee), which we believe represents a $1 billion revenue opportunity within our currently contracted clients; and |
• | expanding our relationships with our top 25 provider clients with an opportunity to extend our provider products and services to more than 7,000 additional healthcare sites. |
• | Offering Additional Solutions |
• | Growing our Platform |
• | Evolving our Products to Cater to an Evolving Industry COVID-19 pandemic has greatly accelerated the demand for virtual care solutions and resulted in rapid growth and increased adoption of digital health technologies, which Sharecare was in a unique position to undertake. By building on our deep expertise in handling and managing mass health data, we launched a suite of distinct but complementary digital tools and programs to address the evolving emotional, educational, clinical, and operational challenges introduced by the pandemic. We intend to continue to look for opportunities to leverage our platform and expertise to provide first-mover solutions to evolving and future demands in the digital healthcare industry. |
• | Acquisitions |
Year Ended December 31, |
2020 to 2021 |
2019 to 2020 |
||||||||||||||||||
(in thousands) |
2021 |
2020 |
2019 |
% Change |
% Change |
|||||||||||||||
Revenue |
$ | 412,815 | $ | 328,805 | $ | 339,541 | 26 | % | (3 | )% | ||||||||||
Costs and operating expenses: |
||||||||||||||||||||
Costs of revenue (exclusive of amortization and depreciation below) |
203,218 | 160,911 | 179,967 | 26 | % | (11 | )% | |||||||||||||
Sales and marketing |
51,407 | 33,335 | 33,993 | 54 | % | (2 | )% | |||||||||||||
Product and technology |
74,438 | 44,078 | 45,855 | 69 | % | (4 | )% | |||||||||||||
General and administrative |
136,594 | 83,238 | 65,824 | 64 | % | 26 | % | |||||||||||||
Depreciation and amortization |
32,601 | 24,684 | 23,782 | 32 | % | 4 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total costs and operating expenses |
498,258 | 346,246 | 349,421 | 44 | % | (1 | )% | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
(85,443 | ) | (17,441 | ) | (9,880 | ) | 390 | % | 77 | % | ||||||||||
Other income (expense) |
||||||||||||||||||||
Interest income |
96 | 71 | 149 | 35 | % | (52 | )% | |||||||||||||
Interest expense |
(27,662 | ) | (31,037 | ) | (28,685 | ) | (11 | )% | 8 | % | ||||||||||
Loss on extinguishment of debt |
(1,148 | ) | — | — | 100 | % | — | |||||||||||||
Other income (expense) |
27,007 | (9,709 | ) | (808 | ) | (378 | )% | 1102 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other expense |
(1,707 | ) | (40,675 | ) | (29,344 | ) | (96 | )% | 39 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss before taxes and loss from equity method investment |
(87,150 | ) | (58,116 | ) | (39,224 | ) | 50 | % | 48 | % | ||||||||||
Income tax (expense) benefit |
2,021 | 1,557 | (213 | ) | 30 | % | (831 | )% | ||||||||||||
Loss from equity method investment |
— | (3,902 | ) | — | n.m. | n.m. | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
$ | (85,129 | ) | $ | (60,461 | ) | $ | (39,437 | ) | 41 | % | 53 | % | |||||||
Net (loss) income attributable to noncontrolling interest in subsidiaries |
(129 | ) | (443 | ) | 543 | (71 | )% | (182 | )% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to Sharecare, Inc. |
$ | (85,000 | ) | $ | (60,018 | ) | $ | (39,980 | ) | 42 | % | 50 | % | |||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net loss |
$ | (85,129 | ) | $ | (60,461 | ) | $ | (39,437 | ) | |||
Add: |
||||||||||||
Depreciation and amortization |
32,601 | 24,684 | 23,782 | |||||||||
Interest income |
(96 | ) | (71 | ) | (149 | ) | ||||||
Interest expense |
27,662 | 31,037 | 28,685 | |||||||||
Income tax (benefit) expense |
(2,021 | ) | (1,557 | ) | 213 | |||||||
Loss on extinguishment of debt |
1,148 | — | — | |||||||||
Other expense (income) |
(27,007 | ) | 9,709 | 808 | ||||||||
Loss from equity method investments |
— | 3,902 | — | |||||||||
Share-based compensation |
46,780 | 19,160 | 3,532 | |||||||||
Severance |
1,278 | 2,553 | 4,378 | |||||||||
Warrants issued with revenue contracts (a) |
79 | 1,188 | 485 | |||||||||
Transaction and closing costs (b) |
31,733 | 2,187 | 2,675 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA (c) |
$ | 27,028 | $ | 32,331 | $ | 24,972 | ||||||
|
|
|
|
|
|
(a) | Represents the non-cash value of warrants issued to clients for meeting specific revenue thresholds. |
(b) | Represents costs related to the Business Combination and transaction and post-closing costs related to acquisitions occurring in 2021 and prior years. |
(c) | Includes non-cash amortization associated with contract liabilities recorded in connection with acquired businesses. |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net loss attributable to Sharecare, Inc. |
$ | (85,000 | ) | $ | (60,822 | ) | $ | (39,980 | ) | |||
Add: |
||||||||||||
Amortization of acquired intangibles (a) |
5,321 | 3,851 | 4,225 | |||||||||
Amortization of deferred financing fees |
15,537 | 6,801 | 6,747 | |||||||||
Change in fair value of warrant liability and contingent consideration |
(26,123 | ) | 9,647 | 566 | ||||||||
Loss from equity method investments |
— | 3,902 | — | |||||||||
Share-based compensation |
46,780 | 19,160 | 3,532 | |||||||||
Severance |
1,278 | 2,553 | 4,378 | |||||||||
Warrants issued with revenue contracts (b) |
79 | 1,188 | 485 | |||||||||
Transaction and closing costs (c) |
31,733 | 2,187 | 2,675 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted net loss (d) |
$ | (10,395 | ) | $ | (11,533 | ) | $ | (17,372 | ) | |||
|
|
|
|
|
|
|||||||
Weighted-average common shares outstanding, basic and diluted |
281,026,365 | 215,094,037 | 205,888,637 | |||||||||
Loss per share |
$ | (0.30 | ) | $ | (0.28 | ) | $ | (0.19 | ) | |||
|
|
|
|
|
|
|||||||
Adjusted loss per share |
$ | (0.04 | ) | $ | (0.05 | ) | $ | (0.08 | ) | |||
|
|
|
|
|
|
(a) | Represents non-cash expenses related to the amortization of intangibles in connection with acquired businesses. |
(b) | Represents the non-cash value of warrants issued to clients for meeting specific revenue thereholds. |
(c) | Represents costs related to the Business Combination and transaction and post-closing costs related to acquisitions occurring in 2021 and prior years. |
(d) | The income tax effect of the Company’s non-GAAP reconciling items are offset by valuation allowance adjustments of the same amount, because the Company is in a full valuation allowance position for all periods presented. |
Year Ended December 31, |
||||||||||||
(in thousands) |
2021 |
2020 |
2019 |
|||||||||
Net cash (used in)/provided by operating activities |
$ | (54,103 | ) | $ | 14,761 | $ | 2,577 | |||||
Net cash used in investing activities |
(112,387 | ) | (19,171 | ) | (16,644 | ) | ||||||
Net cash provided by financing activities |
415,220 | 3,770 | 20,797 |
Name |
Age |
Position | ||||
Jeff Arnold |
52 | Founder, Chief Executive Officer, Chairman and Director | ||||
Justin Ferrero |
48 | President, Chief Financial Officer | ||||
Dawn Whaley |
53 | President, Chief Marketing Officer | ||||
Jaffry Mohammed |
46 | Chief Operating Officer, EVP & Head, Enterprise and Provider | ||||
Colin Daniel |
51 | Chief Administrative Officer | ||||
Carrie Ratliff |
40 | Chief Legal Officer | ||||
Jeffrey A. Allred |
68 | Director | ||||
John Chadwick |
55 | Director | ||||
Dr. Sandro Galea |
50 | Director | ||||
Ken Goulet |
62 | Director | ||||
Dr. Veronica Mallett |
64 | Director | ||||
Alan G. Mnuchin |
61 | Director | ||||
Rajeev Ronanki |
51 | Director | ||||
Jeff Sagansky |
70 | Director |
• | assisting the Sharecare Board in the oversight of (i) the accounting and financial reporting processes of Sharecare and the audits of the financial statements of Sharecare, (ii) the preparation and integrity of the financial statements of Sharecare, (iii) the compliance by Sharecare with financial statement and regulatory requirements, (iv) the performance of Sharecare’s internal finance and accounting personnel and its independent registered public accounting firms, and (v) the qualifications and independence of Sharecare’s independent registered public accounting firms; |
• | reviewing with each of the internal and independent registered public accounting firms the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation; |
• | reviewing and discussing with management and internal auditors Sharecare’s system of internal control and discuss with the independent registered public accounting firm any significant matters regarding internal controls over financial reporting that have come to its attention during the conduct of its audit; |
• | reviewing and discussing with management, internal auditors and independent registered public accounting firm Sharecare’s financial and critical accounting practices, and policies relating to risk assessment and management; |
• | receiving and reviewing reports of the independent registered public accounting firm discussing (i) all critical accounting policies and practices to be used in the firm’s audit of Sharecare’s financial statements, (ii) all alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm, and (iii) other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences; |
• | reviewing and discussing with management and the independent registered public accounting firm the annual and quarterly financial statements and section entitled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | reviewing, or establishing, standards for the type of information and the type of presentation of such information to be included in, earnings press releases and earnings guidance provided to analysts and rating agencies; |
• | discussing with management and the independent registered public accounting firm any changes in Sharecare’s critical accounting principles and the effects of alternative GAAP methods, off-balance sheet structures and regulatory and accounting initiatives; |
• | reviewing material pending legal proceedings involving Sharecare and other contingent liabilities; |
• | meeting periodically with the Chief Executive Officer, Chief Financial Officer, the senior internal auditing executive and the independent registered public accounting firm in separate executive sessions to discuss results of examinations; |
• | reviewing and approving all transactions between Sharecare and related parties or affiliates of the officers of Sharecare requiring disclosure under Item 404 of Regulation S-K prior to Sharecare entering into such; |
• | establishing procedures for the receipt, retention and treatment of complaints received by Sharecare regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees or contractors of concerns regarding questionable accounting or accounting matters; |
• | reviewing periodically with Sharecare’s management, the independent registered public accounting firm and outside legal counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding Sharecare’s financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the FASB, the SEC or other regulatory authorities; and |
• | establishing policies for the hiring of employees and former employees of the independent registered public accounting firm. |
• | reviewing the performance of the Chief Executive Officer and executive management; |
• | assisting the Sharecare Board in developing and evaluating potential candidates for executive positions (including Chief Executive Officer); |
• | reviewing and approving goals and objectives relevant to the Chief Executive Officer and other executive officer compensation, evaluating the Chief Executive Officer’s and other executive officers’ performance in light of these goals and objectives, and setting Chief Executive Officer and other executive officer compensation levels consistent with its evaluation and Sharecare’s philosophy; |
• | reviewing and approving the salaries, bonus and other compensation for all executive officers; |
• | reviewing and approving compensation packages for new corporate officers and termination packages for corporate officers as requested by management; |
• | reviewing and discussing with the Sharecare Board and senior officers plans for officer development and corporate succession plans for the Chief Executive Officer and other senior officers; |
• | reviewing and approving the compensation of Sharecare’s directors; |
• | reviewing and approving executive compensation agreements, policies and plans, including any employment, retention, severance, change-in-control, deferred compensation and “claw-back” agreements, policies and plans; |
• | reviewing and making recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans, and, except as otherwise delegated by the Sharecare Board, acting as the “Plan Administrator” for equity-based and employee benefit plans; |
• | determining and approving Sharecare’s policy relating to change-of-control or “parachute” payments; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for Sharecare’s executive officers and employees; |
• | overseeing Sharecare’s human capital management, including Sharecare’s policies with respect to performance management, talent management, diversity, equity and inclusion, work culture and the development and retention of the Sharecare’s workforce; |
• | reviewing periodic reports from management on matters relating to Sharecare’s personnel appointments and practices; |
• | assisting management in complying with Sharecare’s proxy statement and annual report disclosure requirements; |
• | issuing an annual Report of the Compensation Committee on Executive Compensation for Sharecare’s annual proxy statement in compliance with applicable SEC rules and regulations; |
• | monitoring the Sharecare’s compliance with a prohibition under Sarbanes-Oxley Act on personal loans to directors and executive officers; |
• | annually evaluating the committee’s performance and the committee’s charter and recommending to the Sharecare Board any proposed changes to the charter or the committee; and |
• | undertaking all further actions and discharging all further responsibilities imposed upon the committee from time to time by the Board, the federal securities laws or the rules and regulations of the SEC. |
• | developing and recommending to the Sharecare Board the criteria for appointment as a director; |
• | identifying, considering, recruiting and recommending candidates to fill new positions on Sharecare’s Board; |
• | reviewing candidates recommended by Sharecare stockholders; |
• | conducting the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates; and |
• | recommending director nominees for approval by the Sharecare Board and election by the stockholders of Sharecare at the next annual meeting. |
• | Jeff Arnold, Founder, Chairman and Chief Executive Officer; |
• | Justin Ferrero, President and Chief Financial Officer; and |
• | Dawn Whaley, President and Chief Marketing Officer. |
Name and principal position |
Year |
Salary ($) (1) |
Bonus ($) (2) |
Option awards ($) (3) |
Non-equity Incentive Plan compensation ($) (4) |
All other compensation ($) (5) |
Total ($) |
|||||||||||||||||||||
Jeff Arnold |
2021 | 770,000 | 5,000,000 | 41,836,334 | 802,000 | 532,102 | 48,940,436 | |||||||||||||||||||||
Co-Founder, Chairman and Chief Executive Officer |
2020 | 750,000 | — | 15,855,852 | 300,000 | 1,357,701 | 18,263,553 | |||||||||||||||||||||
Justin Ferrero |
2021 | 545,000 | 2,500,000 | 21,566,022 | 502,000 | 11,412 | 25,124,434 | |||||||||||||||||||||
President and Chief Financial Office |
2020 | 550,000 | — | 4,816,996 | 175,000 | 7,784 | 5,549,780 | |||||||||||||||||||||
Dawn Whaley |
2021 | 545,000 | 2,500,000 | 21,566,022 | 502,000 | 31,788 | 25,144,810 | |||||||||||||||||||||
President and Chief Marketing Officer |
2020 | 550,000 | — | 4,816,996 | 175,000 | 25,576 | 5,567,572 |
(1) | The amounts in this column include salary earned by the executive in 2020 but not paid in 2020, as a result of the COVID-19 pandemic. |
(2) | The amounts in this column represent transaction bonuses paid to each NEO in connection with consummation of the Business Combination as contemplated by the Merger Agreement |
(3) | The amounts represent the aggregate grant-date fair value of options granted to each NEO, computed in accordance with the FASB’s Accounting Standards Codification (“ASC”) Topic 718. See Note 1, Nature of Business and Significant Accounting Policies, to Sharecare’s consolidated financial statements included elsewhere in this prospectus for a discussion of the assumptions made by Sharecare in determining the grant-date fair value of Sharecare’s equity awards. The amounts for 2021 also include the following incremental expense related to a modification of historic options that were granted before the Business Combination to add additional vesting triggers: $21,924,756 in the case of Mr. Arnold, $11,610,233 in the case of Mr. Ferrero and $11,610,233 in the case of Ms. Whaley. Further details are provided below under “ |
Treatment of Options in the Business Combination and Option Modifications |
(4) | The amounts in this column represent annual cash bonus incentive payments to Sharecare’s NEOs in accordance with the terms of their respective Employment Agreements (as defined herein). For 2020, the compensation committee of Legacy Sharecare’s board of directors adjusted bonus milestones for each NEO at the end of the year to account for the proforma effect of certain events, in accordance with the terms of each NEO’s individual employment agreement that were in effect prior to the consummation of the Business Combination. |
(5) | Amounts in this column for 2021 are detailed in the table below: |
Name |
401(k) Match/pension ($) |
Life insurance ($) |
Disability insurance ($) |
Medical ($) |
Additional Compensation for Historical Expenses (6) ($) |
Total all other compensation ($) |
||||||||||||||||||
Jeff Arnold |
— | 4,422 | 1,080 | 26,600 | 500,000 | 532,102 | ||||||||||||||||||
Justin Ferrero |
— | 2,613 | 1,080 | 7,719 | — | 11,412 | ||||||||||||||||||
Dawn Whaley |
1,500 | 3,310 | 1,080 | 25,897 | — | 31,788 |
(6) | Mr. Arnold’s employment agreement in effect prior to the Business Combination provided for additional compensation of $500,000 to cover historical business expenses for which Mr. Arnold did not seek reimbursement, incurred in the Company’s early years by him during the performance of his duties and on behalf of and in the promotion of Sharecare’s interest. |
Name |
2021 Compensation (1) ($) |
|||
Jeff Arnold |
6,690,000 | |||
Justin Ferrero |
3,555,135 | |||
Dawn Whaley |
3,478,067 |
(1) | The amounts in this column including compensation actually paid to each NEO in 2021 in the form of base salary, the transaction bonuses paid in connection with the consummation of the Business Combination, Performance Bonuses (as defined herein) earned in 2020 and amounts related to our employee benefits programs, in each case, as discussed in the Summary Compensation Table above. In addition, Mr. Arnold received additional compensation in 2021 to cover historical business expenses for which Mr. Arnold did not seek reimbursement, as discussed above in Note (6) to the Summary Compensation Table. The amounts in this column exclude the taxable income related to historical options awards that the NEOs were required to exercise and hold before the expiration of their 10-year term. This taxable income was $24,895,494 in the case of Mr. Arnold, $7,843,514 in the case of Mr. Ferrero and $7,843,510 in the case of Ms. Whaley. This |
taxable income was the positive difference between the exercise price of the historical options and the value of Sharecare’s common stock on the date of exercise and was related to historical options that were granted 10-years before the date of exercise. |
Name |
2020 Base Salary ($) |
% Change |
2021 Base Salary prior to Business Combination (1) ($) |
% Change |
Base Salary following the Business Combination (2) ($) |
|||||||||||||||
Jeff Arnold |
750,000 | 13.33 | % | 850,000 | (17.64 | )% | 700,000 | |||||||||||||
Justin Ferrero |
550,000 | 18.18 | % | 650,000 | (30.77 | )% | 450,000 | |||||||||||||
Dawn Whaley |
550,000 | 18.18 | % | 650,000 | (30.77 | )% | 450,000 |
(1) | Base salary for each NEO was increased effective as of January 1, 2021 pursuant to the terms of the previous employment agreements between each of the NEOs and Legacy Sharecare that had been in place prior to the consummation Business Combination. |
(2) | Base salary for each NEO was adjusted in connection with Sharecare’s transition from a private company to a public company upon consummation of the Business Combination. The base salary reductions were effective upon the Closing of the Business Combination. Base salary is subject to annual review and adjustment pursuant to each NEO’s Employment Agreement. |
• | 8,148,490 stock options to Mr. Arnold; |
• | 4,074,245 stock options to Mr. Ferrero; and |
• | 4,074,245 stock options to Ms. Whaley. |
Option Awards |
||||||||||||||||||||||||
Name |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Number of Securities Underlying Unexercise Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
||||||||||||||||||
Jeff Arnold |
2/25/2015 | 3,096,469 | — | — | 1.05 | 2/25/2025 | ||||||||||||||||||
5/6/2016 | 35,630 | — | — | 1.05 | 5/6/2026 | |||||||||||||||||||
3/29/2018 | 5,160,814 | 2,064,288 | (1) |
— | 1.05 | 3/29/2028 | ||||||||||||||||||
4/21/2020 | 3,183,817 | — | — | 1.45 | 4/21/2030 | |||||||||||||||||||
10/26/2020 | 17,362,182 | 1,857,852 | (1) |
— | 1.45 | 10/26/2030 | ||||||||||||||||||
8/13/2021 | — | 2,851,972 | (2) |
— | 10.00 | 08/13/2031 | ||||||||||||||||||
8/13/2021 | — | — | 5,296,518 | (3) |
10.00 | 08/13/2031 | ||||||||||||||||||
Justin Ferrero |
2/25/2015 | 1,639,802 | — | — | 1.05 | 2/25/2025 | ||||||||||||||||||
3/29/2018 | 2,733,042 | 1,093,177 | (1) |
— | 1.05 | 3/29/2028 | ||||||||||||||||||
4/21/2020 | 1,685,969 | — | — | 1.45 | 4/21/2030 | |||||||||||||||||||
10/26/2020 | 3,872,169 | 983,796 | (1) |
— | 1.45 | 10/26/2030 | ||||||||||||||||||
8/13/2021 | — | 1,425,986 | (2) |
— | 10.00 | 08/13/2031 | ||||||||||||||||||
8/13/2021 | — | — | 2,648,259 | (3) |
10.00 | 08/13/2031 | ||||||||||||||||||
Dawn Whaley |
2/25/2015 | 1,639,802 | — | — | 1.05 | 2/25/2025 | ||||||||||||||||||
3/29/2018 | 2,733,042 | 1,093,177 | (1) |
— | 1.05 | 3/29/2028 | ||||||||||||||||||
4/21/2020 | 1,685,969 | — | — | 1.45 | 4/21/2030 | |||||||||||||||||||
10/26/2020 | 3,872,169 | 983,796 | (1) |
— | 1.45 | 10/26/2030 | ||||||||||||||||||
8/13/2021 | — | 1,425,986 | (2) |
— | 10.00 | 08/13/2031 | ||||||||||||||||||
8/13/2021 | — | — | 2,648,259 | (3) |
10.00 | 08/13/2031 |
(1) | The unexercised shares subject to the option become fully vested and exercisable upon the consummation of a Qualified Transaction at a certain Per Share Price (each as defined in each respective award agreement). |
(2) | Stock options vest and become exercisable in three equal installments on the first, second and third anniversary of the grant date, subject to the NEO’s continued employment. |
(3) | Performance-vesting stock options that vest and become exercisable in 11 equal tranches, subject to satisfaction of both a stock price performance hurdle and a service requirement. See “ 2021 Stock Option Award Grants |
• | Stock options and SARs. |
granted to certain stockholders). Other than in connection with certain corporate transactions or changes to Sharecare’s capital structure, stock options and SARs granted under the Incentive Plan may not be repriced, amended, or substituted for with new stock options or SARs having a lower exercise price or base value, nor may any consideration be paid upon the cancellation of any stock options or SARs that have a per share exercise or base price greater than the fair market value of a share on the date of such cancellation, in each case, without shareholder approval. Each stock option and SAR will have a maximum term of not more than ten years from the date of grant (or five years, in the case of ISOs granted to certain stockholders). |
• | Restricted and unrestricted stock and stock units. |
• | Performance awards. |
• | Other share-based awards. |
• | Substitute awards. |
• | The assumption, substitution or continuation of some or all awards (or any portion thereof) by the acquiror or surviving entity; |
• | The acceleration of exercisability or delivery of shares in respect of any award, in full or in part; and/or |
• | The cash payment in respect of some or all awards (or any portion thereof) equal to the difference between the fair market value of the shares subject to the award and its exercise or base price, if any. |
Name (1) |
Fees earned or paid in cash ($) |
Stock Awards($) (2) (3) |
Total ($) |
|||||||||
Jeffrey A. Allred |
35,000 | 136,040 | 171,040 | |||||||||
John H. Chadwick |
50,000 | 136,040 | 186,040 | |||||||||
Sandro Galea |
31,250 | 136,040 | 167,290 | |||||||||
Kenneth R. Goulet |
40,000 | 136,040 | 176,040 | |||||||||
Veronica Mallet |
25,000 | 136,040 | 161,040 | |||||||||
Alan G. Mnuchin |
30,000 | 136,040 | 166,040 | |||||||||
Rajeev Ronanki (1) |
— | — | — | |||||||||
Jeffrey Sagansky |
27,500 | 136,040 | 163,540 |
(1) | Mr. Ronanki is employed by one of Sharecare’s largest customers and has declined any cash or equity compensation for his service as a director pursuant to his employer’s policy. Mr. Arnold is an employee of the Company, and therefore does not receive any compensation for his service on the Sharecare Board. |
(2) | The amounts represent the aggregate grant-date fair value of RSUs granted to each director, computed in accordance with the FASB’s ASC Topic 718. See Note 1, Nature of Business and Significant Accounting Policies, to Sharecare’s consolidated financial statements included elsewhere in this prospectus for a discussion of the assumptions made by Sharecare in determining the grant-date fair value of Sharecare’s equity awards. Each RSU was awarded to the applicable director in September 2021 and is scheduled to vest on the first anniversary date of the consummation of the Business Combination, subject to continued service through the vesting date. |
(3) | As of December, 31, 2021, each non-employee director (other than Mr. Ronanki) held 19,000 RSUs under the Incentive Plan. In addition, Mr. Goulet and Dr. Galea held 712,585 and 61,570 options to purchase common stock, respectively, that represent Legacy Sharecare option awards assumed by Sharecare at closing of the Business Combination. |
• | An annual cash retainer of $50,000; |
• | An annual cash retainer of $22,500 for the chair of the audit committee, $20,000 for the chair of the compensation and human capital committee and $10,000 for the chair of the nominating and corporate governance committee; |
• | An annual cash retainer of $10,000 for other members of the audit committee, $7,500 for other members of the compensation and human capital committee and $5,000 for other members of the nominating and corporate governance committee; |
• | An additional annual cash retainer of $30,000 for serving as Lead Director, and |
• | A one-time initial equity award made in connection with the Closing of the Business Combination that was granted in September 2021 and, thereafter, an annual equity award with a target grant date fair value of $190,000 with newly elected directors being eligible for a pro-rated award. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before we send to the notice of redemption to the warrant holders. |
(1) | prior to such time the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
(2) | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
(3) | at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
• | 1% of the total number of shares of our common stock then outstanding; or |
• | the average weekly reported trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | each person known to Sharecare to be the beneficial owner of more than 5% of our outstanding common stock; |
• | each of our named executive officers and directors; and |
• | all executive officers and directors of Sharecare as a group. |
Number of shares of Common Stock |
% |
Voting Power** |
||||||||||
Directors and Named Executive Officers |
||||||||||||
Alan G. Mnuchin (1) |
5,710,836 | * | * | |||||||||
Jeff Sagansky (2) |
791,467 | * | * | |||||||||
Jeff Arnold (3)(4) |
37,307,433 | 10.7 | % | 10.5 | % | |||||||
John Chadwick (5) |
36,893,128 | 10.6 | % | 10.4 | % | |||||||
Ken Goulet (3)(6) |
956,699 | * | * | |||||||||
Rajeev Ronanki (3) |
— | — | — | |||||||||
Dr. Sandro Galea (3) (7 )† |
61,570 | * | * | |||||||||
Jeffrey Allred (3) |
406,165 | * | * | |||||||||
Dr. Veronica Mallett (3) |
— | — | — | |||||||||
Justin Ferrero (3)(8) |
10,719,290 | 3.1 | % | 3.0 | % | |||||||
Dawn Whaley (3)(9) |
11,812,327 | 3.4 | % | 3.3 | % | |||||||
All Directors and Executive Officers of Sharecare as a Group (14 Individuals) (10) |
106,149,531 | 30.4 | % | 30.0 | % | |||||||
5% Beneficial Owners |
||||||||||||
Entities Affiliated with Claritas Capital (5) |
36,893,128 | 10.6 | % | 10.4 | % |
(1) | Consists of (i) 1,067,773 shares of common stock issuable upon exercise of private placement warrants held by MMT Capital Holdings LLC (“MMT”) and (ii) 4,643,103 shares of common stock held by Falcon Equity Investors LLC. Mr. Mnuchin has voting and investment discretion with respect to the securities held of record by MMT. Eagle Falcon JV Co LLC, which is controlled by Mr. Mnuchin, is the managing member of Falcon Equity Investors LLC and has voting and investment discretion with respect to the common stock held of record by Falcon Equity Investors LLC. Eagle Falcon JV Co LLC and Mr. Mnuchin each disclaims |
any beneficial ownership of the securities held by Falcon Equity Investors LLC other than to the extent of any pecuniary interest each may have therein, directly or indirectly. The business address for these securityholders is 3 Columbus Circle, 24 th Floor, New York, NY 10019. |
(2) | Consists of shares of common stock issuable upon exercise of private placement warrants. Mr. Sagansky’s business address is 3 Columbus Circle, 24th Floor, New York, NY 10019. |
(3) | The business address of each of these stockholders is 255 East Paces Ferry Road NE, Suite 700, Atlanta, Georgia 30305. |
(4) | Consists of (i) 8,468,521 shares of common stock and (ii) 28,838,912 options to purchase common stock currently exercisable or exercisable within 60 days of March 28, 2022. The registered holders of the referenced securities are Jeffrey Arnold, Arnold Media Group, LLC and JT Arnold Enterprises, II LLLP. Mr. Arnold is the beneficial owner and has sole voting and investment power over the referenced securities. |
(5) | Consists of 36,857,499 shares of common stock and 35,629 options to purchase shares of common stock that are currently exercisable or are exercisable within 60 days of March 28, 2022. The registered holders of the referenced securities are the following funds and a managed account under management by entities controlled by John H. Chadwick, founder and partner of Claritas Capital, LLC and a director of Sharecare: Claritas Dozoretz Partners, LLC, Claritas Capital Fund IV, LP, Claritas Irby, LLC, Claritas Opportunity Fund 2013, LP, Claritas Opportunity Fund II, LP, Claritas Sharecare CN Partners, LLC. Claritas Opportunity Fund IV, L.P., Claritas Cornerstone Fund, LP, Claritas Sharecare 2018 Notes, LLC, Claritas Sharecare Notes, LLC, Claritas Sharecare 2019 Notes LLC, Claritas Opportunity Fund V, L.P., Claritas SC Bactes Partners, LLC, Claritas SC Partners, LLC, Claritas Sharecare F3 LLC, Claritas Sharecare-CS Partners, LLC, Claritas Frist Partners, LLC, Claritas Sharp Partners, LLC, Claritas Sharecare Partners LLC, Claritas Irby Partners II, LLC and Claritas Capital Management Services, Inc (collectively, including the managed account, the “Claritas Entities”). On behalf of the Claritas Entities, Mr. Chadwick has voting and investment power over the shares held by the Claritas Entities through his control of the entities that manage the Claritas Entities, which are: Claritas Capital, LLC, Claritas Capital SLP—V, GP, CC Partners IV, LLC, CC SLP V, GP, Claritas Capital EGF—V Partners, LLC, Claritas Capital EGF—IV Partners, LLC, Claritas Opportunity Fund Partners II, LLC, CC Partners IV, LLC, CC SLP IV, GP, CC SLP V, GP, Claritas SCB SLP, GP, CC Partners V, LLC, Claritas SC-SLP GP and Claritas Capital EGF—IV Partners, LLC (he controls Claritas Capital Management Services, Inc. as a director and as its president rather than through a managing entity). Mr. Chadwick expressly disclaims beneficial ownership of all securities held by the Claritas Entities other than to the extent of any pecuniary interest he may have therein, directly or indirectly. The principal address for Claritas Capital is 30 Burton Hills Boulevard, Suite 100, Nashville, TN 37215. |
(6) | Consists of (i) 244,114 shares of common stock and (ii) 712,585 options to purchase common stock currently exercisable or exercisable within 60 days of March 28, 2022. |
(7) | Consists of options to purchase common stock currently exercisable or exercisable within 60 days of March 28, 2022. |
(8) | Consists of (i) 1,881,556 shares of common stock and (ii) 8,837,734 options to purchase common stock currently exercisable or exercisable within 60 days of March 28, 2022. The registered holders of the referenced securities are Justin Ferrero, Arnold Media Group, LLC and JL Ferrero Enterprise LLLP. Mr. Ferrero is the beneficial owner and has sole voting and investment power over the referenced securities. |
(9) | Consists of (i) 1,881,345 shares of common stock and (ii) 9,930,982 options to purchase common stock currently exercisable or exercisable within 60 days of March 28, 2022. The registered holders of the referenced securities are Dawn Whaley, Arnold Media Group, LLC and Queen B Family Management Company, LLLP. Mrs. Whaley is the beneficial owner and has sole voting and investment power over the referenced securities. |
(10) | Consists of an aggregate (i) 54,436,255 shares of common stock, (ii) 1,870,700 shares of common stock issuable upon exercise of private placement warrants and (iii) 49,842,576 options to purchase common stock currently exercisable or exercisable within 60 days of March 28, 2022. |
Selling Securityholder* |
Shares of Common Stock Beneficially Owned Prior to Offering |
Private Placement Warrants Beneficially Owned Prior to Offering |
Shares of Common Stock Offered |
Private Placement Warrants Offered |
Shares of Common Stock Beneficially Owned After the Offered Shares are Sold |
% |
Private Placement Warrants Beneficially Owned After the Offered Private Placement Warrants are Sold |
% |
||||||||||||||||||||||||
Entities affiliated with Claritas Capital (1) |
36,893,128 | — | 37,000,501 | (20) |
— | — | — | — | — | |||||||||||||||||||||||
Entities affiliated with Anthem, Inc. (2) |
10,621,878 | 1,000,000 | 10,322,986 | (20) |
1,000,000 | 298,892 | * | — | — |
Selling Securityholder* |
Shares of Common Stock Beneficially Owned Prior to Offering |
Private Placement Warrants Beneficially Owned Prior to Offering |
Shares of Common Stock Offered |
Private Placement Warrants Offered |
Shares of Common Stock Beneficially Owned After the Offered Shares are Sold |
% |
Private Placement Warrants Beneficially Owned After the Offered Private Placement Warrants are Sold |
% |
||||||||||||||||||||||||
Spring Creek Capital, LLC (3) |
9,000,000 | — | 9,000,000 | — | — | — | — | — | ||||||||||||||||||||||||
Falcon Equity Investor LLC (4) |
4,643,103 | — | 6,224,137 | (20) |
— | — | — | — | — | |||||||||||||||||||||||
Jeffrey Arnold (5) |
37,307,433 | — | 5,729,426 | (20) |
— | 31,578,007 | 9.0 | % | — | — | ||||||||||||||||||||||
Eldridge PIPE Holdings LLC (6) |
3,910,100 | — | 3,910,000 | — | — | — | — | — | ||||||||||||||||||||||||
Digital Alpha Fund (7) |
1,500,000 | — | 1,500,000 | — | — | — | — | — | ||||||||||||||||||||||||
Neal Aronson (8) |
1,500,000 | — | 1,500,000 | — | — | — | — | — | ||||||||||||||||||||||||
Alan Mnuchin (9) |
1,067,773 | 1,067,773 | 1,067,773 | 1,067,773 | — | — | — | — | ||||||||||||||||||||||||
Justin Ferrero (10) |
10,719,290 | — | 1,016,959 | (20) |
— | 9,702,331 | 2.8 | % | — | — | ||||||||||||||||||||||
Dawn Whaley (11) |
11,812,327 | — | 1,016,959 | (20) |
— | 10,795,368 | 3.1 | % | — | — | ||||||||||||||||||||||
Centaurus Advisors, LLC (12) |
1,000,000 | — | 1,000,000 | — | — | — | — | — | ||||||||||||||||||||||||
Exodus Capital LLC (13) |
1,000,000 | — | 1,000,000 | — | — | — | — | — | ||||||||||||||||||||||||
Jeff Sagansky (14) |
791,467 | 791,467 | 791,467 | 791,467 | — | — | — | — | ||||||||||||||||||||||||
Entities managed by UBS O’Connor LLC (15) |
605,264 | 341,333 | 693,241 | (20) |
341,333 | — | — | — | — | |||||||||||||||||||||||
Point72 Associates LLC (16) |
948,744 | — | 745,661 | — | 203,083 | * | — | — | ||||||||||||||||||||||||
The HGC Fund, LP (17) |
473,299 | 341,333 | 517,288 | (20) |
341,333 | — | — | — | — | |||||||||||||||||||||||
Sharecare Foundation |
428,250 | — | 428,250 | — | — | — | — | — | ||||||||||||||||||||||||
Jeff Allred |
406,165 | — | 407,741 | — | — | — | — | — | ||||||||||||||||||||||||
TWORDC Family Partnership, L.P. (18) |
400,000 | — | 400,000 | — | — | — | — | — | ||||||||||||||||||||||||
Other selling securityholders (19) |
7,094,831 | 186,667 | 3,384,238 | (20) |
186,667 | 3,710,593 | 1.1 | % | — | — |
* | Less than 1.0% |
(1) | Shares of common stock beneficially owned prior to this offering consists of 36,857,499 shares of common stock and 35,629 options to purchase shares of common stock that are currently exercisable or are exercisable within 60 days of March 28, 2022. The registered holders of the referenced securities to be registered are the following funds and a managed account under management by entities controlled by John H. Chadwick, founder and partner of Claritas Capital, LLC and a director of Sharecare: Claritas Dozoretz Partners, LLC, Claritas Capital Fund IV, LP, Claritas Irby, LLC, Claritas Opportunity Fund 2013, LP, Claritas Opportunity Fund II, LP, Claritas Sharecare CN Partners, LLC. Claritas Opportunity Fund IV, L.P., Claritas Cornerstone Fund, LP, Claritas Sharecare 2018 Notes, LLC, Claritas Sharecare Notes, LLC, Claritas Sharecare 2019 Notes LLC, Claritas Opportunity Fund V, L.P., Claritas SC Bactes Partners, LLC, Claritas SC Partners, LLC, Claritas Sharecare F3 LLC, Claritas Sharecare—CS Partners, LLC, Claritas Frist Partners, LLC, Claritas Sharp Partners, LLC, Claritas Sharecare Partners LLC, Claritas Irby Partners II, LLC and Claritas Capital Management Services, Inc (collectively, including the managed account, the “Claritas Entities”). On behalf of the Claritas Entities, Mr. Chadwick has voting and investment power over the shares held by the Claritas Entities through his control of the entities that manage the Claritas Entities, which are: Claritas Capital, LLC, Claritas Capital SLP—V, GP, CC Partners IV, LLC, CC SLP V, GP, Claritas Capital EGF—V Partners, LLC, Claritas Capital EGF—IV Partners, LLC, Claritas Opportunity Fund Partners II, LLC, CC Partners IV, LLC, CC SLP IV, GP, CC SLP V, GP, Claritas SCB SLP, GP, CC Partners V, LLC, Claritas SC-SLP GP and Claritas Capital EGF—IV Partners, LLC (he controls Claritas Capital Management Services, Inc. as a director and as its president |
rather than through a managing entity). Mr. Chadwick expressly disclaims beneficial ownership of all securities held by the Claritas Entities other than to the extent of any pecuniary interest he may have therein, directly or indirectly. The principal address for Claritas Capital is 30 Burton Hills Boulevard, Suite 100, Nashville, TN 37215. |
(2) | Shares of common stock beneficially owned prior to this offering include 4,621,878 shares of common stock held by ATH Holding Company, LLC, 5,000,000 shares of common stock issuable upon conversion of Series A Preferred Stock held by Blue Cross of California and 1,000,000 shares of common stock issuable upon exercise of the same number of private placement warrants held by Blue Cross of California. ATH Holding Company, LLC and Blue Cross of California are wholly—owned subsidiaries of Anthem. Scott Anglin, in his capacity as Senior Vice President, Treasurer and Chief Investment Officer of Anthem, Inc., may be deemed to have voting and dispositive power over the securities held by ATH Holding Company, LLC and Blue Cross of California. Mr. Anglin disclaims any beneficial ownership of the securities held by ATH Holding Company, LLC or Blue Cross of California other than to the extent of any pecuniary interest he may have therein, indirectly. The business address of ATH Holding Company, LLC and Blue Cross of California is 220 Virginia Avenue, Indianapolis, IN 46204. |
(3) | Spring Creek, LLC (“Spring Creek”) is 100% owned by SCC Holdings and SCC Holdings is 100% owned by Koch Industries. Koch Industries and SCC Holdings may be deemed to beneficially own the common stock held by Spring Creek by virtue of Koch Industries’ ownership of SCC Holdings and SCC Holdings’ ownership of Spring Creek. The address for Spring Creek Capital, LLC is 4111 E. 37 th N, Wichita, KS 67220. |
(4) | Falcon Equity Investors LLC is the record holder of the securities reported herein. Eagle Falcon JV Co LLC, which is controlled by Mr. Alan Mnuchin, is the managing member of Falcon Equity Investors LLC and has voting and investment discretion with respect to the common stock held of record by Falcon Equity Investors LLC. Eagle Falcon JV Co LLC and Mr. Mnuchin each disclaims any beneficial ownership of the securities held by Falcon Equity Investors LLC other than to the extent of any pecuniary interest each may have there in, directly or indirectly. |
(5) | Shares of common stock beneficially owned prior to this offering consists of 8,468,521 shares of common stock and 28,838,912 options to purchase shares of common stock that are current exercisable or are exercisable within 60 days of March 28, 2022. The registered holders of the referenced shares to be registered are Jeffrey Arnold, Arnold Media Group, LLC and JT Arnold Enterprises, II LLLP. Mr. Arnold is the beneficial owner and has sole voting and investment power over the referenced securities. |
(6) | Eldridge PIPE Holdings, LLC is indirectly controlled by Eldridge Industries, LLC (“Eldridge”). Todd L. Boehly is the indirect controlling member of Eldridge, and in such capacity, may be deemed to have voting and dispositive power with respect to the shares of common stock held by Eldridge PIPE Holdings, LLC. Eldridge is a private investment firm specializing in providing both equity and debt capital. Mr. Boehly is the Chairman, Chief Executive Officer and controlling member of Eldridge. The address for Eldridge PIPE Holdings LLC is 600 Steamboat Road, Suite 200, Greenwich, CT 06830. |
(7) | Consists of shares beneficially owned by Digital Alpha Fund II, LP and Digital Alpha Fund II-A, LP. The address for these holders is 3535 Executive Terminal Drive, Ste 100, Henderson, NV 89052. |
(8) | The address for the selling securityholder is 1180 Peachtree Street NE, Suite 2500, Atlanta, GA 30309. |
(9) | Shares of common stock beneficially owned prior to this offering consist of shares of common stock issuable upon exercise of private placement warrants. MMT is the registered holder of the referenced private placement warrants and shares of common stock issuable upon exercise of such private placement warrants to be registered. Mr. Mnuchin has voting and investment discretion with respect to the securities held of record by MMT. The business address for the holders of these securities is 3 Columbus Circle, 24th Floor, New York, NY 10019. |
(10) | Shares of common stock beneficially owned prior to this offering consists of 1,881,556 shares of common stock and 8,837,734 options to purchase shares of common stock that are currently exercisable or are exercisable within 60 days of March 28, 2022. The registered holders of the referenced shares to be registered are Justin Ferrero, Arnold Media Group, LLC and JL Ferrero Enterprise LLP. Mr. Ferrero is the beneficial owner and has sole voting and investment power over the referenced securities. |
(11) | Shares of common stock beneficially owned prior to this offering consists of 1,881,345 shares of common stock and 9,930,982 options to purchase shares of common stock that are currently exercisable or are exercisable within 60 days of March 28, 2022. The registered holders of the referenced shares to be registered are Dawn Whaley, Arnold Media Group, LLC and Queen B Family Management Company, LLLP. Mrs. Whaley is the beneficial owner and has sole voting and investment power over the referenced securities. |
(12) | Centaurus Holdings, LLC is the general partner of Centaurus Capital LP. Centaurus Holdings, LLC is controlled by its manager, John D. Arnold. The business address of Centaurus is c/o Centaurus Capital LP, 1717 West Loop South, Suite 1800, Houston, TX 77027. |
(13) | The address for Exodus Capital, LLC is 3223 Howell Mill Road NW, Atlanta, GA 30327. |
(14) | Shares of common stock beneficially owned prior to this offering consist of shares of common stock issuable upon exercise of private placement warrants. The business address of Mr. Sagansky is 3 Columbus Circle, 24th Floor, New York, NY 10019. |
(15) | Shares of common stock beneficially owned prior to this offering includes 341,333 shares of common stock issuable upon exercise the same number of private placement warrants. The registered holders of the referenced private placement warrants and shares of common stock to be registered are Nineteen77 Global Multi-Strategy Alpha Master Limited and Nineteen77 Global Merger Arbitrage Master Fund (collectively, the “UBS Entities”). Kevin Russell is the Chief Investment Officer of UBS O’Connor LLC, the investment manager of the UBS Entities, and may be deemed to have voting and dispositive power over the securities held by the UBS Entities. The business address of UBS O’Connor LLC is One North Wacker Drive, Chicago IL 60606. |
(16) | Reflects securities held directly by Point72 Associates, LLC. Point72 Asset Management, L.P. maintains investment and voting power with respect to the securities held by certain investment funds it manages, including Point72 Associates, LLC. Point72 Capital Advisors, Inc. is the general partner of Point72 Asset Management, L.P. Mr. Steven A. Cohen controls each of Point72 Asset Management, L.P. and Point72 Capital Advisors, Inc. By reason of the provisions of Rule 13d—3 of the Exchange Act, each of Point72 Asset Management, L.P., Point72 Capital Advisors, Inc., and Mr. Cohen may be deemed to beneficially own the securities held by Point72 Associates, LLC reflected herein. Each of Point72 Asset Management, L.P., Point72 Capital Advisors, Inc., and Mr. Cohen disclaims beneficial ownership of any such securities. The address for Point72 Associates, LLC is c/o Point72 Asset Management, L.P., 72 Cummings Point Road, Stamford CT 06902. |
(17) | Shares of common stock beneficially owned prior to this offering includes 341,333 shares of common stock issuable upon exercise the same number of private placement warrants. HGC Investment Management Inc., serves as the investment manager of The HGC Fund LP. The business address of HGC Investment Management Inc is 366 Adelaide, Suite 601, Toronto, Ontario, M5V 1R9 Canada. |
(18) | The address for TWORDC Family Partnership, L.P. is 210 E. Capitol Street, Suite 1210, Jackson, MS 39201. |
(19) | Shares of common stock beneficially owned prior to this offering consists of (i) 3,489,093 shares of common stock, (ii) 186,667 shares of common stock issuable upon exercise of private placement warrants and (iii) 3,419,071 options to purchase shares of common stock that are currently exercisable or are exercisable within 60 days of March 28, 2022. The disclosure with respect to the remaining Selling Securityholders is being made on an aggregate basis, as opposed to an individual basis, because their aggregate holdings are less than 1% of the outstanding shares of our common stock and less than 1% of the outstanding warrants to purchase shares of our common stock. |
(20) | Includes Earnout Shares. See “Certain Relationships and Related Party Transactions—Sharecare—Earnout Escrow Agreement.” |
• | any person who is, or at any time during the applicable period was, one of our executive officers or a member of the Sharecare Board; |
• | any person who is known by us to be the beneficial owner of more than 5% of our voting stock; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than 5% of voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of voting stock of Sharecare; and |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
• | the Related Person’s interest in the transaction; |
• | the approximate dollar value of the amount involved in the transaction; |
• | the approximate dollar value of the amount of the Related Person’s interest in the transaction without regard to the amount of any profit or loss; |
• | whether the transaction was undertaken in the ordinary course of business of Sharecare; |
• | whether the transaction with the Related Person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party; |
• | the purpose of, and the potential benefits to us of, the transaction; and |
• | any other information regarding the transaction or the Related Person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction. |
• | banks, financial institutions or financial services entities; |
• | broker-dealers; |
• | governments or agencies or instrumentalities thereof; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | expatriates or former long-term residents of the United States; |
• | persons that actually or constructively own five percent or more (by vote or value) of our shares; |
• | persons that acquired our common stock pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation; |
• | insurance companies; |
• | dealers or traders subject to a mark-to-market method of accounting with respect to shares of common stock or warrants; |
• | persons holding our shares of common stock or warrants as part of a “straddle,” constructive sale, hedge, wash sale, conversion or other integrated or similar transaction; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | partnerships (or entities or arrangements classified as partnerships or other pass-through entities for U.S. federal income tax purposes) and any beneficial owners of such partnerships; |
• | tax-exempt entities; |
• | controlled foreign corporations; and |
• | passive foreign investment companies. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) 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, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under Treasury Regulations to be treated as a United States person. |
• | a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates); |
• | a foreign corporation; or |
• | an estate or trust that is not a U.S. holder; |
• | the gain is effectively connected with the conduct by the Non-U.S. holder of a trade or business within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or |
• | we are or have been a “United States real property holding corporation” (as defined below) for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held our common stock or warrants, and, in the case where shares of our common stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of our common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. holder’s holding period for the shares of our common stock. There can be no assurance that our common stock will be treated as regularly traded on an established securities market for this purpose. |
• | purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; |
• | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | an over-the-counter distribution in accordance with the rules of Nasdaq; |
• | through trading plans entered into by a Selling Securityholder pursuant to Rule 10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to this prospectus and any applicable |
prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; |
• | through one or more underwritten offerings on a firm commitment or best efforts basis; |
• | settlement of short sales entered into after the date of this prospectus; |
• | agreements with broker-dealers to sell a specified number of the securities at a stipulated price per share or warrant; |
• | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; |
• | directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions; |
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
• | through a combination of any of the above methods of sale; or |
• | any other method permitted pursuant to applicable law. |
• | the specific securities to be offered and sold; |
• | the names of the selling securityholders; |
• | the respective purchase prices and public offering prices, the proceeds to be received from the sale, if any, and other material terms of the offering; |
• | settlement of short sales entered into after the date of this prospectus; |
• | the names of any participating agents, broker-dealers or underwriters; and |
• | any applicable commissions, discounts, concessions and other items constituting compensation from the selling securityholders. |
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Audited financial statements: |
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F-9 |
As of December 31, |
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2021 |
2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net (net of allowance for doubtful accounts of $ |
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Other receivables |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Other long-term assets |
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Intangible assets, net |
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Goodwill |
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|
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Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities, Redeemable Noncontrolling Interest, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities (Note 4) |
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Deferred revenue |
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Contract liabilities, current |
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Debt, current (Note 7 and 13) |
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Total current liabilities |
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Contract liabilities, noncurrent |
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Warrant liabilities |
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Long-term debt (Note 7 and 13) |
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Other long-term liabilities |
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|
|
|
|
|||||
Total liabilities |
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Commitments and contingencies (Note 12) |
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Redeemable noncontrolling interest |
— | |||||||
Series A redeemable convertible preferred stock, $ (1) |
— | |||||||
Stockholders’ equity (deficit): |
||||||||
Common stock, $ (1) |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Sharecare, Inc. stockholders’ equity (deficit) (1) |
( |
) | ||||||
Noncontrolling interest in subsidiaries |
||||||||
|
|
|
|
|||||
Total stockholders’ equity (deficit) (1) |
( |
) | ||||||
|
|
|
|
|||||
Total liabilities, redeemable noncontrolling interest, redeemable convertible preferred stock and stockholders’ equity (deficit) |
$ | $ | ||||||
|
|
|
|
(1) | Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2. |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
$ | $ | $ | |||||||||
Costs and operating expenses: |
||||||||||||
Costs of revenue (exclusive of depreciation and amortization below) |
||||||||||||
Sales and marketing |
||||||||||||
Product and technology |
||||||||||||
General and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Total costs and operating expenses |
||||||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
Other income (expense): |
||||||||||||
Interest income |
||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Loss on extinguishment of debt |
( |
) | — | — | ||||||||
Other income (expense) |
( |
) | ( |
) | ||||||||
Total other income (expense) |
( |
) | ( |
) | ( |
) | ||||||
Loss before income tax benefit (expense) and loss from equity method investment |
( |
) | ( |
) | ( |
) | ||||||
Income tax benefit (expense) |
( |
) | ||||||||||
Loss from equity method investment |
— | ( |
) | — | ||||||||
Net loss |
( |
) | ( |
) | ( |
) | ||||||
Net (loss) income attributable to noncontrolling interest in subsidiaries |
( |
) | ( |
) | ||||||||
Net loss attributable to Sharecare, Inc. |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net loss per share attributable to common stockholders, basic and diluted (1) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted-average common shares outstanding, basic and diluted (1) |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Other comprehensive loss adjustments: |
||||||||||||
Foreign currency translation |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Comprehensive (loss) income attributable to noncontrolling interest in subsidiaries |
( |
) | ( |
) | ||||||||
Comprehensive loss attributable to Sharecare, Inc. |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
(1) | Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2. |
Redeemable Noncontrolling Interest |
Redeemable Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interest in Subsidiaries |
Total Stockholders’ Equity (Deficit) |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018, as previously reported |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||||||||||||||||||||
Conversion of shares due to Reverse Recapitalization |
( |
) | ( |
) | — | — | — | |||||||||||||||||||||||||||||||||
Balance at December 31, 2018, effect of Reverse Recapitalization |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock for previously reserved Lucid Shares |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of Series C preferred stock, net of issuance costs |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of warrants in connection with debt and revenue arrangements |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of warrants to common shares |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Beneficial conversion feature in connection with convertible debt |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Cumulative effect of adopting ASU 2014-09 |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Currency translation adjustment |
— | — | — | — | — | — | ( |
) | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest in subsidiaries |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to Sharecare, Inc. |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Balance at December 31, 2019 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
||||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Beneficial conversion feature in connection with convertible debt |
— | — | — | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||||||||
Issuance of redeemable noncontrolling interest for and stock for Visualize Health acquisitions |
— | — | — | — | — | — | — |
Redeemable Noncontrolling Interest |
Redeemable Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interest in Subsidiaries |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Change in fair value of redeemable noncontrolling interest in subsidiaries |
— | — | — | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||||||
Issuance of stock for Mindsciences acquisition |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of stock for Wellstar investment |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of stock for WhitehatAI acquisition |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of warrants in connection with debt and revenue arrangements |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
ASC 810-10 Visualize Health NCI Attribution |
— | — | — | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Redemption of Visualize Health put options |
( |
) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Expiration of Visualize Health put options |
( |
) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest in subsidiaries |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Currency translation adjustment |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Net income (loss) attributable to Sharecare, Inc. |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Other |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||||||||||||||||||||
Stock options exercised |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for doc.ai acquisition |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Settlement of contingent liability on WhitehatAI earnout |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of Series D redeemable convertible preferred stock, net of issuance costs and antidilution provision |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of stock for Carelinx acquisition |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of stock for doc.ai antidilution provision |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of stock for Series D antidilution provision |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of warrants in connection with debt and revenue arrangements |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Common stock issued to settle contingent consideration from acquisitions in prior years |
— | — | — | — | — | — | — | — | — |
Redeemable Noncontrolling Interest |
Redeemable Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Noncontrolling Interest in Subsidiaries |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Common stock issued upon vesting of restricted stock units |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Conversion of warrants to common shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Conversion of convertible notes to common shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Business Combination and Private Placement financing, net of issuance costs |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Cumulative effect of adopting ASU 2021-08 |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Dissolution of redeemable noncontrolling interest for Visualize Health |
( |
) | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other |
— | — | — | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||||||
Currency translation adjustment |
— | — | — | — | — | — | ( |
) | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
Repurchased shares of common stock related to exercise of employee stock options |
— | — | — | ( |
) | ( |
) | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest in subsidiaries |
— | — | — | — | — | — | ( |
) | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
Net income (loss) attributable to Sharecare, Inc. |
— | — | — | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||
Balance at December 31, 2021 |
$ |
— |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||||||||
(1) | Retroactively restated for the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2. |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||||||
Depreciation and amortization expense |
||||||||||||
Non-cash interest expense |
||||||||||||
Write-off of deferred financing fees and debt discount |
— | — | ||||||||||
Loss on extinguishment of debt |
— | — | ||||||||||
Amortization of contract liabilities |
( |
) | ( |
) | ( |
) | ||||||
Accretion of contract liabilities |
||||||||||||
Loss from equity method investment |
— | — | ||||||||||
Change in fair value of warrant liability and contingent consideration |
( |
) | ||||||||||
Share-based compensation |
||||||||||||
Deferred income taxes |
( |
) | ( |
) | ( |
) | ||||||
Payment of PIK interest |
( |
) | — | — | ||||||||
Other |
||||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable, net and other receivables |
( |
) | ( |
) | ||||||||
Prepaid expenses and other assets |
( |
) | ( |
) | ||||||||
Accounts payable and accrued expense |
( |
) | ||||||||||
Deferred revenue |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) used in operating activities |
( |
) |
||||||||||
Cash flows from investing activities: |
||||||||||||
Acquisition of Visualize Health |
— | ( |
) | — | ||||||||
Acquisition of MindSciences |
— | — | ||||||||||
Acquisition of CareLinx |
( |
) | — | — | ||||||||
Acquisition of doc.ai |
( |
) | — | — | ||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Capitalized internal-use software costs |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from issuance of redeemable convertible preferred stock and warrants, net of issuance costs |
||||||||||||
Proceeds from issuance of debt |
||||||||||||
Repayment of debt |
( |
) | ( |
) | ( |
) | ||||||
Net proceeds from Reverse Recapitalization with Falcon Capital Acquisition Corp. |
— | — | ||||||||||
Proceeds from exercise of common stock options |
||||||||||||
Repurchased shares of common stock related to exercise of employee stock options |
( |
) | — | — | ||||||||
Payments on capital lease obligations |
( |
) | ( |
) | ( |
) | ||||||
Financing costs |
( |
) | ( |
) | — | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Effect of exchange rates on cash and cash equivalents |
( |
) | ( |
) | ( |
) | ||||||
Net (decrease) increase in cash and cash equivalents |
( |
) | ||||||||||
Cash and cash equivalents at beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Cash paid for interest |
$ | $ | $ | |||||||||
Cash paid for income taxes |
$ | $ | $ | |||||||||
Noncash financing activities: |
||||||||||||
Deferred offering costs not yet paid |
$ | — | $ | $ | — |
1. |
Nature of Business and Significant Accounting Policies |
• | Legacy Sharecare’s existing stockholders have the greatest voting interest in the Company; |
• | The largest individual minority stockholder in the Company was a stockholder of Legacy Sharecare; |
• | Legacy Sharecare’s directors represent the majority of the new board of directors of the Company; |
• | Legacy Sharecare’s senior management is the senior management of the Company; and |
• | Legacy Sharecare is the larger entity based on historical revenue and has the larger employee base. |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities |
• | Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities |
• | Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Allowance for doubtful accounts – beginning balance |
$ | $ | ||||||
Provision for doubtful accounts |
||||||||
Amounts written off and other adjustments |
( |
) | ( |
) | ||||
Allowance for doubtful accounts – ending balance |
$ | $ | ||||||
Internal use software |
||||
Technology – features/content |
||||
Trade name |
||||
Customer relationships |
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Enterprise |
$ | $ | $ | |||||||||
Provider |
||||||||||||
Life Sciences |
||||||||||||
Total Revenue |
$ | $ | $ | |||||||||
Year Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Re-measurement of contingent consideration |
$ | $ | ( |
) | $ | ( |
) | |||||
Re-measurement of warrant liabilities |
( |
) | ( |
) | ||||||||
Other |
( |
) | ( |
) | ||||||||
Total other income (expense) |
$ | $ | ( |
) | $ | ( |
) | |||||
Recapitalization |
||||
Cash received from Private Placement financing |
$ | |||
Cash paid to Legacy Sharecare stockholders |
( |
) | ||
Cash received from FCAC trust and cash on hand, net of redemptions |
||||
Cash paid for issuance costs and advisory fees |
( |
) | ||
Net proceeds from Reverse Recapitalization with FCAC |
$ | |||
Recapitalization |
||||
Common stock, outstanding prior to Business Combination |
||||
FCAC Sponsor shares |
||||
Earnout Shares |
||||
Common stock of FCAC |
||||
Less: redemption of FCAC shares |
( |
) | ||
Shares issued in Private Placement financing |
||||
Legacy Sharecare shares converted to common stock |
||||
Total shares of common stock immediately after Business Combination |
||||
December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total Fair Value |
|||||||||||||
Cash equivalents |
||||||||||||||||
Money market funds |
$ | $ | $ | $ | ||||||||||||
Total cash equivalents |
$ | $ | $ | $ | ||||||||||||
Liabilities |
||||||||||||||||
Warrant liabilities |
$ | $ | $ | $ | ||||||||||||
Contingent consideration - other liabilities |
||||||||||||||||
Total liabilities at fair value |
$ | $ | $ | $ | ||||||||||||
December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total Fair Value |
|||||||||||||
Cash equivalents |
||||||||||||||||
Money market funds |
$ | $ | $ | $ | ||||||||||||
Total cash equivalents |
$ | $ | $ | $ | ||||||||||||
Liabilities |
||||||||||||||||
Warrant liabilities |
$ | $ | $ | $ | ||||||||||||
Contingent consideration - other liabilities |
||||||||||||||||
Total liabilities at fair value |
$ | $ | $ | $ | ||||||||||||
December 31, 2019 |
$ | |||
Re-measurement of warrants (other (income) expense) |
||||
December 31, 2020 |
||||
Re-measurement of warrants (other (income) expense) |
( |
) | ||
New private placement warrants assumed in connection with the Business Combination |
||||
Conversion of warrants to common stock in connection with the Business Combination |
( |
) | ||
Reclassification to Level 1 measurement upon registration of private placement warrants |
( |
) | ||
December 31, 2021 |
$ | |||
December 31, 2019 |
$ | |||
Contingent consideration from acquisitions |
||||
Re-measurement of contingent consideration (other (income) expense) |
||||
December 31, 2020 |
||||
Contingent consideration from acquisition |
||||
Antidilution provision for Series D Preferred Stock |
||||
Settlement of contingent consideration for doc.ai acquisition |
( |
) | ||
Conversion of Series D Preferred Stock to Series A Preferred Stock |
( |
) | ||
Contingent consideration in connection with the Business Combination |
||||
Settlement of contingent consideration for WhitehatAI earnout |
( |
) | ||
Re-measurement of contingent consideration (other (income) expense) |
( |
) | ||
December 31, 2021 |
$ | |||
Estimated Useful Lives (Years) |
2021 |
2020 |
||||||||||
Computer hardware |
$ | $ | ||||||||||
Furniture/fixtures |
||||||||||||
Leasehold improvements |
||||||||||||
Other |
Indefinite | |||||||||||
Property and equipment, gross |
||||||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||||||
Property and equipment, net |
$ | $ | ||||||||||
2021 |
2020 |
|||||||
Accrued expenses |
$ | $ | ||||||
Accrued compensation |
||||||||
Accrued media costs |
||||||||
Accrued taxes |
||||||||
Accrued other |
||||||||
Total accrued expenses and other current liabilities |
$ | $ | ||||||
Cash and cash equivalents |
$ | |||
Prepaid expenses |
||||
Other current assets |
||||
Developed technology |
||||
Customer relationships |
||||
Goodwill |
||||
Accounts payable and other accrued liabilities |
( |
) | ||
Deferred revenue |
( |
) | ||
Debt |
( |
) | ||
Deferred tax liability |
( |
) | ||
Other long-term liabilities |
( |
) | ||
Total |
$ | |||
Cash |
$ | |||
Accounts receivable |
||||
Other receivables |
||||
Prepaid expenses |
||||
Other current assets |
||||
Developed technology |
||||
Customer relationships |
||||
Trade name |
||||
Other long-term assets |
||||
Goodwill |
||||
Accrued expenses |
( |
) | ||
Contract liabilities - current |
( |
) | ||
Non-current contract liabilities |
( |
) | ||
Other long-term liabilities |
( |
) | ||
Total |
$ | |||
Accounts receivable |
$ | |||
Developed technology |
||||
Customer relationships |
||||
Goodwill |
||||
Accounts payable and other accrued liabilities |
( |
) | ||
Deferred tax liability |
( |
) | ||
Total |
$ | |||
Cash and cash equivalents |
$ | |||
Accounts receivable |
||||
Prepaid expenses and other current assets |
||||
Developed t |
||||
Customer r elationships |
||||
Goodwill |
||||
Accounts payable and other accrued liabilities |
( |
) | ||
Deferred tax liability |
( |
) | ||
Total |
$ | |||
Prepaid expenses and other assets |
$ | |||
Developed t echnology |
||||
Goodwill |
||||
Accounts payable and other current liabilities |
( |
) | ||
Deferred tax liability |
( |
) | ||
Total |
$ | |||
December 31, 2021 |
||||||||||||||||
Cost |
Accumulated Amortization |
Net |
Weighted Average Remaining Life |
|||||||||||||
Definite-lived, intangible assets |
||||||||||||||||
Technology – features/content |
$ | $ | ( |
) | $ | |||||||||||
Trade name |
(3,932 | ) | ||||||||||||||
Customer relationships |
( |
) | ||||||||||||||
Internal use software |
( |
) | ||||||||||||||
Total definite-lived, intangible assets |
$ | $ | ( |
) | $ | |||||||||||
Intangible assets not subject to amortization |
||||||||||||||||
Internal use software projects in process |
$ | $ | — | $ | ||||||||||||
Indefinite-lived, trade names |
— | |||||||||||||||
Total intangible assets not subject to amortization |
$ | $ | — | $ | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | |||||||||||
December 31, 2020 |
||||||||||||||||
Cost |
Accumulated Amortization |
Net |
Weighted Average Remaining Life |
|||||||||||||
Definite-lived, intangible assets |
||||||||||||||||
Technology – features/content |
$ | $ | ( |
) | $ | |||||||||||
Trade name |
( |
) | ||||||||||||||
Customer relationships |
( |
) | ||||||||||||||
Internal use software |
( |
) | ||||||||||||||
Total definite-lived, intangible assets |
$ | $ | ( |
) | $ | |||||||||||
Intangible assets not subject to amortization |
||||||||||||||||
Internal use software projects in process |
$ | $ | — | $ | ||||||||||||
Indefinite-lived, trade names |
— | |||||||||||||||
Total intangible assets not subject to amortization |
$ | $ | — | $ | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | |||||||||||
December 31, 2019 |
$ | |||
Additions |
||||
Foreign currency translation adjustment |
||||
December 31, 2020 |
||||
Additions |
||||
Foreign currency translation adjustment |
( |
) | ||
December 31, 2021 |
$ | |||
Year ending December 31: |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total |
$ | |||
Description |
December 31, 2021 |
December 31, 2020 |
||||||
Senior Secured Credit Agreement, interest payable at either prime + |
$ | $ | ||||||
Second Lien Credit Agreement, interest payable at in-kind interest of $ |
||||||||
Series B-3 Convertible Notes, interest payable at in-kind interest $ |
||||||||
Series B-4 Convertible Notes, interest payable at in-kind interest of $ |
||||||||
Series B Convertible Notes, interest payable at in-kind interest of $ |
||||||||
Note payable |
||||||||
Total debt |
||||||||
Less current portion |
( |
) | ||||||
Total long-term debt |
$ | $ | ||||||
2021 |
2020 |
2019 |
||||||||||
Current expense (benefit): |
||||||||||||
Foreign |
$ | $ | $ | |||||||||
Federal |
( |
) | ||||||||||
State |
||||||||||||
|
|
|
|
|
|
|||||||
Deferred expense (benefit): |
||||||||||||
Foreign |
( |
) | ( |
) | ||||||||
Federal |
( |
) | ( |
) | ||||||||
State |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
( |
) | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Total income tax expense (benefit) |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
Income tax benefit at the federal statutory rate |
% | % | % | |||||||||
Change in valuation allowance |
( |
)% | ( |
)% | ( |
)% | ||||||
State income tax |
% | % | % | |||||||||
Permanent: fair market value adjustments |
% | ( |
)% | ( |
)% | |||||||
Deferred: stock compensation |
( |
)% | % | % | ||||||||
Transaction costs |
% | % | % | |||||||||
Research and development credits |
% | % | % | |||||||||
Legal settlement |
( |
)% | % | % | ||||||||
Other |
( |
)% | % | % | ||||||||
|
|
|
|
|
|
|||||||
Effective income tax rate |
% | % | ( |
)% | ||||||||
|
|
|
|
|
|
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating losses |
$ | $ | ||||||
Share-based compensation expense |
||||||||
Accrued expenses |
||||||||
Property and equipment and internal use software |
||||||||
Contract liabilities |
||||||||
Interest expense |
||||||||
Tax credits |
||||||||
Deferred revenue |
||||||||
Intangible assets |
||||||||
Intangible assets (indefinite life) |
||||||||
Other |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Deferred tax liabilities: |
||||||||
Intangible assets |
( |
) | ( |
) | ||||
Intangible assets (indefinite life) |
( |
) | ( |
) | ||||
Beneficial conversion feature |
( |
) | ||||||
Other |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net deferred tax liability |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
2021 |
2020 |
2019 |
||||||||||
Domestic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Foreign |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total loss before income tax expense |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
2021 |
2020 |
|||||||
Net Operating Losses – Federal |
$ | $ | ||||||
Net Operating Losses – State |
||||||||
Net Operating Losses – International |
||||||||
|
|
|
|
|||||
Total net operating losses |
$ | $ | ||||||
|
|
|
|
2021 |
2020 |
|||||||
Valuation allowance as of beginning of the year |
$ | $ | ||||||
Increases to valuation allowance during the year |
||||||||
|
|
|
|
|||||
Valuation allowance as of end of year |
$ | $ | ||||||
|
|
|
|
Class of stock |
Shares Authorized |
Shares issued and outstanding |
Net carrying value |
Aggregate liquidation preference |
||||||||||||
Series A Preferred Stock |
$ | $ |
Classification |
Underlying Security |
Warrants Outstanding |
Exercise Price per Share | |||||
Equity |
Common | $ | ||||||
Liability - Warrants |
Common | $ |
Options Outstanding |
Restricted Stock Units |
|||||||||||||||||||||||
Number of Options (1) |
Weighted- Average Exercise Price (1) |
Weighted Average Remaining Contractual Term (Years) |
Aggregate Intrinsic Value (in thousands) |
Number of Plan shares outstanding |
Weighted- Average Grant Date Fair Value per share |
|||||||||||||||||||
Outstanding as of December 31, 2019 |
$ | $ | ||||||||||||||||||||||
Granted |
||||||||||||||||||||||||
Exercised |
( |
) | ||||||||||||||||||||||
Cancelled / Forfeited |
( |
) | ||||||||||||||||||||||
Outstanding as of December 31, 2020 |
$ | $ | ||||||||||||||||||||||
Granted |
$ | |||||||||||||||||||||||
Exercised / Released |
( |
) | ( |
) | ||||||||||||||||||||
Cancelled / Forfeited |
( |
) | ( |
) | $ | |||||||||||||||||||
Outstanding as of December 31, 2021 |
$ | $ | $ | |||||||||||||||||||||
Vested and/or exercisable as of December 31, 2021 |
$ | $ | $ | |||||||||||||||||||||
Vested and/or exercisable as of December 31, 2020 |
$ | $ | $ |
(1) | Share and per share amounts prior to July 1, 2021 have been retroactively restated to reflect the Reverse Recapitalization as a result of the Business Combination as described in Notes 1 and 2. |
Years Ended December 31, | ||||||
2021 |
2020 |
2019 | ||||
Expected volatility |
||||||
Expected term (in years) |
||||||
Risk-free interest rate |
||||||
Expected dividend yield |
—% | —% | —% |
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cost of revenues |
$ | $ | $ | |||||||||
Sales and marketing |
||||||||||||
Product and technology |
||||||||||||
General and administrative |
||||||||||||
Total share-based compensation |
$ | $ | $ | |||||||||
Year ending December 31: |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
$ | ||||
Year ending December 31: |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Numerator |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Less: Redeemable noncontrolling interest remeasurement |
( |
) | ||||||||||
Less: (Income) loss attributable to noncontrolling interests in subsidiaries |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss available to common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Denominator |
||||||||||||
Weighted-average common shares outstanding, basic and diluted |
||||||||||||
Net loss per share attributable to common stockholders, basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) |
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Convertible debt |
||||||||||||
Stock options |
||||||||||||
Warrants to purchase common stock |
||||||||||||
Redeemable convertible preferred stock |
||||||||||||
Contingently issuable shares |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
||||||||||||
|
|
|
|
|
|
Item 13. |
Other Expenses of Issuance and Distribution. |
Securities and Exchange Commission registration fee |
$ | 110,944 | ||
Accounting fees and expenses |
* | |||
Legal fees and expenses |
* | |||
Advisory fees |
* | |||
Financial printing and miscellaneous expenses |
* | |||
Total |
$ | * | ||
* | This number represents the aggregate SEC registration fees, which were previously paid with the filings of the initial Registration Statements. |
** | Estimates not presently known. |
Item 14. |
Indemnification of Directors and Officers. |
Item 15. |
Recent Sales of Unregistered Securities. |
Item 16. |
Exhibits and Financial Statements. |
(a) | Exhibits |
Exhibit No. |
Description | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL) |
* | Filed herewith. |
# | Indicates a management contract or compensatory plan or arrangement. |
† | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
(b) | Financial Statements. The financial statements filed as part of this registration statement are listed in the index to the financial statements immediately preceding such financial statements, which index to the financial statements is incorporated herein by reference. |
Item 17. |
Undertakings. |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act to any purchaser: |
(i) | Each prospectus filed by a registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
(ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus |
relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
By: | /s/ Jeffrey T. Arnold | |
Name: | Jeffrey T. Arnold | |
Title: | Chief Executive Officer, Chairman and Director |
Name |
Position |
Date | ||
/s/ Jeffrey T. Arnold Jeffrey T. Arnold |
Chief Executive Officer, Chairman and Director (Principal Executive Officer) |
April 1, 2022 | ||
/s/ Justin Ferrero Justin Ferrero |
President and Chief Financial Officer (Principal Financial Officer) |
April 1, 2022 | ||
/s/ Michael Blalock Michael Blalock |
Chief Accounting Officer (Principal Accounting Officer) |
April 1, 2022 | ||
* Jeffrey A. Allred |
Director | April 1, 2022 | ||
* John H. Chadwick |
Director | April 1, 2022 | ||
* Sandro Galea |
Director | April 1, 2022 | ||
* Kenneth R. Goulet |
Director | April 1, 2022 | ||
* Veronica Mallet |
Director | April 1, 2022 | ||
* Alan G. Mnuchin |
Director | April 1, 2022 |
Name |
Position |
Date | ||
* Rajeev Ronanki |
Director | April 1, 2022 | ||
* Jeffrey Sagansky |
Director | April 1, 2022 |
By: | /s/ Justin Ferrero | |
Name: | Justin Ferraro | |
Title: | Attorney-in-Fact |
Exhibit 5.1
King & Spalding LLP 1180 Peachtree Street, NE Suite 1600 Atlanta, GA 30309 Tel: +1 (404) 572-4600 Fax: +1 404 572 5100 www.kslaw.com |
April 1, 2022
Sharecare, Inc.
255 East Paces Ferry Road NE
Suite 700
Atlanta, GA 30305
Ladies and Gentlemen:
We have acted as counsel to Sharecare, Inc., a Delaware corporation (the Company), in connection with the preparation of the Registration Statement on Form S-1 (File No. 333-259333), originally filed with the Securities and Exchange Commission (the SEC) on September 3, 2021, as amended by Post-Effective Amendment No. 1 being filed with the SEC on the date hereof (such registration statement as so amended, the Registration Statement) under the Securities Act of 1933, as amended (the Securities Act).
The Registration Statement relates to the issuance of up to 17,433,334 shares of the Companys common stock, par value $0.0001 per share (the Common Stock), including:
(i) | up to 5,933,334 shares of Common Stock (the Private Placement Warrant Shares) upon the exercise of 5,933,334 warrants of the Company (the Private Placement Warrants), each exercisable for one share of Common Stock; and |
(ii) | up to 11,500,000 shares of Common Stock (together with the Private Placement Warrant Shares, the Warrant Shares) upon the exercise of 11,500,000 warrants of the Company (together with the Private Placement Warrants, the Warrants), each exercisable for one share of Common Stock. |
The Registration Statement also relates to the offer and sale, from time to time, by the selling holders identified in the Registration Statement or any supplements thereto (the Selling Securityholders) or their permitted transferees of:
(i) | up to 55,174,647 shares of Common Stock issued in connection with the Busines Combination (as defined in the Registration Statement) to certain of the Selling Securityholders (the Merger Shares); |
(ii) | up to 21,848,271 shares of Common Stock issued to certain third-party investors in private placements pursuant to Subscription Agreements (as defined in the Registration Statement) entered into on February 12, 2021 (the PIPE Shares); |
(iii) | up to 3,728,533 Private Placement Warrant Shares issuable to certain of the Selling Securityholders upon exercise of Private Placement Warrants; |
(iv) | up to 5,000,000 shares of Common Stock that may be issued to a Selling Securityholder upon conversion of the Companys Series A Preferred Stock, par value $0.0001 per share (the Series A Preferred Stock) (the Conversion Shares); |
(v) | up to 1,905,236 shares of Common Stock that are subject to forfeiture if certain earn-out conditions are not satisfied under the Earnout Escrow Agreement (as defined in the Registration Statement) that may be held by certain Selling Securityholders (the Earnout Shares); and |
(vi) | up to 3,728,533 Private Placement Warrants. |
In our capacity as such counsel, we have examined and relied upon the accuracy of original, certified, conformed or photographic copies of such records, agreements, certificates and other documents as we have deemed necessary or appropriate to enable us to render the opinions hereinafter expressed. In making such examination and in rendering the opinions set forth below, we have assumed the genuineness of signatures on original documents and the conformity to such original documents of all copies submitted to us as certified, conformed or photographic copies and, as to certificates of public officials, we have assumed the same to have been properly given and to be accurate. As to matters of fact material to this opinion letter, we have relied, without independent verification, upon statements and representations of representatives of the Company and public officials.
This opinion letter is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Securities Act.
Based upon the foregoing, and subject to the assumptions, qualifications and limitations set forth herein, we are of the opinion that:
1. | The Merger Shares and the PIPE Shares have been duly authorized and validly issued and are fully paid and non-assessable. |
2. | The Conversion Shares, when issued upon conversion of the Series A Preferred Stock in accordance with the terms thereof, will be duly authorized, validly issued, fully paid and non-assessable. |
3. | The Earnout Shares, when delivered upon satisfaction of certain triggering events set forth in, and in accordance with the terms and conditions of, the Earnout Escrow Agreement, will be duly authorized, validly issued, fully paid and non-assessable. |
4. | The Warrant Shares, when issued upon exercise of the Warrants in accordance with the terms thereof, will be duly authorized, validly issued, fully paid and non-assessable. |
5. | The Private Placement Warrants constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). |
The opinions expressed herein are limited in all respects to the federal laws of the United States of America, the laws of the State of New York and the Delaware General Corporation Law, and no opinion is expressed with respect to the laws of any other jurisdiction or any effect that such laws may have on the opinions expressed herein. This opinion is limited to the matters stated herein, and no opinion is implied or may be inferred beyond the matters expressly stated herein.
The opinions expressed herein are given as of the date hereof, and we assume no obligation to advise you after the date hereof of facts or circumstances that come to our attention or changes in law that occur, which could affect the opinions expressed herein. This opinion letter is being rendered solely for the benefit of the Company in connection with the matters addressed herein.
We consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to us under the caption Legal Matters in the prospectus that forms a part thereof. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ King & Spalding LLP
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption Experts and to the use of our report dated March 31, 2022, in Post-Effective Amendment No. 1 to the Registration Statement (Form S-1 No. 333-259333) and related Prospectus of Sharecare, Inc. for the registration of its common stock and warrants.
/s/ Ernst & Young LLP
Atlanta, Georgia
March 31, 2022