NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
1.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
FinTech
Acquisition Corp. III (the “Company”) is a blank check company incorporated in Delaware on March 20, 2017. The Company
was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or other similar business transaction, one or more operating businesses or assets (a “Business Combination”). The
Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with
early stage and emerging growth companies.
At
March 31, 2019, the Company had not yet commenced operations. All activity through March 31, 2019 relates to the Company’s
formation and its initial public offering (the “Initial Public Offering”), which is described below, and, since its
Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating
revenues until after the completion of its Business Combination, at the earliest. The Company will generate non-operating income
in the form of interest income from the proceeds derived from the Initial Public Offering.
The
registration statement for the Company’s Initial Public Offering was declared effective on November 15, 2018. On November
20, 2018, the Company consummated the Initial Public Offering of 34,500,000 units (“Units” and, with respect to the
shares of Class A common stock included in the Units sold, the “Public Shares”), which included the full exercise
by the underwriters of their over-allotment option in the amount of 4,500,000 Units, at $10.00 per Unit, generating gross proceeds
of $345,000,000, which is described in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 930,000 units (the “Placement Units”)
at a price of $10.00 per Placement Unit in a private placement to FinTech Investor Holdings III, LLC, FinTech Masala Advisors,
LLC, 3FIII, LLC (collectively, the “Sponsors”) and Cantor Fitzgerald & Co. (“Cantor”), generating
gross proceeds of $9,300,000, which is described in Note 4. The manager of each of the Sponsors is Cohen Sponsor Interests III,
LLC.
Transaction
costs amounted to $21,527,278, consisting of $6,000,000 of underwriting fees, $14,700,000 of deferred underwriting fees and $827,278
of other costs, which were charged to stockholders’ equity upon the closing of the Initial Public Offering. As of March
31, 2019, $1,823,014 of cash was held outside of the Trust Account and is available for working capital purposes.
Following
the closing of the Initial Public Offering on November 20, 2018, an amount of $345,000,000 ($10.00 per Unit) from the net proceeds
of the sale of the Units in the Initial Public Offering and the sale of the Placement Units was placed in a trust account (“Trust
Account”) and were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended
investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of
the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination;
(ii) the redemption of any Public Shares in connection with a stockholder vote to amend the Company’s Amended and Restated
Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its Public
Shares if it does not complete an initial Business Combination by November 20, 2020 (the “Combination Period”); or
(iii) the distribution of the Trust Account, as described below, except that interest earned on the Trust Account can be released
to pay the Company’s tax obligations, if the Company is unable to complete an initial Business Combination within the Combination
Period or upon any earlier liquidation of the Company.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the sale of the Placement Units, although substantially all of the net proceeds are intended to be applied generally
toward consummating a Business Combination. Nasdaq Capital Market (“NASDAQ”) rules provide that the Company’s
initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least
80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) at the
time of the signing a definitive agreement in connection with a Business Combination. However, the Company will only complete
a Business Combination if the post-Business Combination company owns or acquires a majority of the outstanding voting securities
of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an
investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect
a Business Combination.
FINTECH ACQUISITION
CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
The
Company will provide its stockholders with the opportunity to redeem all or a portion of the Public Shares upon the completion
of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii)
by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their
shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any pro rata interest
earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share
amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions
the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a
Business Combination with respect to the Company’s warrants. The Company will proceed with a Business Combination only if
the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company
seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder
vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the
Company will, pursuant to its Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender
offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior
to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company
decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction
with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder
approval in connection with a Business Combination, the Sponsors and the Company’s officers and directors (the “Insiders”)
have agreed to vote their Founder Shares (as defined in Note 5), the shares of Class A common stock included in the Placement
Units (the “Placement Shares”) and any Public Shares held by them in favor of approving a Business Combination.
The
Company will have until the expiration of the Combination Period to consummate its initial Business Combination. If the Company
is unable to consummate a Business Combination within the Combination Period, the Company will (i) cease all operations except
for the purposes of winding up of its affairs; (ii) distribute the aggregate amount then on deposit in the Trust Account, including
any amounts representing interest earned on the Trust Account not previously released to the Company to pay its franchise and
income taxes and up to $100,000 to pay dissolution expenses, pro rata to the public stockholders by way of redemption of the Public
Shares (which redemption would completely extinguish such holders’ rights as stockholders, including the right to receive
further liquidation distributions, if any); and (iii) as promptly as possible following such redemption, dissolve and liquidate
the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation.
The
Company will also provide its stockholders with the opportunity to redeem all or a portion of their Public Shares in connection
with any stockholder vote to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation that
would affect the substance or timing of the Company’s obligation to redeem 100% of Public Shares if it does not complete
an initial Business Combination within the Combination Period. The stockholders will be entitled to redeem their shares for a
pro rata portion of the amount then on deposit in the Trust Account ($10.00 per share, plus any pro rata interest earned on the
funds held in the Trust Account, net of taxes payable). The per-share amount to be distributed to stockholders who redeem their
shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in
Note 6). There will be no redemption rights with respect to the Company’s warrants in connection with such a stockholder
vote to approve such an amendment to the Company’s Amended and Restated Certificate of Incorporation. Notwithstanding the
foregoing, the Company may not redeem shares in an amount that would cause its net tangible assets to be less than $5,000,001.
The Insiders have agreed to vote any Founder Shares and any Public Shares held by them in favor of any such amendment.
The
Insiders and Cantor have agreed to waive their redemption rights with respect to any Founder Shares and Placement Shares, as applicable,
(i) in connection with the consummation of a Business Combination; (ii) in connection with a stockholder vote to amend the Company’s
Amended and Restated Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem
100% of its Public Shares if it does not complete its initial Business Combination within the Combination Period, and (iii) if
the Company fails to consummate a Business Combination within the Combination Period. The Insiders have also agreed to waive their
redemption rights with respect to any Public Shares held by them in connection with the consummation of a Business Combination
and in connection with a stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation to modify
the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if it does not complete its initial
Business Combination within the Combination Period. However, the Insiders will be entitled to redemption rights with respect to
Public Shares if the Company fails to consummate a Business Combination or liquidates within the Combination Period. Cantor will
have the same redemption rights as public stockholders with respect to any Public Shares it acquires. The underwriters have agreed
to waive their rights to deferred underwriting commissions held in the Trust Account in the event the Company does not consummate
a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in
the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is
possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets)
will be less than the initial public offering price per Unit in the Initial Public Offering. Placing funds in the Trust Account
may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service
providers (except the Company's independent registered public accounting firm), prospective target businesses or other entities
it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there
is no guarantee that such persons will execute such agreements. The Company’s Chief Executive Officer has agreed that he
will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target
businesses or vendors or other entities that are owed money by the Company for service rendered, contracted for or products sold
to the Company. However, he may not be able to satisfy those obligations should they arise.
FINTECH ACQUISITION CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
Notwithstanding
the foregoing redemption rights, if the Company seeks stockholder approval of its Business Combination and it does not conduct
redemptions in connection with its Business Combination pursuant to the tender offer rules, the Amended and Restated Certificate
of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with
whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will
be restricted from redeeming its shares with respect to an aggregate of 20.0% or more of the shares sold in the Initial Public
Offering. However, there is no restriction on the Company’s stockholders’ ability to vote all of their shares for
or against a Business Combination.
Liquidity
The
Company has principally financed its operations from inception using proceeds from the sale of its equity securities to its shareholders
prior to the Initial Public Offering and such amount of proceeds from the sale of the Placement Units and the Initial Public Offering
that were placed in an account outside of the Trust Account for working capital purposes. As of March 31, 2019, the Company had
$1,823,014 in its operating bank accounts, $347,937,671 in securities held in the Trust Account to be used for a Business Combination
or to repurchase or redeem its common stock in connection therewith and working capital of approximately $1,232,000. Based on
the foregoing, the Company believes it will have sufficient cash to meet its needs for the next twelve months following the date
from when the financial statements are issued.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions
to Form 10-Q and Article 10 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for
interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation
of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation
of the financial position, operating results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on
Form 10-K for the year ended December 31, 2018 as filed with the SEC on March 28, 2019, which contains the audited financial statements
and notes thereto. The interim results for the three months ended March 31, 2019 are not necessarily indicative of the results
to be expected for the year ending December 31, 2019 or for any future interim periods.
Emerging
growth company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the
“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and
it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered
public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and
it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the
new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
FINTECH ACQUISITION CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
Use
of estimates
The
preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the balance sheet, which management considered in
formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results
could differ significantly from those estimates.
Cash
and cash equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of March 31, 2019 and December 31, 2018.
Common
stock subject to possible redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption
is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common
stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common
stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are
considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at
March 31, 2019 and December 31, 2018, 32,946,947 and 32,833,962 shares of common stock subject to possible redemption is presented
as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets.
Offering
Costs
Offering
costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that are directly
related to the Initial Public Offering. Offering costs amounting to $21,527,278 were charged to stockholders’ equity upon
the completion of the Initial Public Offering.
Income
taxes
The Company complies with
the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach
to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts,
based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of March
31, 2019 and December 31, 2018, the Company had a deferred tax asset of approximately $127,000 and $30,000, respectively, which
had a full valuation allowance recorded against it of approximately $127,000 and $30,000, respectively.
The Company’s currently
taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative costs
are generally considered start-up costs and are not currently deductible. During the three months ended March 31, 2019 and 2018,
the Company recorded income tax expense of approximately $428,000 and $0, respectively, primarily related to interest income earned
on the Trust Account. The Company’s effective tax rate for the three months ended March 31, 2019 was approximately 27% which
differs from the expected income tax rate due to the start-up costs (discussed above) which are not currently deductible.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties
as of March 31, 2019 and December 31, 2018. The Company is currently not aware of any issues under review that could result in
significant payments, accruals or material deviation from its position.
The
Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These
potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions
and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of
unrecognized tax benefits will materially change over the next twelve months. The Company is subject to income tax examinations
by major taxing authorities since inception.
FINTECH ACQUISITION CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
Net
income (loss) per common share
Net
income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding
for the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement
to purchase 17,715,000 shares of Class A common stock in the calculation of diluted income (loss) per share, since the exercise
of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The Company’s statement
of operations includes a presentation of income (loss) per share for common shares subject to redemption in a manner similar to
the two-class method of income per share. Net income per common share, basic and diluted for Class A redeemable common stock
is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes, of approximately
$1,600,000 by the weighted average number of Class A redeemable common stock outstanding for the period. Net loss per common
share, basic and diluted for Class A and Class B non-redeemable common stock is calculated by dividing the net income, less
income attributable to Class A redeemable common stock, by the weighted average number of Class A and Class B non-redeemable
common stock outstanding for the period. Class A and Class B non-redeemable common stock includes the Founder Shares and the Placement
Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
Concentration
of credit risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $250,000. At March 31, 2019 and December 31, 2018, the
Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on
such account.
Fair
value of financial instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance
sheets, primarily due to their short-term nature.
Recently
issued accounting standards
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have
a material effect on the Company’s condensed financial statements.
3.
INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 34,500,000 Units, at a purchase price of $10.00 per Unit, which includes the
full exercise by the underwriters of their over-allotment option in the amount of 4,500,000 Units at $10.00 per Unit. Each Unit
consists of one share of Class A common stock and one-half of one warrant (the “Public Warrant”). Each whole Public
Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 (see Note 7).
4.
PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsors and Cantor purchased an aggregate of 930,000 Placement Units at
a price of $10.00 per Placement Unit, or $9,300,000 in the aggregate, of which 830,000 Placement Units were purchased by the Sponsors
and 100,000 Placement Units were purchased by Cantor. Each Placement Unit consists of one share of Class A common stock and one-half
of one warrant (the “Placement Warrant”). Each whole Placement Warrant is exercisable for one whole share of Class
A common stock at a price of $11.50 per share. The proceeds from the Placement Units were added to the proceeds from the Initial
Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period,
the proceeds from the sale of the Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements
of applicable law) and the Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions
from the Trust Account with respect to the Placement Warrants.
5.
RELATED PARTY TRANSACTIONS
Founder
Shares
On
March 20, 2017, the Company issued an aggregate of 9,803,333 shares of common stock to FinTech Investor Holdings III, LLC (the
“Founder Shares”) for an aggregate purchase price of $25,000. The Company received payment for the Founder Shares
in February 2018.
FINTECH ACQUISITION
CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
On
August 22, 2018, the Company filed an amendment to its Certificate of Incorporation to, among other things, create two classes
of common stock, Class A and Class B, and to convert the outstanding Founder Shares into shares of Class B common stock. The Founder
Shares will automatically convert into shares of Class A common stock upon consummation of a Business Combination on a one-for-one
basis, subject to certain adjustments, as described in Note 7. Also on August 22, 2018, FinTech Investor Holdings III, LLC contributed
back to the Company, for no consideration, 2,040,833 Founder Shares. On October 19, 2018, the Company completed an approximate
0.04847021 stock dividend of its common stock and FinTech Investor Holdings III, LLC transferred an aggregate of 125,000 Founder
Shares to the Company’s independent directors. Additionally, on November 15, 2018, the Company completed an approximate
0.0883121 stock dividend of its common stock. As a result of the foregoing transactions, the Sponsors and the Company’s
directors held 8,857,500 Founder Shares, of which 1,125,000 shares were subject to forfeiture to the extent that the underwriters’
over-allotment option was not exercised in full or in part. As a result of the underwriters’ election to fully exercise
their over-allotment option, 1,125,000 Founder Shares are no longer subject to forfeiture.
The
Insiders have agreed not to transfer, assign or sell any of their Founder Shares (except to permitted transferees) until the earlier
of (i) one year after the completion of a Business Combination, (ii) the last sale price of the Class A common stock equals or
exceed $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any
20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, and (iii) the date
following the completion of a Business Combination on which the Company completes a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of the public stockholders having the right to exchange their
shares of common stock for cash, securities or other property.
Promissory
Note — Related Party
On
February 15, 2018, the Company issued a promissory note to FinTech Investor Holdings III, LLC, pursuant to which FinTech Investor
Holdings III, LLC loaned the Company an aggregate of $229,625 to be used for the payment of costs related to the Initial Public
Offering (the “Promissory Note”). The Promissory Note was non-interest bearing, unsecured and due on the earlier of
December 31, 2018 or the completion of the Initial Public Offering. The Promissory Note was repaid upon the consummation of the
Initial Public Offering on November 20, 2018.
Administrative
Services Agreement
The Company entered into
an agreement commencing on November 15, 2018 through the earlier of the Company’s consummation of a Business Combination
and its liquidation, to pay an affiliate of the Sponsors $10,000 per month for office space, utilities, secretarial support and
administrative services. For the three months ended March 31, 2019, the Company incurred $30,000 in fees for these services. At
March 31, 2019 and December 31, 2018, $0 and $15,000, respectively, is included in accounts payable and accrued expenses in the
accompanying condensed balance sheets.
Related
Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Sponsors, members of the Company’s management
team or any of their respective affiliates or other third parties may, but are not obligated to, loan the Company funds as may
be required (“Working Capital Loans”), which will be repaid only upon the consummation of a Business Combination.
If the Company does not consummate a Business Combination, the Company may use a portion of any funds held outside the Trust Account
to repay the Working Capital Loans; however, no proceeds from the Trust Account may be used for such repayment. If such funds
are insufficient to repay the Working Capital Loans, the unpaid amounts would be forgiven. Up to $1,500,000 of the Working Capital
Loans may be converted into warrants at a price of $1.00 per warrant at the option of the holder. The warrants would be identical
to the Placement Warrants. To date, there are no working capital loans outstanding.
6.
COMMITMENTS AND CONTINGENCIES
Registration
Rights
Pursuant
to a registration rights agreement entered into on November 15, 2018, the holders of the Founder Shares, Placement Units (including
securities contained therein) and the warrants that may be issued upon conversion of the Working Capital Loans (and any shares
of Class A common stock issuable upon the exercise of the Placement Warrants or the warrants issued upon conversion of the Working
Capital Loans) are entitled to registration rights requiring the Company to register such securities for resale (in the case of
the Founder Shares, only after conversion to Class A common stock) . The holders of these securities are entitled to make up to
three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain
“piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business
Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities
Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under
the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
FINTECH ACQUISITION
CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
Underwriting
Agreement
The
underwriters were paid a cash underwriting discount of $6,000,000. In addition, the representative of the underwriters is entitled
to a deferred fee of $14,700,000, which will become payable to the representative of the underwriters from the amounts held in
the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting
agreement.
Consulting Arrangements
The Company has arrangements with third
party consultants to provide services to the Company relating to identification of and negotiation with potential targets, assistance
with due diligence, marketing, financial analyses and investor relations. These arrangements provide for aggregate monthly fees
of approximately $21,000.
7.
STOCKHOLDERS’ EQUITY
Preferred
Stock
— The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share
with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors.
At March 31, 2019 and December 31, 2018, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock
— The Company is authorized to issue 85,000,000 shares of Class A common stock with a par value of
$0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At March 31, 2019 and December 31,
2018, there were 2,483,053 and 2,596,038 shares of Class A common stock issued or outstanding, excluding 32,946,947 and 32,833,962
shares of Class A common stock subject to possible redemption, respectively.
Class
B Common Stock
— The Company is authorized to issue 15,000,000 shares of Class B common stock with a par value of
$0.0001 per share. Holders of the Company’s Class B common stock are entitled to one vote for each common share. At March
31, 2019 and December 31, 2018, there were 8,857,500 shares of Class B common stock issued and outstanding, respectively.
Holders
of Class B common stock will vote on the election of directors prior to the consummation of a Business Combination. Holders of
Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of
stockholders except as required by law.
The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination
on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities
are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business
Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted
(unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect
to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all
shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all
shares of common stock issued and outstanding upon completion of the Initial Public Offering, including Placement Shares, plus
all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination
(excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination). Holders of
Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common
stock, subject to adjustment as provided above, at any time.
Warrants
— Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise
of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business
Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective
registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public
Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no
event later than 20 business days after the closing of a Business Combination, the Company will use its best efforts to file with
the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable
upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain
the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public
Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if the Class A common stock
is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition
of a “covered security” under the Securities Act, the Company, at its option, may require holders of Public Warrants
who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act
and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement.
The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
FINTECH ACQUISITION
CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
The
Company may redeem the Public Warrants:
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in
whole and not in part;
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at
a price of $0.01 per warrant;
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upon
a minimum of 30 days’ prior written notice of redemption;
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if,
and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20
trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the
notice of redemption to the warrant holders; and
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If,
and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such
warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter
until the date of redemption.
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If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise
the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The
Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that
the Placement Warrants and the Class A common stock issuable upon the exercise of the Placement Warrants will not be transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
Additionally,
the Placement Warrants will be non-redeemable so long as they are held by the Sponsors, Cantor or their permitted transferees.
If the Placement Warrants are held by someone other than the Sponsors, Cantor or their permitted transferees, the Placement Warrants
will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The
exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances
including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants
will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company
be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination
Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds
with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust
Account with respect to such warrants. Accordingly, the warrants may expire worthless.
8.
FAIR VALUE MEASUREMENTS
The
Company classifies its U. S. Treasury and equivalent securities as held-to-maturity in accordance with ASC 320 “Investments
- Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the intent to hold
until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying condensed balance sheets
and adjusted for the amortization or accretion of premiums or discounts.
At
March 31, 2019, assets held in the Trust Account were comprised of $8,055 in cash and $347,929,616 in U.S. Treasury Bills. At
December 31, 2018, assets held in the Trust Account were comprised of $1,216,998 in cash and $344,723,030 in U.S. Treasury Bills.
The
gross holding losses and fair value of held-to-maturity securities at March 31, 2019 and December 31, 2018 are as follows:
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Held-To-Maturity
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Amortized Cost
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Gross
Holding
Gains (Losses)
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Fair Value
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March 31, 2019
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U.S. Treasury Securities (Mature on 5/23/2019)
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$
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347,929,616
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$
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34,772
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$
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347,964,388
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December 31, 2018
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U.S. Treasury Securities (Mature on 5/23/2019)
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$
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344,723,030
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$
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(32,510
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)
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$
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344,690,520
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The
Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value
at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
FINTECH ACQUISITION CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2019
(Unaudited)
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company
would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an
orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets
and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and
to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable
inputs used in order to value the assets and liabilities:
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Level 1:
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Quoted
prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which
transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing
basis.
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Level 2:
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Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or
liabilities and quoted prices for identical assets or liabilities in markets that are not active.
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Level 3:
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Unobservable
inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
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9.
SUBSEQUENT EVENTS
The
Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed
financial statements were issued. Based upon this review, the Company did not identify subsequent events that would have required
adjustment or disclosure in the condensed financial statements.