The accompanying notes are an integral part
of the unaudited condensed financial statements.
(1) Excludes up to 699,164 shares of Class B common stock subject to forfeiture as a result of the underwriters’ election to partially
exercise their overallotment option (see Notes 5 and 9).
The accompanying notes are an integral part
of the unaudited condensed financial statements.
(1) Includes up to 699,164 shares of Class B common stock subject to forfeiture as a result of the underwriters’ election to partially
exercise their overallotment option (see Notes 5 and 9).
The accompanying notes are an integral part
of the unaudited condensed financial statements.
The accompanying notes are an integral part
of the unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION
AND BUSINESS OPERATIONS
Foley Trasimene Acquisition Corp. II (the
“Company”) is a blank check company incorporated in Delaware on July 15, 2020. The Company was formed for the
purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses (“Business Combination”).
Although the Company is not limited to
a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on
identifying a prospective target business in financial technology or business process outsourcing, which acts as an essential utility
to industries that are core to the economy. 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.
As of September 30, 2020, the Company had
not commenced any operations. All activity for the period from July 15, 2020 (inception) through September 30, 2020 relates
to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below.
The Company will not generate any operating revenues until after the completion of a 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 August 18, 2020. On August 21, 2020 the Company consummated the Initial Public
Offering of 130,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold,
the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $1,300,000,000 which is described in Note 3.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 18,666,667 warrants (the “Private Placement Warrants”)
at a price of $1.50 per Private Placement Warrant in a private placement to Trasimene Capital Management FT, LP II, an affiliate
of Trasimene Capital Management, LLC (the “Sponsor”), generating gross proceeds of $28,000,000, which is described
in Note 4.
Following the closing of the Initial Public
Offering on August 21, 2020, an amount of $1,300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the
Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”)
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 185 days or less, or in any open-ended investment
company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act,
as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution
of the funds in the Trust Account to the Company’s stockholders, as described below.
On August 26, 2020, the underwriters partially
exercised their over-allotment option, resulting in an additional 16,703,345 Units issued for an aggregate amount of $167,033,450.
In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale
of an additional 2,227,113 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceeds of $3,340,669.
A total of $167,033,450 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $1,467,033,450.
Transaction costs amounted to $81,571,477,
consisting of $29,340,669 in cash underwriting fees, $51,346,171 of deferred underwriting fees and $884,637 of other offering costs.
In addition, as of September 30, 2020, cash of $547,218 was held outside of the Trust Account (as defined below) and is available
for working capital purposes.
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 Private
Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business
Combination. The Company must complete its initial Business Combination with one or more target businesses that together have a
fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding any deferred
underwriting commissions and taxes payable on the interest earned in the Trust Account) at the time the Company signs a definitive
agreement in connection with a Business Combination. The Company will only complete a Business Combination if the post-Business
Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires
a controlling interest in the target business 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.
The Company will provide its
stockholders with the opportunity to redeem all or a portion of their 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. The stockholders will be entitled to redeem their shares
for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two
business days prior to the completion of a Business Combination, including 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. There will be no redemption
rights upon the completion of a Business Combination with respect to the Company’s warrants.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The Company will only proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business
Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination.
If a stockholder vote is not required by applicable law or stock exchange rules and the Company does not decide to hold a stockholder
vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended
and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. 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 applicable law or stock exchange rules, or the Company decides
to obtain stockholder approval for business or other 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 Sponsor has agreed to vote its Founder Shares (as defined in Note 5), and any Public
Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination and not to convert any
shares in connection with a stockholder vote to approve a Business Combination. Additionally, each public stockholder may elect
to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.
Notwithstanding the above, if the Company
seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the
Company’s Amended and Restated Articles 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted
from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior
written consent.
The Sponsor has agreed (a) to waive
its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business
Combination and (b) not to propose an amendment to the Amended and Restated Articles of Incorporation (i) to modify the
substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business
Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholder’s
rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to
redeem their Public Shares in conjunction with any such amendment and (iii) to waive its rights to liquidating distributions
from the Trust Account with respect to the Founder Shares if the Company fails to consummate a Business Combination.
The Company will have until August 21,
2022 (the “Combination Period”) to consummate a Business Combination. If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares,
which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the
approval of the remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case
to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor has agreed to waive its liquidation
rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period.
However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to
liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination
Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust
Account in the event the Company does not complete 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 assets remaining available for distribution will
be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held
in the Trust Account, the Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a
third party for services rendered or products sold to the Company, or by a prospective target business with which the Company
has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00
per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation
of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be
withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of
any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of
the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act
of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be
unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party
claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to
claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent
registered public accounting firm), prospective target businesses or other entities with which the Company does business,
execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust
Account.
Liquidity and Capital Resources
As of September 30, 2020, the Company had $547,218 in its operating bank account, and working capital of approximately $997,000.
The Company's liquidity needs to date have been satisfied through a contribution of $25,000 from Sponsor to cover for certain expenses
in exchange for the issuance of the Founder Shares, the loan of $500,000 from the Sponsor pursuant to a Note (defined below, see Note
5), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note as
of August 21, 2020. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate
of the Sponsor, or certain of the Company's officers and directors may, but are not obligated to, provide the Company Working Capital
Loans (defined below, see Note 5). As of September 30, 2020, there were no amounts outstanding under the Working Capital Loans.
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor
or an affiliate of the Sponsor, or certain of the Company's officers and directors to meet its needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating the Business Combination.
Management continues to evaluate the impact
of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the balance
sheet. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 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 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 audited financial statements and notes thereto included in the Company’s
final prospectus for its Initial Public Offering as filed with the SEC on August 20, 2020, as well as the audited balance sheet
included in the Company’s Current Report on Form 8-K, as filed with the SEC on August 27, 2020. The interim results
for the period from July 15, 2020 (inception) through September 30, 2020 are not necessarily indicative of the results to
be expected for the period ending December 31, 2020 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, 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 of 2002, 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.
Use of Estimates
The preparation of the unaudited
condensed financial statements in conformity with GAAP requires 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 condensed
financial statements and the reported amounts of revenues and expenses during the reporting period.
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 financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future 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 September 30, 2020.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Class A Common Stock Subject to
Possible Redemption
The Company accounts for its Class A
common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” Class A 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 is 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 Class A 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 September 30,
2020, the 141,181,096 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside
of the stockholders’ equity section of the Company’s condensed balance sheet.
Offering Costs
Offering costs consist of underwriting,
legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public
Offering. Offering costs amounting to $81,571,477 were charged to stockholders’ equity upon the completion of the Initial
Public Offering.
Income Taxes
The Company accounts for income taxes under
ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the
expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
As of September 30, 2020, the Company had a deferred tax asset of approximately $19,000, which had a full valuation allowance
recorded against it of approximately $19,000.
The Company’s current taxable
income primarily consists of interest income earned on the Trust Account. The Company’s general and administrative
costs are generally considered start-up costs and are not currently deductible. During the period from July 15, 2020
(inception) through September 30, 2020, the Company recorded income tax expense of approximately $20,000, primarily
related to interest income earned on the Trust Account. The Company’s effective tax rate for the period from July 15,
2020 (inception) through September 30, 2020 was approximately (683%), which differs from the expected income tax rate
due to the start-up costs (discussed above) which are not currently deductible.
ASC 740 also clarifies the accounting for
uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and
measurement process for financial statement recognition and measurement of a tax position 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 September 30, 2020. 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 is subject to income tax examinations by major taxing authorities since inception.
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 69,794,894 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 unaudited
condensed statement of operation include 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 of $126,374
for the period from July 15, 2020 (inception) through September 30, 2020, less applicable franchise and income taxes of
approximately $53,000 for the period from July 15, 2020 (inception) through September 30, 2020, by the weighted average
number of Class A redeemable common stock since issuance. Net loss per common share, basic and diluted for Class B
non-redeemable common stock is calculated by dividing the net income (loss), less income attributable to Class A
redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the
period. Class B non-redeemable common stock includes the Founder Shares as these shares do not have any redemption
features and do not participate in the income earned on the Trust Account.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Concentration of Credit Risk
Financial instruments that potentially
subject the Company to concentrations 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 September 30, 2020, the Company has 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 Measurement,” approximates
the carrying amounts represented in the accompanying condensed balance sheet, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s
unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering,
the Company sold 146,703,345 Units, at a purchase price of $10.00 per Unit, inclusive of 16,703,345 Units sold to the underwriters
on August 26, 2020 upon the underwriters’ election to partially exercise their over-allotment option. Each Unit consists
of one share of Class A common stock and one-third of one redeemable warrant (“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 per share, subject
to adjustment (see Note 7).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Sponsor purchased an aggregate of 18,666,667 Private Placement Warrants at a price of $1.50 per Private
Placement Warrant, for an aggregate purchase price of $28,000,000. On August 26, 2020, in connection with the underwriters’
election to partially exercise their over-allotment option, the Company sold an additional 2,227,113 Private Placement Warrants
to the Sponsor, at a price of $1.50 per Private Placement Warrant, generating gross proceeds of $3,340,669. Each Private Placement
Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment
(see Note 7). The proceeds from the sale of the Private Placement Warrants were added to the net 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 Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public
Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In July 2020, the Sponsor purchased 34,500,000
shares of the Company’s Class B common stock (the “Founder Shares”) for an aggregate purchase price of $25,000.
On August 14, 2020, the Sponsor transferred 25,000 Founder Shares to each of the independent directors at their original purchase
price. On August 18, 2020, the Company effected a stock dividend with respect to its Class B common stock of 2,875,000 shares
thereof, resulting in an aggregate of 37,375,000 outstanding shares of Class B common stock. The Founder Shares include an aggregate
of up to 699,164 shares of Class B common stock that remain subject to forfeiture by the Sponsor following the underwriters’
election to partially exercise their over-allotment option so that the number of Founder Shares will collectively represent 20%
of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering. As a result of the underwriters’
election to partially exercise their over-allotment option, a total of 4,175,836 Founder Shares are no longer subject to forfeiture.
On October 2, 2020, the underwriters’ remaining over-allotment expired unexercised, resulting in the forfeiture of 699,164
Founder Shares. Accordingly, as of October 2, 2020, there are 36,675,836 Founder Shares issued and outstanding (see Note 9).
The Sponsor has agreed, subject to
limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one
year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the last
reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock
capitalizations, 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, or (y) the date on which the Company completes a
liquidation, merger, amalgamation, stock exchange, reorganization or other similar transaction that results in all of the
Company’s stockholders having the right to exchange their shares of Class A common stock for cash, securities or
other property.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Related Party Advances
The Sponsor advanced the Company an aggregate
of $480,000 to cover expenses related to the Initial Public Offering. The advances were non-interest bearing and due on demand.
The outstanding advances of $480,000 were repaid at the closing of the Initial Public Offering on August 21, 2020.
Promissory Note — Related
Parties
On July 17, 2020, the Company
issued a promissory note (the “Promissory Note”) to the Sponsor and an affiliate of the Sponsor, pursuant to
which the Company may borrow up to an aggregate principal amount of $800,000. The Promissory Note was non-interest bearing
and payable on the earlier of (i) January 31, 2021 or (ii) the completion of the Initial Public Offering. The
outstanding balance under the Promissory Note of $500,000 was repaid at the closing of the Initial Public Offering on August
21, 2020.
Related Party Loans
In order to finance transaction costs in
connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers
and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such
Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination,
without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon completion of a Business
Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants.
In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account
to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
No amounts have been borrowed under this arrangement as of September 30, 2020.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate the impact
of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on
the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of
the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
Administrative Services Agreement
The Company entered into an agreement,
commencing on August 18, 2020, to pay Cannae Holdings, Inc. (“Cannae Holdings”) up to $5,000 per month for office space
and administrative support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying
these monthly fees. For the period from July 15, 2020 (inception) through September 30, 2020, the Company incurred and paid
$10,000 in fees for these services.
Registration Rights
Pursuant to a registration rights agreement
entered into on August 21, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued
upon conversion of the Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are
entitled to registration rights. The holders of these securities will be 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. 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 lockup period. The Company will bear the expenses incurred in connection with the
filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a
45-day option from the date of Initial Public Offering to purchase up to 19,500,000 additional Units to cover over-allotments,
if any, at the Initial Public Offering price less the underwriting discounts and commissions. On August 26, 2020, the underwriters
partially exercised their over-allotment option to purchase an additional 16,703,345 Units at $10.00 per Unit, leaving 2,796,655
Units available for purchase. On October 2, 2020, the underwriters’ remaining over-allotment expired
unexercised (see Note 9).
The underwriters are entitled to a deferred
fee of $0.35 per Unit, or $51,346,171 in the aggregate. The deferred fee will become payable to 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.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Forward Purchase Agreement
The Company entered into a forward purchase
agreement with Cannae Holdings, a diversified holding company which is externally managed by Trasimene Capital Management, LLC
but is not an affiliate of the Company or the Sponsor. Pursuant to such agreement, Cannae Holdings has agreed to purchase shares
of Class A common stock in an aggregate share amount equal to 15,000,000 shares of Class A common stock, plus an aggregate
of 5,000,000 redeemable warrants to purchase one share of Class A common stock at $11.50 per share, for an aggregate purchase
price of $150,000,000, or $10.00 for one share of Class A common stock and one-third of one warrant, in a private placement
to occur concurrently with the closing of a Business Combination. The warrants to be sold as part of the forward purchase agreement
will be identical to the warrants sold as part of the Units in the Initial Public Offering.
In connection with the forward purchase
securities sold to Cannae Holdings, the Company expects that the initial stockholders will receive (by way of an adjustment to
their existing shares of Class B common stock) an aggregate number of additional shares of Class B common stock so that
the initial stockholders, in the aggregate, on an as-converted basis, will hold 20% of the shares of Class A common stock
at the time of the closing of a Business Combination. Under the forward purchase agreement, the Company will provide a right of
first offer to Cannae Holdings if the Company proposes to raise additional capital by issuing any equity, or securities convertible
into, exchangeable or exercisable for equity securities, other than the units and certain excluded securities. In addition,
if the Company seeks stockholder approval of a proposed initial Business Combination, Cannae Holdings has agreed under the forward
purchase agreement to vote any shares of Class A common stock owned by Cannae Holdings in favor of any proposed initial Business
Combination.
NOTE 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. The Company’s board of directors
will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or
other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The
board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could
adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. At
September 30, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock. The
Company is authorized to issue 800,000,000 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 September 30, 2020, there were 5,522,249 shares of Class A
common stock issued and outstanding, excluding 141,181,096 shares of Class A common stock subject to possible redemption.
Class B Common Stock. The
Company is authorized to issue 80,000,000 shares of Class B common stock, with a par value of $0.0001 per share. Holders of
the Class B common stock are entitled to one vote for each share. At September 30, 2020, there were 37,375,000 shares of Class B
common stock issued and outstanding, of which an aggregate of up to 699,164 shares of Class B common stock were subject to
forfeiture as a result of the underwriters’ election to partially exercise their over-allotment option so that the number
of Founder Shares would equal 20% of the Company’s issued and outstanding common stock after the Initial Public Offering
(see Note 9).
Only holders of the Class B common
stock will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A common
stock and holders of Class B common stock will vote together as a single class on all other matters submitted to a vote of
the Company’s stockholders except as otherwise required by law.
The Class B common stock will
automatically convert into Class A common stock on the first business day following the completion of a Business
Combination at a ratio such that the number of Class A common stock issuable upon conversion of all Class B common
stock will equal, in the aggregate, 25% of the sum of (i) the total number of shares of Class A common stock issued
and outstanding upon completion of Initial Public Offering, plus (ii) the sum of (a) the total number of shares of
Class A common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or
deemed issued, by the Company in connection with or in relation to the completion of a Business Combination (including the
forward purchase shares, but not the forward purchase warrants), excluding any Class A common stock or equity-linked
securities exercisable for or convertible into Class A common stock issued, or to be issued, to any seller in a Business
Combination, and any private placement warrants issued to the Sponsor upon conversion of Working Capital Loans, minus
(b) the number of Public Shares redeemed by public stockholders in connection with a Business Combination. Any
conversion of Class B common stock will take effect as a compulsory redemption of Class B common stock and an
issuance of Class A common stock as a matter of Delaware law. In no event will the Class B common stock convert
into Class A common stock at a rate of less than one to one.
FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
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 and
(b) 12 months from the closing of the Initial Public Offering. The Public Warrants have an exercise price of $11.50 per
share and will expire five years from the completion of a Business Combination, at 5:00 p.m., New York City time, or
earlier upon redemption or liquidation.
The Company will not be obligated to deliver
any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant
exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the
warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with
respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will
not be obligated to issue shares of Class A common stock upon exercise of a warrant unless the Class A common stock issuable
upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence
of the registered holder of the warrants.
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, it will use its commercially
reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A
common stock issuable upon exercise of the warrants. The Company will use its commercially reasonable 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 or redemption of the warrants in accordance with the provisions of the warrant agreement. If a registration
statement covering the issuance of the Class A common stock issuable upon exercise of the warrants is not effective by the
60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration
statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants
on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. In addition,
if the shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the
Company may, at its option, require holders of the 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 elects to do so, the Company will not
be required to file or maintain in effect a registration statement, but it will use its best efforts to register or qualify the
shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise
price by surrendering the warrants for that number of shares of Class A common stock equal to the lesser of (A) the quotient
obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied
the excess of the “fair market value” less the exercise price of the warrants by (y) the fair market value and
(B) 0.361. The “fair market value” shall mean the volume weighted average price of the Class A common stock
for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant
agent.
Redemption of Warrants When the Price
per Share of Class A Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company
may redeem the outstanding Public Warrants:
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·
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in whole and not in part;
|
|
·
|
at a price of $0.01 per Public Warrant;
|
|
·
|
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
|
·
|
if, and only if, the last reported sale price of the Class A common stock for any 20 trading days within a 30 trading day period ending three business days before sending the notice of redemption to warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like).
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If and when the warrants become
redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying
securities for sale under all applicable state securities laws. However, the Company will not redeem the warrants unless an effective
registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the
warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the
30-day redemption period.
Redemption of Warrants When the Price
per Share of Class A Common Stock Equals or Exceeds $10.00 — Once the warrants become exercisable, the Company
may redeem the outstanding warrants:
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·
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in whole and not in part;
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FOLEY TRASIMENE ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
|
·
|
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A common stock;
|
|
·
|
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and
|
|
·
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if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) the Private Placement Warrants must also be concurrently called for redemption on the same as the outstanding Public Warrants, as described above.
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The exercise price and number of
shares of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the
event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except
as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the Public 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
Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution
from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public
Warrants may expire worthless.
In addition, if (x) the Company issues
additional Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of
a Business Combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective
issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the
Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date
of the completion of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the
Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which
the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise
price of the Public Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the
Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices described above adjacent to “Redemption
of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $18.00” and “Redemption of Warrants
When the Price per Share of Class A Common Stock Equals or Exceeds $10.00” will be adjusted (to the nearest cent) to
be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
The Private Placement Warrants are identical
to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (x) the Private Placement Warrants
and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable
or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (y) the
Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial
purchasers or their permitted transferees and (z) the Private Placement Warrants and the Class A common stock issuable
upon exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are
held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable
by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 8. FAIR VALUE MEASUREMENTS
The Company classifies its U.S. Treasury
and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.”
Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity
treasury securities are recorded at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion
of premiums or discounts.
At September 30, 2020, assets held
in the Trust Account were comprised of $600 in cash and $1,467,159,224 in U.S. Treasury securities. During the period from July
15, 2020 (inception) through September 30, 2020, the Company did not withdraw any interest income from the Trust Account.
The gross holding gains and fair value
of held-to-maturity securities at September 30, 2020 are as follows:
|
|
Held-To-Maturity
|
|
Amortized
Cost
|
|
|
Gross
Holding
Loss
|
|
|
Fair Value
|
|
September 30, 2020
|
|
U.S. Treasury Securities (Mature on 11/19/2020)
|
|
$
|
1,467,159,224
|
|
|
$
|
(5,304
|
)
|
|
$
|
1,467,153,920
|
|
FOLEY TRASIMENE
ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(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:
|
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:
|
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.
|
|
|
|
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events
and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued.
Based upon this review, other than described below, the Company did not identify any subsequent events that would have required
adjustment or disclosure in the condensed financial statements.
On October 2, 2020, the underwriters’ remaining over-allotment
expired unexercised, resulting in the forfeiture of 699,164 Founder Shares. Accordingly, as of October 2, 2020, there are 36,675,836
Founder Shares issued and outstanding.