References to "we", "us", "our" or the "Company" are toFar Point Acquisition Corporation , except where the context requires otherwise. The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this report. Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our otherSEC filings. Overview We are a blank check company incorporated onFebruary 23, 2018 as aDelaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any specific business combination target. Our Sponsor isFar Point LLC , aDelaware limited liability company. We consummated our Initial Public Offering onJune 14, 2018 . Our amended certificate of incorporation provides that, if we are unable to complete an Initial Business Combination bySeptember 14, 2020 , we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay taxes (less up to$100,000 of accrued 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 liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company's remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations underDelaware law to provide for claims of creditors and the requirements of other applicable law. OnJanuary 16, 2020 , the Company entered into the Merger Agreement, pursuant to which, the parties to the Merger Agreement have agreed that, in connection with the Closing (as defined in the Merger Agreement), (i) the Seller Parties will undertake a series of transactions pursuant to which they will sell, exchange and contribute the ordinary shares of Global Blue for a mix of cash and shares of New Global Blue and (ii) a wholly-owned indirect subsidiary of New Global Blue will merge with and into the Company, with the Company being the surviving corporation in the merger and a wholly-owned indirect subsidiary of New Global Blue. Pursuant to the Merger each share of the Company's common stock issued and outstanding as of immediately prior to the Closing (other than Excluded Shares, as defined in the Merger Agreement) will be exchanged for one share of New Global Blue's ordinary shares, and each Company warrant will convert to a warrant to acquire one New Global Blue ordinary share on the same terms. Upon consummation of the Business Combination, New Global Blue will be a publicly traded foreign private issuer. It intends to apply to list its shares and warrants on the NYSE under the trading symbol "GB". New Global Blue will be the ultimate parent company of the business currently operated by Global Blue and its subsidiaries. Global Blue is a leading provider of tax free shopping and payment solutions. The pending Business Combination with Global Blue is referred to as the "Global Blue Transaction". See the Current Reports on Form 8-K filed by the Company with theSEC onJanuary 16, 2020 (as amended),May 7, 2020 ,May 27, 2020 ,June 29, 2020 ,July 15, 2020 , andAugust 7, 2020 and the Definitive Proxy Statement on Schedule 14A filed by the Company onAugust 4, 2020 (the "Proxy Statement") for further information related to the pending Global Blue Transaction. 15 -------------------------------------------------------------------------------- Table of Contents Results of Operations Our entire activity had been related to our formation, our Initial Public Offering, which was consummated onJune 14, 2018 , and since the Initial Public Offering, the search for a prospective Initial Business Combination and in connection with the pending Global Blue Transaction, and we will not be generating any operating revenues until the closing and completion of an Initial Business Combination. We have to incurred increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as in connection with the pending Global Blue Transaction. For the three months endedJune 30, 2020 , we had net loss of approximately$1.3 million , which consisted of approximately$179,000 in interest and investment income, offset by approximately$1.4 million in general and administrative costs (of which approximately$1.3 million was merger expenses),$50,000 in franchise tax expense, and approximately$3,000 in income tax benefit. For the six months endedJune 30, 2020 , we had net loss of approximately$5.9 million , which consisted of approximately$2.7 million in interest and investment income, offset by approximately$8.0 million in general and administrative costs (of which approximately$7.6 million was merger expenses), approximately$100,000 in franchise tax expense, and approximately$514,000 in income tax expense. For the three months endedJune 30, 2019 , we had net income of approximately$2.6 million , which consisted of approximately$4.3 million in interest and investment income, offset by approximately$799,000 in general and administrative costs,$50,000 in franchise tax expense, and approximately$917,000 in income tax expense. For the six months endedJune 30, 2019 , we had net income of approximately$5.1 million , which consisted of approximately$8.1 million in interest and investment income, offset by approximately$1.1 million in general and administrative costs, approximately$95,000 in franchise tax expense, and approximately$1.7 million in income tax expense. Going Concern Consideration The accompanying financial statements have been prepared assuming we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As ofJune 30, 2020 , we had approximately$517,000 in our operating bank account, approximately$18.9 million of investment income available in the Trust Account to pay for franchise and income taxes, and a working capital deficit of approximately$9.0 million (excluding franchise and income tax obligations). Further, we have incurred and expects to continue to incur significant costs in pursuit of our acquisition plans. ThroughJune 30, 2020 , our liquidity needs have been satisfied through receipt of a$25,000 capital contribution from our Sponsor in exchange for the issuance of the Founder Shares to the Sponsor,$300,000 in note payable and$40,276 in advances from related party, the proceeds from the consummation of the private placement not held in Trust Account of approximately$2.2 million , and investment income withdrawn from the Trust Account of approximately$5.4 million since inception to pay for tax obligations. We fully repaid these borrowings and advances from our Sponsor and related parties onJune 15, 2018 . To finance transaction costs in connection with an Initial Business Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors may, but are not obligated to, loan us working capital loans. If we complete an Initial Business Combination, we would repay the working capital loans out of the proceeds of the Trust Account released to us. Otherwise, the working capital loans would be repaid only out of funds held outside the Trust Account. In the event that an Initial Business Combination is not completed, we 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. Except for the foregoing, the terms of such working capital loans, if any, have not been determined and no written agreements exist with respect to such loans. The working capital loans would either be repaid upon consummation of an Initial Business Combination, without interest, or, at the lender's discretion, up to$1.5 million of such working capital loans may be convertible into warrants of the post-Business Combination entity at a price of$1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As ofJune 30, 2020 , there were no working capital loans outstanding. 16 -------------------------------------------------------------------------------- Table of Contents Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of its operations and/or pending business combination, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. In connection with our assessment of going concern considerations in accordance with FASB Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the liquidity, the mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate afterSeptember 14, 2020 . Related Party Transactions Founder Shares OnMarch 16, 2018 , our Sponsor purchased 11,500,000 Founder Shares for an aggregate price of$25,000 , or approximately$0.002 per share. InJune 2018 , we effected two stock dividends, the first for 0.25 share per share, and the second for 0.1 share per share, aggregating 0.375 share of Class B common stock for each outstanding share of Class B common stock, resulting in 15,812,500 Founder Shares outstanding. OnMay 18, 2018 , the Sponsor transferred 40,000 Founder Shares to each of our independent director nominees, at the original per share purchase price. Following the stock dividends inJune 2018 , each of the independent director nominees transferred 15,000 shares back to the Sponsor. As used herein, unless the context otherwise requires, "Founder Shares" shall be deemed to include the shares of Class A common stock issuable upon conversion thereof. The Founder Shares are identical to the Class A common stock included in the Units sold in the Initial Public Offering except that the Founder Shares automatically convert into shares of Class A common stock at the time of our Initial Business Combination on a one-for-one basis, subject to adjustments and certain transfer restrictions, as described in more detail below. 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. Our Sponsor had agreed to forfeit up to 2,062,500 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters. OnJune 14, 2018 , the underwriters exercised their over-allotment option in full, hence, these Founder Shares were no longer subject to forfeiture. Our initial stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the Initial Business Combination or (B) subsequent to the Initial Business Combination, (x) if the last sale price of our Class A common stock equals or exceeds$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 the Initial Business Combination, or (y) the date on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Private Placement Warrants Concurrently with the closing of the Initial Public Offering, our Sponsor purchased an aggregate of 9,766,667 Private Placement Warrants at a price of$1.50 per whole Private Placement Warrant ($14.65 million in the aggregate) in a private placement. Each whole Private Placement Warrant is exercisable for one whole share of our Class A common stock at a price of$11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If an Initial Business Combination is not completed bySeptember 14, 2020 , 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. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. Our Sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the Initial Business Combination. 17 -------------------------------------------------------------------------------- Table of Contents Forward Purchase Agreement OnMay 18, 2018 ,Cloudbreak Aggregator LP , the Forward Purchaser, entered into the Forward Purchase Agreement with us that provides for the purchase of shares of our Class A common stock for$9.50 per share in a private placement that will close simultaneously with the closing of our Initial Business Combination. The actual number of Forward Purchase Shares to be purchased will be a number of shares (rounded up to the nearest whole share) equal to (A) the excess of the number of shares of Class A common stock that are redeemed from holders in connection with our Initial Business Combination (which redemptions are not revoked prior to the date of our Initial Business Combination) over 20,000,000, multiplied by (B) a fraction, the numerator of which is$10.00 and the denominator of which is$9.50 . The Forward Purchase Shares will be identical to the shares of Class A common stock included in the Units sold in the Initial Public Offering, except that the Forward Purchase Shares will be subject to transfer restrictions and certain registration rights. The Forward Purchaser has the right to transfer a portion of its obligation to purchase the Forward Purchase Shares to permitted transferees, and the Sponsor may, in its discretion, transfer, directly or indirectly, certain of its Founder Shares and Private Placement Warrants to any such permitted transferees, subject to compliance with applicable securities laws. The Forward Purchase Agreement also provides that the Forward Purchaser and any permitted transferees are entitled to certain registration rights with respect to their Forward Purchase Shares. Registration Rights The holders of Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of working capital loans, if any, will be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement dated as ofJune 11, 2018 . These holders are entitled to certain demand and "piggyback" registration rights. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period for the securities to be registered. We will bear the expenses incurred in connection with the filing of any such registration statements. Related Party Loans and Advances Our Sponsor had agreed to loan us an aggregate of$300,000 to cover expenses related to the Initial Public Offering pursuant to the Note. This loan was non-interest bearing and payable on the earlier ofJune 30, 2020 or the completion of the Initial Public Offering. In addition to the fully outstanding Note, our Sponsor and certain of our affiliates also paid certain administrative expenses and offering costs of$40,276 on behalf of our company. These advances were due on demand and were non-interest bearing. We fully repaid the Note and advances to our Sponsor and affiliates onJune 15, 2018 . In connection with the pending Global Blue Transaction certain agreements have been, or will be, entered intoThird Point as described in the Proxy Statement. Commitments and Contingencies Underwriting Agreement The underwriters were entitled to an underwriting discount of$0.20 per unit, or$11.85 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred underwriting commission of$0.35 per unit, or approximately$20.7 million 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 we complete an Initial Business Combination, subject to the terms of the underwriting agreement. The underwriters did not receive, and will not receive, any underwriting discounts on Units purchased, directly or indirectly, byThird Point . 18 -------------------------------------------------------------------------------- Table of Contents Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted inthe United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies: Class A Common Stock Subject to Possible Redemption We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 " Distinguishing Liabilities from Equity ." Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A common stock (including Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders' equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. All of the 63,250,000 Public Shares contain a redemption feature which allows for the redemption of Class A common stock under our liquidation or tender offer/stockholder approval provisions. In accordance with FASB ASC 480, redemption provisions not solely within our control require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of FASB ASC 480. Although we have not specified a maximum redemption threshold, our amended and restated certificate of incorporation provides that in no event will we redeem our Public Shares in an amount that would cause our net tangible assets to be less than$5,000,001 . We recognize changes in redemption value immediately as they occur and will adjust the carrying value of the security at the end of each reporting period. Increases or decreases in the carrying amount of redeemable shares of Class A common stock shall be affected by charges against additional paid-in capital or in the absence of additional paid-in capital, retained earnings. Accordingly, atJune 30, 2020 andDecember 31, 2019 , 61,666,074 and 62,258,819 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders' equity section of the accompanying balance sheets, respectively. Net Income (Loss) Per Share We comply with accounting and disclosure requirements of FASB ASC Topic 260, " Earnings Per Share ." Net income (loss) per share is computed by dividing net income applicable to common stockholders by the weighted average number of shares of common stock outstanding for the periods. We have not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 30,850,000 shares of Class A common stock in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted earnings per share is the same as basic earnings per share for each period presented. Our statements of operations include a presentation of income (loss) per share for common stock subject to redemption in a manner similar to the two-class method of income per share. Net income per share, basic and diluted for Class A common stock, for the three and six months endedJune 30, 2020 is calculated by dividing the investment income earned on the Trust Account of approximately$179,000 and approximately$2.7 million , net of applicable income and franchise taxes of approximately$47,000 and approximately$614,000 , resulting in total net income of approximately$132,000 and approximately$2.1 million , respectively, by the weighted average number of shares of Class A common stock outstanding of 63,250,000 for the periods. Net loss per share, basic and diluted for Class B common stock, for the three and six months endedJune 30, 2020 is calculated by dividing the net loss of approximately$1.3 million and approximately$5.9 million , less income attributable to Class A common stock of approximately$132,000 and approximately$2.1 million , resulted to a net loss of approximately$1.4 million and approximately$8.0 million , respectively, by the weighted average number of shares of Class B common stock outstanding of 15,812,500 for the periods. 19 -------------------------------------------------------------------------------- Table of Contents Net income per share, basic and diluted for Class A common stock is calculated by dividing the investment income earned on the Trust Account of approximately$4.3 million and approximately$8.1 million , net of applicable income and franchise taxes of approximately$967,000 and approximately$1.8 million , resulting in total net income of approximately$3.4 million and approximately$6.3 million , for three and six months endedJune 30, 2019 , respectively, by the weighted average number of shares of Class A common stock outstanding for the periods. Net loss per share, basic and diluted for Class B common stock is calculated by dividing the net income of approximately$2.6 million and$5.1 million , less income attributable to Class A common stock of approximately$3.4 million and$6.3 million , respectively, by the weighted average number of shares of Class B common stock outstanding for the periods. Off-Balance Sheet Arrangements and Contractual Obligations As ofJune 30, 2020 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. JOBS Act The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an "emerging growth company," whichever is earlier.
© Edgar Online, source