System1(SST) - 2020 Q4 - Annual Report

Part I Item 1. Business Trebia Acquisition Corp. is a Cayman Islands blank check company seeking business combinations in financial services and technology, with a 24-month completion deadline - The Company is a blank check company formed to effect a merger, capital stock exchange, asset acquisition, or similar business combination[13] - The Company intends to focus on industries that complement its management's background, including financial services, technology, software, data, analytics, and services[14] Initial Public Offering (IPO) and Trust Account Details | Metric | Value | | :--- | :--- | | IPO Date | June 19, 2020 | | Units Sold | 51,750,000 | | Price per Unit | $10.00 | | Gross Proceeds from Units | $517,500,000 | | Gross Proceeds from Private Warrants | $12,350,000 | | Amount Placed in Trust Account | $517,500,000 | | Total Transaction Costs | $29,241,089 | - The Company has 24 months from the closing of its IPO to complete an initial business combination, failing which it will cease operations and redeem public shares[67] - The company's acquisition criteria focuses on fundamentally sound but underperforming companies at an inflection point, where it can drive improved financial performance and create value[26] Item 1A. Risk Factors The company faces significant risks as a blank check entity, including failure to complete a business combination, COVID-19 impacts, conflicts of interest, and going concern doubts - The company is a recently incorporated entity with no operating history or revenues, providing no basis for investors to evaluate its ability to achieve its business objective[91][212] - There is a risk of not completing an initial business combination within the 24-month period, which would lead to the redemption of public shares and the expiration of warrants as worthless[92][102] - The COVID-19 pandemic could adversely affect the search for a business combination and the operations of any target business acquired[92][104] - Executive officers and directors have other business obligations, including to other blank check companies, creating potential conflicts of interest in allocating time and business opportunities[92][193][194] - Sponsors, executive officers, and directors will lose their entire investment if a business combination is not completed, creating a conflict of interest in determining an appropriate target[95][201] - As a Cayman Islands company, it may be difficult for U.S. investors to protect their interests and enforce legal rights through U.S. federal courts[223][224] Item 1B. Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[236] Item 2. Properties The company does not own real estate, utilizing leased office space at 41 Madison Avenue, New York, NY, for a monthly fee of $10,000 - The company maintains its executive offices at 41 Madison Avenue, Suite 2020, New York, NY 10010 and pays a fee of $10,000 per month to BGPT Trebia LP for office space and administrative services[237] Item 3. Legal Proceedings No material litigation, arbitration, or governmental proceedings are currently pending against the company or its management - There is no material litigation, arbitration or governmental proceeding currently pending against the company[239] Item 4. Mine Safety Disclosures This item is not applicable to the company's business - Not applicable[240] Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, common stock, and warrants trade on the NYSE, with IPO proceeds of $517.5 million placed in a trust account - The company's Units, Class A common stock, and Warrants trade on the NYSE under the symbols "TREB.U", "TREB", and "TREB WS", respectively[240] Use of IPO Proceeds | Item | Amount | | :--- | :--- | | Gross Proceeds from IPO | $517,500,000 | | Amount Placed in Trust Account | $517,500,000 | | Underwriting Fees (paid) | $10,350,000 | | Deferred Underwriting Fees | $18,112,500 | | Other Offering Costs | $778,589 | Item 6. Selected Financial Data The company has elected to omit the Selected Financial Data section as permitted by SEC Release No. 33-10890 - The company has elected to exclude the disclosures formerly required by this item, pursuant to SEC Release No. 33-10890[246] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations As a blank check company, Trebia reported a net loss of $806,028 for 2020, faces liquidity challenges, and has significant contingent obligations, raising going concern doubts - For the period from February 11, 2020 (inception) through December 31, 2020, the company had a net loss of $806,028, consisting of formation and operating costs[253] - As of December 31, 2020, the company had $843,643 in cash held outside the Trust Account for working capital purposes[257] - Management has concluded that there is substantial doubt about the company's ability to continue as a going concern, as it will need to raise additional capital to fund its operations until a business combination is completed[261][382] - The underwriters are entitled to a deferred fee of $18,112,500, payable from the Trust Account only upon completion of a Business Combination[265] - The company has a forward purchase agreement with Cannae Holdings, which has committed to purchase $75 million of Class A ordinary shares and warrants concurrently with the closing of the Business Combination[259][266] Item 7A. Quantitative and Qualitative Disclosures about Market Risk The company is not subject to material market or interest rate risk, as trust account funds are invested in cash - As of December 31, 2020, the company was not subject to any material market or interest rate risk, with proceeds in the Trust Account invested in cash[273] Item 8. Financial Statements and Supplementary Data This section refers to the full financial statements and related notes included at the end of the report Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting principles or financial disclosure - None[276] Item 9A. Controls and Procedures Management concluded disclosure controls were effective as of December 31, 2020, with no internal control report required for newly public companies - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[278] - A management report on internal control over financial reporting is not included, as permitted by SEC rules for newly public companies[279] Item 9B. Other Information The company reports no other information - None[280] Part III Item 10. Directors, Executive Officers and Corporate Governance This section details the company's directors and executive officers, board structure, independent directors, established committees, Code of Ethics, and potential conflicts of interest - The board of directors is divided into three classes with three-year terms, consisting of Class I (Lance Levy), Class II (Mark D. Linehan, James B. Stallings), and Class III (William P. Foley, II, Frank R. Martire, Jr.)[291] - The board has determined that Lance Levy, Mark D. Linehan, and James B. Stallings are independent directors under NYSE and SEC rules[294] - The company has established an Audit Committee, a Compensation Committee, and a Nominating Committee with specified members and charters[299][300][305] - A Code of Ethics applicable to all directors, officers, and employees has been adopted[310] Item 11. Executive Compensation No cash compensation has been paid to executive officers or directors, with only reimbursements for office space, administrative support, and out-of-pocket expenses - No compensation of any kind has been paid to executive officers or directors for services rendered[316] - The company reimburses BGPT Trebia LP $10,000 per month for office space and administrative support services[316] - Sponsors, executive officers, and directors are reimbursed for out-of-pocket expenses incurred in connection with identifying and completing a business combination[316] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details beneficial ownership of common stock as of March 31, 2021, with sponsors Trasimene Trebia LP and BGPT Trebia LP as principal owners Beneficial Ownership as of March 31, 2021 | Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Common Stock | | :--- | :--- | :--- | | Trasimene Trebia LP | 7,395,937 | 11.4% | | BGPT Trebia LP | 5,466,563 | 8.4% | | William P. Foley, II | 7,395,937 | 11.4% | | Frank R. Martire, Jr. | 5,466,563 | 8.4% | | All officers and directors as a group (7 individuals) | 12,937,500 | 20.0% | Item 13. Certain Relationships and Related Transactions, and Director Independence This section outlines related party transactions, including sponsor purchases of founder shares and warrants, and administrative service agreements - The Sponsors purchased 12,937,500 Founder Shares for an aggregate price of $25,000[325] - The Sponsors purchased 8,233,334 Private Placement Warrants at $1.50 per warrant for a total of $12,350,000[327] - The Company pays BGPT Trebia LP $10,000 per month for office space and administrative services, with $65,000 incurred for the period ended Dec 31, 2020[328] - A promissory note for up to $300,000 from BGPT Trebia LP was fully repaid on June 22, 2020[330] Item 14. Principal Accounting Fees and Services Marcum LLP served as the independent auditor, with total fees of $92,025 for audit services from inception to December 31, 2020, all pre-approved by the audit committee Accounting Fees (Inception to Dec 31, 2020) | Fee Category | Amount | | :--- | :--- | | Audit Fees | $92,025 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | | Total Fees | $92,025 | - The audit committee pre-approves all audit and permissible non-audit services provided by the independent auditors[335] Part IV Item 15. Exhibits, Financial Statement Schedules This section lists exhibits filed as part of the Form 10-K, including articles of association, warrant agreement, and other material contracts Item 16. Form 10-K Summary This item is not applicable - None[342] Financial Statements Report of Independent Registered Public Accounting Firm Marcum LLP issued an unqualified opinion on the financial statements but included an explanatory paragraph regarding substantial doubt about the company's going concern ability - The auditor's report contains an explanatory paragraph raising substantial doubt about the Company's ability to continue as a going concern[347] Financial Statements Data The financial statements reflect the company's pre-combination SPAC position, showing total assets of $518.6 million, a net loss of $806,028, and significant IPO-related cash flows Balance Sheet as of December 31, 2020 | Category | Amount (USD) | | :--- | :--- | | Assets | | | Cash | $843,643 | | Cash held in Trust Account | $517,500,000 | | Total Assets | $518,553,433 | | Liabilities & Equity | | | Accrued expenses | $613,050 | | Deferred underwriting fee payable | $18,112,500 | | Total Liabilities | $18,725,550 | | Class A ordinary shares subject to possible redemption | $494,827,880 | | Total Shareholders' Equity | $5,000,003 | Statement of Operations (Inception to Dec 31, 2020) | Line Item | Amount (USD) | | :--- | :--- | | Formation and operating costs | $806,028 | | Net loss | ($806,028) | | Basic and diluted net loss per share, ordinary shares | ($0.06) | Notes to Financial Statements The notes provide critical context on the company's SPAC formation, going concern issues, accounting policies, IPO details, related-party transactions, and major commitments - The Company has until June 19, 2022 (24 months from IPO) to complete a Business Combination[375] - Class A ordinary shares subject to possible redemption are classified as temporary equity outside of the shareholders' equity section on the balance sheet[392] - The Sponsors purchased 12,937,500 Founder Shares for an aggregate price of $25,000[409] - The company has a contingent fee arrangement for approximately $1,522,000, payable only upon consummation of a Business Combination[421]