The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
Overview
We are a blank check company incorporated in the Cayman Islands on January 24,
2020 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses. We intend to effectuate our Business
Combination using cash derived from the proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, our shares, debt or a
combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
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On November 8, 2021, Tuatara Capital Acquisition Corporation, a Cayman Islands
exempted company ("TCAC"), entered into an Agreement and Plan of Merger (as it
may be amended, supplemented or otherwise modified from time to time, the
"Merger Agreement"), by and among TCAC, HighJump Merger Sub, Inc., a Delaware
corporation ("Merger Sub"), and SpringBig, Inc., a Delaware corporation
("SpringBig").
The Merger Agreement and the transactions contemplated thereby were approved by
the boards of directors of each of TCAC and SpringBig.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from January 24, 2020 (inception) through December 31, 2021
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and identifying a target company for a
Business Combination. We do not expect to generate any operating revenues until
after the completion of our Business Combination. We generate non-operating
income in the form of interest income on investments held in the Trust Account.
We incur expenses as a result of being a public company (for legal, financial
reporting, accounting and auditing compliance), as well as for due diligence
expenses.
For the year ended December 31, 2021, we had a net income of $7,707,350, which
consists of a change in the fair value of warrant liability of $12,960,000 and
interest earned on investments held in the Trust Account of $35,810, offset by
transaction costs allocated to warrants of $853,386, compensation expense of
$2,400,000 and formation and operating cost of $2,035,074.
For the period from January 24, 2020 (inception) through December 31, 2020, we
had a net loss of $5,064 which consists of formation and operational costs.
Liquidity, Capital Resources and Going Concern
On February 17, 2021, we consummated the Initial Public Offering of 20,000,000
units, which includes a partial exercise by the underwriters of their
overallotment option in the amount of 2,500,000 Units, at $10.00 per Unit,
generating gross proceeds of $200,000,000. Simultaneously with the closing of
the Initial Public Offering, we consummated the sale of 6,000,000 Private
Placement Warrant at a price of $1.00 per Private Placement Warrant in a private
placement to the Sponsor, generating gross proceeds of $6,000,000.
Following the Initial Public Offering, the partial exercise of the
over-allotment option, and the sale of the Private Placement Warrants, a total
of $200,000,000 was placed in the Trust Account. We incurred $11,766,856 in
Initial Public Offering related costs, including $4,000,000 of underwriting
fees, $7,000,000 of deferred underwriting fees and $766,856 of other costs.
For the year ended December 31, 2021, cash used in operating activities was
$739,608. Net income of $7,707,350 was affected by interest earned on
investments held in the Trust Account of $35,810, a change in the fair value of
warrant liability of $12,960,000, compensation expense of ($2,400,000) and
transaction costs allocable to warrants ($853,386). Changes in operating assets
and liabilities used $1,295,466 of cash for operating activities.
For the period from January 24, 2020 (inception) through December 31, 2020, cash
used in operating activities was $64. Net loss of $5,064 was offset by formation
cost paid by Sponsor in exchange for issuance of founder shares of $5,000.
As of December 31, 2021, we had investments held in the Trust Account of
$200,035,810 (including $35,810 of interest income) consisting of securities
held in a money market fund that invests in U.S. Treasury securities. We may
withdraw interest from the Trust Account to pay taxes, if any. We intend to use
substantially all of the funds held in the Trust Account, including any amounts
representing interest earned on the Trust Account (less income taxes payable),
to complete our Business Combination. To the extent that our share capital or
debt is used, in whole or in part, as consideration to complete our Business
Combination, the remaining proceeds held in the Trust Account will be used as
working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
As of December 31, 2021, we had cash of $621,472. We intend to use the funds
held outside the Trust Account primarily to identify and evaluate target
businesses, perform business due diligence on prospective target businesses,
travel to and from the offices, plants or similar locations of prospective
target businesses or their representatives or owners, review corporate documents
and material agreements of prospective target businesses, and structure,
negotiate and complete a Business Combination.
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In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the Sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may
use a portion of the working capital held outside the Trust Account to repay
such loaned amounts but no proceeds from our Trust Account would be used for
such repayment. Up to $1,500,000 of such loans may be convertible into warrants
at a price of $1.00 per warrant, at the option of the lender. The warrants would
be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our Public Shares upon consummation
of our Business Combination, in which case we may issue additional securities or
incur debt in connection with such Business Combination.
Going Concern
In connection with the Company's assessment of going concern considerations in
accordance with Financial Accounting Standard Board's Accounting Standards
Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability
to Continue as a Going Concern," the Company has until February 17, 2023, to
consummate a Business Combination. It is uncertain that the Company will be able
to consummate a Business Combination by this time. If a Business Combination is
not consummated by this date, there will be a mandatory liquidation and
subsequent dissolution of the Company. Management has determined that the
liquidity condition and mandatory liquidation, should a Business Combination not
occur, and potential subsequent dissolution raises substantial doubt about the
Company's ability to continue as a going concern. No adjustments have been made
to the carrying amounts of assets or liabilities should the Company be required
to liquidate after February 17, 2023.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2021. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay the Sponsor
up to $10,000 per month for office space, administrative and support services.
Upon completion of a Business Combination or its liquidation, the Company will
cease paying these monthly fees.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,000,000
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.
Merger Agreement
On November 8, 2021, Tuatara Capital Acquisition Corporation ("TCAC") entered
into an Agreement and Plan of Merger (as it may be amended, supplemented or
otherwise modified from time to time, the "Merger Agreement"), by and among
TCAC, HighJump Merger Sub, Inc., a Delaware corporation ("Merger Sub"), and
SpringBig, Inc., a Delaware corporation ("SpringBig").
The Merger Agreement provides for, among other things, the following
transactions on or prior to the closing date: (i) TCAC will become a Delaware
corporation (the "Domestication") and, in connection with the Domestication, (A)
TCAC's name will be changed as mutually agreed to between the parties, (B) each
then-issued and outstanding TCAC Class A Ordinary Share will convert
automatically, on a one-for-one basis, into one share of common stock of TCAC
(the "New SpringBig Common Stock"), (C) each then-issued and outstanding TCAC
Class B Ordinary Share will convert automatically, on a one-for-one basis, into
one share of New SpringBig Common Stock, and (D) each then-issued and
outstanding common warrant of TCAC will convert automatically, on a one-for-one
basis, into a warrant to purchase one share of New SpringBig Common Stock; and
(ii) following the Domestication, Merger Sub will merge with and into SpringBig,
with SpringBig as the surviving company in the merger and, after giving effect
to such merger, continuing as a wholly-owned subsidiary of TCAC (the "Merger").
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The Business Combination is expected to close in mid-2022, following the receipt
of the required approval by TCAC's shareholders, required regulatory approvals
and the fulfillment of other customary closing conditions.
In accordance with the terms and subject to the conditions of the Merger
Agreement, based on an implied equity value of $245 million, (i) each share of
SpringBig common stock (other than dissenting shares) will be canceled and
converted into the right to receive the applicable portion of the merger
consideration comprised of New SpringBig Common Stock, as determined in the
Merger Agreement (the "Share Conversion Ratio"), and (ii) vested and unvested
options of SpringBig outstanding and unexercised immediately prior to the
effective time of the Merger will convert into comparable options that are
exercisable for shares of New SpringBig Common Stock, with a value determined in
accordance with the Share Conversion Ratio.
As part of the aggregate consideration payable to the SpringBig's
securityholders pursuant to the Merger Agreement, holders of SpringBig's common
stock (including those holders of converted preferred stock of SpringBig) and
holders of options of SpringBig's common stock will also have the right to
receive their pro rata portion of up to an aggregate of 9,000,000 shares of New
SpringBig Common Stock ("Contingent Shares") if any of the following stock price
conditions are met: (i) 5,500,000 Contingent Shares if the closing price of New
SpringBig Common Stock equals or exceeds $12.00 per share (as adjusted for share
splits, share dividends, reorganizations, and recapitalizations) on any twenty
(20) trading days in a thirty (30)-trading-day period at any time after the
closing date and by the third anniversary of the closing date; (ii) 2,250,000
Contingent Shares if the closing price of New SpringBig Common Stock equals or
exceeds $15.00 per share (as adjusted for share splits, share dividends,
reorganizations, and recapitalizations) on any twenty (20) trading days in a
thirty (30)-trading-day period at any time after the closing date and by the
third anniversary of the closing date; and (iii) 1,250,000 Contingent Shares if
the closing price of the New SpringBig Common Stock equals or exceeds $18.00 per
share (as adjusted for share splits, share dividends, reorganizations, and
recapitalizations) on any twenty (20) trading days in a thirty (30)-trading-day
period at any time after the closing date and by the third anniversary of the
closing date.
PIPE Financing (Private Placement)
In connection with the signing of the Merger Agreement, TCAC entered into
subscription agreements (the "Subscription Agreements") with certain investors
(the "PIPE Investors"). Pursuant to the Subscription Agreements, the PIPE
Investors agreed to subscribe for and purchase, and TCAC agreed to issue and
sell to such investors, on the closing date, an aggregate of 1,310,000 shares of
New SpringBig Common Stock for a purchase price of $10.00 per share, for
aggregate gross proceeds of $13,100,000 (the "PIPE Financing").
Advisory Service Agreement
On August 12, 2021 TCAC entered into an agreement (the "Agreement") with Cantor
Fitzgerald & Co. ("CF&CO) to act as a capital markets advisor in connection with
the proposed business combination (the "Business Combination") with SpringBig,
Inc. CF&CO acknowledges that the Company may engage additional advisors in the
same capacity (together with CF&CO, the "Capital Markets Advisors"), provided
that CF&CO will be the "lead" capital markets advisor and CF&CO shall not be
responsible for the actions or inactions of any other capital markets
advisor. In consideration of our services pursuant to this Agreement, the
Company agrees to pay CF&CO a fee of $5,000,000 (the "Advisory Fee") upon the
consummation of the Business Combination ("Closing"). $2,000,000 of the Advisory
Fee shall be payable in cash, and the remainder of the Advisory Fee ("Redemption
Dependent Portion") payable in cash and common stock of the Company ("Common
Stock"), with the portions of each to depend on the final amount of redemptions
from the Company's trust account established for the benefit of the Company's
public stockholders (the "Trust Account") in connection with the Business
Combination.
Subsequent to the Agreement, TCAC entered into a second agreement ("Second
Agreement") with Cantor Fitzgerald & Co. ("CF&CO) to receive one or more
financing(s) through the private placement, offering or other sale of equity
instruments in any form, including, without limitation, (i) equity instruments
in any form, including, without limitation, preferred or common equity, or
instruments convertible into preferred or common equity or other related forms
of interests or capital of the Company in one or a series of transactions (an
"Equity Financing") and (ii) debt in any form, including, but not limited to,
bank debt, high yield debt or mezzanine debt, notes, bonds, debentures or other
debt securities, of the Company in one transaction or a series of transactions
(a "Debt Financing" and any Equity Financing or Debt Financing, (a "Financing"),
in the cases of (i) and (ii), in connection with the business combination
contemplated by the Agreement and Plan of Merger between the Company and
SpringBig, Inc., dated as of November 8, 2021 (the "Business Combination," and
such agreement, the "Merger Agreement"). The Company hereby engages CF&CO to act
as the Company's financial advisor, placement agent and arranger in connection
with any Financing for the Business Combination. In consideration of our
services pursuant to this Second Agreement, the Company agrees to pay CF&CO the
following compensation:
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(a) Upon the closing of any Financing (which is contemplated to fund and close
concurrently with the closing of the Business Combination), the Company shall
pay to CF&CO a non-refundable cash fee equal to 4% of the aggregate maximum
gross proceeds received or receivable in connection with such Financing,
including, without limitation, aggregate amounts committed by investors to
purchase securities, whether or not all securities are issued on the closing
date of the Equity Financing.
(b) In no event shall the aggregate amount of the fees payable to CF&CO pursuant
to this section 3 be less than $1,500,000.
(c) The fees payable pursuant to this section 3 shall be in addition to any
other fees that the Company may be required to pay directly to any
prospective investor to secure its financing commitment.
(d) For the avoidance of doubt, if the structure of a Financing contemplates
multiple issuances, financing availability that is contingent upon the
occurrence of some future event or any other delayed consideration
structure, such Financing shall be considered a single Financing, and not
multiple Financings, and all fees payable pursuant to this section 3 for
such Financing shall be payable in full on the closing date of such
Financing.
(e) All fees payable hereunder will be payable in U.S. dollars in immediately
available funds to CF&CO for its own account, or as directed by it, free and
clear of and without deduction for any and all present or future applicable
taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto (with appropriate gross-up for withholding
taxes) and will not be subject to reduction by way of setoff or
counterclaim. Once paid, no fee will be refundable under any circumstances.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
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 critical accounting policies:
Warrant Liability
We account for the warrants issued in connection with our Initial Public
Offering in accordance with the guidance contained in ASC 815 under which the
warrants do not meet the criteria for equity treatment and must be recorded as
liabilities. Accordingly, we classify the warrants as liabilities at their fair
value and adjust the warrants to fair value at each reporting period. This
liability is subject to re-measurement at each balance sheet date until
exercised, and any change in fair value is recognized in our statement of
operations.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory
redemption are classified as a liability instrument and measured at fair value.
Conditionally redeemable ordinary shares (including ordinary shares 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, ordinary shares
are classified as shareholders' equity. Our ordinary shares feature certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, ordinary shares subject
to possible redemption are presented at redemption value as temporary equity,
outside of the shareholders' equity section of our balance sheets.
Net Income (Loss) Per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net loss by the
weighted average number of ordinary shares outstanding during the period. We
have two classes of shares, which are referred to as Class A ordinary shares and
Class B ordinary shares. Income and losses are shared pro rata between the two
classes of shares. Accretion associated with the redeemable shares of Class A
ordinary shares is excluded from earnings per share as the redemption value
approximates fair value.
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Recent Accounting Pronouncements
In August 2020, the FASB issued ASU No. 2020-06, "Debt-Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in
Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies
accounting for convertible instruments by removing major separation models
required under current GAAP. ASU 2020-06 removes certain settlement conditions
that are required for equity contracts to qualify for the derivative scope
exception and it also simplifies the diluted earnings per share calculation in
certain areas. ASU 2020-06 is effective for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. We are currently assessing the impact, if any, that
ASU 2020-06 would have on our financial position, results of operations or cash
flows.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on the Company's condensed financial statements.
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