References to the "Company," "GO Acquisition Corp.," "our," "us" or "we" refer
to GO Acquisition Corp. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the financial statements and the notes thereto contained elsewhere in this
report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, 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. For information identifying important
factors that could cause actual results to differ materially from those
anticipated in the forward-looking statements, please refer to the Item 1.A.
Risk Factors. The Company's securities filings can be accessed on the EDGAR
section of the SEC's website at www.sec.gov. Except as expressly required by
applicable securities law, the Company disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
Overview
We are a blank check company incorporated on June 12, 2020 as a Delaware company
for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with
one or more businesses (the "Business Combination"). Although we may pursue
targets in any industry, the Company intends to focus its efforts on
travel-related and travel-adjacent businesses with either all or a substantial
portion of their activities in North America or Europe. We intend to effectuate
our initial Business Combination using cash from the proceeds of the Initial
Public Offering and the sale of the Private Placement Warrants, our capital
stock, debt or a combination of cash, stock and debt. We are an emerging growth
company and, as such, we are subject to all of the risks associated with
emerging growth companies.
Our Sponsor is GO Acquisition Founder LLC, a Delaware limited liability company.
Our registration statement for the Initial Public Offering was declared
effective on August 4, 2020. On August 7, 2020, we consummated the Initial
Public Offering of 50,000,000 Units, at $10.00 per Unit, generating gross
proceeds of $500.0 million, and incurring offering costs of approximately
$28.1 million, inclusive of $17.5 million in deferred underwriting commissions.
On September 21, 2020, the underwriter exercised the over-allotment option in
full to purchase an additional 7,500,000 Units (the "Over-Allotment Units"),
generating gross proceeds of $75.0 million (the "Over-Allotment"), and incurred
additional offering costs of approximately $4.1 million in underwriting fees
(inclusive of approximately $2.6 million in deferred underwriting fees).
Simultaneously with the closing of the Initial Public Offering on August 7,
2020, we consummated the Private Placement of an aggregate of 8,000,000 Private
Placement Warrants at a price of $1.50 per Private Placement Warrant to our
Sponsor, generating proceeds of $12.0 million. Simultaneously with the closing
of the Over-Allotment Units, on September 21, 2020, the Company consummated the
second closing of the Private Placement, resulting in the purchase of an
aggregate of an additional 1,000,000 Private Placement Warrants by the Sponsor,
generating gross proceeds to the Company of $1.5 million.
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Upon the closing of the Initial Public Offering, the Over-Allotment and the
Private Placement, $575.0 million ($10.00 per Unit) of the net proceeds of the
sale of the Units in the Initial Public Offering and of the Private Placement
Warrants in the Private Placement were placed in the Trust Account located in
the United States at JP Morgan Chase Bank, N.A. with Continental Stock
Transfer & Trust Company acting as trustee, and invested only in U.S.
"government securities" within the meaning of Section 2(a)(16) of the Investment
Company Act having a maturity of 185 days or less or in money market funds
meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations, as
determined by the Company, until the earlier of: (i) the completion of a
Business Combination and (ii) the distribution of the Trust Account as described
below.
Our 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.
If we are unable to complete a Business Combination within the Combination
Period (24 months from the closing of the Initial Public Offering, or August 7,
2022, as may be extended by approval of our stockholders), 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, if any
(less up to $100,000 of interest to pay dissolution expenses), divided by the
number of the then outstanding Public Shares, which redemption will completely
extinguish Public Stockholders' rights as stockholders (including the right to
receive further liquidation distributions, if any), subject to applicable law;
and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the remaining stockholders and our board of directors,
liquidate and dissolve, subject in each case, to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable
law.
Liquidity and Capital Resources
At December 31, 2020, we had cash of approximately $1.3 million and working
capital of approximately $1.1 million.
Our liquidity needs since inception had been satisfied through the cash receipt
of $25,000 from our Sponsor to purchase the Founder Shares, and a loan of
$200,000 pursuant to a note issued to our Sponsor (the "Note"). Subsequent to
the consummation of the Initial Public Offering, our liquidity needs have been
satisfied with the net proceeds from the consummation of the Private Placement
not held in the Trust Account. The Note remains unpaid to date and is due on
demand. In addition, in order to finance transaction costs in connection with a
Business Combination, our Sponsor or its affiliates may, but are not obligated
to, provide us working capital loans ("Working Capital Loans"). To date, there
are no amounts outstanding under any Working Capital Loans.
Based on the foregoing, our management believes that we will have sufficient
working capital and borrowing capacity to meet our needs through the earlier of
the consummation of a Business Combination or one year from this filing. Over
this time period, we 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.
Our 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 financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity from inception up to December 31, 2020 was in preparation
for our Initial Public Offering and, since the consummation of our Initial
Public Offering, the search for a prospective target business. We will not
generate any operating revenues until the closing and completion of our initial
Business Combination, at the earliest.
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For the period from June 12, 2020 (inception) through December 31, 2020, we had
a net loss of approximately $95,000, which consisted of approximately $208,000
in general and administrative expenses, approximately $110,000 in franchise tax
expense, and income tax expense of approximately $30,000, partially offset by
net gain from investments held in the Trust Account of $253,000.
Founder Shares
In June 2020, our Sponsor purchased 14,375,000 shares of our Class B common
stock, par value $0.0001 per share (the "Founder Shares"), for an aggregate
price of $25,000. In July 2020, our Sponsor transferred 25,000 Founder Shares to
each of our independent directors at their original purchase price. Our Sponsor
agreed to forfeit up to 1,875,000 Founder Shares to the extent that the
over-allotment option was not exercised in full by the underwriters. The
underwriters exercised their over-allotment option in full on September 21,
2020. As a result, these shares were no longer subject to forfeiture.
The holders of the Founder Shares (the "Initial Stockholders") agreed, subject
to limited exceptions, not to transfer, assign or sell any of the Founder Shares
until the earlier to occur of: (a) one year after the completion of the initial
Business Combination and (b) upon completion of the initial 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
the initial Business Combination or (y) the date on which we complete a
liquidation, merger, capital stock exchange or other similar transaction after
the initial Business Combination that results in all of the stockholders having
the right to exchange their Class A common stock for cash, securities or other
property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering and the
Over-Allotment, on August 7, 2020 and September 21, 2020, respectively, we
consummated the Private Placement of 9,000,000 Private Placement Warrants in the
aggregate at a price of $1.50 per Private Placement Warrant to our Sponsor,
generating proceeds of $13.5 million.
Each whole Private Placement Warrant is exercisable for one whole share of
Class A common stock at a price of $11.50 per share. A portion of the proceeds
from the sale of the Private Placement Warrants to our Sponsor was added to the
proceeds from the Initial Public Offering held in the Trust Account. If the we
do not complete a Business Combination within the Combination Period, the
Private Placement Warrants will expire worthless. The Private Placement Warrants
will be non-redeemable for cash and exercisable on a cashless basis so long as
they are held by our Sponsor or permitted transferees.
The 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.
Related Party Loans
On June 22, 2020, our Sponsor agreed to loan us an aggregate of up to $300,000
to cover expenses related to the Initial Public Offering pursuant to a
promissory note (the "Note"). This loan was non-interest bearing and payable
upon the completion of the Initial Public Offering. As of December 31, 2020, we
borrowed $200,000 under the Note. We have not repaid the Note to date.
In addition, in order to finance transaction costs in connection with a 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 funds as may be
required ("Working Capital Loans"). If we complete a 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 a Business Combination
does not close, 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 a Business Combination 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 of December 31, 2020, we had no borrowings under the Working
Capital Loans.
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Our Sponsor, officers and directors, or any of their respective affiliates will
be reimbursed for any out-of-pocket expenses incurred in connection with
activities on our behalf such as identifying potential target businesses and
performing due diligence on suitable Business Combinations. Our audit committee
will review on a quarterly basis all payments that were made to our Sponsor,
officers or directors, or their affiliates.
Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any (and any shares of
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 pursuant to a registration rights agreement. The holders of these
securities are entitled to make up to three demands, excluding short form
demands, that we register such securities. In addition, the holders have certain
"piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of the initial Business Combination. We will bear
the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per Unit, or
$11.5 million in the aggregate, paid upon the closing of the Initial Public
Offering and Over-Allotment. In addition, the underwriters will be entitled to a
deferred fee of $0.35 per Unit, or $20.1 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 the Company completes a Business Combination,
subject to the terms of the underwriting agreement.
Critical Accounting Policies
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account is comprised of U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act, with a maturity of 185 days or less, or investments in
money market funds that invest in U.S. government securities, or a combination
thereof. The investments held in the Trust Account are classified as trading
securities. Trading securities are presented on the balance sheet at fair value
at the end of each reporting period. Gains and losses resulting from the change
in fair value of these securities is included in gain on marketable securities,
dividends and interest held in Trust Account in the accompanying statement of
operations. The estimated fair values of investments held in the Trust Account
are determined using available market information.
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. Accordingly, at December 31, 2020, 55,118,239 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 sheet.
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Net Loss Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." Net loss per common share is computed by dividing net loss
by the weighted average number of shares of common stock outstanding during the
period. We have not considered the effect of the warrants sold in the Initial
Public Offering and Private Placement to purchase an aggregate of 28,166,667
shares of Class A common stock in the calculation of diluted earnings per common
share, since their inclusion would be anti-dilutive under the treasury stock
method. As a result, diluted earnings per common share is the same as basic
earnings per common share for the period presented.
Our statement of operations include a presentation of income 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 is calculated by dividing the investment income
earned on the Trust Account of approximately $253,000, net of applicable income
and franchise taxes of approximately $140,000 for the period from June 12, 2020
(inception) to December 31, 2020, by the weighted average number of shares of
Class A common stock outstanding. Net loss per share, basic and diluted for
Class B common stock for the period from June 12, 2020 (inception) through
December 31, 2020 is calculated by dividing the net loss of approximately
$95,000, less net income attributable to Class A common stock of approximately
$113,000, resulting in a net loss of approximately $208,000 for the period from
June 12, 2020 (inception) to December 31, 2020, by the weighted average number
of Class B common stock outstanding.
Recent Accounting Pronouncements
Our management does not believe that there are any recently issued, but not yet
effective, accounting pronouncements, if currently adopted, that would have a
material effect on our financial statements.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" and under the JOBS Act are 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, the
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.
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