Business Context and Reporting Period
VPC Impact Acquisition Holdings III, Inc., a special purpose acquisition company, filed this Form 8-K on June 7, 2021, announcing a definitive merger agreement with Dave Inc. The proposed transaction would combine Dave with the SPAC through two merger steps, with the resulting company expected to be publicly listed.
Transaction and Key Financial Terms
- Dave stockholders are to receive aggregate merger consideration with an implied equity value of $3.5 billion, calculated using a deemed value of $10.00 per share of Parent Common Stock.
- The consideration is expected to consist of newly issued Parent Class A and Class V common stock, subject to the transaction's fully diluted share calculation.
- Parent entered into PIPE subscription agreements for 21 million shares of Parent Class A Common Stock at $10.00 per share, implying gross proceeds of $210 million.
- The transaction requires at least $210 million of available cash at closing, after giving effect to redemptions, the PIPE or alternative financing, and before specified transaction costs and debt repayment.
- A potential repurchase from Dave CEO Jason Wilk and CFO Kyle Beilman is contingent on Parent Cash exceeding $300 million. The repurchase price is $10.00 per share, with a maximum aggregate repurchase price of $60 million; 80% would be allocated to Mr. Wilk and 20% to Mr. Beilman.
- No revenue, profit, cash-flow, margin, debt, or liquidity results for Dave are reported in this Form 8-K. The filing text does not provide clear historical financial statement values.
Material Changes Versus the Prior Comparable Period
This filing is a transaction announcement rather than an earnings report. It does not provide period-over-period operating or financial comparisons. The material change is the execution of the merger agreement and related financing, governance, equity, and support arrangements.
Governance, Capitalization, Outlook, and Risks
- Before closing, Dave will recapitalize into a dual-class structure. Parent Class A Common Stock will generally have one vote per share, while Parent Class V Common Stock will have ten votes per share.
- Shares received by Mr. Wilk are expected to be Parent Class V shares, providing him with approximately 70% of the voting power immediately after closing, assuming no SPAC redemptions.
- Founder holders agreed to potential forfeiture of up to 1,586,037 earnout shares based on post-closing trading-price thresholds of $12.50 and $15.00, subject to the agreement's conditions.
- Dave stockholders are generally subject to a six-month lock-up after closing; founder holders are subject to a separate lock-up generally extending up to 12 months, with specified early-release conditions.
- Closing is subject to SPAC stockholder approval, Dave stockholder approval, effectiveness of the Form S-4 registration statement, applicable antitrust clearance, exchange listing approval, satisfaction of the minimum cash condition, and other customary conditions.
- The outside date for completing the merger is January 31, 2022, subject to the agreement's termination provisions.
- Management's forward-looking statements include expectations regarding transaction timing, future operations, growth, market opportunities, customer contracts, debt levels, and regulatory developments. The filing cautions that these are subject to substantial uncertainty.
- Highlighted risks include failure to complete the transaction, redemption levels, inability to obtain financing or approvals, uncertainty in projected financial information, customer contract cancellations, competition, product or launch failures, regulatory changes, legal or investigative proceedings, COVID-19 impacts, and failure to realize expected benefits.
Most Important Facts for Investors to Verify
- Whether the merger closed and the final post-transaction capital structure, including redemptions and PIPE funding.
- Dave's historical and projected revenue, profitability, cash flow, debt, liquidity, and operating metrics in the eventual Form S-4, proxy statement, or subsequent periodic filings.
- Whether the $210 million minimum cash condition was satisfied after redemptions, transaction expenses, and any debt repayment.
- The final number of shares issued to Dave stockholders, the treatment of options, warrants, restricted stock, and earnout shares, and the resulting dilution.
- The effect of the dual-class structure and Mr. Wilk's voting control on public stockholder rights.
- The amount and timing of any repurchase from Mr. Wilk and Mr. Beilman and its effect on available cash.
- Completion of required stockholder, regulatory, registration, and exchange-listing approvals.