Business Context and Reporting Period
This Form 8-K, dated July 15, 2021, is filed by FG New America Acquisition Corp. (FGNA) regarding its proposed business combination with Opportunity Financial, LLC (OppFi). The filing details a waiver of a closing condition and a corresponding sponsor forfeiture agreement executed on the same date.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, or margins for the reporting period. The primary financial data points relate to the transaction structure:
- Original Closing Cash Condition: $200,000,000.
- Waived Closing Cash Condition: Reduced to a minimum of $83,000,000.
- Warrant Exercise Prices: $11.50 per share (Class A) and $15.00 per share (Class A).
Material Changes
On July 15, 2021, the parties signed a Waiver Letter and a Sponsor Forfeiture Agreement, resulting in the following material changes to the Business Combination Agreement:
- Cash Condition Waiver: OppFi waived the requirement for $200,000,000 in Available Closing Cash, lowering the threshold to $83,000,000.
- Equity Issuance: The shortfall in cash will be addressed by issuing additional equity in the Company and OppFi.
- Lock-Up Revision: The Investor Rights Agreement was revised to exclude the additional equity issued in lieu of cash from lock-up provisions.
- Sponsor Forfeiture: FG New America Investors LLC (the Sponsor) agreed to forfeit the following securities contingent upon Closing:
- 2,500,000 shares of Class B common stock.
- 1,600,000 warrants exercisable at $11.50 per share.
- 600,000 warrants exercisable at $15.00 per share.
Outlook, Risks, and Contingencies
Management highlights several risks and contingencies that could impact the completion of the business combination or future performance:
- Transaction Risks: Failure to obtain stockholder or regulatory approvals, or the occurrence of events triggering termination of the agreement.
- Operational Risks: Disruption of current plans, inability to retain key employees, and the impact of the COVID-19 pandemic.
- Market Risks: Inability to list shares on the NYSE post-combination and market acceptance of the "OppFi Card" product.
- Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ materially from projections due to economic, competitive, and legal factors.
Investor Verification Checklist
- Verify the definitive proxy statement for detailed financial projections and risk factors regarding OppFi.
- Confirm the final amount of Available Closing Cash at the time of Closing to ensure it meets the revised $83,000,000 threshold.
- Review the specific terms of the revised Investor Rights Agreement regarding the lock-up exclusions for new equity.
- Monitor the status of stockholder approval and regulatory clearances required to close the transaction.
- Assess the dilution impact of the additional equity issuance replacing the waived cash requirement.