Planet Labs PBC current report, 07 July 2021

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SEC Form 8-K Summary

Business Context and Reporting Period

On July 7, 2021, dMY Technology Group, Inc. IV, a special purpose acquisition company, announced a definitive agreement to combine with Planet Labs Inc. The transaction would result in Planet becoming a wholly owned subsidiary of a renamed public company, referred to as “New Planet.” This is a transaction announcement rather than a periodic operating report.

Transaction Terms and Key Financial Metrics

  • Planet equityholders would receive $2.135 billion of aggregate base consideration in newly issued New Planet Class A and Class B common stock, valued at $10.00 per share.
  • Planet equityholders may receive up to 27 million additional shares in contingent earnout consideration, in four equal tranches tied to New Planet share-price or change-of-control thresholds of $15, $17, $19 and $21.
  • A private investment in public equity transaction would issue 20 million dMY IV Class A shares at $10.00 per share, generating $200 million of gross proceeds, subject to customary closing conditions.
  • New Planet Class B shares would carry 20 votes per share, compared with one vote per Class A share. Founder-held Class B shares would convert to Class A shares upon specified events, including the applicable founder’s departure, certain transfers, death or incapacity, and no later than the 10-year anniversary of closing.
  • The filing text does not provide clear values for Planet’s revenue, net income or loss, cash flow, margins, debt, cash balance or liquidity. Audited Planet financial statements for the fiscal years ended January 31, 2021 and 2020 were furnished as an exhibit, but their figures are not included in the provided text.
  • The furnished financial statements were prepared under AICPA standards rather than PCAOB standards and may be adjusted or presented differently in the future Registration Statement.

Material Changes Versus the Prior Comparable Period

The filing does not report period-over-period operating results. The material change is the proposed public-company combination, associated equity issuance and planned $200 million PIPE financing.

Guidance, Outlook, Risks and Unusual Items

  • Closing requires approval by dMY IV and Planet stockholders, effectiveness of a Form S-4 Registration Statement, applicable antitrust clearance, required Federal Communications Commission and National Oceanic and Atmospheric Administration consents, NYSE listing approval and satisfaction of other customary conditions.
  • After applicable redemptions, dMY IV must have at least $250 million of cash available at closing for Planet’s benefit, and must retain at least $5,000,001 of net tangible assets.
  • The merger may be terminated if closing has not occurred by February 21, 2022, or under other specified circumstances, including failure to obtain stockholder approval, a final legal prohibition or material breach.
  • Planet founders, certain executives, directors, major stockholders, the sponsor and dMY officers and directors agreed to voting, transfer-restriction and/or lock-up arrangements. Certain lock-ups generally extend 12 or 18 months, subject to specified early-release provisions.
  • Founder and sponsor earnout arrangements are tied to the same $15, $17, $19 and $21 share-price thresholds and generally expire or are cancelled after five years if unvested.
  • Identified risks include failure to satisfy closing conditions, stockholder redemptions, regulatory or legal challenges, COVID-19 impacts, failure to obtain or maintain NYSE listing, transaction costs, disruption to operations, competition, customer and employee retention, and inability to achieve anticipated benefits or profitable growth.

Most Important Facts for Investors to Verify

  1. Review the definitive proxy statement/prospectus and Form S-4 for updated transaction terms, financial statements, pro forma capitalization and risk factors.
  2. Verify the amount of cash remaining after dMY IV stockholder redemptions and whether the $250 million minimum cash condition is satisfied.
  3. Assess Planet’s audited and PCAOB-compliant financial statements, including revenue growth, losses, cash burn, debt and liquidity.
  4. Confirm required stockholder, antitrust, FCC and NOAA approvals and the expected closing date.
  5. Evaluate dilution from the $2.135 billion stock consideration, the $200 million PIPE, earnout shares, equity awards, founder shares and warrants.
  6. Review the voting-control implications of the founders’ 20-votes-per-share Class B stock and the applicable conversion provisions.