Business Context and Reporting Period
This filing is the fiscal 2020 Form 10-K of Acies Acquisition Corp., not an operating-company filing for PLAYSTUDIOS, Inc. Acies was a Cayman Islands blank-check company formed on August 14, 2020 to pursue a business combination. The reporting period covers inception through December 31, 2020.
Acies completed its initial public offering in October 2020 and focused on identifying a target in live, location-based and mobile experiential entertainment. On February 1, 2021, after year-end, Acies entered into a definitive merger agreement with PLAYSTUDIOS, Inc.
Financial Highlights
| Metric | Period-end or period amount |
|---|---|
| Operating revenue | None; the company had not commenced operations or generated operating revenue. |
| Net loss | $238,958 for the period from inception through December 31, 2020. |
| Formation and operating costs | $264,690. |
| Interest income and unrealized gain | $22,174 of interest income and $3,558 of unrealized gain on Trust Account investments. |
| Cash used in operating activities | $932,462. |
| Cash outside Trust Account | $1,061,717. |
| Trust Account securities | $215,275,732, invested substantially in U.S. Treasury bills. |
| Total assets | $217,017,121. |
| Deferred underwriting fee payable | $7,533,750, payable only if a business combination is completed, subject to the underwriting agreement. |
| Shareholders’ equity | $5,000,010. |
| Debt | No long-term debt, capital leases or operating leases. Certain short-term related-party advances and a promissory note were repaid. |
Margins and operating profitability are not meaningful because Acies had no operating business or revenue. There is no prior comparable annual period because the company was formed in 2020.
Material Changes and Transactions
- Acies sold 21,525,000 units at $10.00 per unit, generating gross proceeds of $215.25 million, including a partial over-allotment exercise.
- The Sponsor purchased 4,536,667 private placement warrants for aggregate gross proceeds of $6.805 million.
- A total of $215.25 million was deposited into the Trust Account.
- The Sponsor forfeited 368,750 Class B ordinary shares after the underwriters exercised only part of the over-allotment option, leaving 5,381,250 Class B shares outstanding.
- As of December 31, 2020, 20,445,277 Class A shares were subject to possible redemption at an aggregate redemption value of $204.477 million.
- After year-end, Acies agreed to acquire PLAYSTUDIOS for stated merger consideration of $1.041 billion, subject to elections, redemptions, closing conditions and potential earnout consideration of up to 15 million additional shares.
- Acies also entered into a $250 million PIPE subscription for 25 million shares of New PLAYSTUDIOS Class A common stock, subject to closing.
Liquidity, Outlook, Risks and Unusual Items
Acies intended to use substantially all Trust Account funds to complete its initial business combination. Funds outside the Trust Account were intended to fund target searches, due diligence, transaction costs and general working capital. Management stated that additional financing might be required, particularly if public shareholders exercise significant redemption rights.
The company disclosed substantial doubt about its ability to continue as a going concern if a business combination is not completed, because cash and working capital outside the Trust Account were not sufficient to fund planned activities for a reasonable period. Sponsor, officer and director loans were possible but not committed.
- The company was required to complete a business combination by October 27, 2022, or January 27, 2023 if a qualifying agreement had been signed by October 27, 2022. Failure would require liquidation and redemption of public shares; warrants would expire worthless.
- Completion of the PLAYSTUDIOS transaction was subject to shareholder approvals, regulatory clearance, Nasdaq listing approval, minimum net tangible assets of $5 million and minimum available cash plus PIPE proceeds of $200 million, among other conditions.
- Public shareholders had redemption rights, subject to applicable limits. Redemptions could reduce cash available for the transaction and potentially prevent closing.
- The filing identifies conflicts of interest because the Sponsor, directors and officers held founder interests and had obligations or interests in other businesses, including another SPAC.
- COVID-19 could negatively affect the company’s financial position, operations or target search, although the specific impact was not determinable at the reporting date.
- A stockholder lawsuit filed in March 2021 and a related demand letter alleged fiduciary-duty breaches and deficiencies in the merger disclosure. Acies considered the allegations without merit but could not predict the outcome.
- The company paid an affiliate of the Sponsor $10,000 per month for office, administrative and secretarial services.
- Internal control disclosure was subject to the transition period for a newly public emerging growth company; management concluded that disclosure controls and procedures were effective as of December 31, 2020.
Most Important Facts to Verify
- Confirm that the requested issuer is Acies Acquisition Corp. rather than PLAYSTUDIOS, Inc.; this filing reports the SPAC’s pre-combination financial position.
- Verify whether the proposed PLAYSTUDIOS merger closed, the final redemption level, and the amount of cash ultimately available at closing.
- Review the later Form S-4, proxy materials and subsequent filings for final merger consideration, earnout terms, PIPE funding and sponsor forfeitures.
- Assess the effect of the $7.534 million deferred underwriting fee, transaction expenses and any placement-agent fees on post-combination liquidity.
- Monitor the stockholder litigation and any disclosure amendments or settlement obligations.
- Evaluate the going-concern risk if the business combination failed or required additional financing.
- Review warrant dilution, redemption provisions and the potential impact of 11.7 million public and private placement warrants.