Nerdy Inc. current report, 06 October 2020

Business Context and Reporting Period

This Form 8-K was filed by TPG Pace Tech Opportunities Corp., not Nerdy Inc., and reports events occurring primarily on October 6 and October 9, 2020. The company is a special purpose acquisition company (SPAC) formed to pursue an initial business combination.

Key Financial Metrics and Capitalization

  • The company completed an initial public offering of 45,000,000 units at $10.00 per unit.
  • Gross IPO proceeds were $450.0 million.
  • Each unit consisted of one Class A ordinary share and one-fifth of one redeemable warrant.
  • The company separately sold 7,333,333 private placement warrants to its sponsor at $1.50 per warrant, generating approximately $11.0 million of gross proceeds.
  • Approximately $450.0 million was deposited into a trust account, comprising $441.0 million of IPO proceeds and $9.0 million of private placement warrant proceeds.
  • Approximately $15.75 million of IPO underwriting discounts were deferred and included in the amounts described as deposited into the trust account.
  • The filing does not provide revenue, operating profit, net income, cash flow, margins, or debt balances for a comparable period.

Material Changes and Transactions

  • The SEC declared the company’s Form S-1 registration statement effective on October 6, 2020.
  • The IPO closed on October 9, 2020.
  • The company adopted amended and restated memorandum and articles of association and entered into warrant, trust, registration rights, private placement, administrative services, letter, and indemnity agreements.
  • Private placement warrants generally have transfer restrictions while held by the sponsor, may be exercised on a cashless basis by permitted holders, and are subject to registration rights.

Outlook, Risks, and Unusual Items

  • Trust-account funds generally cannot be released until the initial business combination, certain shareholder-approved amendments, or the redemption of public shares if no business combination is completed within 24 months after the IPO closing.
  • The company had not identified or completed an initial business combination in this filing.
  • Investors remain exposed to the risk that the company may not complete a business combination within the required 24-month period, in which case public shares are generally subject to redemption, subject to applicable law.
  • Warrants may create future dilution if exercised. Public warrants have an exercise price of $11.50 per share.
  • The filing contains no operating guidance or management forecast.

Facts Investors Should Verify

  1. Confirm that this filing relates to TPG Pace Tech Opportunities Corp. rather than Nerdy Inc.
  2. Verify the IPO closing date, total units issued, $450.0 million IPO proceeds, and approximately $11.0 million of private placement proceeds.
  3. Review the trust-account restrictions and the 24-month deadline for completing an initial business combination.
  4. Review the warrant terms, including the $11.50 exercise price, transfer restrictions, and potential dilution.
  5. Examine the filed registration rights, sponsor, administrative services, and indemnity agreements for related-party obligations.