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Item 2.01.
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Completion of Acquisition or Disposition of Assets.
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The disclosure set
forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.
On December 29, 2020,
the Business Combination was approved by the stockholders of the Company at the special meeting in lieu of the 2020 annual meeting
of stockholders (the “Special Meeting”). The Business Combination was completed on December 29, 2020.
The aggregate consideration
for the Business Combination was $522.4 million, consisting of (i) $313.5 million payable in 31,350,625 HoldCo Class B Units and
31,350,625 shares of Class B common stock, (ii) $30 million in Closing Cash Consideration and (iii) the repayment of $150.0 million,
representing one-half of the existing principal amount owed by GNOG LLC under the Credit Agreement, together with related prepayment
premium of approximately $24.0 million, as well as accrued and unpaid interest in an amount of approximately $4.9 million. Houlihan
Lokey rendered an opinion as to the fairness, from a financial point of view, to the Company, of the consideration to be paid by
the Company pursuant to the Purchase Agreement.
Tilman J. Fertitta,
our Chief Executive Officer and Chairman and one of the sponsors, and the former Chief Executive Officer and Co-Chairman of Landcadia,
indirectly owns all of the equity interests in LF LLC which, prior to the Closing of the Business Combination, owned all of the
equity interests in GNOG HoldCo and GNOG LLC.
As of the Closing Date
and following the completion of the Business Combination, the Company had the following outstanding securities:
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●
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36,982,320 shares of Class A common stock;
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31,350,625 shares of Class B common stock;
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●
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16,425,000 warrants, each exercisable for one share of Class A Common Stock at a price of $11.50 per share.
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As of the Closing Date
and following the completion of the Business Combination, LF LLC owned 31,350,625 HoldCo Class B Units and 31,350,625 shares of
Class B common stock. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, LF
LLC will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender
of a corresponding number of shares of Class B common stock), on a one for-one basis, for either shares of Class A common stock,
or at the election of the Company, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the
market value of such shares of Class A common stock, each of which is redeemable on a one-for-one basis for shares of Class A Common
Stock.
Immediately following
the Closing and by virtue of the holdings by Mr. Fertitta and his affiliates, including LF LLC, of shares of Class A common
stock and Class B common stock, Mr. Fertitta beneficially owns approximately 11.1% of the economic interests of the Company
(excluding any shares of Class A common stock that may be issued upon exercise of the warrants held by them) and 79.9% of the voting
power of the capital stock of the Company (after the automatic downward adjustment of Mr. Fertitta and his affiliates’
voting power in accordance with the terms of the Fourth Amended and Restated Charter (as defined below)). Mr. Fertitta and
his affiliates beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo through LF LLC’s HoldCo
Class B Units, which carry no voting rights. In addition, Landcadia HoldCo owns all of the equity interests in GNOG HoldCo,
which owns all of the equity interests in GNOG LLC.
The rules of the Nasdaq
Stock Market (“Nasdaq”) define a “controlled company” as a company of which more than 50% of the voting
power for the election of directors is held by an individual, a group or another company. As noted above, following the completion
of the Business Combination, Mr. Fertitta and his affiliates hold 79.9% of the voting power of the Company. As a result, the Company
is a controlled company under the Nasdaq listing rules. As a “controlled company,” the Company qualifies for exemptions
from certain corporate governance rules, including (i) a board of directors comprised of a majority of independent directors; (ii)
compensation of the Company’s executive officers being determined by a majority of the independent directors or a compensation
committee comprised solely of independent directors; (iii) a compensation committee charter which, among other things, provides
the compensation committee with the authority and funding to retain compensation consultants and other advisors; and (iv) director
nominees selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating
committee comprised solely of independent directors. Following the Closing, the Company intends to rely on the exemptions described
in clauses (i), (ii), (iii) and (iv) above. If the Company ceases to be a “controlled company,” and its securities
are still listed on Nasdaq, it will be required to comply with these requirements by the date its status as a “controlled
company” changes or within specified transition periods applicable to certain provisions, as the case may be.
Prior to the Closing,
the Landcadia was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After
the Closing, the Company became a holding company whose assets primarily consist of interests in its subsidiaries, including GNOG
LLC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
The Company makes forward-looking
statements in this Current Report on Form 8-K. These forward-looking statements relate to expectations for future financial performance,
business strategies or expectations for the Company’s business. Specifically, forward-looking statements may include statements
relating to:
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the benefits of the Business Combination;
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·
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the future financial performance of the Company following the Business Combination;
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expansion plans and opportunities; and
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·
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other statements preceded by, followed by or that include the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.
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These forward-looking
statements are based on information available as of the date of this Current Report on Form 8-K and the Company’s management’s
current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking
statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not
undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made,
whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number
of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from
those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
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the risk that the Business Combination disrupts current plans and operations;
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the ability to recognize the anticipated benefits of the Business Combination, which may be affected
by, among other things, competition and the ability of the combined business to grow and manage growth profitably;
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costs related to the Business Combination;
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changes in applicable laws or regulations;
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factors relating to the future business, operations and financial performance of GNOG LLC, including:
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GNOG LLC’s inability to compete with other forms of entertainment for consumers’ discretionary
time and income;
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market conditions and global and economic factors beyond GNOG LLC’s control, including the
potential adverse effects of the ongoing global COVID-19 pandemic and reductions in discretionary consumer spending, among others;
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GNOG LLC’s inability to attract and retain users;
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GNOG LLC’s inability to profitably expand into new markets;
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changes in applicable laws or regulations;
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the failure of third-party service providers to perform services and protect intellectual property
rights required for the operation of GNOG LLC’s business;
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the possibility that the Company or GNOG LLC may be adversely affected by other economic, business,
and/or competitive factors; and
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other risks and uncertainties indicated or incorporated by reference in this Current Report on
Form 8-K, including those set forth in the “Risk Factors” section in Landcadia’s definitive proxy statement filed
with the U.S. Securities and Exchange Commission (the “SEC”) on December 2, 2020 (the “Proxy Statement”)
relating to the Special Meeting, which is incorporated herein by reference.
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Business
The business of Landcadia
prior to the Business Combination is described in the Proxy Statement in the section entitled “Information About the Company,”
which is incorporated herein by reference. The business of GNOG LLC prior to the Business Combination is described in in the Proxy
Statement in the section entitled “Business of GNOG,” which is incorporated herein by reference.
Risk Factors
The risk factors related
to the Company’s business and operations and the Business Combination are set forth in the Proxy Statement in the section
entitled “Risk Factors,” which is incorporated herein by reference.
Properties
The properties of the
Company are described in the Proxy Statement in the section entitled “Business of GNOG – Property,” which
is incorporated herein by reference.
Financial Information
Reference
is made to the disclosure set forth in Item 9.01 of this Current Report concerning the financial information of GNOG LLC,
which is incorporated herein by reference. Reference is further made to the disclosures contained in the Proxy Statement in the
sections titled “Summary Historical Financial Information of GNOG” and “GNOG Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated herein by reference.
The
unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2020
is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.
Security Ownership of Certain Beneficial
Owners and Management
The following table
sets forth information known to the Company regarding beneficial ownership of the Company’s common stock as of December 29,
2020, after giving effect to the Closing, by:
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each person known by the Company to be the beneficial owner of more than 5% of outstanding common stock;
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each of the Company’s executive officers and directors; and
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all executive officers and directors of the Company as a group.
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Beneficial ownership
is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if
he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days. Shares of common stock issuable upon exercise of options or warrants currently exercisable
or exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of class and percentage
of total voting power of the beneficial owner thereof.
The beneficial ownership
of the Company’s common stock is based on 36,982,320 shares of Class A common stock and 31,350,625 shares of Class B common
stock issued and outstanding as of December 29, 2020.
Unless otherwise indicated,
the Company believes that each person named in the table below has sole voting and investment power with respect to all shares
of common stock beneficially owned by him.
Name and Address of
Beneficial Owner(1)
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Number of Shares of
Class A Common
Stock
Beneficially Owned
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%
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Number of Shares of
Class B Common
Stock Beneficially
Owned
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%
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% of Total Voting
Power**
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Directors and Executive Officers
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Tilman J. Fertitta(2)
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7,032,292
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17.6
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31,350,625
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100
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79.9
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Richard H. Liem
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-
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-
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-
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-
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-
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Steven L. Scheinthal
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-
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-
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-
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-
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-
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Michael S. Chadwick
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-
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-
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-
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-
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-
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G. Michael Stevens
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-
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-
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-
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-
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-
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Scott Kelly
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-
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-
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-
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-
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-
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Thomas Winter
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-
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-
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-
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-
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-
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Michael Harwell
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-
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-
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-
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-
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-
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All Executive Officers and Directors as a Group (eight individuals)
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7,032,292
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17.6
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31,350,625
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100
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79.9
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Greater than 5% Stockholders
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Davidson Kempner(3)
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2,000,000
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5.4
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-
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-
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*
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*
Less than 1%.
** Percentage of total voting power represents
the combined voting power with respect to all shares of Class A common stock and Class B common stock, voting as a single class.
As described elsewhere herein, each share of Class B common stock is entitled to 10 votes per share, subject to certain limitations
described herein, and each share of Class A common stock is entitled to one vote per share.
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(1)
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Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is c/o Golden Nugget Online Gaming, Inc., 1510 West Loop South, Houston, Texas 77027.
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(2)
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The
number of shares of Class A common stock includes 2,941,667 shares of Class A common stock underlying the private placement
warrants held by Mr. Fertitta. LF LLC is the record holder of the shares of Class B common stock reported herein. LF LLC is
indirectly owned by Fertitta Entertainment, Inc. (“FEI”) and Mr. Fertitta is the owner of FEI. As such, Mr. Fertitta may be
deemed to have beneficial ownership of the shares of Class B common stock held directly by LF LLC.
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(3)
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According to a Schedule 13G filed on May 17, 2019, Davidson Kempner Partners (“DKP”), Davidson Kempner Institutional Partners, LP. (“DKIP”) and Davidson Kempner International, Ltd., (“DKIL”) hold the interests shown. MHD Management Co. (“MHD”) is the general partner of DKP and MHD Management Co. GP, L.L.C. is the general partner of MHD. Davidson Kempner Capital Management LP (“DKCM”) is responsible for the voting and investment decisions of DKP, DKIP and DKIL. Thomas L. Kempner, Jr. and Anthony A. Yoseloff, through DKCM, are responsible for the voting and investment decisions relating to the securities held by DKP, DKIP and DKIL. The address of each of these entities is c/o Davidson Kempner Capital Management LP, 520 Madison Avenue, 30th Floor, New York, New York 10022.
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Directors and Executive Officers
Information
with respect to the Company’s directors and executive officers after the Closing is set forth in the Proxy Statement in the
section entitled “Management After the Transaction,” which is incorporated herein by reference.
In connection with
and effective upon the Closing, each of Landcadia’s officers and directors resigned, with the exception of Mr. Fertitta.
In addition, effective
upon the Closing, the size of the Company’s board of directors (the “Board”) was increased from five to six members.
At the Special Meeting, each of Michael S. Chadwick, Tilman J. Fertitta, Scott J. Kelly, Richard H. Liem, Steven L. Scheinthal
and G. Michael Stevens and were elected by the Company’s stockholders to serve as directors of the Company, with terms expiring
at the Company’s 2021 annual meeting of stockholders.
Director Independence
The Board has determined
that each of Messrs. Chadwick, Kelly, and Stevens are independent within the meaning of the Nasdaq rules and the applicable SEC
rules.
Committees of the Board of Directors
Following the Closing,
the only standing committee of the board is the audit committee (the “Audit Committee”). The principal functions of
the Audit Committee are detailed in the Audit Committee charter, which is available on the Company’s website, and include,
among others:
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the appointment, compensation, retention, replacement, and oversight of the work of the independent
registered public accounting firm engaged by the Company;
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pre-approving all audit and permitted non-audit services to be provided by the independent registered
public accounting firm engaged by the Company, and establishing pre-approval policies and procedures;
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reviewing and discussing with the independent auditors all relationships the auditors have with
the Company in order to evaluate their continued independence;
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setting clear hiring policies for employees or former employees
of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;
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·
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setting clear policies for audit partner rotation in compliance
with applicable laws and regulations;
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·
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obtaining and reviewing a report, at least annually, from the independent registered public accounting
firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any
material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry
or investigation by governmental or professional authorities within the preceding five years respecting one or more independent
audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent
registered public accounting firm and the Company to assess the independent registered public accounting firm’s independence;
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reviewing and approving any related party transaction required to be disclosed pursuant to Item 404
of Regulation S-K promulgated by the SEC prior to the Company entering into such transaction; and
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reviewing with management, the independent registered public accounting firm, and the Company‘s
legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government
agencies and any employee complaints or published reports that raise material issues regarding the Company‘s financial statements
or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards
Board, the SEC or other regulatory authorities.
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Effective upon the
Closing, the Board appointed Messrs. Chadwick, Kelly and Stevens as members of the Audit Committee. All members of the Audit Committee
are independent within the meaning of the federal securities laws and the meaning of the Nasdaq rules. Each member of the Audit
Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq, and the
Board has determined that Mr. Chadwick is an “audit committee financial expert,” as that term is defined by the applicable
rules of the SEC.
Executive Compensation
Information
with respect to the executive compensation of GNOG LLC’s executive officers and directors prior to the Closing is described
in the Proxy Statement in the section entitled “Executive Compensation,” which is incorporated herein by reference.
The Board adopted and
the stockholders of the Company approved the Golden Nugget Online Gaming, Inc. 2020 Incentive Award Plan (the “Incentive
Plan”), effective upon Closing. The material terms of the Incentive Plan are described in the section entitled “Proposal
No. 6 – The Incentive Plan Proposal” in the Proxy Statement, which is incorporated herein by reference. A copy
of the full text of the Incentive Plan is attached hereto as Exhibit 10.9 and is incorporated herein by reference.
Certain Relationships and Related
Transactions
The
disclosure set forth in Item 1.01 above is incorporated herein by reference.
The information set
forth in the section entitled “Certain Relationships and Related Party Transactions” in the Proxy Statement
is incorporated herein by reference.
On December 31, 2020,
the Company agreed that it would, in lieu of LF LLC, pay the required interest payment of $2.3 million to GNOG LLC due on such
date under the Second A&R Intercompany Note. As a result of the Company making such payment, no shares of Class B common stock
or HoldCo Class B Units were issued to LF LLC under the HoldCo LLC Agreement.
Legal Proceedings
Information
with respect to the legal proceedings is described in the Proxy Statement in the section entitled “Litigation Relating
to the Transaction,” which is incorporated herein by reference.
Market Price and Dividends on the
Registrant’s Common Equity and Related Stockholder Matters
In connection with
the Closing, the shares of Class A common stock and warrants began trading on The Nasdaq Global Market under the symbols “GNOG”
and “GNOGW,” respectively. Landcadia’s units automatically separated into their component securities upon consummation
of the Business Combination and, as a result, no longer trade as a separate security and were delisted from Nasdaq. There is no
public market for the shares of Class B common stock.
As of the Closing
Date, there were approximately three holders of record of Class A common stock and 1 holder of record of Class B common
stock. Such amounts do not include DTC participants or beneficial owners holding shares through nominee names.
The Company has not
paid any cash dividends on its common stock to date. It is the present intention of the Company to retain any earnings for use
in its business operations and, accordingly, the Company does not anticipate the Board declaring any dividends in the foreseeable
future.
Recent Sales of Unregistered Securities
Information about unregistered
sales of the Company’s equity securities is set forth under Item 3.02 of this Current Report on Form 8-K, which is incorporated
herein by reference.
Description of the Company’s
Securities
A description of the
Company’s common stock, preferred stock and warrants is included in the Proxy Statement in the section entitled “Description
of Securities,” which is incorporated herein by reference.
Indemnification of Directors and
Officers
Information about the
indemnification of the Company’s directors and officers is set forth in the sections of the Proxy Statement entitled “Information
about the Company – Limitation on Liability and Indemnification of Officers and Directors” and “Certain
Relationships and Related Transactions – Indemnification Agreements and Directors and Officers Liability Insurance”
and under “Indemnification Agreements” in Item 1.01 of this Current Report on Form 8-K, which
information is incorporated herein by reference.