| Mergers |
Note
3—Mergers
As further discussed in Note 1, on August 15, 2022, the Mergers
were consummated pursuant to the Merger Agreement. In connection with the Closing, the following occurred in addition to the disclosures
in Note 1:
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(a) Each then-issued and outstanding Class A ordinary share, par value $0.0001 per share, of Founder (“Founder Class A Shares”) automatically converted into one share of Class A Common Stock, (b) each then-issued and outstanding Class B ordinary share, par value $0.0001 per share, of Founder (“Founder Class B Shares” and, together with Founder Class A Shares, “Founder Ordinary Shares”), converted into one share of Class A Common Stock, pursuant to the Sponsor Agreement, dated December 15, 2021, by and among Founder, Founder SPAC Sponsor LLC (“Sponsor”), Holdings LLC, and certain insiders of Founder, (c) each then-issued and outstanding public warrant of Founder, each representing a right to acquire one Founder Class A Share for $11.50 (a “Founder Public Warrant”), converted automatically, on a one-for-one basis, into a public warrant of the Company (a “Public Warrant”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement, dated October 14, 2021, by and between Founder and Continental Stock Transfer and Trust Company (as amended, the “Warrant Agreement”), (d) each then-issued and outstanding private placement warrant of Founder, each representing a right to acquire one Founder Class A Share for $11.50 (a “Founder Private Placement Warrant”), converted automatically, on a one-for-one basis, into a private placement warrant of the Company (the “Private Warrant” and together with the Public Warrants, the “Warrants”) that represents a right to acquire one share of Class A Common Stock for $11.50 pursuant to the Warrant Agreement, and (e) each then-issued and outstanding unit of Founder, each representing a Founder Class A Share and one-half of a Founder Public Warrant (a “Founder Unit”), that had not been previously separated into the underlying Founder Class A Share and one-half of one Founder Public Warrant upon the request of the holder thereof, was separated and automatically converted into one share of Class A Common Stock and one-half of one Public Warrant. No fractional Public Warrants were issued upon separation of the Founder Units. |
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The Company was issued Class A Units in Holdings LLC (“Class A Units”) and all preferred units, common units, and incentive units of Holdings LLC (including such convertible instruments, the “Rubicon Interests”) outstanding as of immediately prior to the Merger were automatically recapitalized into Class A Units and Class B Units of Holdings LLC (“Class B Units”), as authorized by the Eighth Amended and Restated Limited Liability Company Agreement of Holdings LLC (“A&R LLCA”) that was adopted at the time of the Merger. Following the Blocker Mergers, (a) holders of Rubicon Interests immediately before the Closing, other than the Blocker Companies (the “Blocked Unitholders”), were issued Class B Units (the “Rubicon Continuing Unitholders”), (b) Rubicon Continuing Unitholders were issued a number of shares of Class V Common Stock equal to the number of Class B Units issued to the Rubicon Continuing Unitholders, (c) Blocked Unitholders were issued shares of Class A Common Stock (as a result of the Blocker Mergers), and (d) following the adoption of the equity incentive award plan of Rubicon adopted at the Closing (the “2022 Plan”) and the effectiveness of a registration statement on Form S-8 filed on October 19, 2022, holders of phantom units of Holdings LLC immediately prior to the Closing (“Rubicon Phantom Unitholders”) and those current and former directors, officers and employees of Holdings LLC entitled to certain cash bonuses (the “Rubicon Management Rollover Holders”) are to receive restricted stock units (“RSUs”) and deferred stock units (“DSUs”), and such RSUs and DSUs will vest into shares of Class A Common Stock on February 11, 2023, the date that is 180 days following the Closing. $47.6 million of compensation expenses related to the Rubicon Management Rollover Holders’ RSUs and DSUs have been recognized in accrued expenses on the accompanying unaudited condensed consolidated balance sheet as of September 30, 2022. In addition to the securities issuable at the Closing and the RSUs and DSUs, certain of the Rubicon Management Rollover Holders received one-time cash payments (the “Cash Transaction Bonuses”). In addition, pursuant to the Merger Agreement, (i) Blocked Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Class A Shares and (ii) Rubicon Continuing Unitholders immediately before the Closing received a right to receive a pro rata portion of the Earn-Out Units and an equivalent number of shares of Class V Common Stock, in each case, depending upon the performance of Class A Common Stock during the five year period after the Closing, as discussed in greater detail in Note 1. |
| - | Certain
investors (the “PIPE Investors”) purchased, and the Company sold to such PIPE
Investors an aggregate of 12,100,000 shares of Class A Common Stock at a price of $10.00 per share pursuant to and as set
forth in the subscription agreements against payment by such PIPE Investors of the respective
amounts set forth therein. |
| - | Certain
investors (the “FPA Sellers”) purchased, and the Company issued and sold to such
FPA Sellers, an aggregate of 7,082,616 shares of Class A Common Stock pursuant to and as
set forth in the Forward Purchase Agreement entered into between Founder and ACM ARRT F LLC
(“ACM Seller”) on August 4, 2022, against payment by such FPA Sellers of
the respective amounts set forth therein. See Note 11 for further information. |
| - | The
Company (a) caused to be issued to certain investors 880,000 Class B Units pursuant
to the Merger Agreement, (b) issued 160,000 shares of Class A Common Stock to certain investors, and (c) Sponsor forfeited 160,000 Founder Class B Shares. See Note 10 for further
information. |
| - | Blocked
Unitholders and Rubicon Continuing Unitholders retained aggregate 19,846,916 shares of Class
A Common Stock and 118,677,880 shares of Class B Common Stock, representing 83.5% of voting
power in the Company at the Closing. |
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The Company and Holdings LLC entered into the Tax Receivable Agreement with the TRA Holders. See Note 1 for further information. |
| - | The
Company contributed approximately $73.8 million of cash to Rubicon Technologies Holdings,
LLC, representing the net amount held in the Company’s trust account following the
redemption of Class A Common Stock originally sold in Founder’s initial public offering,
less (b) cash consideration of $28.9 million paid to Holdings LLC’s certain management
members, plus (c) $121.0 million in aggregate proceeds received from the PIPE Investors,
less (d) the aggregate amount of transaction expenses incurred by the parties to the Merger
Agreement and (e) payment to the FPA Sellers pursuant to the Forward Purchase Agreement. |
| - | The
Company incurred $67.3
million in transaction costs relating to the Mergers, $23.1 million
of which was paid as of September 30, 2022 and the remaining amount was recognized in accrued expenses on the accompanying
condensed consolidated balance sheet as of September 30, 2022. The Company has the option to settle a majority of the transaction costs that were unpaid and
accrued as of September 30, 2022 in cash or Class A Common Stock at the Company’s discretion. The transaction
costs have been offset against additional paid-in capital in the accompanying condensed consolidated statements of
stockholders’ equity (deficit) and noncontrolling interest. |
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