| De-SPAC, Material Terms of the de-SPAC Transaction [Text Block] |
On June 12, 2026, SPAC entered into the Business Combination Agreement with BIG3 HoldCo LLC, a Delaware limited liability company, Halfcourt Holdco, Inc., a Delaware corporation, Halfcourt Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Pubco, and Halfcourt Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of Pubco. Pursuant to the Business Combination Agreement, and on the terms and subject to the conditions thereof, among other things, (a) on the day that is one day prior to the date of the SPAC Merger, SPAC will transfer, by way of continuation, out of the Cayman Islands and into the State of Delaware so as to re-domicile as and become a Delaware corporation, and (b) at the closing, (i) SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving entity and a wholly-owned subsidiary of Pubco and (ii) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity and a wholly-owned subsidiary of Pubco. Concurrently with the execution of the Business Combination Agreement, the Company entered into the Sponsor Support Agreement with the Sponsor, each of SPAC’s independent directors, Pubco and the Company, pursuant to which the Insiders agreed to, among other things, vote in favor of and otherwise support the Business Combination. In addition, pursuant to the Sponsor Support Agreement, the Sponsor will, effective as of immediately prior to the Domestication and conditioned upon the closing of the Business Combination, forfeit and surrender to SPAC an aggregate of 2,750,000 Founder Shares held by the Sponsor. The Sponsor may, in its discretion, transfer to third parties up to an additional 500,000 Founder Shares held by the Sponsor to incentivize non-redemptions or investments into SPAC or Pubco or otherwise to support the Business Combination, provided that any portion of the Discretionary Founder Shares that are not so transferred shall be forfeited by the Sponsor and surrendered to SPAC. In addition, pursuant to the Sponsor Support Agreement, 500,000 shares of Pubco Class A Common Stock to be held by the Sponsor as of the closing will be subject to vesting over a five-year period.
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| De-SPAC, SPAC Reasons for the Structure, and Timing of De-SPAC and Related Financing Transaction [Text Block] |
On June 11, 2026, at a meeting of the board of directors, the SPAC Board unanimously (i) determined that it is fair, advisable and in the best interests of SPAC and the SPAC Shareholders for SPAC to enter into the Business Combination Agreement and each Ancillary Document, (ii) approved the Business Combination and other transactions contemplated by the Business Combination Agreement, and approved SPAC’s execution, delivery of, and performance of its obligations under the Business Combination Agreement and each Ancillary Document thereto to which SPAC is, or is contemplated to be, a party and the transactions contemplated thereby (including the Business Combination), on the terms and subject to the conditions set forth therein and (iii) adopted resolutions recommending the adoption of the Business Combination Agreement and, as applicable, the approval of each Ancillary Document thereto to which SPAC is, or is contemplated to be, a party and the transactions contemplated thereby, on the terms and subject to the conditions set forth therein, by the SPAC Shareholders. Before reaching its decision, the SPAC Board and/or members of the SPAC management team held extensive meetings (virtual and in-person) and teleconferences with the Company’s management team, advisors and stakeholders, and industry and subject matter specialists from White & Case, and additionally discussed the following, without limitation, amongst each other: | ● | The Company’s historical financial statements, including the substantial doubt about the Company’s ability to continue as a going concern, and the Company’s current budget, capital expenditures, near-term funding requirements for the currently planned season and future growth plans; |
| ● | the SPAC Board did not review revenue or profit projections in accepting the valuation, given the emerging nature of the business, and instead considered publicly reported information regarding financing and sale transactions involving sports teams and emerging leagues, which information was not independently verified by SPAC or the SPAC Board; |
| ● | the results of the legal due diligence performed by White & Case, including, without limitation, a review of corporate matters, material contracts and business relationships, intellectual property and information technology, data privacy and cybersecurity, employment, compensation and benefits, real estate, and environmental information; and |
| ● | Perceived market enthusiasm about sports generally at the moment, including among other things, the New York Knicks’ dramatic run to the NBA championship and the World Cup in North America, and general lack of access to investable opportunities in sports for most investors. |
The SPAC Board considered a wide variety of reasons and factors in connection with its evaluation of the Business Combination. Given the complexity of those reasons and factors, the SPAC Board did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific reasons and factors it took into account in reaching its decision. Different individual members of the SPAC Board may have given different weight to different reasons and factors in their evaluation of the Business Combination. At the time that it approved the Business Combination, the SPAC Board viewed its position as being based on all of the information available and the reasons and factors presented to and considered by it and believed it had the necessary information to make an informed decision. This explanation of the SPAC Board’s reasons for the approval of the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in conjunction with the reasons and information discussed under the section of this proxy statement/prospectus entitled “Cautionary Note Regarding Forward-Looking Statements.”
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| Material Differences in Security Holders' Rights, SPAC Versus the Combined Company [Text Block] |
This section of the proxy statement/prospectus describes the material differences between the rights of SPAC Shareholders and the rights of Pubco Stockholders upon completion of the Domestication. The SPAC is an exempted company incorporated under the Companies Act. The rights of SPAC Shareholders are currently governed by the Companies Act, Cayman Islands law generally and the SPAC Organizational Documents. Upon completion of the Business Combination, the rights of the SPAC Shareholders who become shareholders of Pubco will be governed by the DGCL and the Pubco Organizational Documents, as they will be in effect as of the Closing. The Companies Act (As Revised) of the Cayman Islands and Cayman Islands law generally differ in some material respects from laws generally applicable to United States corporations and their stockholders. In addition, the SPAC Organizational Documents differ in certain material respects from the Pubco Organizational Documents. As a result, when you become a stockholder of Pubco, your rights will differ in some regards as compared to when you were a shareholder of SPAC. Below is a summary chart outlining important similarities and differences in the corporate governance and stockholder/shareholder rights associated with each of the SPAC and Pubco according to applicable law and the organizational documents of the SPAC and Pubco. This section does not include a complete description of all differences between the rights of the SPAC Shareholders and Pubco Stockholders following completion of the Business Combination, nor does it include a complete description of the specific rights of these shareholders. Furthermore, the identification of some of the differences in the rights of these shareholders as material is not intended to indicate that other differences do not exist. You are urged to read carefully the relevant provisions of the Companies Act and the DGCL and the organizational documents of each company. This summary is qualified in its entirety by reference to the full text of the SPAC Organizational Documents, the Proposed Pubco Charter, attached to this proxy statement/prospectus as Annex D, and the Proposed Pubco Bylaws, attached to this proxy statement/prospectus as Annex E, as well as the Delaware corporate law and corporate laws of the Cayman Islands, including the Companies Act, to understand how these laws apply to SPAC and Pubco. Comparison of Shareholder Rights Under Applicable Corporate Law and the Organizational Documents of SPAC and Pubco | | | | | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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| | | | | Applicable Legislation | | Laws of the State of Delaware | | The Companies Act (As Revised) of the Cayman Islands | | | | | | Authorized Shares | | The Proposed Pubco Charter authorizes [ ] shares of all classes of capital stock, consisting of (i) [ ] shares of Common Stock, par value $0.0001 per share, comprised of [ ] shares of Class A Common Stock and [ ] shares of Class B Common Stock, and (ii) [ ] shares of Preferred Stock, par value $0.0001 per share. | | The SPAC Organizational Documents authorize 481,000,000 shares, consisting of 400,000,000 Class A ordinary shares, 80,000,000 Class B ordinary shares and 1,000,000 preference shares, each with a par value of US$0.0001. | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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Voting, in general | | The Proposed Pubco Charter provides that, except as otherwise required by law or the Proposed Pubco Charter, holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters submitted to a vote of stockholders, with each holder of Class A Common Stock entitled to one vote per share and each holder of Class B Common Stock entitled to ten votes per share. Under the DGCL, unless otherwise provided in the certificate of incorporation or bylaws, directors are elected by a plurality of the votes cast, and other matters are generally decided by the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the matter. Consistent with the DGCL, the Proposed Pubco Bylaws provide that directors will be elected by a plurality of the votes cast at a meeting of stockholders by the holders of stock entitled to vote in the election, and that, unless otherwise required by law, the Proposed Pubco Charter or the Proposed Pubco Bylaws, all other matters brought before a meeting of stockholders at which a quorum is present will be decided by the affirmative vote of a majority of the votes cast (excluding abstentions and broker non-votes) on the matter. | | The SPAC Organizational Documents provide that, subject to any rights or restrictions attached to any shares, every member present (in person, by proxy, or by duly authorized representative) has one vote for every share of which they are the holder. Under the Companies Act and the SPAC Organizational Documents, routine corporate matters may be approved by an ordinary resolution (being a resolution passed by a simple majority of the shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting). | | | | | | Stockholder/Shareholder Approval of Business Combinations | | Under the DGCL, and subject to certain statutory exceptions (including for mergers between a parent corporation and a majority-owned subsidiary under Section 253 of the DGCL, and for certain mergers not requiring a vote of the surviving corporation’s stockholders under Section 251(f) of the DGCL), a merger, consolidation or sale of all or substantially all of a corporation’s assets generally requires approval by the corporation’s board of directors and the affirmative vote of the holders of a majority of the outstanding stock of the corporation entitled to vote thereon. Neither the Proposed Pubco Charter nor the Proposed Pubco Bylaws impose a greater voting requirement for the approval of business combinations generally. | | Mergers require a special resolution, and any other authorization as may be specified in the relevant articles of association. Parties holding certain security interests in the constituent companies must also consent. All mergers (other than parent/subsidiary mergers) require shareholder approval - there is no exception for smaller mergers. Where a bidder has acquired 90% or more of the shares in a Cayman Islands company, it can compel the acquisition of the shares of the remaining shareholders and thereby become the sole shareholder. A Cayman Islands company may also be acquired through a ‘scheme of arrangement’ sanctioned by a Cayman Islands court and approved by 75% in value of the shareholders present and voting at a shareholders’ meeting (or, in the case of a creditor scheme, a majority in number representing 75% in value of the creditors present and voting). | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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General Vote Required for Combinations with Interested Stockholders/Shareholders | | Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a “business combination” with an “interested stockholder” (generally, a holder of 15% or more of the corporation’s outstanding voting stock) for three years following the date such person became an interested stockholder, unless (i) the board approved the business combination or the transaction resulting in the person becoming an interested stockholder before such time, (ii) the interested stockholder acquired at least 85% of the corporation’s voting stock (excluding certain shares) in the transaction that made it an interested stockholder, or (iii) the business combination is approved by the board and by the affirmative vote of at least 662/3% of the outstanding voting stock not owned by the interested stockholder. The Proposed Pubco Charter provides that Pubco has elected not to be governed by Section 203 of the DGCL, and accordingly this statutory restriction will not apply to Pubco. | | No similar provision. | | | | | | Requirement for Quorum | | Under the DGCL, unless otherwise specified in the certificate of incorporation or bylaws (and in no event less than one-third of the shares entitled to vote), a quorum for a meeting of stockholders consists of a majority of the shares entitled to vote, present in person or represented by proxy. Consistent with this default rule, the Proposed Pubco Bylaws provide that the presence, in person or by proxy, of the holders of a majority of the shares entitled to vote will constitute a quorum for a meeting of Pubco Stockholders. | | Under the SPAC Organizational Documents, the quorum for a general meeting is one-third of the shares, with holders who are individuals present in person or by proxy, or, if a corporation or other non-natural person, by its duly authorized representative or proxy. | | | | | | Stockholder/Shareholder Consent to Action Without Meeting | | Under the DGCL, unless otherwise provided in the certificate of incorporation, any action required or permitted to be taken at a stockholders’ meeting may instead be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize the action at a meeting. The Proposed Pubco Charter permits stockholder action by written consent in lieu of a meeting until the Final Conversion Date. From and after the Final Conversion Date, any action required or permitted to be taken by Pubco Stockholders must be effected at a duly called annual or special meeting of stockholders, and stockholders will no longer be permitted to act by written consent. | | Under the Companies Act, shareholders may act by written resolution in lieu of a meeting. The SPAC Organizational Documents provide that a resolution in writing signed by or on behalf of all of the members entitled to receive notice of and to attend and vote at general meetings (including a special resolution) is as valid and effective as if passed at a duly convened general meeting. | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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Appraisal Rights | | Under Section 262 of the DGCL, stockholders of a Delaware corporation who do not vote in favor of certain mergers or consolidations, and who otherwise comply with the required statutory procedures, are generally entitled to demand appraisal of, and to receive payment in cash for, the fair value of their shares as determined by the Delaware Court of Chancery, together with interest, if any. Appraisal rights are generally unavailable, however, for shares of a class or series listed on a national securities exchange or held of record by more than 2,000 stockholders as of the record date, unless the merger consideration consists of anything other than stock of the surviving corporation, stock of another corporation that is so listed or so widely held, cash in lieu of fractional shares, or a combination thereof, or in certain other circumstances specified by the DGCL. Neither the Proposed Pubco Charter nor the Proposed Pubco Bylaws alter the appraisal rights available to Pubco Stockholders under the DGCL. | | Minority shareholders that dissent from a statutory merger of a Cayman Islands company are entitled to be paid the fair market value of their shares, which if necessary may ultimately be determined by the court. However, these rights are not available where an open market exists on a recognized stock exchange for the shares in question. | | | | | | Inspection of Books and Records | | Under Section 220 of the DGCL, any stockholder of record has the right, upon written demand under oath stating a proper purpose reasonably related to such person’s interest as a stockholder, to inspect during the usual hours of business the corporation’s stock ledger, list of stockholders and other books and records, and to make copies or extracts therefrom. Consistent with Section 220 of the DGCL, the Proposed Pubco Bylaws provide that any stockholder of record, in person or by attorney or other agent, has the right, upon written demand under oath stating the purpose, to inspect for any proper purpose Pubco’s stock ledger, a list of its stockholders, its annual financial statements and its minutes of stockholder meetings for the past three years. | | Shareholders generally do not have any rights to inspect or obtain copies of the register of shareholders or other corporate records of a company. The directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of SPAC or any of them shall be open to the inspection of shareholders not being directors, and no shareholder (not being a director) shall have any right of inspecting any account or book or document of SPAC except as conferred by law or authorized by the directors or by ordinary resolution. | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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Stockholder/Shareholder Lawsuits | | Under the DGCL, a stockholder may bring a derivative action on behalf of a corporation to enforce the corporation’s rights, subject to procedural requirements, including that the plaintiff was a stockholder at the time of the transaction complained of (or acquired shares thereafter by operation of law), that the plaintiff fairly and adequately represents the interests of similarly situated stockholders, and that the plaintiff first make a demand on the board of directors to bring the action or plead with particularity why such a demand would be futile. Delaware law also permits direct and class action claims by stockholders for certain breaches of fiduciary duty, subject to applicable procedural requirements. | | In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board of directors. A shareholder may be entitled to bring a derivative action on behalf of the company, but only in certain limited circumstances. | | | | | | Number and Classification of Directors | | Under the DGCL, the number of directors constituting the board is fixed by, or in the manner provided in, the bylaws, unless the certificate of incorporation fixes the number, in which case a change requires a charter amendment. A board need not be classified into separate classes unless the certificate of incorporation or an initial bylaw, or a bylaw adopted by the stockholders, so provides. The Proposed Pubco Charter and the Proposed Pubco Bylaws provide that the size of the Pubco Board will be fixed exclusively by the Pubco Board from time to time and will consist of not less than one director. The Pubco Board is not classified; unless otherwise provided by the Proposed Pubco Charter and subject to the special rights of holders of any series of Preferred Stock, directors will be elected annually and will hold office until the next annual meeting of stockholders and until their successors are elected and qualified. | | Under the SPAC Organizational Documents, the board of directors consists of not less than one person. The Company may by ordinary resolution increase or reduce the limits on the number of directors. The board of directors is divided into three classes: Class I, Class II and Class III. | | | | | | Removal of Directors | | Under the DGCL, unless the certificate of incorporation provides otherwise, directors of a corporation without a classified board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote in an election of directors. The Proposed Pubco Charter provides that directors may be removed from office at any time, with or without cause, only by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of Pubco’s capital stock entitled to vote thereon, voting together as a single class. | | Under the SPAC Organizational Documents, the Company may by ordinary resolution appoint any person to be a director or may by ordinary resolution remove any director. | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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Fiduciary Duties of Directors | | Under Delaware law, directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and its stockholders. The duty of care generally requires directors to act on an informed basis, in good faith and with the care that a reasonably prudent person would exercise in similar circumstances. The duty of loyalty generally requires directors to act in good faith and in a manner they reasonably believe to be in the best interests of the corporation and its stockholders, and to refrain from using their position to further their own personal interests at the expense of the corporation. Neither the Proposed Pubco Charter nor the Proposed Pubco Bylaws alter the fiduciary duties owed by Pubco’s directors under Delaware law. | | A director owes fiduciary duties to a company, including to exercise loyalty, honesty and good faith to the company as a whole. In addition to fiduciary duties, directors of SPAC owe a duty of care, diligence and skill. Such duties are owed to the company but may be owed directly to creditors or shareholders in certain limited circumstances. | | | | | | Indemnification of Directors and Officers | | Section 145 of the DGCL permits a Delaware corporation to indemnify its directors, officers, employees and agents against expenses (including attorneys’ fees), judgments, fines and settlement amounts actually and reasonably incurred by them in connection with certain actions, suits or proceedings, if they acted in good faith and in a manner they reasonably believed to be in, or not opposed to, the best interests of the corporation, subject to certain limitations. The Proposed Pubco Charter provides that Pubco will, to the fullest extent permitted by Section 145 of the DGCL, indemnify and advance expenses to directors, officers, employees and agents of Pubco (and certain persons serving at Pubco’s request in similar capacities for other entities) who are or were made, or threatened to be made, a party to certain actions, suits or proceedings by reason of such service, subject to receipt of an undertaking to repay such advanced expenses if it is ultimately determined that the person is not entitled to indemnification. | | A Cayman Islands company generally may indemnify its directors or officers except with regard to their own actual fraud, willful neglect or willful default. Under the SPAC Organizational Documents, no person shall be found to have committed actual fraud, willful neglect or willful default unless or until a court of competent jurisdiction shall have made a finding to that effect. | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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Limited Liability of Directors | | Section 102(b)(7) of the DGCL permits a Delaware corporation to include a provision in its certificate of incorporation eliminating or limiting the personal monetary liability of directors (and, in limited circumstances, certain officers) for breach of fiduciary duty, except for liability (i) for any breach of the duty of loyalty, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) for unlawful payment of dividends or unlawful stock purchases or redemptions (applicable to directors only), or (iv) for any transaction from which the director or officer derived an improper personal benefit. Consistent with Section 102(b)(7) of the DGCL, the Proposed Pubco Charter provides that a director or officer of Pubco will not be personally liable to Pubco or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability is not permitted under the DGCL. | | Liability of directors may be unlimited, except with regard to their own actual fraud, willful neglect or willful default. | | | | | | Exclusive Forum | | The DGCL permits a Delaware corporation to designate the Court of Chancery of the State of Delaware (or, if the Court of Chancery lacks jurisdiction, another Delaware state court, or if no Delaware state court has jurisdiction, a federal court located in Delaware) as the exclusive forum for certain internal corporate claims, and separately permits a corporation to designate the federal district courts of the United States as the exclusive forum for claims arising under the Securities Act. Consistent with the DGCL, the Proposed Pubco Charter provides that, unless the Pubco Board consents in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for derivative actions brought on Pubco’s behalf, claims of breach of fiduciary duty, claims arising under the DGCL, the Proposed Pubco Charter or the Proposed Pubco Bylaws, and other claims governed by the internal affairs doctrine, subject to certain exceptions (including for claims as to which the Court of Chancery lacks subject matter jurisdiction or an indispensable party is not subject to its jurisdiction, and for claims arising under the Securities Act or the Exchange Act, for which there is exclusive or concurrent federal jurisdiction). | | Under the SPAC Organizational Documents, unless SPAC consents in writing to the selection of an alternative forum, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with the SPAC Organizational Documents or otherwise related in any way to each shareholder’s shareholding in SPAC. This provision does not apply to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any claim for which the federal district courts of the United States of America are the sole and exclusive forum. | | | | | |
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Provision | | Pubco - Delaware | | SPAC - Cayman Islands |
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Blank Check Preferred Stock | | The Proposed Pubco Charter authorizes the Board of Directors to issue shares of Preferred Stock, in one or more series, and to fix the voting powers, designations, preferences and other rights of each series, without a separate vote of the stockholders. The number of authorized shares of Preferred Stock may be increased or decreased by the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock entitled to vote thereon, without a separate vote of the holders of the Preferred Stock. See the FOURTH Article, Section A of the Proposed Pubco Charter. | | The SPAC Organizational Documents authorize the issuance of 1,000,000 preference shares, and the directors may allot, issue, grant options over or otherwise dispose of shares (including preference shares) with such rights and restrictions as they think proper, without a general meeting vote, subject to the terms of the memorandum and applicable law. | | | | | | Corporate Name | | The Proposed Pubco Charter provides that the name of the corporation is “Big3 Basketball Holdings, Inc.” | | The SPAC Organizational Documents provide that the name of the company is “Graf Global Corp.” | | | | | | Perpetual Existence | | The Proposed Pubco Charter provides that the Corporation is to have a perpetual existence. | | The SPAC Organizational Documents provide that if SPAC does not consummate a Business Combination (as defined in the SPAC Organizational Documents) within 24 months from the consummation of its initial public offering (or such earlier or later date as provided in the SPAC Organizational Documents) or such later time as the SPAC Shareholders may approve, SPAC shall redeem the public shares and, as promptly as reasonably possible, cease operations except for the purposes of winding up, subject to its obligations under Cayman Islands law to provide for the claims of creditors. | | | | | | Provisions Related to Status as Blank Check Company | | Not applicable. Following the Business Combination, Pubco will operate as the ongoing public company and will not be subject to the blank check company restrictions (such as the Trust Account and the deadline to complete a Business Combination) that apply to SPAC prior to the Business Combination. | | The SPAC Organizational Documents set forth various provisions related to SPAC’s status as a blank check company prior to the consummation of a Business Combination, including restrictions on the issuance of additional shares, redemption and tender offer mechanics tied to the Trust Account, and the deadline to complete a Business Combination. |
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| De-SPAC, Federal Income Taxes Consequences, SPAC Security Holders [Text Block] |
The tax treatment of SPAC Warrants in the SPAC Merger depends on whether the Mergers qualify solely as a Section 351 Transaction or the SPAC Merger also qualifies as a Section 368(a) Reorganization. If the Mergers qualify solely as a Section 351 Transaction (and the SPAC Merger does not also qualify as a Section 368(a) Reorganization), a U.S. Holder that in the SPAC Merger only exchanges SPAC Warrants for Pubco Warrants (and does not also exchange any Post-Domestication SPAC Common Stock for Pubco Class A Common Stock in the SPAC Merger) generally will recognize gain or loss on the deemed exchange of SPAC Warrants for Pubco Warrants equal to the difference between the fair market value of the Pubco Warrants received and such U.S. Holder’s adjusted tax basis in the SPAC Warrants surrendered. If a U.S. Holder in the SPAC Merger exchanges both Post-Domestication SPAC Common Stock for Pubco Class A Common Stock and Post-Domestication SPAC Warrants for Pubco Warrants, and the Mergers qualify solely as a Section 351 Transaction (and the SPAC Merger does not also qualify as a Section 368(a) Reorganization), the Pubco Warrants received by such U.S. Holder may be treated as taxable boot in the Section 351 Transaction, which could cause the U.S. Holder to recognize gain (but not loss) on the exchange of its Post-Domestication SPAC Common Stock for Pubco Class A Common Stock in an amount not exceeding the fair market value of the Pubco Warrants received. If the SPAC Merger qualifies as a Section 368(a) Reorganization (whether or not the Mergers also qualify as a Section 351 Transaction), a U.S. Holder generally would not recognize gain or loss on the deemed exchange of SPAC Warrants for Pubco Warrants, and the holding period of the Pubco Warrants would include the holding period of the SPAC Warrants exchanged therefor (which, assuming the Domestication qualifies as an F Reorganization, generally will include the holding period of the SPAC Warrants from which the SPAC Warrants of the domesticated SPAC were derived). If the Mergers fail to qualify as a Section 351 Transaction and the SPAC Merger fails to qualify as a Section 368(a) Reorganization, the SPAC Merger generally will be treated as a taxable sale or exchange of Post-Domestication SPAC Common Stock and Post-Domestication SPAC Warrants for Pubco Class A Common Stock and Pubco Warrants, and the Company Merger generally will be treated as a taxable sale by each Seller of its Company Interest to Pubco, in each case with gain or loss measured by reference to the difference between the fair market value of the Pubco securities received (and, in the case of a Seller, the amount of the Company’s liabilities treated as assumed or taken subject to by Pubco) and such holder’s adjusted tax basis in the property surrendered. The U.S. federal income tax consequences of the Business Combination to a Non-U.S. Holder generally are expected to be similar to those described above for U.S. Holders, except that (i) the exchange of SPAC Warrants for Pubco Warrants generally is not expected to result in U.S. federal income tax to a Non-U.S. Holder unless (A) the gain, if any, is effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States, (B) Non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year of the SPAC Merger and certain other requirements are met, and (ii) because the Company is treated as a partnership for U.S. federal income tax purposes, the transfer of Company Interests by a Non-U.S. Holder is subject to additional partnership-specific rules that do not apply to a Non-U.S. Holder of SPAC securities or Pubco Securities, including potential withholding under Section 1446(f) of the Code, which rules are discussed further under “Material U.S. Federal Income Tax Considerations —Non-U.S. Holders —Tax Consequences of the Business Combination to Non-U.S. Holders”. None of SPAC, the Company or Pubco has sought or intends to seek a ruling from the IRS with respect to the tax treatment of the Business Combination. The tax consequences of the Business Combination are complex and will depend on a holder’s particular circumstances. All holders, including Sellers, are urged to consult their tax advisor regarding the tax consequences to them of the Business Combination. For a more complete discussion, see “Material U.S. Federal Income Tax Considerations —U.S. Holders —Tax Consequences of the Business Combination to U.S. Holders” and “Material U.S. Federal Income Tax Considerations —Non-U.S. Holders — Tax Consequences of the Business Combination to Non-U.S. Holders”.
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