Updated to reflect the Company’s reverse stock split, which became effective at 4:01 p.m. (ET) on December 12, 2022.
How can I exercise my Paysafe warrants?
On August 21, 2021, the warrants were made DTC eligible and put on DTC’s warrant system (“WARR”) where your individual broker should be able to exercise warrants on your behalf. You should contact your individual broker for further information.
What are the terms of the warrants?
The following description is a summary of the terms of the Paysafe warrants. For more information, please see pages 172-173 of Paysafe’s registration statement on Form F-1, filed with the Securities and Exchange Commission (“SEC”) on May 19, 2021 (“F-1”).
The Company may call all such warrants for redemption if, and only if, the reported last sale price of our common shares equals or exceeds $216.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day before the Company sends the notice of redemption to the holders of such public warrants. In addition, the Company may only call such public warrants for redemption:
- in whole and not in part;
- at a price of $0.01 per warrant;
- upon not less than 30 days’ prior written notice of redemption to each warrantholder.
Additionally, the Company may call all such public warrants for redemption at a price of $0.10 per warrant when the price per share of our common shares equals or exceeds $120.00 provided that (i) the Reference Value equals or exceeds $120.00 per share (subject to adjustment) and (ii) if the Reference Value is less than $216.00 per share (subject to adjustment), the “private warrants” are also concurrently called for redemption on the same terms as the outstanding public warrants. After the Company has provided notice of redemption to the holders of such warrants, the holders of such warrants may elect to exercise their warrants on a “cashless basis” and receive a number of our common shares as set forth in the Warrant Agreement (a “Make-Whole Exercise”).
If and when the public warrants become redeemable, the Company may not exercise its redemption rights if the issuance of common shares upon exercise of such warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
A holder of a public warrant may notify the Company in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) (the “Maximum Percentage”) of our common shares outstanding immediately after giving effect to such exercise. By written notice to the Company, the holder of a public warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
The public warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a “cashless basis,” if applicable), by certified check or bank draft payable to the order of the warrant agent, for the number of such warrants being exercised. The warrant holders do not have the rights or privileges of holders of common shares or any voting rights until they exercise their public warrants and receive our common shares.
Private Placement Public Warrants
As set forth in the Warrant Agreement, the “public warrants” that were previously issued in the private placement (i) may be exercised for cash or on a “cashless basis,” (ii) shall not be redeemable by the Company and (iii) shall only be redeemable by the Company if the “Reference Value”, defined as the last reported sales price of the shares of Class A common stock for any twenty (20) trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which notice of the redemption is given, is less than $216.00 per share.
Except as otherwise provided in Section 6 of the Warrant Agreement, the terms of the “private warrants” mirror those of the public warrants. For more information, see page 173 of the F-1.
What are the tax implications of the Paysafe warrants?
The jurisdiction of the SPAC, target and post-transaction entity may cause significantly different U.S. federal income tax consequences to holders of interests in the SPAC. The Paysafe transaction consisted of a domestic SPAC combining with a foreign target and the post-transaction company remained offshore and will be a taxable event to certain U.S. holders. For a summary of the expected tax U.S. federal income tax consequences of the Business Combination to U.S. holders of FTAC Common Stock and/or FTAC Warrants, please see pages 16-17 of Paysafe’s Form F-4, filed with the SEC on December 21, 2020, as amended (“F-4”), and pages 139-150 of the F-4 for a more detailed description.