FiscalNote Holdings, Inc., (“FiscalNote”), a leading AI-driven enterprise SaaS company that delivers legal and regulatory data and insights, and Duddell Street Acquisition Corp. (“Duddell Street” or “DSAC”) (Nasdaq: DSAC), a publicly-traded special purpose acquisition company, today announced FiscalNote’s signing of a commitment letter for a significantly upsized credit facility, with Runway Growth Capital, ORIX Growth Capital, and Atalaya Capital Management, providing for up to $250 million in senior debt funding, as well as enhancements to the Business Combination Agreement such as the establishment of a bonus pool for non-redeeming DSAC shareholders.
The expanded credit facility will provide a 5-year senior secured term loan of up to $250 million, including an aggregate principal amount of $150 million financing committed at closing with an additional accordion facility for $100 million, subject to certain conditions. Proceeds at closing are expected to be used to drive the company’s growth through an acceleration of investment in go-to-market and other capabilities, fund the company’s successful M&A strategy, and refinance certain existing indebtedness of FiscalNote. The new credit facility replaces the previously announced PIPE with a flexible source of funding with an attractive cost of capital that can expand as the company grows.
In addition, FiscalNote and DSAC are allocating, on a pro rata basis, the 10 million shares previously reserved for the PIPE into a bonus pool available exclusively to non-redeeming DSAC public shareholders and backstop providers, with existing FiscalNote equity holders retaining approximately 75% pro forma equity ownership in the post-business combination company.
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The parties also have expanded the scope of the existing earnout structure, providing existing FiscalNote equity holders the opportunity to receive additional shares of common stock of the combined company if certain stock price growth targets are achieved.
The company currently remains on pace to achieve its growth targets and is reiterating its revenue guidance for FY2022.
“This incremental capital represents a tremendous opportunity for shareholders and is an accomplishment for FiscalNote, while marking yet another impactful milestone in securing our long-term success as a publicly-traded company,” said Tim Hwang, CEO & Co-founder of FiscalNote. “It’s a strong validation from leading financial partners who share a deep confidence in our global mission, growth plan, and business proposition. We look forward to leveraging this facility to execute our growth strategy, lower our cost of capital, and drive long-term value.”
“The new facility, combined with the revised transaction structure, reaffirms FiscalNote and Duddell Street’s joint commitment to drive long-term value creation for all shareholders,” said Manoj Jain, CEO of Duddell Street, and Co-Chief Investment Officer of Maso Capital. “FiscalNote continues to execute its growth strategy, and with significant funding from global partners, we believe the company has the foundation it needs to achieve its organic and M&A targets. Overall, these enhancements represent responsible and effective financial stewardship of the company through a sustainable and beneficial capital structure.”
Business Combination Agreement Details
FiscalNote previously announced plans to become a publicly-traded company through a business combination agreement with Duddell Street Acquisition Corp. (Nasdaq: DSAC). Completion of the proposed business combination is subject to Duddell Street’s registration statement on Form S-4 (the “Registration Statement”) being declared effective by the Securities & Exchange Commission (“SEC”), the approval of the proposed business combination by Duddell Street’s shareholders, and other customary closing conditions. The SEC is continuing its regulatory review process in connection with the Registration Statement. Once this review is completed, the parties will seek the required shareholder approvals and proceed to close the proposed business combination, with a target closing date in Q2 of this year.