Certain Relationships and Related Party Transactions
The following includes a summary of transactions since January 1, 2021 to which we or Legacy FiscalNote have been a party in which the amount
involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had
or will have a direct or indirect material interest, other than transactions that are described under the section Executive Compensation. We also describe below certain other transactions with our directors, executive officers and
stockholders.
Certain Relationships and Related Person Transactions Legacy FiscalNote
Ozmen Note
On July 3, 2019, Legacy
FiscalNote issued a Subordinated Convertible Promissory note in the principal amount of $4,000,000 and bearing interest at a rate of 15% per annum over five years (the Ozmen Note) to Ozmen Ventures FN LLC, now known as 8090 FN LLC
(Ozmen). Concurrently with the issuance of the Ozmen Note, Tim Hwang and the Timothy T. Hwang Revocable Trust (the Hwang Trust) entered into a binding term sheet (the Term Sheet) with Ozmen pursuant
to which the Hwang Trust agreed to purchase the Ozmen Note from Ozmen on the one-year anniversary of the issuance date of the Ozmen Note in exchange for (i) $4,000,000 in immediately available funds and (ii)
$4,000,000 in the form of shares of the then senior-most class and series of capital stock of FiscalNote, which would be generated from an immediate conversion of the Ozmen Note by the Hwang Trust.
On March 1, 2021, pursuant to a Letter Agreement, by and among Ozmen, Mr. Hwang, the Hwang Trust and Legacy FiscalNote, the parties agreed to amend the Ozmen
Note to, among other things, (i) reduce the interest rate from 15% to 1% and (ii) waive all accrued interest under the Ozmen Note through, but not including, the effective date of the Letter Agreement in exchange for the issuance to Ozmen
by Legacy FiscalNote of 549,484 shares of Series F Preferred Stock of FiscalNote. In addition, pursuant to the Letter Agreement, Mr. Hwang, the Hwang Trust and Ozmen agreed to terminate the Term Sheet. The Ozmen Note automatically converted
into shares of common stock of Legacy Fiscal Note immediately prior to the Business Combination, which were exchangeable for 722,070 shares of Fiscal Note pursuant to the terms of the Business Combination.
FrontierView Convertible Notes
Concurrent with, and in order to finance, the acquisition of FrontierView, Legacy FiscalNote entered into a $15.0 million convertible note with XC FiscalNote-B, LLC and a $3.0 million convertible note with Skyone Capital Pty Limited (collectively the FrontierView Convertible Notes). Keith Nilsson, one of our directors, is managing
director of XC FiscalNote-B, LLC, with voting and disposition power over securities held by such entity, and Conrad Yiu, one of our directors, is a director of Skyone Capital Pty Limited, with voting and
disposition power over securities held by such entity. The FrontierView Convertible Notes were subordinate to Legacy FiscalNotes senior debt and senior subordinated convertible note then outstanding, accrued no interest, did not provide for
voluntary prepayment, matured at 150% of the principal amount in the event specified conversion events had not occurred by September 30, 2024, and provided for automatic conversion as defined within the agreement at 150% of the principal amount
based on a $1.0 billion conversion cap, subject to potential adjustment above 150% if and to the extent necessary to take into account dilution from conversion of Legacy FiscalNotes senior subordinated convertible note then outstanding
(such that the holders would receive a return of no less than 150% on the conversion of the FrontierView Convertible Notes). The FrontierView Convertible Notes automatically converted into an aggregate of 2,274,642 shares of common stock of Legacy
Fiscal Note immediately prior to the Business Combination, which were exchangeable for 2,700,000 shares of Fiscal Note pursuant to the terms of the Business Combination.
Certain Relationships and Related Person Transactions - DSAC
As of June 30, 2022, DSAC had a payable of $0.3 million due to an affiliate of the Sponsor, resulting from the affiliate paying certain costs on behalf of
DSAC.
As of December 31, 2020, DSAC had $0.4 million due from an affiliate of the Sponsor, consisting of the net proceeds from the consummation of the IPO
and the Private Placement held in the bank account of an affiliate of the Sponsor that was settled with the affiliate of our sponsor in March 2021.
On
August 28, 2020, the Sponsor agreed to loan DSAC up to $250,000 to be used for the payment of costs related to the IPO pursuant to a promissory note (the Note). The Note is non-interest
bearing, unsecured and due upon the closing of the IPO. As of December 31, 2020, DSAC borrowed approximately $176,000 under the Note. DSAC repaid the Note on March 31, 2021.
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2023 Proxy Statement |
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