UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to

Commission file number: 001-38271

SENTINEL ENERGY SERVICES INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number: (281) 407-0686

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

The aggregate market value of the common stock held by non-affiliates of the registrant, computed as of June 30, 2020 (the last business day of the registrant’s most recently completed second fiscal quarter) based on the last sale price was approximately $562,500.

As of March 31, 2021, 550,911 shares of Class A common stock, par value $0.0001 per share and 862,500 shares of Class B common stock, par value $0.0001 per share were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

Unless otherwise stated in this Annual Report on Form 10-K (this “Annual Report”), references to:

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K (this “Annual Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “look,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

The forward-looking statements contained in this Annual Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors”. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under “Risk Factors” may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Annual Report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Annual Report, those results or developments may not be indicative of results or developments in subsequent periods.

PART I

Item 1. Business

Introduction

Sentinel Energy Services Inc. (the “Company”) was formed as a blank check company for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company is also a “smaller reporting company” as defined in the Exchange Act.

The Company was incorporated on June 5, 2017 in the Cayman Islands. On December 28, 2018, the Company changed its jurisdiction of incorporation (the “Domestication”) from the Cayman Islands (“Sentinel Cayman”) to the State of Delaware (“Sentinel Delaware”) and continued to be named Sentinel Energy Services Inc. As a result of the Domestication, the securities of Sentinel Cayman converted into securities of Sentinel Delaware, such that Sentinel Cayman’s issued and outstanding Class A ordinary shares (the “Class A ordinary shares”) and Class B ordinary shares (the “Class B ordinary shares”) automatically converted by operation of law into one share of Class A common stock (“Class A common stock”) and Class B common stock (“Class B common stock”), of Sentinel Delaware, respectively. Similarly, each of Sentinel Cayman’s outstanding units and warrants, automatically converted by operation of law, on a one-for-one basis, into Units (defined below) of Sentinel Delaware and warrants, including the Private Placement Warrants and Public Warrants (each as defined below) to acquire the corresponding number of shares of Class A common stock, respectively. All references to the Company’s capital stock both before and after the Domestication are referred to as shares of “common stock” in this filing.

As of December 31, 2020, the Company has not yet commenced operations. All activity through December 31, 2020 related to (1) the Company’s formation and issuance of the Founder Shares in June 2017, (2) the Public Offering and sale of Private Placement Warrants (each as defined below) which closed in November 2017, (3) the subsequent search for a business combination candidate, including activities in connection with the announced and subsequently terminated proposed business combination with Strike Capital, LLC (“Strike”) and (4) liquidation activities following the Company’s inability to consummate a business combination prior to the November 7, 2019 deadline under the Company’s certificate of incorporation (the “Charter”). The Company has not generated any operating revenues since inception. The Company generated non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering and sale of Private Placement Warrants until November 2019.

Our management team is led by Andrew Gould, our Chairman, who has more than 42 years’ experience in global energy and related business, and Gerald Cimador, our Chief Financial Officer, who has extensive financial and accounting experience in account and private investment management firms. To date, our efforts have been limited to organizational activities as well as activities related to the Public Offering and sale of Private Placement Warrants, the identification and evaluation of prospective acquisition targets for a business combination, and subsequent liquidation activities.

Offerings and Liquidation

The Company intended to finance its initial business combination with proceeds from Company’s initial public offering (the “Public Offering”) of its units (the “Units”), each of which consisted of (A) one share of the Company’s Class A common stock, par value $0.0001 per share (the “Public Shares”), and (B) one-third of one warrant exercisable to purchase one share of the Company’s Class A common stock (each whole warrant, a “Public Warrant”), and from the Company’s private placement sale of warrants exercisable to purchase one share of Company’s Class A common stock (each, a “Private Placement Warrant”) to Sentinel Management Holdings, LLC (the “Sponsor”).

The Public Offering closing occurred in November 2017 for a total of 34,500,000 Units, including Units issued in connection with the exercise of the underwriters’ overallotment option in the Public Offering, with gross proceeds of $345 million at a price of $10.00 per Unit. The sale of the Private Placement Warrants also closed in November 2017 for a total of 5,933,333 Private Placement Warrants, including an additional issuance to the Sponsor in connection with the exercise of the underwriter’s overallotment option in the Public Offering, with gross proceeds of approximately $8.9 million at a price of $1.50 per Private Placement Warrant.

Following the Public Offering and sale of the Private Placement Warrants, the Company searched for a business to combine with in a transaction that would generate value for the Company’s stockholders. However, over the same period, the energy sector experienced significant headwinds, which increased the challenges faced by the Company in sourcing a compelling target business. Despite the Company’s best efforts, it was not able to consummate a business combination prior to the November 7, 2019 deadline under its Charter. As a result and in accordance with the Charter, the Company commenced the liquidation of the trust account which had a balance of approximately $355.5 million (the “Trust Account”) following a holdback of approximately $1.35 million for Company’s income tax liability for its fiscal year ended December 31, 2019 and dissolution expenses, and returned the funds held therein to its public stockholders by redeeming all of the Public Shares included in the Units at a price of approximately $10.30 per share on November 18, 2019. The Company subsequently made a final distribution of $1,152,035, or approximately $0.03 per former Public Share, on May 4, 2020 following the Company’s payment of its income tax liability of $259,284 for the fiscal year ended December 31, 2019 and payment of settlement expenses of $100,351 in connection with the distribution. The Trust Account was subsequently closed with no balance remaining.

In addition, during the liquidation period, the Company and the holders of its Public Warrants executed an amendment to the Warrant Agreement, dated as of November 2, 2017, between the Company and Continental Stock Transfer & Trust Company, which automatically converted the Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. In December 2019, the Company paid $225,990 to the holders of the Public Warrants in connection with the conversion. The Sponsor forfeited the Private Placement Warrants as a result of the Company being unable to consummate a business combination prior to the deadline in its Charter.

As of December 31, 2020, there are no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock have been issued and shares of Class B Common stock remain outstanding. For more information, please see “Item 13. Certain Relationships and Related Transactions, and Director Independence—Certain Relationships and Related Transactions.”

Employees

We do not anticipate having any employees as we were unable to successfully consummate a business combination. We currently have two officers and may elect additional officers from time to time, including an officer to serve as our Chief Executive Officer. Our officers are not paid for their services to us and we do not expect any such payments as we were unable to successfully consummate a business combination. These individuals are not obligated to devote any specific number of hours to our matters. The amount of time that they will devote in any time period will vary.

Available Information

We are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the Securities and Exchange Commission (the “SEC”) on a regular basis, and are required to disclose certain material events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The SEC’s Internet website is located at http://www.sec.gov. In addition, the Company will provide copies of these documents without charge upon request in writing at 700 Louisiana Street, Suite 2700, Houston, Texas 77002 or by telephone at (281) 407-0686. The Company does not have an Internet website.

Recent Events

On December 30, 2020, Krishna Shivram submitted his resignation as Chief Executive Officer of the Company, effective as of that date. Mr. Shivram remains as a member of the board of directors of the Company.

Item 1A. Risk Factors

You should carefully consider all of the following risk factors and all the other information contained in this Annual Report, including the financial statements. If any of the following risks occur, our business, financial condition or results of operations may be materially and adversely affected. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business.

The recent COVID-19 pandemic and resulting worldwide economic conditions could adversely affect our business operations, financial condition, results of operations, and cash flows.

Management continues to evaluate the impact of the COVID-19 pandemic on the industry, including consideration of the timing of the development and distribution of an effective vaccine or treatments. Management has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and results of its operations, the specific impact is not readily determinable as of the date of this Annual Report or these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Nasdaq Capital Market (the “NASDAQ”) delisted our securities from trading on its exchange, which may limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our Class A common stock, warrants and units were listed on NASDAQ and were subsequently delisted. We cannot assure you that our securities will be listed on NASDAQ in the future.

We may not have sufficient funds to satisfy indemnification claims of our directors and officers.

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. Accordingly, any indemnification provided will be able to be satisfied by us only if we have sufficient funds or we consummate an initial business combination, which we were unable to do by the deadline in our Charter. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duties. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

We may file a winding up petition or a winding up petition may be filed against us that is not dismissed, and in that case a liquidator may seek to recover the proceeds we distributed from the Trust Account and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby potentially exposing the members of our board of directors and us to claims of punitive damages.

We may file a winding up petition or a winding up petition may be filed against us that is not dismissed. Any distributions received by stockholders from the Trust Account could be viewed under applicable debtor/creditor and/or insolvency laws as a “voidable preference.” As a result, a liquidator could seek to challenge the transaction and recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

In addition, we may have imposed upon us burdensome requirements, including:

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we would need to ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business would need to identify and complete a business combination and thereafter operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor. We were unable to complete a business combination by the deadline in our Charter.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete an initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business. We were unable to complete a business combination by the deadline in our Charter.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by stockholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our stockholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

We may not hold an annual meeting of stockholders, which could delay the opportunity for our stockholders to elect directors.

We may not hold an annual meeting of stockholders until after the consummation of an initial business combination, which could delay the opportunity for our stockholders to elect directors. There is no requirement under the DGCL for us to hold annual or general meetings to elect directors. Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. We were unable to complete a business combination by the deadline in our Charter, and thus a business combination is unlikely.

The past performance of CSL, Mr. Gould, Mr. Shivram and other members of our management team may not be indicative of future performance of an investment in the Company.

Information regarding performance by, or businesses associated with, CSL and its affiliates, Mr. Gould, and Mr. Shivram is presented for informational purposes only. Past performance by CSL, Mr. Gould, Mr. Shivram and other members of our management team is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record of CSL’s or, Mr. Gould’s, Mr. Shivram’s or other members of our management team’s performance as indicative of our future performance of an investment in the company or the returns the company will, or is likely to, generate going forward. None of our officers or directors have had experience with blank check companies or special purpose acquisition companies in the past. Mr. Shivram resigned as Chief Executive Officer of the Company effective as of December 30, 2020, and remains a member of the board of directors of the Company. We were unable to complete a business combination by the deadline in our Charter, and thus a business combination is unlikely.

We are dependent upon our officers and directors, and their loss could adversely affect our ability to operate.

Our operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service of our officers and directors. In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, may have conflicts of interest in allocating their time among various business activities. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.

Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

The holders of the Founder Shares control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

The Founder Shares entitle the holders to elect all of our directors prior to an initial business combination. We were unable to complete a business combination by the deadline in our Charter, and thus a business combination is unlikely. Holders of Class A common stock will have no right to vote on the election of directors during such time. This provision of our Charter may only be amended by a resolution passed by a majority of at least two-thirds of our common stock entitled to vote on such amendment. As a result, holders of Class A common stock not have any influence over the election of directors prior to an initial business combination. Accordingly, holders of Founder Shares may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that holders of Class A common stock do not support, including amendments to our Charter and approval of major corporate transactions. If the holders of the Founder Shares purchase any additional common stock in privately negotiated transactions, this would increase their control. Neither the holders of the Founder Shares nor, to our knowledge, any of our officers or directors have any current intention to purchase additional securities, other than in connection with funding our ongoing operations and expenses. In addition, our board of directors, whose members were elected by the then-holders of the Founder Shares, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of a business combination, in which case all of the current directors will continue in office until at least the completion of a business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our Sponsor, because of its ownership position through the Founder Shares, will have considerable influence regarding the outcome.

We are an emerging growth company within the meaning of the Securities Act and a smaller reporting company within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

Similarly, as a smaller reporting company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies,” including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We may be a smaller reporting company even after we are no longer an “emerging growth company.”

Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.

We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We do not own any real estate or other physical properties materially important to our operation. Our executive office is located at 700 Louisiana Street, Suite 2700, Houston, Texas 77002. We consider our current office space adequate for our current operations.

Item 3. Legal Proceedings

To the knowledge of our management, there is no material litigation, arbitration, bankruptcy, receivership, governmental proceeding or other proceeding currently pending against us or any members of our management team in their capacity as such.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Market Information

The Units, which were comprised of one share of our Class A common stock and one third of one warrant to purchase the same, ceased trading on The Nasdaq Capital Market (the “NASDAQ”) on November 6, 2019. There is no established trading market, public or otherwise, for any class of our common equity.

The following table sets forth the high and low bid for each full quarterly period based solely on closing prices within the two most recent fiscal years where our Units were listed on the NASDAQ:

Historical Closing Prices

Holders

On March 31, 2021, there were no holders of record of the Units, one holder of record of our Class A common stock, three holders of record of our Class B common stock, referred to herein as the Founder Shares, and no holders of record of our warrants for purchase of shares of our Class A common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company has no equity compensation plans for its officers or directors.

Sales of Unregistered Securities

On December 15, 2020, the Company issued 7,500 of its Class A Common Stock to the Sponsor pursuant to a private placement offering in exchange for the Sponsor’s payment of a $75,000 cash capital contribution. The proceeds were used to fund the ongoing operations of the Company.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

There were no purchases to disclose during the three months ended December 31, 2020.

Item 6. Selected Financial Data

As a “smaller reporting company,” we are not required to provide disclosure pursuant to this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company was formed as a blank check company for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. For more information about the Company, please see “Item 1. Business” in this Annual Report on Form 10-K.

Recent Events

On December 30, 2020, Krishna Shivram submitted his resignation as Chief Executive Officer of the Company, effective as of that date. Mr. Shivram remains as a member of the Board of Directors of the Company.

Results of Operations

We have not generated any operating revenues to date, and we will likely not generate any operating revenues in the future. Our entire activity up to December 31, 2020 has related (1) the Company’s formation and issuance of the Founder Shares in June 2017, (2) the Public Offering and sale of Private Placement Warrants which closed in November 2017, (3) the subsequent search for a business combination candidate, including activities in connection with the announced and subsequently terminated proposed business combination with Strike, and (4) liquidation activities following the Company’s inability to consummate a business combination prior to the November 7, 2019 deadline under the Company’s Charter. For the year ended December 31, 2020, we had a net loss of $148,800, which consisted of $148,800 of general and administrative expenses. For the year ended December 31, 2019, we had net income of $3,764,677, which consisted of $2,866,675 of general administrative expenses, offset by $6,890,275 of investment income on the Trust Account and an expense of $258,923 for income taxes.

Liquidity and Capital Resources

We presently have no revenue; our net income (loss) was $(148,800) and $3,764,677 for the years ended December 31, 2020 and 2019, respectively, and consists primarily of professional fees and, for 2019, costs related to our search for a business combination. For the year ended December 31, 2020, our liquidity needs were satisfied through funding from our Sponsor. The Company does not expect to seek loans, advances or contributions from parties other than the Sponsor or an affiliate of the Sponsor.

Loans and Advances from Related Party

On March 1, 2019, we issued a non-interest bearing convertible promissory note (the “Convertible Promissory Note”) in the amount of up to $1,500,000 to our Sponsor to fund our ongoing expenses, any amounts borrowed thereunder which were convertible into warrants of a post-business combination entity to purchase shares of our Class A common stock, at a price of $1.50 per warrant, convertible at the option of the lender. Such warrants were identical to the Private Placement Warrants. We do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor. Through March 31, 2020, the Company drew $999,640 on the Convertible Promissory Note. In addition, the Company received advances from the Sponsor to fund operations and ongoing expenses in the amount of $4,211,777 through December 31, 2020, of which $1,832,134 was advanced in the fiscal year ended December 2020.

The total amount drawn on the Convertible Promissory Note and $2,379,643 of the amount advanced by the Sponsor was converted into shares of the Company’s Class A common stock at $10.00 per share pursuant to a conversion agreement by and between the Company and the Sponsor (the “Conversion Agreement”), dated March 31, 2020. The remaining $1,832,134 of the amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor shares of the Company’s Class A common stock at $10.00 per share on March 31, 2020. The Company issued a total of 521,142 shares of the Company’s Class A common stock to the Sponsor in connection with such conversions.

All unpaid principal under the Convertible Promissory Note was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company by the deadline specified in its Charter. As a result, the Convertible Promissory Note is no longer available to the Company as a source of financing.

As of December 31, 2020, there is no amount advanced from our Sponsor that remains unconverted to shares of our capital stock.

Contributions from Related Party

On May 15, 2020, the Sponsor paid $25,000 to us in exchange for the issuance of 2,500 shares of Class A common stock to the Sponsor. On August 7, 2020, the Sponsor paid a $197,687 capital contribution to us in exchange for the issuance of 19,769 shares of Class A common stock. Together, these contributions during the fiscal year ended December 31, 2020 totaled $222,687, in exchange for which the Company issued 22,269 shares of Class A common stock to the Sponsor. On December 15, 2020, the Sponsor paid a $75,000 capital contribution to us in exchange for the issuance of 7,500 shares of Class A common stock. Together, these contributions during the fiscal year ended December 31, 2020 totaled $297,687, in exchange for which the Company issued 29,769 shares of Class A common stock to the Sponsor.

As of December 31, 2020, there are 550,911 shares of the Company’s Class A common stock outstanding, all of which are held by our Sponsor.

Mandatory Liquidation, Going Concern and Liquidity

We were unable to complete an initial business combination by the November 7, 2019 deadline under our Charter and so we commenced the liquidation of the assets in the Trust Account on November 8, 2019. This raises substantial doubt about our ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In connection with our assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we determined that we do not have sufficient liquidity to meet our future obligations; however, management has determined that it has access to funds from our Sponsor that alleviate going concern. As of December 31, 2020, we had a working capital deficit of approximately $203,500, current liabilities of approximately $337,700 and cash of approximately $77,800.

For more information regarding our liquidity, see “—Liquidity and Capital Resources” above.

Critical Accounting Policies

Loans, Advances and Contributions from Related Parties

For information regarding loans, advances and contributions from related parties, please see “—Liquidity and Capital Resources” above.

Common stock subject to possible redemption

We have no outstanding Public Shares. As of the close of business on November 7, 2019, the Public Shares were deemed cancelled and represented only the right to receive the redemption amount. For information regarding the completion of the redemption, see “Item 1. Business—Offerings and Liquidation.”

Recent Accounting Pronouncements

We do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.

JOBS Act

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions are applicable to us for a period of five years from the date of completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2020.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. 

The underwriters in the Public Offering were entitled to deferred underwriting commissions of $12,075,000. The deferred underwriting commissions would have become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement. The underwriters were not entitled to any interest accrued on the deferred underwriting commissions. Because we were unable to complete an initial business combination under the November 7, 2019 deadline under our Charter, the underwriters will not receive the deferred underwriting commission.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company,” we are not required to provide disclosure pursuant to this Item.

Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

Sentinel Energy Services Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Sentinel Energy Services Inc. (the “Company”) as of December 31, 2020 and 2019, the related statements of income, changes in stockholders’ equity (deficit) and cash flows, for the years ended December 31, 2020 and 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company failed to consummate a business combination within the time period required by its certificate of incorporation (November 7, 2019). This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor since 2017.

Whippany, New Jersey 

March 31, 2021

SENTINEL ENERGY SERVICES INC.

BALANCE SHEETS

See accompanying notes to financial statements

SENTINEL ENERGY SERVICES INC.
STATEMENTS OF OPERATIONS

See accompanying notes to financial statements

SENTINEL ENERGY SERVICES INC.

StatementS of Changes in STOCKHOLDERS’ Equity (DEFICIT)

See accompanying notes to financial statements

SENTINEL ENERGY SERVICES INC.

StatementS of Cash Flows

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

SENTINEL ENERGY SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Financial Officer (the “Certifying Officer”) who is both our principal executive and principal financial officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the evaluation, our Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Management’s Report on Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision of our Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework.” Based on that evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2020.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

As of December 31, 2020, our directors and officers are as follows:

Gerald Cimador — Chief Financial Officer and Chief Accounting Officer. Gerald Cimador has served as our Chief Financial Officer and Chief Accounting officer since June 16, 2017. He is currently serving as the Chief Financial Officer of CSL. From 1999 to 2008 Mr. Cimador was Controller of Moore Capital Management LP, a private investment management firm. Prior to that, from 1997 to 1999, Mr. Cimador served as Audit Manager of Ernst & Young LLP. Mr. Cimador started his career as Audit Senior for Goldstein Golub Kessler & Co. from 1994-1997. He has a BBA in Accounting from Hofstra University.

Kent Jamison — General Counsel and Secretary. Kent Jamison has served as our General Counsel and Secretary since June 16, 2017 and served as a member of our board of directors from January 2, 2018 until November 7, 2018. Mr. Jamison joined CSL in May 2015 as General Counsel. His responsibilities included overseeing legal and related compliance matters for the Investment Manager and the Portfolio Companies. Before joining the Investment Manager, Mr. Jamison was a senior partner at Locke Lord LLP, focusing primarily on private equity and merger and acquisition transactions and securities compliance matters. Mr. Jamison holds a B.A. cum laude from Davidson College and a J.D. cum laude from Wake Forest University.

Andrew F. J. Gould — Director. Andrew Gould has served as Chairman of our board of directors since June 30, 2017. Mr. Gould served as the Chairman of the Board of Directors and Chief Executive Officer of Schlumberger Limited from 2003 until his retirement in 2011. Mr. Gould started his career at Schlumberger in 1975 and held various leadership roles throughout the world before his appointment as the Chief Executive Officer. Mr. Gould currently serves as an independent director of Saudi Aramco and as a director of BJS LLC. He previously served as a non-executive director of Rio Tinto, a resources and mining corporation, from 2002 until 2012, and a non-executive director and Chairman of BG Group, an international exploration and production company, from 2011 until 2016. Mr. Gould has a Bachelor’s degree in Economic History from Cardiff University and qualified as a chartered accountant in the United Kingdom.

Krishna Shivram — Director. Krishna Shivram served as our Chief Executive Officer from June 16, 2017 to December 30, 2020. He was recently interim Chief Executive Officer and Chief Financial Officer of Weatherford International plc, a provider of oil and gas services. He was previously appointed Executive Vice President and Chief Financial Officer of Weatherford International plc in November 2013. He has over 29 years of financial and operational management experience in the oilfield service industry and previously worked for Schlumberger Ltd. in a variety of roles across the globe. Immediately prior to joining Weatherford, Mr. Shivram served as Vice President and Treasurer of Schlumberger Ltd. since January 2011. During his tenures with Weatherford and Schlumberger, Mr. Shivram either directly or as part of a team effected M&A transactions valued at over $15 billion, creating significant shareholder value in the process. Mr. Shivram currently also serves on the board of directors of Ranger Energy Services, Inc.

Charles S. Leykum — Director. Charles S. Leykum has served as a member of our board of directors since June 16, 2017. Mr. Leykum founded CSL, an energy services-focused private equity firm in 2008. Prior to founding CSL, Mr. Leykum was a Portfolio Manager at Soros Fund Management LLC. Before his time at Soros, he worked in the Principal Investment Area and the Investment Banking Division of Goldman Sachs & Co. Mr. Leykum currently also serves on the board of directors of Ranger Energy Services, Inc. Mr. Leykum graduated with a Bachelor of Arts in Economics from Columbia University and a Master of Business Administration from Harvard Business School.

Number and Terms of Office of Executive Officers and Directors

Our board of directors is divided into three classes, each of which serves for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Following the Domestication, the board of directors assigned terms of office to our directors in office in accordance with the Charter filed in connection therewith. The term of office of the first class of directors, consisting of Mr. Marshall, was to expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Messrs. Zenner and Shivram, was to expire at the second annual meeting of stockholders. The term of office for the third class of directors, consisting of Messrs. Leykum and Gould, was to expire at the third annual meeting of stockholders. We do not currently intend to hold an annual meeting of stockholders and no annual meeting has been held since the Domestication. A director holds office until the annual meeting of stockholders for the year in which his or her term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. As a result, no term of office of any of the directors has expired by the passage of time. Messrs. Zenner and Marshall have subsequently resigned on May 28, 2020.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Treasurer and such other offices as may be determined by the board of directors.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of the shares of our common stock to file an initial report of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the SEC. The SEC rules require us to disclose late filings of initial reports of stock ownership and changes in stock ownership by our directors, executive officers and 10% stockholders.

Based solely on a review of copies of Forms 3, 4 and 5 filed with the SEC, we believe that during the fiscal year ended December 31, 2020, all Section 16(a) filing requirements applicable to our directors, executive officers and 10% stockholders were completed in a timely manner, except that Mr. Leykum, our Sponsor and CSL Sentinel Holdings, LLC each had one late form 4 filing on March 31, 2021 on which five transactions were reported late, and Messrs. Zenner and Marshall each had one late form 4 filing on March 31, 2021 on which one transaction was reported late.

Director Independence

An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has not determined that any of our directors are “independent directors” as defined in applicable SEC rules.

Committees of the Board of Directors

In connection with our liquidation due to our inability to complete an initial business combination prior to the November 7, 2019 deadline in our Charter, we disbanded the audit committee, the compensation committee and the nominating and corporate governance committee in order to consolidate our operations and implement cost-saving measures.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, and in the past year has not served, as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving on our board of directors.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, executive officers and any future employees. We filed copies of our form of Code of Ethics as exhibits to our registration statement in connection with our initial public offering. You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us in writing at 700 Louisiana Street, Suite 2700, Houston, Texas 77002 or by telephone at (281) 407-0686. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Limitation on Liability and Indemnification of Officers and Directors

Our Charter provides for the indemnification of our officers and directors by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our Charter provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.

We have entered into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our Charter. Our bylaws also permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We have purchased a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

We believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.

Item 11. Executive Compensation

None of our executive officers or directors have received any cash or other compensation for services rendered to us. Our Sponsor, executive officers, directors, or any of their respective affiliates, are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf, including previous activities related to identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information available to us at March 31, 2021 regarding the beneficial ownership of our common stock held by:

In the table below, percentage ownership is based on 550,911 shares of Class A common stock, or the Founders Shares, and 862,500 shares of Class B common stock issued and outstanding as of March 31, 2021. Voting power represents the combined voting power of Class A common stock or Class B common stock owned beneficially by such person. On all matters to be voted upon, the holders of the Class A commons stock and Class B common stock generally vote together as a single class.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all common stock beneficially owned by them.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

Founder Shares

Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, the only securities of the Company outstanding were shares of Class B common stock (the “Founder Shares”). The Founder Shares are identical to the shares of Class A common stock that were included in the Units sold in the Public Offering except that (1) holders of the Founder Shares have the right to vote on the election of directors prior to an initial business combination, (2) the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (3) holders of the Founder Shares entered into letter agreements with the Company pursuant to which they agreed to waive their redemption rights with respect to any Founder Shares held by them in connection with the completion of an initial business combination, (4) the Founder Shares will automatically convert on a one-for-one basis into shares of Class A common stock at the time of an initial business combination and (5) the Founder Shares are subject to registration rights, as described below.

The shares of Class B common stock were originally issued in June 2017 pursuant to an Amended and Restated Securities Purchase Agreement, by and between the Sponsor and the Company, for the purchase of 14,375,000 shares of Class B common stock for $25,000, or approximately $0.002 per share. The Sponsor subsequently surrendered 5,750,000 Founder Shares for no consideration to adjust its holdings to an expected 20% of the Company’s combined outstanding shares of Class A common stock and Class B common following the Public Offering, resulting in the Sponsor holding 8,625,000 Founder Shares.

The Sponsor subsequently transferred 37,500 Founder Shares at their original purchase price to Marc Zenner in October 2017 and Jon A. Marshall in April 2018, both of whom were independent directors of the Company at the time. Each of the Sponsor and Messrs. Zenner and Marshall subsequently agreed to forfeit 90% of their Founder Shares when the Company was unable to consummate a business combination prior to the deadline in its Charter, resulting in the Sponsor currently holding 855,000 Founder Shares and each of Messrs. Zenner and Marshall owning 3,750 Founder Shares. As a result, the total number of Founder Shares outstanding as of December 31, 2020 is 862,500.

Transfer Restrictions

The terms applicable to the Founder Shares provide that, subject to limited exceptions, the Sponsor may not transfer, assign or sell any of the same until the earlier to occur of: (A) one year after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property. The Sponsor transferred the portion of its Founder Shares noted above to Messrs. Zenner and Marshall in accordance with those terms or pursuant to a waiver thereof.

Registration Rights

The holders of Founders Shares that may be issued equity securities of the Company upon conversion of working capital loans may be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement, by and between the Company, the Sponsor and Mr. Zenner. The registration rights include certain demand and “piggyback” rights.

However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Loans and Advances from Related Party

The Company does not expect to seek loans, advances or contributions from parties other than the Sponsor or an affiliate of the Sponsor. To fund ongoing expenses and operations, the Company borrowed $5,211,417 from the Sponsor in 2019 and 2020, all of which has been converted into shares of the Company’s Class A common stock. The funds were borrowed in connection with (1) the non-interest bearing Convertible Promissory Note issued to the Sponsor on March 1, 2019 in the amount of up to $1.5 million, from which the Company drew $999,640 before the outstanding amount was converted to shares of Class A common stock on March 31, 2020, and (2) non-interest bearing advances to date totaling approximately $4,211,777 from the Sponsor, of $1,832,134 was advanced in the Company’s fiscal year ended December 31, 2020. The total amount drawn on the Convertible Promissory Note and $2,379,643 of the amount advanced by the Sponsor was converted into shares of the Company’s Class A common stock at $10.00 per share pursuant to the Conversion Agreement by and between the Company and the Sponsor, dated March 31, 2020. The remaining $1,832,134 of the amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor shares of the Company’s Class A common stock at $10.00 per share on March 31, 2020. The Company issued 521,142 shares of the Company’s Class A common stock to the Sponsor in connection with such conversions.

All unpaid principal under the Convertible Promissory Note was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company by the deadline specified in its Charter. As a result, the Convertible Promissory Note is no longer available to the Company as a source of financing.

As of December 31, 2020, there is no amount advanced from our Sponsor that remains unconverted to shares of our capital stock.

Contributions from Related Party

On May 15, 2020, the Sponsor paid $25,000 to us in exchange for the issuance of 2,500 shares of Class A common stock to the Sponsor. On August 7, 2020, the Sponsor paid a $197,687 capital contribution to us in exchange for the issuance of 19,769 shares of Class A common stock. On December 15, 2020, the Sponsor paid a $75,000 capital contribution to us in exchange for the issuance of 7,500 shares of Class A common stock. Together, these contributions during the fiscal year ended December 31, 2020 totaled $297,687, in exchange for which the Company issued 29,769 shares of Class A common stock to the Sponsor. As of December 31, 2020, there are 550,911 shares of the Company’s Class A common stock outstanding, all of which are held by our Sponsor.

Administrative Support Agreement

Commencing on the date the Units were first listed on the NASDAQ, the Company agreed to pay an affiliate of the Sponsor up to $10,000 per month for office space, utilities and secretarial and administrative support. Since the Company was unable to complete its initial business combination prior to the November 7, 2019 deadline in the Charter, pursuant to the Administrative Support Agreement, the Company ceased paying these monthly fees. The administrative support agreement, however, remains in place for the benefit of the Company.

The Company incurred $0 and $27,535 for such expenses under the administrative service agreement for the years ended December 31, 2020 and 2019, respectively.

Item 14. Principal Accountant Fees and Services.

The firm of WithumSmith+Brown, PC acts as our independent registered public accounting firm. The following is a summary of fees paid to WithumSmith+Brown, PC for services rendered.

Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by WithumSmith+Brown, PC in connection with regulatory filings. The aggregate fees billed by WithumSmith+Brown, PC for professional services rendered for the audit of our annual financial statements, and other required filings with the SEC for the years ended December 31, 2020 and 2019 totaled approximately $30,000 and $52,000, respectively. The above amounts include interim procedures and audit fees.

Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. During the years ended December 31, 2020 and 2019, we did not pay for consultations concerning financial accounting and reporting standards.

Tax Fees. We paid $4,500 and nil, respectively, to WithumSmith+Brown, PC for tax planning and tax compliance for the years ended December 31, 2020 and 2019.

All Other Fees. We did not pay WithumSmith+Brown, PC for other services for the years ended December 31, 2020 and 2019.

Pre-Approval Policy

The Company had no audit committee for our fiscal year ended December 31, 2020. Since our audit committee disbanded in late 2019, one of our executive officers has approved and expects to pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved prior to the completion of the audit).

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report:

(1) Financial Statements

(2) Financial Statements Schedule

All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto in is Item 15 of Part IV below.

(3) Exhibits

EXHIBIT INDEX

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gerald Cimador and Kent Jamison and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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