01—Abstract
Summary
Summary of the 10-K filed March 13, 2019. Cited figures are marked; the original filing is the authoritative source.
This 2018 Form 10-K for Vertiv Holdings Co (VRT), filed in March 2019, primarily details the company's corporate governance, executive team, and related party transactions, as it was a newly formed SPAC at the time.
The report confirms that disclosure controls and procedures were effective as of December 31, 2018. Notably, the company had no internal control report for financial reporting due to its transition period as a newly public entity. A significant point for investors is the Sponsor Commitment from GS Sponsor LLC, providing up to $2.0 milliona in liquidity for ordinary course expenses through June 2018, with no additional equity interest gained by the sponsor.
The filing also highlights the experienced leadership team, including CEO David M. Cote, who has a strong background from Honeywell.
It details the roles and affiliations of the Board of Directors and the committee structures (Audit, Compensation, Nominating & Corporate Governance), emphasizing the independence of key directors. A crucial aspect for investors to consider is the potential for conflicts of interest arising from the multiple affiliations of officers and directors, particularly those associated with Goldman Sachs, as they have fiduciary duties to other entities that could be presented with business opportunities before Vertiv.
02—Key points
Key Highlights
- Disclosure controls and procedures were evaluated as effective as of December 31, 2018.
- No management report on internal control over financial reporting was included due to the company's status as a newly public entity.
- GS Sponsor LLC committed to provide up to $2.0 million in liquidity for ordinary course expenses through June 12, 2020.
- The leadership team, including CEO David M. Cote, comprises experienced individuals with backgrounds in major corporations like Honeywell.
- The Board of Directors has three standing committees (Audit, Compensation, Nominating & Corporate Governance), with independent directors serving on each.
- Potential conflicts of interest exist due to officers' and directors' affiliations with other entities, notably Goldman Sachs, which may take precedence for business opportunities.
- Founder Shares are held primarily by GS DC Sponsor I LLC, David M. Cote, and GS Sponsor LLC, representing a significant portion of Class B common stock and influencing director elections.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 13, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $4.29B$0 | — |
| Cost of Revenue | $2.87B— | — |
| Gross Profit | $1.42B— | — |
| R&D Expenses | $198.30M— | — |
| SG&A Expenses | $1.22B— | — |
| Interest Expense | $288.80M— | — |
| Net Income | $5.03M-$1K | +394359.2% |
| EPS (Basic) | $-2.65— | — |
| EPS (Diluted) | $-2.65— | — |
| Shares Outstanding (Basic) | 118.26M— | — |
| Shares Outstanding (Diluted) | 118.26M— | — |
05—Questions
Frequently Asked Questions
What is the current financial position or performance of Vertiv Holdings Co. as detailed in this 10-K?
This particular 10-K filing from March 2019 focuses heavily on corporate structure, governance, and related party disclosures for Vertiv Holdings Co., which was operating as a SPAC (Special Purpose Acquisition Company) at the time. It does not provide detailed financial statements or operational performance metrics for the year ended December 31, 2018. Investors seeking financial performance data would need to consult the audited financial statements section or subsequent filings.
What are the key risks for investors related to the management and board of directors?
A significant risk highlighted is the potential for conflicts of interest. Many officers and directors have affiliations with other entities, particularly Goldman Sachs. This means they have fiduciary duties to these other entities, and business opportunities may be presented to them before Vertiv. While the company states it believes these conflicts won't materially affect its ability to complete an Initial Business Combination, and its charter renounces interest in certain corporate opportunities, it remains a factor for investors to monitor.
What is the Sponsor Commitment and its implications?
GS Sponsor LLC has committed to providing up to $2.0 million in liquidity for Vertiv's ordinary course expenses until June 12, 2020. Importantly, this liquidity will be provided as a contribution to the Sponsor's Founder Shares and does not grant GS Sponsor LLC any additional equity interest in the company. This arrangement ensures basic operational funding is available.
Are there any concerns regarding internal controls over financial reporting?
The report states that there was no change in internal control over financial reporting during the fiscal year that materially affected it. However, a report of management's assessment regarding internal control over financial reporting, and the auditor's attestation, are not included. This is explicitly stated to be due to a transition period established by SEC rules for newly public companies.
06—Continue