425: Teamshares Investor Day Reveals Growth, Going Concern Risk

Live Oak Acquisition Corp. V and Teamshares Inc. held an investor day detailing their proposed business combination, highlighting growth potential alongside a significant going concern warning.

Summary

• Live Oak Acquisition Corp. V (Live Oak) and Teamshares Inc. (Teamshares) hosted an Investor Day on March 31, 2026, in connection with their proposed business combination.
• Teamshares is a tech-enabled acquirer of small and medium-sized enterprises (SMEs) with $0.5M to $5M EBITDA from retiring owners, integrating them onto its platform and enabling employee stock ownership.
• The proposed business combination implies a Pro Forma Enterprise Value of $825M as of December 31, 2025, with an anticipated closing in Q2 2026.
• The transaction includes up to $339M in primary proceeds and a $126M PIPE at $9.20/share, which was oversubscribed.
• Teamshares forecasts Pro Forma Adjusted EBITDA to grow from $19M in 2025 to $60M in 2026 and $100M in 2027, representing a 129% CAGR from 2025-2027.
• The company currently operates 92 companies and has a repeatable acquisition model, sourcing over 15,000 size-qualified leads annually through its software.
• Teamshares management team is founder-led, has invested $1M at Series E, is investing an additional $1M in the PIPE, and has a 4-year/$25 per share lock-up.
• The independent auditor's report for Teamshares' financial statements for the years ended December 31, 2025, and 2024, includes an explanatory paragraph expressing substantial doubt about Teamshares' ability to continue as a going concern.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing with significant caution. While the business model and growth projections are compelling, the explicit 'going concern' warning from the independent auditor, coupled with critical upcoming debt maturities, introduces a fundamental and high level of financial risk that overshadows the positive operational aspects.

Positives

• Teamshares presents a highly innovative market leader position as a tech-enabled acquirer of SMEs, with 92 companies currently and a significant total addressable market (TAM).
• The company is at a key Free Cash Flow (FCF) inflection point, being EBITDA positive and scaled above General & Administrative (G&A) expenses, with incremental EBITDA mostly dropping through.
• Strong growth forecasts include a 129% Pro Forma Adjusted EBITDA CAGR from 2025-2027, targeting $100M+ in 2027.
• The acquisition model demonstrates attractive unit economics with a historical average purchase multiple of 4.9x EBITDA and a 22% LTM Return on Equity.
• Teamshares' software-driven platform industrializes the acquisition process, reducing closing costs to less than $30K per acquisition, significantly lower than typical search funds ($300K-$600K).
• The company has achieved ~7.2% organic EBITDA growth from 2024 to 2025 for comparable operating subsidiaries and ~3% organic EBITDA growth CAGR from 2019-2025.
• Corporate overhead decreased by $2M from 2024 to 2025, and platform employee reduction was 15%, indicating scalability and productivity gains through technology.
• The proposed business combination is supported by a $126M common equity PIPE, which was oversubscribed, anchored by a $1.8T AUM long-only investor and a $20B+ fundamental hedge fund.
• Management's interests are aligned with shareholders through significant personal investment, a 4-year/$25 per share lock-up, market or below-market salaries, no cash bonuses, and stock-based incentive plans.
• The public listing is expected to provide better capital access, with public credit being cheaper, deeper, and faster, and public equity serving as an advantage for Teamshares.

Negatives

• The independent registered public accounting firm's report expresses substantial doubt about Teamshares' ability to continue as a going concern for one year from December 31, 2025.
• Teamshares' ability to continue as a going concern is dependent on successfully refinancing and/or extending certain indebtedness, including the i80 Facility due December 5, 2026, and the HBC Facility.
• There is no assurance that refinancing or extensions of credit agreement maturity dates will be obtained on acceptable terms or at all, potentially impairing business strategies and leading to capital shortages.
• Live Oak shareholders will experience significant dilution as a consequence of the Proposed Business Combination and related financings.
• The ability of Live Oak's public shareholders to exercise redemption rights could deplete the trust account, diminishing capital available to the combined company.

Risks

• Live Oak may not obtain the required shareholder approval to consummate the Proposed Business Combination.
• Live Oak's sponsors, directors, and officers have potential conflicts of interest in recommending the Business Combination.
• The ability of Live Oak's public shareholders to exercise redemption rights could deplete the trust account prior to closing, diminishing capital for the combined company.
• Securities of companies formed through SPAC combinations may experience a material decline in price post-combination.
• Live Oak's due diligence review may not have identified all material issues or risks associated with Teamshares.
• If the valuation attributed to Teamshares is not representative of its actual value, the trading price of combined company shares may suffer.
• Significant transaction costs in connection with the Business Combination may exceed estimates and will be paid from proceeds, diminishing available capital.
• If securities or industry analysts do not publish or cease publishing research, or change recommendations adversely, the combined company's share price and trading volume could decline.
• An active trading market for the combined company's securities may not be consistently available, leading to potential price declines or volatility.
• There are no current plans for the combined company to pay cash dividends for the foreseeable future.
• The combined company may be unable to obtain additional financing to fund its operations or growth.
• There is no assurance the combined company will meet or comply with Nasdaq listing standards.
• Teamshares' principal revenues are expected to be earned in the future through subsidiaries, and it depends on operating companies for cash.
• Teamshares' recent growth rates may not be indicative of future growth.
• Future revenue and operating results will be harmed if Teamshares is unable to acquire new companies, retain existing ones, or expand its operating companies base.
• Revenues and profits generated through acquisition may be less than anticipated, and Teamshares may fail to uncover all liabilities of acquisition targets.
• Teamshares may need to incur additional indebtedness or seek capital through new equity or debt financings to support its growth strategy.
• Failure to effectively source, acquire, and integrate companies could harm Teamshares' ability to increase its number of operating companies.
• Teamshares' acquisition cycle can be long and unpredictable, requiring considerable time and expense.
• Teamshares could be deemed an investment company under the Investment Company Act, leading to burdensome compliance requirements and restricted activities.
• Failure to offer high-quality support could harm Teamshares' business and reputation.
• Operating companies may never achieve or sustain profitability.
• Failure to improve and enhance the functionality, performance, reliability, design, security, and scalability of Teamshares' platform and products may adversely affect its business.
• Natural catastrophic events and man-made problems (e.g., power disruptions, cyberattacks, pandemics) may disrupt Teamshares' business.
• Failure to manage growth effectively may hinder business plan execution, service levels, and competitive challenges.
• Acquisitions may divert management's attention, result in additional dilution, or fail to integrate successfully.
• Teamshares faces intense competition from well-established companies.
• Teamshares may need to change its business model to remain competitive or fail to adapt to rapidly changing technology and industry standards.
• Increasing operational complexity as Teamshares grows will create management challenges.
• Dependence on senior management and inability to attract/retain highly skilled employees may adversely affect the business.
• Estimates of market opportunity and forecasts of market growth may prove inaccurate.
• Pursuit of new business strategies and acquisitions could disrupt ongoing business and present unforeseen risks.
• A cyberattack, security breach, or other unauthorized access could delay or interrupt service, harm reputation, or lead to significant liability.
• Dependence on third-party data hosting and transmission services, with potential for cost increases, interruptions, or poor service.
• Reliance on third-party proprietary and open-source software, with risks of licensing issues, errors, or litigation.
• Growth depends in part on the success of strategic relationships with third parties.
• Substantial costs in protecting or defending proprietary rights.
• Subject to financial and economic sanctions, export controls, anti-corruption, anti-bribery, and anti-money laundering laws.
• Insurance costs may increase significantly, or coverage may be inadequate.
• Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect business and profitability.
• Potential for additional obligations to collect and remit sales tax and other taxes, including for past sales.
• Acquisitions may not be as valuable or generate anticipated cash, or material liabilities may be discovered.

Future Outlook

Teamshares aims to grow Pro Forma Adjusted EBITDA 5x in two years, from $19M in 2025 to $100M in 2027, driven by its repeatable acquisition engine and modest organic growth assumptions. The company plans to acquire $40M in EBITDA in 2026 and $45M in 2027. Corporate overhead is expected to increase by approximately 25% through 2027, primarily due to public company compliance costs. The company's capital allocation strategy prioritizes acquisitions for primary growth, with selective allocation to organic growth opportunities. There are no initial plans for share repurchases or dividends, with the focus on reinvesting cash flow into new acquisitions.

Management Comments

• Rick Hendrix (Live Oak CEO): "Capital markets expertise to support Teamshares as a new public company, support capital raising across equity and debt markets, leverage SPAC experience to navigate post-merger transition and public market dynamics, advise on investor messaging, positioning and engagement with public market investors, build equity research coverage and engagement with trading desks to drive interest and liquidity, and act as a strategic partner to management on growth initiatives and capital allocation."
• Michael Brown (Teamshares Founder & CEO): "A differentiated small cap listing with a significant growth opportunity, simple, transparent financial metrics, clear, repeatable compounding model as a programmatic acquiror, software helps access, industrialize + scale our model in the SME market, and disciplined capital allocation, focused on long-term shareholder value."
• Teamshares management is a "founder-led team built for scale with executive experience aligned to the model," having "invested $1M at Series E" and "investing $1M in PIPE," with a "4 year / $25 per share lock-up," receiving "market salaries or below," "no cash bonuses," and an "incentive plan entirely stock-based."

Industry Context

StockSavvy.ai notes that Teamshares operates in the growing market of small and medium-sized enterprise (SME) acquisitions, particularly targeting businesses owned by retiring Baby Boomers and Gen X. Its tech-enabled, programmatic acquisition model differentiates it from traditional search funds by industrializing the process and significantly lowering transaction costs. The company's focus on employee ownership for acquired businesses also positions it uniquely within the broader M&A landscape, addressing succession planning challenges for retiring owners while fostering employee alignment and retention. This approach taps into a vast and underserved market of millions of SMEs.

Comparison to Industry Standards

• Teamshares' entry multiple of 11.9x 2027E Pro Forma Adjusted EBITDA is attractive compared to public company peers that trade at an average of 14.7x 2027E EBITDA.
• The cost to close an acquisition for Teamshares is less than $30K, significantly lower than the typical $300K-$600K for a search fund, as cited by the Yale School of Management.
• Teamshares' ~7.2% organic EBITDA growth from 2024 to 2025 for comparable operating subsidiaries outperforms the Russell 2000 subset, which saw a (2.2)% YoY growth in EBITDA for similar industries and size ranges, indicating a +9% outperformance.
• Programmatic acquirors, as a capital allocation strategy, have historically demonstrated strong performance, with recent comparable companies achieving approximately 18% compounding annual returns since January 2020, outpacing the S&P 500 by about 6% annually.

Legal Proceedings

• The outcome of any legal proceedings that may be instituted against the parties following the announcement and consummation of the Business Combination is a risk factor.

Stakeholder Impact

• **Shareholders (Live Oak)**: Will experience significant dilution and face risks of share price decline post-combination, but also potential for substantial returns if the business combination is successful and the going concern issue is resolved.
• **Shareholders (Teamshares)**: Existing shareholders are aligned with meaningful earnout economics, vesting at $12, $15, and $20 per share, indicating potential for significant upside.
• **Employees (of acquired companies)**: The model helps employees earn company stock, fostering alignment and retention, potentially leading to improved company performance.
• **Retiring Owners (SMEs)**: Teamshares offers a 'permanent home' for their businesses, providing a structured exit strategy.
• **Creditors**: The ability to refinance or extend existing indebtedness, particularly the i80 Facility, is critical for current creditors and will impact future financing terms.

Next Steps

• Live Oak and Teamshares intend to file a Registration Statement with the SEC, which will include a proxy statement/prospectus.
• After the Registration Statement is declared effective, the definitive proxy statement/prospectus will be mailed to Live Oak shareholders for voting on the Business Combination.
• The Business Combination is anticipated to close in Q2 2026.
• Teamshares management plans to alleviate the going concern conditions by using proceeds from the Business Combination to refinance or repay the HBC Facility and potentially improve liquidity.
• Teamshares must successfully refinance and/or extend its i80 Facility, which is due on December 5, 2026.
• The board will consider opportunistic share repurchases in market dislocation when excess capital exists, though there are no initial plans for a share buyback program or dividends.

Key Dates

Recommendation

The independent auditor's explicit 'going concern' warning for Teamshares, coupled with the critical need to refinance substantial debt (i80 Facility due December 5, 2026) and the dependence on the successful completion and proceeds of the Business Combination to address these issues, presents an exceptionally high level of financial uncertainty and risk. While the business model and growth projections are attractive, this fundamental liquidity risk makes the investment highly speculative. A seasoned investor would prioritize capital preservation and likely recommend a strong sell or avoidance until these severe financial uncertainties are definitively resolved and the company demonstrates a clear path to sustainable liquidity.

Keywords

Teamshares, Live Oak Acquisition Corp. V, SPAC, Business Combination, SME Acquisition, Employee Ownership, Financial Technology, Corporate Governance, Risk Management, SEC Filing, Investor Day, Merger, Private Equity, Small Business, Growth Strategy