S-1/A: Zapata Computing Holdings Inc. Files Amendment No. 1 to Form S-1, Registers Resale of Common Stock and Warrants

Zapata Computing Holdings Inc. has filed an amendment to its Form S-1 registration statement to register the resale of shares of Common Stock and Warrants by selling securityholders.

Summary

• Zapata Computing Holdings Inc. filed Amendment No. 1 to its Form S-1 registration statement with the SEC on May 6, 2024.
• The filing registers the offer and sale by selling securityholders of up to 3,131,528 shares of Common Stock issued upon conversion of Senior Secured Notes at $4.50 per share.
• It also covers 4,875,000 shares of Common Stock issued to Insiders in exchange for Class B Common Stock at approximately $0.003 per share.
• Additionally, 837,500 shares of Common Stock transferred to NRA Investors by Sponsors for no cash consideration are included.
• The registration includes 500,000 shares of Common Stock issued pursuant to the Forward Purchase Agreement at approximately $10.99 per share.
• It also covers 42,372 shares of Common Stock issued to third parties for services related to the Merger.
• Furthermore, 6,463,936 shares of Common Stock issued to Legacy Zapata Stockholders at the closing of the Merger are registered.
• The filing also pertains to 13,550,000 Private Warrants held by Sponsors, exercisable for one share of Common Stock at $11.50.
• The registration statement also covers the offer and sale of up to 13,550,000 shares of Common Stock issuable upon exercise of the Private Warrants and the issuance of up to 25,049,982 shares of Common Stock that are issuable upon the exercise of Warrants.
• The company will not receive any proceeds from the sale of Common Stock or Warrants by the Selling Securityholders, except with respect to amounts it may receive upon the exercise of the Warrants.
• The last reported sales price of Common Stock was $1.25 per share on May 3, 2024.
• The company could receive up to approximately $288.1 million if all Warrants are exercised for cash.
• The company has also filed a separate registration statement registering the resale by Lincoln Park of up to 13,000,000 shares of Common Stock pursuant to the Purchase Agreement, which was declared effective on April 18, 2024.
• The 40,900,318 shares of Common Stock (including Common Stock underlying Warrants) that may be issued or resold pursuant to this prospectus represent approximately 141% of the Common Stock outstanding as of March 28, 2024 (approximately 67% on a fully-diluted basis).

Sentiment

Score: 4

Explanation: The document is largely factual, but the high percentage of shares being registered for resale and the potential for price decline contribute to a negative sentiment.

Positives

• Registration allows selling securityholders to offer and sell their shares, potentially increasing liquidity.
• Exercise of warrants could bring up to $288.1 million in proceeds to the company.

Negatives

• The company will not receive any proceeds from the sale of Common Stock or Warrants by the Selling Securityholders, except with respect to amounts it may receive upon the exercise of the Warrants.
• The issuance or resale of shares of Common Stock pursuant to this prospectus could have a significant negative impact on the trading price of the shares of Common Stock.
• The 40,900,318 shares of Common Stock (including Common Stock underlying Warrants) that may be issued or resold pursuant to this prospectus represent approximately 141% of the Common Stock outstanding as of March 28, 2024 (approximately 67% on a fully-diluted basis).

Risks

• The issuance or resale of Common Stock pursuant to this prospectus could have a significant negative impact on the trading price of the shares of Common Stock.
• Certain of the Selling Securityholders purchased, or are able to purchase, Common Stock at prices that are well below the current trading price of the Common Stock.
• The company may be unable to raise capital or additional financing when needed on acceptable terms, or at all.
• The company does not expect to rely on the cash exercise of Warrants to fund its operations.

Future Outlook

The company expects to require additional capital to pursue its business objectives and intends to rely on other sources of cash to continue to fund its operations.

Industry Context

The announcement relates to the market for generative AI and quantum computing, where Zapata Computing is positioning itself as a key player.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or competitors.
• The document does not list specific comparible companies, projects, and results.

Stakeholder Impact

• Existing shareholders face potential dilution and price decline.
• Warrantholders may be affected by the potential for cashless exercise and redemption.
• The company's ability to fund operations may be affected by the reliance on warrant exercises.

Next Steps

• Selling Securityholders may offer, sell or distribute all or a portion of the securities registered hereby publicly or through private transactions at prevailing market prices or at negotiated prices.
• The company will bear all costs, expenses and fees in connection with the registration of these securities, including with regard to compliance with state securities or blue sky laws.

Key Dates

Keywords

Common Stock, Warrants, Selling Securityholders, Registration Statement, Private Warrants, Zapata Computing, Resale, Merger, Shares, Stock