10-K

Large accelerated filer

Accelerated filer

Non-accelerated filer

Small reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2021

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

For the transition period from

Commission File Number

001-40775

INSIGHT ACQUISITION CORP.

(Exact name of Registrant as specified in its Charter)


Delaware		86-3386030
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
333 East 91 st Street
New York, NY 10128
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (917)

374-2922

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


Title of each class	Trading Symbols	Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock and one-half of one Redeemable Warrant	INAQ.U	The New York Stock Exchange
Class A Common Stock, $0.0001 par value	INAQ	The New York Stock Exchange
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50	INAQ WS	The New York Stock Exchange

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

None

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 15(d) of the 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 the 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 Registrant’s Units began trading on the New York Stock Exchange (the “NYSE”) on September 2, 2021 and the Registrant’s Class A common stock began separate trading on the NYSE on October 25, 2021. The aggregate market value of the Registrant’s Class A common stock outstanding, other than shares held by persons who may be deemed affiliates of the Registrant, at December 31, 2021, was $239,760,000.

As of March 25, 2022, there were 24,000,000 shares of Class A common stock, par value $0.0001 per share, and 6,000,000 shares of Class B common stock, par value $0.0001 per share, issued and outstanding, respectively.

PCAOB ID Number: 100 Auditor Name: WithumSmith+Brown, PC Auditor Location: New York, New York

Documents Incorporated by Reference: None.

Table of Contents

TABLE OF CONTENTS


		Page

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			1

PART I			1
Item 1.	Business		1
Item 1A.	Risk Factors		20
Item 1B.	Unresolved Staff Comments		49
Item 2.	Properties		49
Item 3.	Legal Proceedings		49
Item 4.	Mine Safety Disclosures		49

PART II			50
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		50
Item 6.	Reserved		51
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		51
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		56
Item 8.	Financial Statements and Supplementary Data		56
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		56
Item 9A.	Controls and Procedures		56
Item 9B.	Other Information		57
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		57

PART III			58
Item 10.	Directors, Executive Officers and Corporate Governance		58
Item 11.	Executive Compensation		65
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		66
Item 13.	Certain Relationships and Related Transactions, and Director Independence		67
Item 14.	Principal Accounting Fees and Services		68

PART IV			70
Item 15.	Exhibits, Financial Statement Schedules		70
Item 16.	Form 10-K Summary		71

SIGNATURES			72

POWERS OF ATTORNEY			72

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Unless otherwise stated in this Annual Report on

Form 10-K

(this “Report”), references to:

•

“we,” “us,” “company” or “our company” are to Insight Acquisition Corp., a Delaware corporation;

•

“Cantor” or the “representative” are to Cantor Fitzgerald & Co., the representative of the underwriters in our initial public offering (“IPO”);

•

“Odeon” are to Odeon Capital Group, LLC, an underwriter in our IPO;

•

“DGCL” refers to the Delaware General Corporation Law as the same may be amended from time to time;

•

“anchor investors” are the up to 13 qualified institutional buyers or institutional accredited investors which are not affiliated with any member of our management and that each expressed to us an interest in purchasing up 2,376,000 units in our IPO, as further described herein;

•

“founder shares” are to shares of Class B common stock initially purchased by our sponsor in a private placement prior to our IPO and the shares of Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our initial business combination as described herein;

•

“initial stockholders” are to holders of our founder shares prior to our IPO (other than the anchor investors);

•

“management” or our “management team” are to our executive officers and directors;

•

“directors” are to our current directors;

•

“public shares” are to shares of Class A common stock sold as part of the units in our IPO (whether they were purchased in our IPO or thereafter in the open market);

•

“public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” will only exist with respect to such public shares;

•

“private placement warrants” are to the warrants issued to our sponsor, Cantor and Odeon in a private placement simultaneously with the closing of our IPO; and

•

“sponsor” are to Insight Acquisition Sponsor LLC, a Delaware limited liability company, formed by our Executive Chairman and Chief Executive Officer.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report includes, and oral statements made from time to time by representatives of the company may include, 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”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Report. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. Forward-looking statements in this Report may include, for example, statements about:

•

our ability to select an appropriate target business or businesses;

•

our ability to complete our initial business combination;

•

our expectations around the performance of a prospective target business or businesses;

•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

•

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

•

our potential ability to obtain additional financing to complete our initial business combination;

•

our pool of prospective target businesses;

•

the ability of our officers and directors to generate a number of potential business combination opportunities;

•

our public securities’ potential liquidity and trading;

•

the lack of a market for our securities;

•

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

•

the trust account not being subject to claims of third parties; or

•

our financial performance.

The forward-looking statements contained in this 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 “Item 1A. 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.

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PART I

Item 1.

Business.

Introduction

We are a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, which we refer to throughout this Report as our initial business combination, with one or more businesses or entities. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination.

We completed our IPO on September 7, 2021 and the proceeds of our IPO are held in a trust account for the benefit of our public stockholders. We may use such amounts to help fund our initial business combination, subject to the right of our public stockholders to have their shares of common stock of our company redeemed in connection with our initial business combination.

While we may pursue an acquisition in any business industry or sector, we intend to concentrate our efforts identifying businesses in the FinTech or financial services industry with an enterprise value of approximately $750 million to $1.5 billion, with particular emphasis on businesses that are providing or changing technology for traditional financial services (“FinTech”), those in the wealth, investment, asset management and insurance sectors, or certain types of technology companies that provide services to the FinTech or financial services companies. Such companies might include those providing artificial intelligence, blockchain, data and analytics, tech-enabled services, risk/compliance/KYC/AML solutions, including those focused on financial, regulatory, fraud and cybersecurity risk, and/or enterprise software solutions, among others. In addition, we intend to capitalize on the ability of our management team to identify and acquire a business in the Fintech or financial services industries that can benefit from our experience and differentiated global network.

Company History

On September 7, 2021, we consummated our IPO of 24,000,000 units (the “Units”). Each Unit consists of one share of Class A common stock of the company, par value $0.0001 per share, and

one-half

of one redeemable warrant of the company (“Warrant”), with each whole Warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the company of $240,000,000. The company granted the underwriters of the IPO, a

45-day

option to purchase up to 3,600,000 additional Units solely to cover over-allotments, if any.

Simultaneously with the closing of the IPO, the company completed the private sale of an aggregate of 7,500,000 warrants (the “Sponsor Private Placement Warrants”) to Insight Acquisition Sponsor LLC at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the company of $7,500,000. In addition, simultaneously with the closing of the IPO, the company completed the private sale of an aggregate of 1,200,000 warrants (the “UW Private Placement Warrants” and together with the Sponsor Private Placement Warrants, the “Private Placement Warrants”) to Cantor and Odeon at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the company of $1,200,000.

The Private Placement Warrants are identical to the Warrants sold in the IPO, except that the Private Placement Warrants, so long as they are held by the purchasers thereof or their permitted transferees, (i) are not redeemable by the company, (ii) may not (including the Class A common stock issuable upon exercise of such Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by such holders until 30 days after the completion of the company’s initial business combination, (iii) may be exercised by the holders on a cashless basis and (iv) are subject to the

lock-up

and registration rights limitations imposed by FINRA Rule 5110. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

A total of $241,200,000, comprised of $232,500,000 of the proceeds from the IPO (which amount includes $12,000,000 of the underwriters’ deferred discount) and $8,700,000 of the proceeds of the sale of the Private Placement Warrants, was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to the company to pay its taxes, the funds held in the trust account will not be released from the trust account until the earliest of (i) the completion of the company’s initial business combination, (ii) the redemption of any shares of Class A common stock included in the Units sold in the IPO (“public shares”) properly submitted in connection with a stockholder vote to amend the company’s amended and restated certificate of incorporation to modify the substance or timing of the company’s obligation to redeem 100% of the public shares if the company does not complete its initial business combination within 18 months from the closing of the IPO, or with respect to any other material provisions relating to stockholders’ rights or

pre-initial

business combination activity and (iii) the redemption of the public shares if the company is unable to complete an initial business combination within 18 months from the closing of the IPO, subject to applicable law.

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On October 16, 2021, the

45-day

over-allotment option granted to the underwriters of our IPO expired unexercised.

On October 20, 2021, we announced that holders of the Units may elect to separately trade the Class A Common Stock and Warrants. Those Units not separated will continue to trade on the NYSE under the symbol “INAQ.U,” and the Class A common stock and redeemable warrants that are separated will trade on the NYSE under the symbols “INAQ” and “INAQ WS,” respectively.

Business Strategy

Our business strategy is to identify and complete a business combination that creates long-term value for our stockholders. Our investment team is well positioned to successfully identify attractive opportunities with growth-stage FinTech and related technology companies, as well as with Wealth or Investment management firms. With our prior investment experience and extensive networks, we are confident that we can successfully execute an initial business combination.

We believe that applying Insight’s approach to investing, and leveraging Insight’s network, resources and expertise, will help our management team execute on our business strategy:

•

Growth mindset.

Insight looks to partner with future market leading companies with several years of sustained growth, with a history of customer trust and engagement and a business model that is reflective of the value they provide. These companies often have potential for a sustained category leadership position, and we will leverage Insight’s experience in identifying growth-stage companies with the potential to become market leaders.

•

Management-focused, partnership-oriented approach.

We will aim to align with the strategy and goals of the management team we partner with. By partnering with existing management, we believe that we can build upon management’s existing traction and support them as they strive to achieve category leadership, while minimizing the business disruption associated with a leadership transition.

•

Long investment horizon

. Insight is a long-term investor and our goal is to help companies transform into industry leaders, and to be supportive along the way by continuing to serve on the Board of Directors. We will target companies where we can be a long-term partner, supporting their path towards market leadership.

We believe there are many potential targets within the FinTech (as well as adjacent technologies), asset and wealth management, and broader financial services sectors that could become attractive public companies. These potential targets exhibit a broad range of business models and financial characteristics from mature businesses with recurring revenues and strong cash flows to high growth innovative companies.

We do not intend to limit our search to one segment of the financial services ecosystem, but will instead target a wide variety of companies across the financial services and technology sectors, with a focus on FinTech and adjacent technologies. The FinTech sector, for example, saw $45.3 billion of financing volume in 2020. Q1 2021 was the largest and most active quarter ever for FinTech financing activity with over $29 billion in volume across more than 750 transactions

During the same period, there was an active IPO market, with six US FinTech initial public offerings. Additionally, 2021 was an active year for special purpose acquisition company (“SPAC”) transactions (16 completed through June 2021) in the FinTech sector, or mergers between FinTech companies and SPACs, with announced deal values of $54.9 billion. Total announced merger and acquisition (“M&A”) dollar volume reached $95 billion in Q1 2021, with 21 deals all valued over $1 billion, the most ever in a single quarter

The wealth industry has attracted the attention of private equity investors due to its steady growth, high profit margins, consistent cash flow, and low capital requirements. M&A across the vertical remains a principal path to solving strategic challenges and repositioning businesses for growth. Transaction activity remained high in 2020 with 253 announced transactions, a slight reduction year-over-year with the previous year’s 270 transactions. The 2020 transactions included 51 traditional asset manager sales, 51 alternative asset manager sales, and 151 private wealth manager sales. 2020 deal activity was spread across firms with different sizes of assets under management (“AUM”). The transacted AUM rose to $2.9 trillion, implying an average AUM per transaction of $11.6 billion in 2020 versus $1.3 trillion in AUM transacted in 2019, implying an average AUM per transaction of $4.67 billion for that year.

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According to McKinsey & Company research, in 2000, the North American wealth management industry totaled $13 trillion in client assets, which grew by approximately 45%, reaching roughly $19 trillion in 2010. There were approximately 420,000 advisors in the US and Canada in 2010. By the end of the third quarter of 2020, the industry was managing a record-high $34.7 trillion in client assets, with

annualized year-to-date net flows

at a healthy 2.6%. While as of 2018, the total number of advisors remained largely unchanged from 2010, the advisor workforce aged materially in the US, with only 25% under the age of 44, compared to 33% in 2010. Future industry consolidation will be driven by the fact that a substantial number of advisors are expected to retire over the next decade with their managed assets becoming available for acquisition. These retirements are further fueled by the level of education and professional competency demanded of advisors. The industry is also experiencing a substantial transfer of generational assets and an influx of new generational assets, with a direction towards advisors and companies possessing strong technology. As a consequence, businesses are constantly looking to implement, invest or acquire technology platforms that can further their growth and differentiate their product offerings. This disruption and change in the delivery of financial services includes, among others, digital payments, digital advice (robo-advice), exchanges and trading platforms, the use of big data and artificial intelligence, cloud computing and digital assets. As modelled by Aite Group, assets managed on digital investment platforms are set to increase from AUM of $343 billion in the third quarter of 2019 to $1.68 trillion by 2025 and according to Juniper Research, consumer spending via digital wallets will exceed $10 trillion in 2025, an 83% increase from the $5.5 trillion spent via digital wallets in 2020. According to the Ernst & Young Global Capital Confidence Barometer, 89% of wealth and asset managers that responded to their surveys agreed that digital transformation will present them with opportunities to reposition their overall business strategy and reshape their portfolios. Of the executives surveyed, 77% believe that their chief executive has a clear vision to achieve accelerated digital transformation through M&A. With increased adoption of technology solutions by consumers and businesses alike, we believe that all components of the industry including both mature and innovative newcomers are poised for continued growth in overall market size and penetration. Key industry characteristics include long-term organic growth, attractive competitive dynamics, and further consolidation opportunities to scale. Key business characteristics include high barriers to entry, low risk of technological obsolescence, and public market-ready scale. Key financial metrics include organic revenue growth, recurring revenues, and strong cash flow conversion. We will seek to acquire established businesses that we believe are fundamentally sound, but potentially would benefit from the financial, operational, technological, strategic or managerial improvements our company and management team can provide to maximize value. We will also look at earlier-stage companies that exhibit the potential to transform the industries in which they participate, and which offer the potential of sustained high levels of revenue growth.

Our Past SPAC Company Blank Check Experience

Jeffrey Gary, who is our CEO and CFO, was an officer and director of Fusion Acquisition Corp. (NYSE: FUSE; “Fusion I”), a special purpose acquisition company that completed its initial public offering in June 2020 in which it sold units, each consisting of one share of Class A common stock

and one-half of one

warrant to purchase one share of Class A common stock for an offering price of $10.00 per unit, generating aggregate proceeds of approximately $350,000,000.

On September 22, 2021, Fusion I closed its agreement and plan of merger with MoneyLion Inc. (“MoneyLion”), pursuant to which, among other things, MoneyLion became a wholly owned subsidiary of Fusion I. In connection with the business combination, Fusion I raised $250 million through a private placement of shares of its Class A common stock at a price of $10.00 per share. Mr. Gary remains a member of the board of directors of MoneyLion.

Jeffrey Gary, who is our CEO and CFO, was also an officer and director of Fusion Acquisition II Corp. (NYSE: FSNB; “Fusion II”), a special purpose acquisition company that completed its initial public offering in February 2021 in which it sold units, each consisting of one share of Class A common stock

and one-third of one

warrant to purchase one share of Class A common stock for an offering price of $10.00 per unit, generating aggregate proceeds of approximately $500,000,000.

Our Management Team

We will seek to capitalize on the financial services experience and contacts of the members of our board of directors (“Board) and management team, including Michael Singer, our Executive Chairman, and Jeffrey Gary, our Chief Executive Officer and Chief Financial Officer, to identify, evaluate, and acquire a target business.

Michael Singer, our Executive Chairman, is the Managing Partner of Alternative Insight, LLC. In 2017, he formed Alternative Insight LLC to serve as management company for his investment management activities, directorships and consultancy. He was Executive Vice Chairman of the Board of Directors of National Holdings Corporation (Nasdaq: NHLD), which was sold to B. Riley Financial in February 2021. From 2012 to 2017, Mr. Singer was Chief Executive Officer and President of Ramius (Cowen Investment Management). Prior to that, he was Head of Alternative Investments at Third Avenue Management. From 2004 to 2009, he was

co-President

of Ivy Asset Management, an institutional fund of hedge funds business. Mr. Singer began his career at Weiss, Peck & Greer, where he spent nine years and served as Senior Managing Director and Executive Committee Member. Mr. Singer received his Juris Doctorate from the Emory University

SEC Form 10-K filed by Insight Acquisition Corp.