In this workout scenario analysis is being conducted for the merger of FE Solutions SPAC and Case Incorporated. We are asked to complete the pro forma equity ownership table using the three share prices given. If I just show this table, we've got a share price of 10, 12.5 and 15.

Now we need a quick recap of who the major shareholders are at the moment. We've got the SPAC shareholders, those outside investors who invested in the IPO. We've got the sponsor who originally set up the spac. We've then got the PIPE. They provided additional funding when the acquisition happened, and we've got the target company shareholders. When we've bought Case Incorporated, we offered them lots of shares in the new company in the SPAC. So what I'm going to have to do, first of all, is work out all of their shareholdings. So we'll start with our SPAC shareholders. The SPAC shareholders originally owned 5.5 million shares, but 40% of those shareholders decided they were going to redeem. So we're only left with the 60%. Thereafter, so we've only got 3.3 million shareholders.

Next up, we want our sponsor, the sponsors a bit further up. They were the promote shares that they invested to 1.4 million. Then the PIPE shareholders, they were in just the cell below that. So number of shares issued in the PIPE transaction is 10. And lastly, our target company shareholders, we're offering them loads of shares here, 65.5. So the total number of shares adds up to 80.2. And in terms of who's got the most ownership, I'll take the 3.3 for the SPAC shareholders divided by the total and lock that. Copy it down. And we can see that target company shareholders have 81.7%, however, the share price is currently 10, and there are some warrants which create new shares. Those warrants have a redemption price of 11.5, so when the share price is 10, the warrants wouldn't be exercised, but when the share price is 12.5, they would be exercised. So we need to use the treasury stock method to help us work out how many extra shares will be created. As a quick reminder of what the treasury stock method says, the number of new shares that we'll create is going to be the share price minus the exercise price of the warrants, all divided by the share price again, and then multiplied by the number of warrants. And that will give us the new shares created.

Let's do it for the SPAC shareholders to start with. I'm going to take the share price of 12.5. I'll subtract out the exercise price for the warrants of 11.5. I'm going to lock onto that and then divide it by the share price. Again, I'll then need to multiply it by the number of warrants that they have.

They had 5.5 million warrants, however that was before the redemption of 40%. So I'll multiply that by one minus the 40%, and I'll need to make sure that I lock onto those number of warrants and lock onto the 40%. And that means we create naught 0.26 million extra shares. Now, if I copy that and go to the right, so I'm now underneath the share price of 15, and if I then paste the formula, everything links up to the 15 and links up to the original 5.5 and the 11.5. So I can now see the SPAC dilution at a price of 12.5 and at 15. I need to do the same calculation for the sponsor. So double open bracket, I take the 12.5 minus the exercise price of 11.5, lock onto that, all divided by the 12.5 again, and then multiply that by the number of warrants that the sponsor had. 3.5. I need to lock onto that. Close the brackets, 0.28. If I copy that figure, go to the right. If the share price goes up to 15, then we now are creating 0.81, brand new shares.

So let's work out our number of shares now to the SPAC shareholders. If we've got a share price of 12.5, it's the original 3.3. I'm going to lock 1, 2, 3 times just so I lock column C, add on the 0.26, and I should be able to copy that to the cell below and then copy that to the right.

The number of PIPE shares if I lock onto that stays at 10. And the number of target company shareholders, their new shares stays the same as well.

So the number of total shares was 80.2. It now goes up to 80.7, and I can see that the shareholding, the ownership, whereas we had 4.1% for the SPAC shareholders originally, that's now gone up to 4.4, and our sponsor was 1.7, and that's gone up to 2%. I can finish up for the 15 share price as well. And again, I can see that ownership has gone up again here now up to 5% for the SPAC shareholders and 2.7% for the sponsor. So the more the share price goes up, the more rewards are being gained by the sponsor and the SPAC shareholders.