ボウレロの年次報告

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-K

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

For the fiscal year ended July 2, 2023


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

Commission file number 001-40142

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BOWLERO CORP.

(Exact name of registrant as specified in its charter)

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Delaware									98-1632024
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

7313 Bell Creek Road
Mechanicsville, Virginia									23111
(Address of Principal Executive Offices)									(Zip Code)

(804) 417-2000

Registrant's telephone number, including area code

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	BOWL	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 Section 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 and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by 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. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of Class A common stock held by non-affiliates of the registrant on the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $520,746,000, based on the closing price of $13.48 for shares of the registrant’s Class A common stock as reported by the New York Stock Exchange.

The registrant had outstanding 100,948,208 shares of Class A common stock, 60,819,437 shares of Class B common stock, and 136,373 shares of Series A convertible preferred stock as of August 30, 2023.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders, expected to be filed within 120 days of our fiscal year end, are incorporated by reference into Part III.

Auditor Name:

Deloitte & Touche LLP

Auditor Location:

Richmond, Virginia

Auditor Firm ID:

Table of Contents

Index to Financial Statements

Table of Contents


		Page
Part I
	Item 1. Business	1
	Item 1A. Risk Factors	5
	Item 1B. Unresolved Staff Comments	18
	Item 2. Properties	18
	Item 3. Legal Proceedings	19
	Item 4. Mine Safety Disclosures	20
Part II
	Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
	Item 6. Reserved	23
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk	31
	Item 8. Financial Statements and Supplementary Data	33
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	79
	Item 9A. Controls and Procedures	79
	Item 9B. Other Information	80
	Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection	80
Part III
	Item 10. Directors, Executive Officers and Corporate Governance	81
	Item 11. Executive Compensation	81
	Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters	81
	Item 13. Certain Relationships and Related Transactions, and Director Independence	81
	Item 14. Principal Accounting Fees and Services	81
Part IV
	Item 15. Exhibits, Financial Statement Schedules	82
	Item 16. For 10-K Summary	84
Signatures

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions and forecasts. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under the section of this Annual Report on Form 10-K titled Part I, Item 1A “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our results to vary from expectations include, but are not limited to: our ability to design and execute our business strategy; changes in consumer preferences and buying patterns; our ability to compete in our markets; the occurrence of unfavorable publicity; risks associated with long-term non-cancellable leases for our centers; our ability to retain key managers; risks associated with our substantial indebtedness and limitations on future sources of liquidity; our ability to carry out our expansion plans; our ability to successfully defend litigation brought against us; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights and claims of intellectual property and proprietary right infringement, misappropriation or other violation by competitors and third parties; failure to hire and retain qualified employees and personnel; the cost and availability of commodities and other products we need to operate our business; cybersecurity breaches, cyber-attacks and other interruptions to our and our third-party service providers’ technological and physical infrastructures; catastrophic events, including war, terrorism and other conflicts; public health emergencies and pandemics, such as COVID-19 pandemic, or natural catastrophes and accidents; changes in the regulatory atmosphere and related private sector initiatives; fluctuations in our operating results; economic conditions, including the impact of increasing interest rates, inflation and recession; and other risks, uncertainties and factors set forth in this Annual Report on Form 10-K, including those set forth under Part I, Item 1A “Risk Factors.” These forward-looking statements reflect our views with respect to future events as of the date of this Annual Report on Form 10-K and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report on Form 10-K and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Annual Report on Form 10-K. We anticipate that subsequent events and developments will cause our views to change. You should read this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. Our forward-looking statements do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.

Part I

Item 1. Business

Overview

We are the world’s largest operator of bowling entertainment centers. Since the acquisition of the original Bowlmor Lanes location in 1997 in Greenwich Village, New York City, our journey has continued to revolutionize bowling entertainment. We operate traditional bowling centers and more upscale entertainment concepts with lounge seating, arcades, enhanced food and beverage offerings, and more robust customer service for individuals and group events, as well as hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. Our bowling business is our only operating segment. All amounts are in thousands, except share, per share or as otherwise specifically noted.

Competitive Strengths

We believe our key competitive strengths include our highly loyal customers, diverse product offerings, excellent and well-diversified geographic locations, proven business model, and experienced management team, all of which contribute to our solid track record of sustainable growth and generating positive earnings.

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Loyal Customers: With the over 30-million customers we serve each year, we are well-positioned in highly attractive markets across North America to capitalize on the very large addressable markets for bowling and out-of-home entertainment. With our strong market position, we are able to leverage our competitive strengths to grow our business by, among other things, differentiating our bowling, dining, and amusement video game entertainment offerings for our retail, league, and group event customers. Retail consists of our walk-in customers and is by far our largest and most diverse audience. Leagues are a large and stable source of recurring revenue, and group events, such as birthday parties and corporate events, are a consistent revenue stream with significant growth potential.

Branding: Our centers operate under different brand names and our branding plays an integral role in the success of our business. The Bowlero branded centers offer a more upscale entertainment concept with lounge seating, enhanced food and beverage offerings, and a more robust customer service for individual and group events. The AMF centers are traditional bowling centers in an updated format. In May 2023, we announced the signing of an asset purchase agreement to acquire the Lucky Strike brand and all of its bowling centers. See Recen t Development s within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for more details on the future acquisition of Lucky Strike.

Diverse Product Offerings: We attribute our success to our many competitive strengths and our ongoing efforts to grow and revitalize all aspects of the bowling industry. We are well positioned in the marketplace with our well-located centers, combined with our strong branding and highly loyal customer base. We have made significant investments over the years in upgrading and converting our centers and training our staff to provide our guests with world-class customer experiences. Our gaming operations pioneer in-center gaming, apps and new technology to bring gaming into and beyond our bowling centers. Our food and beverage offerings are a key element to the overall experience at our centers for which we are well positioned for the price, quality and value. As the leader in bowling entertainment, the Professional Bowlers Association (“PBA”) is a strategic part of our operations, as the PBA has thousands of members and millions of fans across the globe. The PBA is the major sanctioning body for the sport of professional ten-pin bowling in the United States, a membership organization for professional bowlers, and the host of several professional bowling tours and tournaments and related broadcasting.

Proven Business Model: Bowlero has a lengthy history since our founding in 1997. We remain focused on creating long-term shareholder value by driving organic growth through conversions and upgrading of centers to more upscale entertainment concepts offering a broader range of offerings, as well as through the opening of new centers. Additionally, we have implemented several initiatives, including self-service kiosks, robotic process automation, online reservations and event sales, as well as other technologies to optimize our resources so as to operate with a leaner staffing model, further improving margins and operating cash flows.

A key part of our growth strategy is center acquisitions. We have an established blueprint for in-market acquisitions, including entering markets through direct purchases or through leasing arrangements, and we continually evaluate potential acquisitions that strategically fit within our overall growth strategy. We acquired 16 bowling centers in fiscal 2023 and 43 bowling centers since the start of fiscal year 2022. In addition, with the pending Lucky Strike acquisition, we expect to add an additional 14 centers across nine states to our portfolio. See in Note 3 - Business Combinations and Acquisitions to our consolidated financial statements included in this Annual Report on Form 10-K.

Proven Management Team: Our executive management team is well proven and highly experienced with a long track record of driving positive results for increased shareholder value and world-class experiences for our guests. Our founder continues to drive the entrepreneurial culture which underpins our ongoing success. Our management team is committed to constantly improving our world-class company. We also have a team of skilled, loyal and committed managers and other associates at each of our centers. We have developed and maintain as a key initiative the training of our center managers and associates to attract and retain talent, create high-performance center leadership teams and maintain a culture to build upon our inspiring purpose, vision and values.

Our Industry

We operate in the leisure industry, which includes entertainment, dining, and amusements. The leisure industry is comprised of a large number of venues ranging from small to large, heavily themed destinations. We are the world’s largest owner and operator of bowling centers, and we are approximately six times larger than the next largest operator of U.S. based bowling centers. The out-of-home entertainment market includes concepts that are broad family entertainment centers, such as amusement parks, movie theaters, sporting events, sports activity centers and arcades. The addressable market in the United States is estimated to be $4,000,000 for bowling and over $100,000,000 for the out-of-home entertainment. We believe we are well-positioned with our competitive advantages to grow our revenues and profitability, especially in light of the shift in consumer spending from products to experiential spending.

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Foreign Operations

We currently operate four centers in Mexico and two in Canada. Our Mexican and Canadian centers, combined, represented approximately $13,520 and $8,800 in revenues for the fiscal years 2023 and 2022, respectively, and have combined net assets of $31,200 and $23,000 as of July 2, 2023 and July 3, 2022, respectively. Our foreign operations are subject to various risks of conducting businesses in foreign countries, including changes in foreign currencies, laws, regulations, and economic and political stability.

Competition

The out-of-home entertainment industries are highly competitive, with a number of major national and regional chains operating in each of these spaces. In this regard, we compete for customers on the basis of (a) our name recognition; (b) the price, quality, variety and perceived value of our food and entertainment offerings; (c) the quality of our customer service; and (d) the convenience and attractiveness of our facilities. To a lesser extent, we also compete directly and/or indirectly with other dining and entertainment formats, including full-service and quick-service restaurants appealing to families with young children, the quick service pizza segment, movie theaters, themed amusement attractions and other entertainment facilities.

We believe that our principal competitive strengths consist of the quality, variety and unique nature of our entertainment offerings, our established and well-known brands, the quality and value of the food and service we provide, the location, attractiveness, and cleanliness of our centers, and the whole-family fun we offer our guests.

Intellectual Property

We own various trademarks, used in connection with our business, which have been registered with the appropriate patent and trademark offices. The duration of such trademarks is unlimited, subject to continued use and renewal. We believe that we hold the necessary rights for protection of the trademarks considered essential to conduct our business. We believe our trade name and our ownership of trademarks are an important competitive advantage, and we actively seek to protect our interests in such property. See Note 4 - Goodwill and Other Intangible Assets to our consolidated financial statements included in this Annual Report in Form 10-K for more details.

Seasonality

Our operating results fluctuate seasonally. We typically generate our highest sales volumes during the third quarter of each fiscal year due to the timing of leagues, holidays and changing weather conditions. School operating schedules, holidays and weather conditions may also affect our sales volumes in some operating regions differently than others. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for our full fiscal year.

Government Regulation

We are subject to various federal, state and local laws and regulations affecting the development and operation of our centers. For a discussion of government regulation risks to our business, see “Risk Factors.”

Environmental, Social, Governance (“ESG”)

We are committed to advancing a purpose-led vision and fostering a culture that encourages our employees to enhance our business and the communities in which we operate. We endeavor to integrate ESG practices that create sustainable economic value to our employees, stockholders, communities, and other stakeholders.

From an environmental perspective, we have implemented and plan to continue to implement policies and practices with the goal of supporting the continued reduction of energy consumption (thereby reducing greenhouse gas emissions), water, and waste production across the portfolio. Initiatives we have taken include the installation of solar panels on the roofs of our bowling centers, electric vehicle charging stations in the parking lots of our bowling centers, and LED lighting. Additionally, we are continuing to research solar and alternative energy options to further reduce our consumption and carbon footprint.

Human Capital Management

Overview: As of July 2, 2023, we employed approximately 10,083 employees, including approximately 9,611 in the operation of our centers and approximately 472 at the corporate level. We had 3,289 full-time employees and 6,794 part-time employees, of whom 68 were based in Canada and 118 in Mexico. We had 73 employees who are members of a union.

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We believe that our employee relations are satisfactory, and we have not experienced any work stoppages at any of our centers. Each center typically employs a center General Manager, two operation managers, a facilities manager who oversees the maintenance of the facility and bowling equipment, and approximately 20 to 30 associates to handle food and beverage preparation, customer service and maintenance. Our staffing requirements are seasonal, and the number of people we employ at our stores fluctuates throughout the year.

Human Capital Management Strategy: Our reputation for exceptional quality relies on having exceptional people who support our guest-focused mission in our bowling centers, so we ensure that our team is rewarded, engaged and developed to build fulfilling careers. We provide competitive associate wages that are appropriate to employee positions, skill levels, experience, knowledge and geographic location. In the United States, we offer our associates a wide array of health, and welfare benefits, which we believe are competitive relative to others in our industry. We benchmark our benefits plan annually to ensure our associate value proposition remains competitive and attractive to new talent. In our operations in Canada and Mexico, we offer benefits that may vary from those offered to our U.S. associates due to customary local practices and statutory requirements. In all locations, we provide time off benefits, company-paid holidays, recognition programs and career development opportunities.

Workforce Diversity: Diversity, equality, inclusion and belonging are fundamental principles in our culture. We strive to create a workplace where all our associates can thrive and to employ a workforce that represents the communities where we operate and the customers we serve. We are committed to fostering, cultivating, celebrating and preserving a culture of diversity, equality, inclusion and belonging among our associates, customers and suppliers. We embrace our associates’ differences in age, color, disability, ethnicity, family or marital status, gender identity or expression, language, national origin, physical and mental ability, political affiliation, race, religion, sexual orientation, socio-economic status, caste, veteran status, and other characteristics that make our associates unique. Bowlero’s diversity initiatives include, but are not limited to, our practices and policies on recruitment and selection; compensation and benefits; professional development and training; promotions; transfers; social and recreational programs; terminations; and the ongoing development of a work environment that encourages and enforces respectful communication, teamwork, work/life balance and engaging in community efforts that promote a greater understanding and respect for the principles of diversity.

Our workforce diversity is summarized in the table below:


	Female		Male		Not Declared		Total
American Indian/Alaskan Native	0.3	%	0.4	%	—	%	0.7	%
Asian	1.1	%	1.9	%	—	%	3.0	%
Black or African-American	9.2	%	11.1	%	0.1	%	20.4	%
Hispanic or Latino	9.9	%	11.3	%	0.2	%	21.4	%
Native Hawaiian/Pacific Island	0.2	%	0.3	%	—	%	0.5	%
Not Declared	1.4	%	1.3	%	0.7	%	3.4	%
Two or more Races	2.1	%	2.3	%	0.1	%	4.5	%
Unknown	0.1	%	—	%	—	%	0.1	%
White	20.1	%	25.3	%	0.6	%	46.0	%
Total	44.4	%	53.9	%	1.7	%	100.0	%

Business Combination

On December 15, 2021, Isos Acquisition Corporation, a Cayman Islands exempted company, (“Isos”) consummated its acquisition of Bowlero Corp., a Delaware corporation (“Old Bowlero”), pursuant to the business combination agreement, dated as of July 1, 2021, as amended (the “Business Combination Agreement”), between Old Bowlero and Isos. In connection with the consummation of the transactions contemplated by the Business Combination Agreement, Isos was redomiciled as a Delaware corporation and Old Bowlero was merged with and into Isos, with Isos surviving the merger (the “Business Combination”). In addition, in connection with the consummation of the Business Combination, “Isos Acquisition Corporation” was renamed “Bowlero Corp.”

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Item 1A. Risk Factors

In addition to the other information contained in this Annual Report on Form 10-K, including the matters addressed under the heading “Forward-Looking Statements,” you should carefully consider the following risk factors in this Annual Report on Form 10-K before investing in our securities. The risk factors described below disclose both material and are not intended to be exhaustive and are not the only risks facing us. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, results of operations and cash flows in future periods or are not identified because they are generally common to businesses.

Risks Related to Our Business and Industry

If we are unable to successfully design and execute our business strategy plan, including growing comparable center sales, our revenues and profitability may be adversely affected.

Our ability to increase revenues and profitability is dependent on executing effective business strategies. If we are delayed or unsuccessful in executing our strategies or if our strategies do not yield desired results, our business, financial condition and results of operations may suffer. Our ability to meet our business strategy plan is dependent upon, among other things, our ability to:

•increase gross sales and operating profits at existing centers with bowling, food, beverage, game and entertainment options desired by our guests;

•evolve our marketing and branding strategies to continue to appeal to our guests;

•innovate and implement new initiatives to provide a unique guest experience;

•identify adequate sources of capital to fund and finance strategic initiatives;

•grow and expand operations;

•identify new opportunities to improve customer reach;

•maintain a talented workforce responsive to customer needs and operational demands; and

•identify, implement and maintain cost-reducing strategies to scale operations.

Changes in consumer buying patterns and economic slowdowns could negatively affect our results of operations.

Visiting our centers is a discretionary purchase for consumers; therefore, our business is susceptible to economic slowdowns and recessions. We are dependent in particular upon discretionary spending by consumers living in the communities in which our centers are located. A significant weakening in the local economies of these geographic areas, or any of the areas in which our centers are located, may cause consumers to curtail discretionary spending, which in turn could reduce our centers’ sales and have an adverse effect on our business and our results of operations. Our centers are sometimes located near high density retail areas such as regional malls, lifestyle centers, big box shopping centers and entertainment centers. We depend on a high volume of visitors at these locations to attract guests to our centers. As demographic and economic patterns change, current centers may or may not continue to be attractive or profitable.

E-commerce or online shopping continues to increase and negatively impact consumer traffic at traditional “brick and mortar” retail sites located in regional malls, lifestyle centers, big box shopping centers and entertainment centers, and a decline in development or closures of businesses in these settings or a decline in visitors to retail areas near our centers could negatively affect our sales.

Advances in technologies or certain changes in consumer behavior driven by such technologies could have a negative effect on our business. Technology and consumer offerings continue to develop, and we expect new or enhanced technologies and consumer offerings will be available in the future. As part of our marketing efforts, we use a variety of digital platforms including search engines, mobile, online videos and social media platforms to attract and retain guests. We also test new technology platforms to improve our level of digital engagement with our guests and employees to help strengthen our marketing and related consumer analytics capabilities. These initiatives may not prove to be successful and may result in expenses incurred without the benefit of higher revenues or increased engagement.

We may not be able to compete favorably in the highly competitive out-of-home and home-based entertainment markets, which could have a material adverse effect on our business, results of operations or financial condition.

The out-of-home entertainment market is highly competitive. We compete for customers’ discretionary entertainment dollars with providers of out-of-home entertainment, including localized attraction facilities such as other bowling centers, movie theaters, sporting events, sports activity centers, arcades and entertainment centers, nightclubs, and restaurants as well as theme parks. Some of the entities operating these businesses are larger and have significantly greater financial resources, a greater number of locations, have been in business longer, have greater name recognition and are better established in the markets where our centers are located or are planned to be located. As a result, they may be able to invest greater resources than we can in attracting customers and succeed in attracting customers who would otherwise come to our centers. We also face competition from local, regional, and national establishments that offer similar entertainment experiences to ours that are highly competitive with respect to price, quality of service, location, ambience and type and quality of food.

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In addition, we also face competition from increasingly sophisticated home-based forms of entertainment, such as internet and video gaming and home movie streaming and delivery. Our failure to compete favorably in the competitive out-of-home and home-based entertainment markets could have a material adverse effect on our business, results of operations and financial condition.

Unfavorable publicity or a failure to respond effectively to adverse publicity, could harm our business.

Our brand and our reputation are among our most important assets. Our ability to attract and retain customers depends, in part, upon the external perception of Bowlero, the quality of our facilities and our integrity. Multi-location businesses, such as ours, can be adversely affected by unfavorable publicity resulting from food safety concerns, flu or other virus outbreaks and other public health concerns stemming from one or a limited number of our centers. Additionally, we rely on our network of suppliers to properly handle, store, and transport our ingredients for delivery to our centers. Failure by our suppliers, or their suppliers, could cause our ingredients to be contaminated, which could be difficult to detect and put the safety of our food in jeopardy.

Negative publicity may also result from crime incidents, data privacy breaches, scandals involving our employees or operational problems at our centers. Regardless of whether the allegations or complaints are valid, unfavorable publicity related to one or more of our centers could affect public perception of the entire brand. Even incidents at similar businesses could result in negative publicity that could indirectly harm our brand. If one or more of our centers were the subject of unfavorable publicity and we are unable to quickly and effectively respond to such reports, our overall brand could be adversely affected, which could have a material adverse effect on our business, results of operations and financial condition.

The dissemination of information via social media and similar platforms may harm our business, prospects, financial condition, and results of operations, regardless of the information’s accuracy. The inappropriate use of social media vehicles by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation.

Further, if we are not effective in addressing social and environmental responsibility matters or achieving relevant sustainability goals, consumer trust in our brand may suffer. Consumer demand for our products and our brand value could diminish significantly if any such incidents or other matters erode consumer confidence in us or our products, which could likely result in lower revenues.

We are subject to risks associated with leasing space subject to long-term, non-cancelable leases.

Payments under our non-cancelable, long-term operating leases account for a significant portion of our operating expenses and we expect many of the new centers we open in the future will also be leased. We often cannot cancel these leases without substantial economic penalty. If an existing or future center is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease, including, among other things, paying the rent for the remainder of the lease term. We depend on cash flow from operations to pay our lease obligations. If our business does not generate adequate cash flow from operating activities and sufficient funds are not otherwise available to us from borrowings under our existing credit facility, we may not be able to service our operating lease obligations, grow our business, respond to competitive challenges or fund other liquidity and capital needs, all of which could have a material adverse effect on us.

In addition, as each of our leases expires, we may choose not to renew, or may not be able to renew, such existing leases if the renewal rent is too high and/or the capital investment required to maintain the centers at the leased locations is not justified by the return required on the investment. If we are not able to renew the leases at rents that allow such centers to remain profitable as their terms expire, the number of such centers may decrease, resulting in lower revenue from operations, or we may relocate a center, which could subject us to construction and other costs and risks, and in either case, could have a material adverse effect on our business, results of operations and financial condition.

Our financial performance and the ability to implement successfully our strategic direction could be adversely affected if we fail to retain, or effectively respond, to a loss of key management.

Our future success is substantially supported by the contributions and abilities of senior management, including key executives and other leadership personnel. Changes in senior management could expose us to significant changes in strategic direction and initiatives. A failure to maintain appropriate organizational capacity and capability to support leadership excellence or a loss of key skill sets could jeopardize our ability to meet our business performance expectations and growth targets. Although we have employment agreements with many members of senior management, we cannot prevent members of senior management from terminating their employment with us. Losing the services of members of senior management could materially harm our business until a suitable replacement is found, and such replacement may not have equal experience and capabilities.

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We face risks related to our substantial indebtedness and limitations on future sources of liquidity.

Our substantial indebtedness as of July 2, 2023 and our forecasted current debt service and interest payments in fiscal year 2024 could have important consequences to us, including:

•making it more difficult for us to satisfy our obligations with respect to our debt, and any failure to comply with the obligations under our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing our indebtedness increasing our vulnerability to general economic and industry conditions;

•requiring a substantial portion of our cash flow from operations to be dedicated to the payment of obligations with respect to our debt, thereby reducing our ability to use our cash flow to fund our operations, lease payments, capital expenditures, selling and marketing efforts, product development, future business opportunities and other purposes;

•exposing us to the risk of continued increased interest rates as some of our borrowings are at variable rates;

•limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, strategic acquisitions and general corporate or other purposes; and

•limiting our ability to plan for, or adjust to, changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less highly leveraged.

Covenants in our debt agreements restrict our business and could limit our ability to implement our business plan.

Our credit facility contains covenants that may restrict our ability to implement our business plan, finance future operations, respond to changing business and economic conditions, secure additional financing, and engage in opportunistic transactions, such as strategic acquisitions. In addition, if we fail to satisfy the covenants contained in the credit facility, our ability to borrow under the revolving credit loans portion of the credit facility may be restricted. The credit facility includes covenants restricting, among other things, our ability to do the following under certain circumstances:

•incur or guarantee additional indebtedness or issue certain disqualified or preferred stock;

•pay dividends or make other distributions on, or redeem or purchase any equity interests or make other restricted payments;

•make certain acquisitions or investments;

•create or incur liens;

•transfer or sell assets;

•incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries;

•alter the business that we conduct;

•enter into transactions with affiliates; and

•consummate a merger or consolidation or sell, assign, transfer, lease or otherwise dispose of all or substantially all our assets.

In addition, failure to meet a leverage-based test that is applicable when our revolving credit facility, along with certain letters of credit, is at least 35% drawn, is a default under the agreement governing our credit facilities. The leverage-based test is calculated in accordance with the agreement governing our credit facilities.

Events beyond our control may affect our ability to comply with our covenants. Additionally, our master lease agreements include cross-default provisions with the agreement governing our credit facilities. If we default under the credit facility because of a covenant breach or otherwise, all outstanding amounts thereunder could become immediately due and payable. We cannot assure you that we will be able to comply with our covenants under the credit facility or that any covenant violations will be waived in the future. Any violation that is not waived could result in an event of default, permitting our lenders to declare outstanding indebtedness and interest thereon due and payable, and permitting the lenders under the revolving credit loans provided under the credit facility to suspend commitments to make any advance, or require any outstanding letters of credit to be collateralized by an interest bearing cash account, any or all of which could have a material adverse effect on our business, financial condition and results of operations. In addition, if we fail to comply with our financial or other covenants under the credit facility, we may need additional financing to service or extinguish our indebtedness. We may not be able to obtain financing or refinancing on commercially reasonable terms, or at all. We cannot assure you that we would have sufficient funds to repay outstanding amounts under the credit facility and any acceleration of amounts due would have a material adverse effect on our liquidity and financial condition.

The adoption or modification of laws and regulations relating to our business could limit or otherwise adversely affect the manner in which we conduct our business.

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The growth and development of the market for online commerce has led to more stringent consumer protection laws, imposing additional burdens on us. We may be required to comply with new regulations or legislation or new interpretations of existing regulations or legislation. This compliance could cause us to incur significant additional expense or alter our business model or could result in substantial fines, civil liability and/or harm to reputation for noncompliance. In addition, the delivery of PBA content in international markets exposes us to multiple regulatory frameworks and societal norms, the complexity of which may result in unintentional noncompliance which could adversely affect our business and operating results.

Our failure to continue to build and maintain our brand of entertainment could adversely affect our operating results.

We must continue to build and maintain our strong brand identity to attract and retain fans who have a number of entertainment choices. The production of compelling live, televised, streamed and film content is critical to our ability to generate revenues across our media platforms and product outlets. Our ability to produce compelling content depends on our ability to attract professional bowlers to our tournaments. Professional bowlers are independent agents and make their own decisions on whether or not to participate in a tournament. In addition, we are partially dependent on advertising, sponsorship and marketing revenue from third parties in order to be able to host tournaments. If such third parties decide to sponsor or advertise at other types of sporting events, our costs for hosting tournaments will increase, and we may host fewer tournaments, resulting in a decrease in the amount of content that we can produce.

Effective consumer communications, such as marketing, customer service and public relations are also important. The role of social media by fans and by us is an important factor in our brand perception. If our efforts to create compelling services and goods and/or otherwise promote and maintain our brand, services and merchandise are not successful, our ability to attract and retain fans may be adversely affected. Such a result would likely lead to a decline in our television ratings, attendance at our live events post-pandemic, and/or otherwise impact our sales of goods and services, which would adversely affect our operating results.

Risks Related to Information Technology and Cybersecurity

Information technology system failures or interruptions may impact our ability to effectively operate our business.

We rely heavily on various information technology systems, including point-of-sale, kiosk and amusement operations systems in our centers, data centers that process transactions, communication systems and various other software applications used throughout our operations. While some of these systems have been internally developed or we rely on third-party providers and platforms for some of our information technology systems and support. Although we have operational safeguards in place, those technology systems and solutions could become vulnerable to damage, disability, or failures due to theft, fire, power outages, telecommunications failure or other catastrophic events. Any failure of these systems could significantly impact our operations and could make our content unavailable or degraded. These service disruptions could be prolonged. Our reliance on systems operated by third parties also presents the risks faced by the third party’s business, including the operational, cybersecurity, and credit risks of those parties. If those systems were to fail or otherwise be unavailable, and we were unable to timely recover, we could experience an interruption in our operations. Our business interruption insurance may not cover us in the event these types of business interruptions occur.

Cybersecurity breaches or other privacy or data security incidents that expose confidential customer, personal employee or other material, confidential information that is stored in our information systems or by third parties on our behalf may impact our business.

Many of our information technology systems (and those of our third-party business partners, whether cloud-based or hosted in proprietary servers), including those used for point-of-sale, web and mobile platforms, mobile payment systems and administrative functions, contain personal, financial or other information that is entrusted to us by our guests and associates. Many of our information technology systems also contain proprietary and other confidential information related to our business, such as business plans and initiatives. A cyber incident (generally any intentional or unintentional attack that results in unauthorized access resulting in disruption of systems, corruption of data, theft or exposure of confidential information or intellectual property) that compromises the information of our customers or employees could result in widespread negative publicity, damage to our reputation, a loss of customers, and disruption of our business.

The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements. Compliance with these requirements can be costly and time-consuming and the costs could adversely impact our results of operations due to necessary system changes and the development of new administrative processes. The California Consumer Privacy Act of 2018, provides a private right of action for data breaches and requires companies that process information about California residents to make new disclosures to consumers about their data collection, use and sharing practices and allows consumers to opt out of certain data sharing with third parties. Security breaches could also result in a violation of applicable privacy and other laws, and subject us to private consumer, business partner or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability. We are required to maintain the highest level of Payment Card Industry Data Security Standard (“PCI”) compliance at our corporate office and centers.

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If we do not maintain the required level of PCI compliance, we could be subject to costly fines or additional fees from the card brands that we accept or lose our ability to accept those payment cards.

Our existing cybersecurity policy includes cybersecurity techniques, tactics, and procedures, including continuous monitoring and detection programs, network protections, annual employee training and awareness and incident response preparedness. In addition, we periodically scan our environment for any vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures. We utilize a voluntary tool to help manage privacy risk by independently benchmarking our cybersecurity program to the NIST Cybersecurity Framework, using an independent third party, and we share the results of our annual audit with our audit committee. Although we employ security technologies and practices and have taken other steps to try to prevent a breach, there are no assurances that such measures will prevent or detect cybersecurity breaches, and we may nevertheless not have the resources or technical sophistication to prevent rapidly evolving types of cyberattacks. We maintain a separate insurance policy covering cybersecurity risks and such insurance coverage may, subject to policy terms and conditions, cover certain aspects of cyber risks, but this policy is subject to a retention amount and may not be applicable to a particular incident or otherwise may be insufficient to cover all our losses beyond any retention. Based on recent court rulings, there is uncertainty as to whether traditional commercial general liability policies will be construed to cover the expenses related to cyberattacks and breaches if credit and debit card information is stolen.

We have been and likely will continue to be, the target of cyber and other security threats. If in the future, we experience a security breach, we could become subject to claims, lawsuits or other proceedings for purportedly fraudulent transactions arising out of the theft of credit or debit card information, compromised security and information systems, failure of our employees to comply with applicable laws, the unauthorized acquisition or use of such information by third parties, or other similar claims.

Our reliance on computer systems and software could expose us to material financial and reputational harm if any of those computer systems or software were subject to any material disruption or corruption.

Our servers and those of third parties used in our business may be vulnerable to cybersecurity attacks, computer viruses (including worms, malware, ransomware and other destructive or disruptive software or denial of service attacks), physical or electronic break-ins and similar disruptions and could experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse, theft or release of proprietary, confidential, sensitive or otherwise valuable company or subscriber data or information. Such a cybersecurity attack, virus, break-in, disruption or attack could remain undetected for an extended period, could harm our business, financial condition or results of operations, be expensive to remedy, expose us to litigation and/or damage our reputation. Our insurance may not cover expenses related to such disruptions or unauthorized access fully or at all.

Because the techniques used to obtain unauthorized access to, or disable, degrade or sabotage, these systems and servers change frequently and often are not recognized until launched against a target, we and the third parties used in distribution of our content may be unable to anticipate these techniques, implement adequate preventative measures or remediate any intrusion on a timely or effective basis. Moreover, the development and maintenance of these preventative and detective measures is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite the efforts of us and/or third parties, the possibility of these events occurring cannot be eliminated.

Risks Related to the Location-Based Entertainment Industry

Our success depends upon our ability to recruit and retain qualified center management and operating personnel while also controlling our labor costs.

We must continue to attract, retain, and motivate qualified management and operating personnel to maintain consistency in our service, hospitality, quality, and atmosphere of our centers, and to also support future growth. Adequate staffing of qualified personnel is a critical factor impacting our guests’ experience in our centers. Qualified management and operating personnel are typically in high demand. If we are unable to attract and retain a satisfactory number of qualified management and operating personnel, labor shortages could delay the planned openings of new centers or adversely impact our existing centers. Any such delays, material increases in employee turnover rates in existing centers or widespread employee dissatisfaction could have a material adverse effect on our business and results of operations. Competition for qualified employees could require us to pay higher wages, which could result in higher labor costs and could have a material adverse effect on our results of operations.

We may be subject to increased labor and insurance costs.

Our operations are subject to federal, state and local laws governing such matters as minimum wages, working conditions, overtime and tip credits. As federal, state and local minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees, but also the wages paid to employees at wage rates that are above minimum wage.

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Labor shortages, increased employee turnover, and health care and other benefit or working condition regulations also have increased and may continue to increase our labor costs. These increased costs could, in turn, lead us to increase our prices, which could impact our sales. Conversely, if competitive pressures or other factors prevent us from offsetting increased labor costs by increases in menu prices, our profitability may decline. In addition, the current premiums that we pay for our insurance (including workers’ compensation, general liability, property, health, and directors’ and officers’ liability) may increase at any time, thereby further increasing our costs. The dollar amount of claims that we actually experience under our workers’ compensation and general liability insurance may also increase at any time, thereby further increasing our costs. Further, the decreased availability of property and liability insurance has the potential to negatively impact the cost of premiums and the magnitude of uninsured losses.

Our revenues and operating results may fluctuate significantly due to various risks and unforeseen circumstances, including natural disasters, public health emergencies, acts of violence or terrorism, seasonality, weather, and other factors outside our control.

Certain regions in which our centers are located have been, and may in the future be, subject to natural disasters, such as earthquakes, floods, and hurricanes. Depending upon its magnitude, a natural disaster could severely damage a cohort of our centers, which could adversely affect our business, results of operations or financial condition. Our corporate headquarters and our data center are located in Richmond, Virginia and our backup data facility is located in Dallas, Texas. A natural or man-made disaster could significantly impact our ability to provide services and systems to our centers and negatively impact our operations.

Any act of violence at or threatened against our centers or the retail complexes in which they are located, including active shooter situations and terrorist activities, may result in restricted access to our centers and/or closures in the short-term and, in the long term, may cause our guests and associates to avoid visiting our centers. Any such situation could adversely impact cash flows and make it more difficult to fully staff our centers, which could materially adversely affect our business.

Public health emergencies and pandemics such as the COVID-19, including any variants, may result in center closures or cause our guests and associates to avoid visiting our centers, in each case for an indeterminate amount of time. Any such situation could adversely impact cash flows and make it more difficult to fully staff our centers, which could materially adversely affect our business.

Our operating results fluctuate significantly due to seasonal factors. School operating schedules, holidays and weather conditions affect our sales volumes in all of our regions, but the impact and the timing of impact varies in each region. In addition, unfavorable weather conditions during the winter and spring seasons could have a significant impact on our results.

Our operations are susceptible to the changes in cost and availability of commodities and other products, which could negatively affect our operating results.

Our profitability depends in part on our ability to anticipate and react to changes in commodity and other product costs. Various factors beyond our control, including adverse weather conditions, governmental regulation and monetary policy, product availability, recalls of food products, disruption of our supplier manufacturing and distribution processes due to public health crises or pandemics, and seasonality, may affect our commodity costs or cause a disruption in our supply chain. In an effort to mitigate some of this risk, we have multiple short-term supply contracts with a limited number of suppliers. If any of these suppliers do not perform adequately or otherwise fail to distribute products or supplies to our centers, we may be unable to replace the suppliers in a short period of time on acceptable terms, which could increase our costs, cause shortages of food and other items at our centers and cause us to remove certain items from our menu. Changes in the price or availability of commodities for which we do not have short-term supply contracts could have a material adverse effect on our profitability. Expiring contracts with our food suppliers could also result in unfavorable renewal terms and therefore increase costs associated with these suppliers or may necessitate negotiations with other suppliers. Other than short-term supply contracts for certain food items and certain utilities contracts, we currently do not engage in futures contracts or other financial risk management strategies with respect to potential price fluctuations in the cost of food and other supplies. Also, the unplanned loss of a major distributor could adversely affect our business by disrupting our operations as we seek out and negotiate a new distribution contract. If we have to pay higher prices for food or other product costs, our operating costs may increase, and, if we are unable to adjust our purchasing practices or pass any cost increases on to our guests, our operating results could be adversely affected.

Our procurement of new games and amusement and entertainment offerings is contingent upon availability, and in some instances, our ability to obtain licensing rights.

Our ability to continue to procure new games, amusement and entertainment offerings, and other entertainment-related equipment is important to our business strategy. The number of suppliers from which we can purchase games, amusement offerings and other entertainment-related equipment is limited. To the extent the number of suppliers declines, we could be subject to the risk of distribution delays, pricing pressure, lack of innovation and other associated risks.

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We may not be able to anticipate and react to changing amusement offerings cost by adjusting purchasing practices or game prices, and a failure to do so could have a material adverse effect on our operating results. In addition, any decrease in availability of new amusement offerings that appeal to guests could lead to decreases in revenues as guests negatively react to lack of new game options.

Our ability to develop future offerings is dependent on, among other things, obtaining rights to compelling game content and developing new amusement offerings that are accepted by our guests. There is no guarantee that additional licensing rights will be obtained by us or that our guests will accept the future offerings that we develop. The result could be increased expenses without increased revenues putting downward pressure on our results of operations and financial performance.

We may not be able to operate our centers or obtain/maintain licenses and permits necessary for such operation, in compliance with laws, regulations and other requirements, which could adversely affect our business, results of operations or financial condition.

We are subject to licensing and regulation by state and local authorities relating to the sale of alcoholic beverages, health, sanitation, safety, building and fire codes. Each center is required to obtain a license to sell alcoholic beverages on the premises from a state authority and, in certain locations, county and municipal authorities. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. In some states, the loss of a license for cause with respect to one center may lead to the loss of licenses at all centers in that state and could make it more difficult to obtain additional licenses in that state. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of each center, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage and dispensing of alcoholic beverages. We generally have not encountered any material difficulties or failures in obtaining and maintaining the required licenses, permits and approvals that could impact the continuing operations of an existing center, or delay or prevent the opening of a new center. Although we do not anticipate any material difficulties occurring in the future, the failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew licenses, could have a material adverse effect on operations and our ability to obtain such a license or permit in other locations.

We are subject to extensive domestic and international laws and regulations and failure to comply with existing or new laws and regulations could adversely affect our operational efficiencies, cost structure and talent availability.

We are subject to various federal, state, and local laws and regulations that govern numerous aspects of our business.

Compliance with these laws and regulations and future new laws or changes in laws or regulations that impose additional requirements can be costly. Any failure or perceived failure to comply with these laws or regulations could result in, among other things, revocation of required license, administrative enforcement actions, fines, civil and criminal liability, and/or closure of centers. We could also be strictly liable, without regard to fault, for certain environmental conditions at properties we formerly owned or operated as well as at our current properties. Further, more stringent and varied requirements of local and state governmental bodies with respect to zoning, land use and environmental factors could delay or prevent development of new centers in certain locations.

The growth and development of the market for online commerce has led to more stringent consumer protection

laws, imposing additional burdens on us. Our international operations may also expose us to other additional risks, such as

violations of anti-bribery and anti-corruption laws, such as the United States Foreign Corrupt Practices Act, or violations of

economic sanctions laws, such as the regulations enforced by the U.S. Department of the Treasury’s Office of Foreign

Assets Control.

We believe it is becoming increasingly likely that the United States federal government will significantly increase the federal minimum wage and tip credit wage (or eliminate the tip credit wage) and require significantly more mandated benefits than what is currently required under federal law. Should this happen, other jurisdictions that have historically mandated higher wages and greater benefits than what is required under federal law may seek to further increase wages and mandated benefits. In addition to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages and other benefits paid to other associates who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage. Because we employ a large workforce, any wage increase and/or expansion of benefits mandates could have a particularly significant impact on our labor costs. Our vendors, contractors and business partners are similarly impacted by wage and benefit cost inflation, and many have or will increase their price for goods, construction, and services in order to offset their increasing labor costs. We may not be able to partially or fully offset cost increases resulting from changes in minimum wage rates by increasing bowling, menu or game prices, improving productivity, or through other adjustments, and our business, results of operations and financial condition could be adversely affected. Moreover, although only a few of our employees have been or are now represented by any unions, labor organizations may seek to represent an increasing number of our employees in the future, and if they are successful, our payroll expenses and other labor costs may be increased in the course of collective bargaining, and/or there may be strikes or other work disruptions that may adversely affect our business.

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Litigation, including allegations of illegal, unfair or inconsistent employment practices, may adversely affect our business, results of operations or financial condition.

Our business may be adversely affected by the risk of legal proceedings brought by or on behalf of our customers, employees, suppliers, shareholders, government agencies or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. In recent years, a number of companies have been subject to lawsuits, including class action lawsuits, alleging violations of federal and state law regarding workplace and employment matters, discrimination and similar matters, and a number of these lawsuits have resulted in the payment of substantial damages by the defendants. We have had from time to time and now have such lawsuits pending against us. In addition, from time to time, customers file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to a center. We are also subject to a variety of other claims in the ordinary course of business, including personal injury, lease, and contract claims.

We are also subject to “dram shop” statutes in certain states in which our centers are located. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. Recent litigation against restaurant chains has resulted in significant judgments and settlements under dram shop statutes. Because these cases often seek punitive damages, which may not be covered by insurance, such litigation could have an adverse impact on our business, results of operations or financial condition. Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from operations and hurt our financial performance. A judgment significantly in excess of our insurance coverage or not covered by insurance could have a material adverse effect on our business, results of operations or financial condition. Also, adverse publicity resulting from these allegations may materially affect our centers and us.

Failure to adequately protect our intellectual property could harm our business.

We regard our intellectual property as having significant value and being important to our marketing efforts. We use a combination of intellectual property rights, such as trademarks and trade secrets, to protect our brand and certain other proprietary processes and information material to our business. The success of our business strategy depends, in part, on our continued ability to use our intellectual property rights to increase brand awareness and further develop our branded products in both existing and new markets. If we fail to protect our intellectual property rights adequately, we may lose an important advantage in the markets in which we compete. If third parties misappropriate or infringe on our intellectual property, the value of our image, brand and the goodwill associated therewith may be diminished, our brand may fail to achieve and maintain market recognition, and our competitive position may be harmed, any of which could have a material adverse effect on our business, including our revenues. Policing unauthorized use of our intellectual property is difficult, and we cannot be certain that the steps we have taken will prevent the violation or misappropriation of such intellectual property rights by others. To protect our intellectual property, we may become involved in litigation, which could result in substantial expenses, divert the attention of management and adversely affect our revenue, financial condition and results of operations.

We cannot be certain that our products and services do not and will not infringe on the intellectual property rights of others. Any such claims, regardless of merit, could be time-consuming and expensive to litigate or settle, divert the attention of management, cause significant delays, materially disrupt the conduct of our business and have a material adverse effect on our financial condition and results of operations. As a consequence of such claims, we could be required to pay a substantial damage award, take a royalty-bearing license, discontinue the use of third-party products used within our operations and/or rebrand our products and services.

General Risk Factors

Changes in tax laws and resulting regulations could result in changes to our tax provisions and subject us to additional tax liabilities that could materially adversely affect our financial performance.

We are subject to income, sales, use and other taxes in the United States and certain non-U.S. jurisdictions including Mexico and Canada. Changes in applicable U.S. federal, state, local or non-U.S. tax laws and regulations, including the Tax Cuts and Jobs Act (the “Tax Act”), Inflation Reduction Act, and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), or their interpretation and application, including the possibility of retroactive effect and changes to state tax laws that may occur in response to these enacted law changes, could affect our effective income tax rate. Further, tax proposals issued recently in the United States under the Biden administration have contained important amendments that could have a material impact on the overall tax position of U.S. taxpayers.

The Organization for Economic Cooperation and Development (the “OECD”), has been working on a Base Erosion and Profit Shifting (“BEPS”) project, and issued a report in 2015, an interim report in 2018, and has issued additional guidelines and proposals that may change various aspects of the existing framework under which our tax obligations are determined in the countries in which we do business.

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While this project is in an advanced stage, we cannot predict what its outcome will be or what potential impact it may have on our tax obligations and operations. In July and October of 2021, the OECD/G-20 Inclusive Framework on BEPS released statements outlining a political agreement on the general rules to be adopted for taxing the digital economy, specifically with respect to nexus and profit allocation (Pillar One) and rules for a global minimum tax (Pillar Two). Additional guidance and details regarding implementation of these rules continues to be released and the rules are expected to be finalized in the near future. Any implementation of these rules via domestic legislation of countries or via international treaties, could have a material impact on our effective tax rate or result in higher cash tax liabilities. There can be no assurance that our tax payments, tax credits, or incentives will not be adversely affected by these or other initiatives.

Moreover, the final determination of any potential tax audits or related litigation could be materially different from our historical tax provisions and accruals. The Company currently has open audits in Mexico and in several state and local jurisdictions. Changes in our tax expense or an increase in our tax liabilities, whether due to changes in applicable laws and regulation, the interpretation or application thereof, or a final determination of tax audits or litigation, could materially adversely affect our financial performance.

Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the Business Combination or other ownership changes.

Old Bowlero had incurred losses during its history. To the extent that we generate taxable losses or not enough taxable income, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all. As of July 2, 2023, the Company had U.S. federal net operating loss carryforwards of approximately $143,277. Under the Tax Act, as modified by the CARES Act, U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. Some states have conformed to the Tax Act or the CARES Act, while others have not.

In addition, Old Bowlero’s net operating loss carryforwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”), and state tax authorities including the treatment of the Combination as a reverse acquisition for income tax purposes. Under Sections 382 and 383 of the Code, Bowlero’s federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in the ownership of Bowlero’s stock. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Our ability to utilize certain net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including potential changes in connection with the Business Combination or other transactions. Similar rules may apply under state tax laws. It is currently estimated that $36,745 of the Company’s NOLs are subject to limitation due to the changes in ownership that occurred in 2004 and 2017. The Company expensed $208,697 in the current fiscal year of tax losses that will expire unused due to the limitation caused by the 2004 ownership change. The Company has concluded it has not experienced an ownership change, as defined under Section 382 and 383, since July 2017.

We previously recorded a valuation allowance related to Old Bowlero’s net operating loss carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets. Much of these valuation allowances were released in fiscal 2023.

Failure of our internal control over financial reporting could harm our business and financial results.

Our management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with generally accepted accounting principles in the United States. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we would prevent or detect a misstatement of our financial statements or fraud. Any failure to maintain an effective system of internal control over financial reporting, including such a failure or inability to provide timely reporting about the effectiveness of their controls of our third-party service providers on whose controls we rely, could limit our ability to report our financial results accurately and timely or to detect and prevent fraud. Historically, Bowlero has had several material weaknesses and significant accounting deficiencies, which may occur again. A significant financial reporting failure or material weakness in internal control over financial reporting could result in substantial cost to remediate and could cause a loss of investor confidence and decline in the market price of our stock. See “Additional Risks Related to Ownership of Our Class A common stock — The obligations associated with being a public company involve significant expenses and requires significant resources and management attention, which may divert from our business operations.”

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We have in prior fiscal years identified material weaknesses in our internal control over financial reporting. If we fail to remediate these material weaknesses, identify additional material weaknesses, or if we otherwise fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

We did not design and maintain effective controls over certain financial reporting processes in prior years, including acquisition accounting, accounting for fixed assets, and certain financial reporting disclosures. Additionally, we did not design and maintain effective controls over system access controls to establish segregation of duties for those with roles and responsibilities for the general ledger. We have remediated the material weaknesses identified during the prior fiscal years, which included additional training of existing staff, hiring additional staff with technical accounting skills and engaging third-party experts to assist in accounting for acquisitions and technical areas, as well as the development of more formal internal control processes and improving information technology controls over system access. However, we cannot guarantee that these steps will be sufficient nor that we will not have material weaknesses in the future. These material weaknesses, or difficulties encountered in implementing new or improved controls or remediation, could prevent us from accurately reporting our financial results, result in material misstatements in our financial statements or cause us to fail to meet our reporting obligations.

Additional Risks Related to Ownership of Our Class A common stock

Our only significant assets are our ownership interests in our operating subsidiaries and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or satisfy our other financial obligations.

We have no direct operations and no significant assets other than our ownership of our operating subsidiaries. We depend on our operating subsidiaries for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company and to pay any dividends with respect to our common stock. The financial condition and operating requirements of our operating subsidiaries may limit our ability to obtain cash from such subsidiaries. The earnings from, or other available assets of, Bowlero may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or satisfy our other financial obligations.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon us.

The price of our Class A common stock may be volatile.

The price of our Class A common stock may fluctuate due to a variety of factors, including:

•developments involving our competitors;

•changes in laws and regulations affecting our business;

•variations in our operating performance and the performance of our competitors in general;

•actual or anticipated fluctuations in our quarterly or annual operating results;

•publication of research reports by securities analysts about us or our competitors or our industry;

•the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

•actions by stockholders, including the sale by them of any of their securities;

•additions and departures of key personnel;

•commencement of, or involvement in, litigation involving the Company;

•changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

•the volume of shares of our Class A common stock available for public sale; and

•general economic and political conditions, such as the effects of the COVID-19 pandemic, supply chain issues, inflation, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.

These market and industry factors may materially reduce the market price of our Class A common stock regardless of our operating performance.

We have discretion over payment of any cash dividends.

Any determination to pay dividends on our common stock is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.

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We may be subject to securities litigation, which is expensive and could divert management attention.

The market price of our Class A common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation now or in the future. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.

Future resales of our Class A common stock may cause the market price of our securities to drop significantly, even if our business is performing well

As of August 30, 2023, A-B Parent LLC (“Atairos”) and Cobalt Recreation LLC (“Cobalt”), which is indirectly owned by Mr. Shannon, our Chairman, Founder and Chief Executive Officer, collectively beneficially own approximately 92% of the outstanding shares of Bowlero’s common stock (which includes both Class A common stock and Class B common stock). None of Atairos or Cobalt are subject to any lock-ups and are not restricted from selling shares of Bowlero’s common stock held by them, other than by applicable securities laws. We have also registered shares held by the Atairos and Cobalt for sale under various registration statements and such registration statements remain available for use. As such, sales of a substantial number of shares of Bowlero’s common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Class A common stock.

The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may be diverted from our business operations.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Sarbanes-Oxley Act. The Exchange Act requires the filing of annual, quarterly and current reports with respect to a public company’s business and financial condition. The Sarbanes-Oxley Act requires, among other things, that a public company establish and maintain effective internal control over financial reporting. Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. As a result, we have and will continue to incur significant legal, accounting and other expenses due to implementation and maintenance of internal controls over financial reporting as a public company and to remediate any significant deficiencies and material weaknesses in internal controls over financial reporting. Our management team and many of our other employees have devoted and will continue to need to devote substantial time to compliance.

We are currently an emerging growth company within the meaning of the Securities Act, and to the extent we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are currently an “emerging growth company” within the meaning of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”) and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

When we cease to be an emerging growth company, we will no longer be able to take advantage of certain exemptions from reporting, and, absent other exemptions or relief available from the SEC, we will also be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will incur additional expenses in connection with such compliance and our management will need to devote additional time and effort to implement and comply with such requirements.

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Delaware law and our organization documents contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

Our organizational documents and the Delaware General Corporation Law (the “DGCL”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and therefore depress the trading price of the Class A common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management.

Any issuance by us of preferred stock could delay or prevent a change in control of us. Our board of directors has the authority to cause us to issue, without any further vote or action by the stockholders, shares of preferred stock in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges, and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices, and liquidation preferences of such series. The issuance of shares of our preferred stock may have the effect of delaying, deferring, or preventing a change in control without further action by the stockholders, even where stockholders are offered a premium for their shares.

In addition, as long as Atairos and Mr. Shannon beneficially own at least a majority of the voting power of our outstanding common stock, Atairos and Mr. Shannon will be able to control all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and certain corporate transactions. Together, these certificate of incorporation, bylaw and statutory provisions could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as well as the significant common stock beneficially owned by Atairos and Mr. Shannon could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers, thereby reducing the likelihood that our stockholders could receive a premium for their common stock in an acquisition.

Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities.

Under our certificate of incorporation, none of Atairos or any affiliates of Atairos, or any of their respective officers, directors, agents, stockholders, members or partners, has any duty to refrain from engaging, directly or indirectly, in the same business activities, similar business activities, or lines of business in which we operate. In addition, our certificate of incorporation provides that, to the fullest extent permitted by law, no officer or director of ours who is also an officer, director, employee, managing director or other affiliate of Atairos will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such individual directs a corporate opportunity to Atairos, instead of us, or does not communicate information regarding a corporate opportunity to us that the officer, director, employee, managing director, or other affiliate has directed to Atairos. These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations, or prospects if attractive corporate opportunities are allocated by Atairos to itself or its affiliates instead of to us.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation provides that, unless Bowlero otherwise consents in writing, the Court of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, another court of the State of Delaware or, if no court of the State of Delaware has jurisdiction, then the United States District Court for the District of Delaware) will be the sole and exclusive forum for resolution of (a) any derivative action or proceeding brought on behalf of Bowlero, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, agent or stockholder of Bowlero to Bowlero or any of the Bowlero’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, the certificate of incorporation or the bylaws or (d) any action asserting a claim governed by the “internal affairs doctrine.” Notwithstanding the foregoing, the federal district courts of the United States will be the exclusive forum for the resolution of any claims arising under the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

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We recognize that the forum selection clause in our certificate of incorporation may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clause in our certificate of incorporation may limit our stockholders’ ability to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders. The Court of Chancery of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and, to the fullest extent permitted by law, to have consented to the provisions of our certificate of incorporation described above. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. However, the enforceability of similar forum provisions (including exclusive federal forum provisions for actions, suits or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents has been challenged in legal proceedings and there is uncertainty as to whether courts would enforce the exclusive forum provisions in our certificate of incorporation. If a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.

We cannot predict the impact that our dual class structure may have on the stock price of our Class A common stock.

We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on its treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our stock. These policies are still fairly new and it is as of yet unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Because of our dual class structure, we will likely be excluded from certain of these indexes and we cannot assure you that other stock indexes will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make shares of our Class A common stock less attractive to other investors. As a result, the market price of shares of our Class A common stock could be adversely affected.

The dual class structure of our common stock, as well as board designation rights of Mr. Shannon and Atairos and consent rights of Atairos have the effect of concentrating voting power with Mr. Shannon and Atairos, which limit an investor’s ability to influence the outcome of important transactions, including a change in control.

Shares of Class B common stock have 10 votes per share, while shares of Class A common stock have one vote per share. Mr. Shannon holds all of the issued and outstanding shares of Class B common stock. Accordingly, Mr. Shannon, directly or indirectly, holds over 80% of the voting power of our capital stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions, despite holding only approximately 38% of the total shares of Bowlero’s common stock. So long as at least approximately 18% of the outstanding of shares of our Class B common stock remain outstanding, the holders of Class B common stock will be able to control the outcome of matters submitted to a stockholder vote requiring a majority vote.

In addition, pursuant to the Stockholders Agreement (as defined below), Mr. Shannon and Atairos have board designation rights and Atairos also has certain consent rights as described below.

Mr. Shannon and Atairos may have interests that differ from our stockholders and may vote in a way with which our stockholders disagree and which may be adverse to our stockholders' interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of Bowlero, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of Bowlero, and might ultimately affect the market price of shares of our Class A common stock.

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Bowlero’s founder and Chief Executive Officer and Atairos have certain board nomination rights that enable them to exercise substantial control over all corporate actions, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote.

We have entered into a stockholders agreement with Atairos and Cobalt (the “Stockholders Agreement”), which Mr. Shannon controls, pursuant to which each of Atairos and Cobalt has the right to designate nominees for election to our board of directors at any meeting of our stockholders. The number of nominees that each of Atairos and Cobalt are entitled to nominate is dependent on their respective beneficial ownership of the Class A common stock and the Class B common stock. For so long as Atairos and its affiliates own (i) 15% or more of the combined Class A common stock and the Class B common stock, Atairos will be entitled to designate three directors to our board of directors and (ii) less than 15% but at least 5%, Atairos will be entitled to designate one director to our board of directors. For so long as Cobalt and its affiliates own (i) 15% or more of the combined Class A common stock and the Class B common stock, Cobalt will be entitled to designate three directors to our board of directors and (ii) less than 15% but at least 5%, Cobalt will be entitled to designate one director to our board of directors.

In addition, the Stockholders Agreement grants Atairos special governance rights for so long as Atairos and its affiliates collectively maintain beneficial ownership of at least 15% of the combined Class A common stock and Class B common stock, including, but not limited to, rights of approval over certain strategic transactions such as mergers or other similar transactions in significance that is above 15% of the total enterprise value of Bowlero, joint ventures involving investment or contribution in excess of 15% of the total enterprise value of Bowlero, incurring indebtedness above a certain threshold, increasing the size of the board of directors, and issuing capital stock representing more than 15% of the outstanding common stock or creating a capital stock that is senior to the common stock.

Accordingly, for so long as Atairos and Mr. Shannon continue to control a significant percentage of the voting power of Bowlero, they will be able to significantly influence the composition of our board of directors and management and the approval of actions requiring stockholder approval. The concentration of ownership could also deprive our stockholders of an opportunity to receive a premium for their shares of Class A common stock as part of a sale of Bowlero and ultimately might affect the market price of Class A common stock.

We are a “controlled company” within the meaning of the rules of the New York Stock Exchange (“NYSE”). As a result, we qualify for exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies.

Mr. Shannon, controls a majority of the voting power of Bowlero. As a result, Bowlero is a “controlled company” within the meaning of the corporate governance standards of the NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:

•a majority of our board of directors consist of “independent directors” as defined under the rules of the NYSE;

•we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

•we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

•an annual performance evaluation of the compensation and nominating and corporate governance committees be conducted.

We currently do not and do not intend to utilize any of these exemptions. However, we will be able to utilize any of these exemptions in the future at our discretion for so long as Bowlero is a “controlled company.” Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company conducts its operations in properties that are owned and leased. We lease our corporate headquarters located at 7313 Bell Creek Road, Mechanicsville, Virginia 23111. We also lease office space and storage space in various locations.

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We operate bowling centers in 34 states and territories within the United States, as well as centers in Mexico and Canada. The following summarizes the Company’s current centers in operation by country and ownership classification as of July 2, 2023:


Centers in United States
Leased			280
Owned			42
Total centers in the United States			322

Centers in Mexico
Leased			1
Owned			3
Total centers in Mexico			4

Centers in Canada
Leased			2
Owned			—
Total centers in Canada			2

Total centers			328

The following table summarizes the Company’s current operating centers in the United States by state or territory as of July 2, 2023:


State	Number of Locations	State	Number of Locations
California	46	Massachusetts	5
Florida	31	Wisconsin	5
Virginia	29	Kansas	4
Texas	23	Missouri	4
New York	20	Washington	4
Arizona	17	Michigan	3
Maryland	17	Oklahoma	3
Illinois	14	South Carolina	3
Colorado	13	Iowa	2
Georgia	13	Delaware	1
North Carolina	13	Indiana	1
New Jersey	10	Louisiana	1
Pennsylvania	9	Nebraska	1
Ohio	8	Oregon	1
Alabama	7	Puerto Rico	1
Minnesota	6	Rhode Island	1
Connecticut	5	Tennessee	1

As of July 2, 2023, we currently have seven centers in development, and four permanently closed centers in our real estate portfolio.

Item 3. Legal Proceedings

From time to time, we are involved in various inquiries, investigations, claims, lawsuits and other legal proceedings that are incidental to the conduct of our business. These matters typically involve claims from customers, employees or other third parties involved in operational issues common to the retail, restaurant and entertainment industries. Such matters typically represent actions with respect to contracts, intellectual property, taxation, employment, employee benefits, personal injuries and other matters.

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A number of such claims may exist at any given time and there are currently a number of claims and legal proceedings pending against us.

For a description of all material pending legal proceedings, see Note 11 - Commitments and Contingencies of the notes to Consolidated Financial Statements of this Annual Report on Form 10-K.

Item 4. Mine Safety Disclosures

Not applicable.

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Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our Class A common stock is currently listed on the NYSE under the symbol “BOWL”.

Holders of Common Stock

As of August 30, 2023, there were 96 holders of record of our Class A common stock. Such amounts do not include Depository Trust Company participants or beneficial owners holding shares through nominee names.

Issuer Purchases of Equity Securities

On February 7, 2022, the Company announced that its Board of Directors authorized a share and warrant repurchase program providing for repurchases of up to $200,000 of the Company’s outstanding Class A common stock and warrants through February 3, 2024. On May 18, 2022, the Company redeemed all its outstanding warrants. On May 16, 2023, the Board of Directors authorized the initial replenishment of the remaining balance of the repurchase program to $200,000, and on September 6, 2023, the Board of Directors authorized a further replenishment of the then-current balance of the repurchase program to $200,000. Repurchases of shares are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases are based on a variety of factors, including stock price, regulatory limitations, debt agreement limitations, and other market and economic factors. The share repurchase plan does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase plan at any time.

The Company purchased 7,881,635 shares of our Class A common stock during the fiscal year ended July 2, 2023, 6,937,461 shares of which were purchase under Rule 10b5-1 agreements and 944,174 shares were purchased on the open market. The following table provides information regarding purchases of our securities made by us for the quarter ended July 2, 2023.


Fiscal Period	Total Number of Class A Shares Purchased	Average Price Paid per Class A Share*		Total Number of Shares Purchased as Part of Publicly Announced Programs	Dollar Value of Shares That May Yet Be Purchased Under The Publicly Announced Repurchase Program*
April 3, 2023 to May 7, 2023	999,768	$	14.53	999,768	$	126,562
May 8, 2023 to June 4, 2023	2,259,841	12.88		2,259,841	185,263
June 5, 2023 to July 2, 2023	3,153,634	11.87		2,209,460	159,499
Total	6,413,243	$	12.64	5,469,069

*The average price paid per share and dollar value of shares that may yet be purchased under the plan includes any commissions paid to repurchase stock (but excludes any excise taxes).

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Performance Graph

COMPARISON OF CUMULATIVE TOTAL RETURN*

Among Bowlero Corp., the S&P TMI Consumer Discretionary Index

and the S&P 500 Index


	12/15/21		12/26/21		03/27/22		07/03/22		10/02/22		01/01/23		04/02/23		07/02/23
Bowlero Corp	$	100.00	$	91.50	$	108.60	$	110.00	$	123.10	$	134.80	$	169.50	$	116.40
S&P TMI Consumer Discretionary	100.00		100.92		90.46		68.55		69.47		64.14		74.06		83.47
S&P 500	100.00		100.37		96.84		81.89		77.08		82.91		89.12		96.92

*Assumes $100 was invested on December 15, 2021, the day our stock began trading as Bowlero Corp., following the Business Combination between Old Bowlero and Isos, including reinvestment of dividends.

Dividend Policy

We have not paid any cash dividends on the Class A common stock to date. As a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries. We may retain future earnings, if any, in order to pursue our business plan, cover operating costs and otherwise remain competitive. Any decision to declare and pay dividends in the future will be made at the discretion of the board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that the board of directors may deem relevant. In addition, under Delaware law, our board of directors may declare dividends only to the extent of our surplus (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no surplus, out of our net profits for the then-current and/or immediately preceding fiscal year. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur.

For our Series A Preferred Stock, dividends accumulate on a cumulative basis on a 360-day year commencing from the issue date. The dividend rate is fixed at 5.5% per annum on a liquidation preference of $1,000 per share. Payment dates are June 30 and December 31 of each year with a record date of June 15 for the June 30 payment date and December 15 for the December 31 payment date. Declared dividends will be paid in cash if the Company declares the dividend to be paid in cash. If the Company does not pay all or any portion of the dividends that have accumulated as of any payment date, then the dollar amount of the dividends not paid in cash will be added to the liquidation preference and deemed to be declared and paid in-kind.

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During the year ended July 2, 2023, the Company paid cash dividends of $3,969 on our preferred stock. See Note 15 - Common Stock, Preferred Stock and Stockholders’ Equity of the notes to Consolidated Financial Statements of this Annual Report on Form 10-K for more details.

Item 6. [Reserved]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with Bowlero Corp.’s audited consolidated financial statements and notes included herein. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the heading “Risk Factors.” Actual results may differ materially from those contained in any forward-looking statements. All period references are to our fiscal periods unless otherwise indicated. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” the “Company,” and “Bowlero” are intended to mean the business and operations of Bowlero Corp. and its consolidated subsidiaries. Unless otherwise indicated, all financial information in this section is presented in thousands.

Discussion regarding our financial condition and results of operations for fiscal 2022 compared with fiscal 2021 is included in Item 7 of the Annual Report on Form 10-K for the fiscal period ended July 3, 2022.

Overview

Bowlero Corp. is the world’s largest operator of bowling entertainment centers. The Company operates traditional bowling centers and more upscale entertainment concepts with lounge seating, arcades, enhanced food and beverage offerings, and more robust customer service for individuals and group events, as well as hosting and overseeing professional and non-professional bowling tournaments and related broadcasting.

On December 15, 2021, we completed the Business Combination contemplated by the Business Combination Agreement, dated as of July 1, 2021, as amended on November 1, 2021, by and among Isos and Bowlero Corp. (“Old Bowlero”). Pursuant to the Business Combination Agreement, Old Bowlero was merged with and into Isos, with Isos surviving the merger, and Isos was renamed “Bowlero Corp.” See Note 2 - Significant Accounting Policies of the notes to Consolidated Financial Statements of this Annual Report on Form 10-K for more details.

The Company remains focused on creating long-term shareholder value through continued organic growth, the conversion and upgrading of centers to more upscale entertainment concepts offering a broader range of offerings, the opening of new centers and acquisitions. A core tenet of our long-term strategy to increase profitability is to grow the size and scale of the Company in order to improve our leverage of Selling, General and Administrative expenses (“SG&A”). For fiscal year 2023 as compared to fiscal 2022, the Company’s total revenue (inclusive of acquisitions and new centers) increased by approximately 16% and the Company’s total revenue on a same-store basis increased by approximately 12%.

Same-store revenues includes revenue from centers that are open in periods presented (open in both the current period and the prior period being reported) and excludes revenues from centers that are not open in both periods presented, such as recently acquired centers or centers closed for upgrades, renovations or other such reasons, as well as media revenues. We continue to see positive momentum for future demand and we have recovered to far better than pre-pandemic performance.

Recent Developments

Bowlero’s results for the fiscal year ended July 2, 2023 exhibited continued strong revenue growth. This growth has been bolstered by the strength of our business model, the increase in confidence of our customers, and the resilience in the bowling market. Additionally, the further improvements in our results demonstrate our continued ability to execute our growth strategy and business model. To highlight the Company’s recent activity during the fiscal year ended July 2, 2023:

•We acquired 16 bowling entertainment centers, which we believe will aid the Company in several key geographic markets and aid in leveraging our fixed costs.

•We have a strong pipeline of potential acquisitions that we continue to actively evaluate. We have signed five agreements to acquire 19 centers, which are set to close in fiscal year 2024. This includes the agreement to acquire the assets of Lucky Strike Entertainment, LLC (“Lucky Strike”), which consists of 14 locations across nine states.

•We are negotiating four lease agreements for build-outs of new bowling entertainment centers and have a total of six signed leases for build-outs of new bowling entertainment centers in prime markets.

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•We launched MoneyBowl, the Company’s proprietary skill-based gamification app. MoneyBowl is now active in 64 centers as of July 2, 2023, which represents 20% of the center population. Total downloads are now over 85,000.

•We renovated or remodeled 38 bowling centers and expanded or refurbished arcades in 26 centers.

•On March 2, 2023, Bowlero’s closing stock price of Class A common stock equaled or exceeded $15.00 for 10 trading days within a 20-trading day period. As a result, 11,418,361 Earnout Shares were fully vested and are no longer subject to the applicable vesting restrictions. See Note 13 - Earnouts in the notes to the Consolidated Financial Statements of this Annual Report on Form 10-K for further information.

Presentation of Results of Operations

The Company reports on a fiscal year with each quarter generally comprised of one 5-week period and two 4-week periods. Our current fiscal year was fifty-two weeks and ended on July 2, 2023 (“fiscal 2023”). The fiscal year ended July 3, 2022 (“fiscal 2022”) was fifty-three weeks, which consisted of an extra week in the fourth quarter as compared to our fifty-two week fiscal years.

All amounts are presented in thousands, unless otherwise noted, except share and per share amounts.

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Results of Operations

Fiscal Year Ended July 2, 2023 Compared To the Fiscal Year Ended July 3, 2022

Analysis of Consolidated Statement of Operations. The following table displays certain items from our consolidated statements of operations for the fiscal years ended presented below:


	Fiscal Year Ended
(in thousands)	July 2, 2023		%(1)		July 3, 2022		%(1)		Change		% Change
Revenues	$	1,058,790	100.0	%	$	911,705	100.0	%	$	147,085	16.1	%
Costs of revenues	716,384		67.7	%	609,971		66.9	%	106,413		17.4	%
Gross profit	342,406		32.3	%	301,734		33.1	%	40,672		13.5	%

Operating (income) expenses:
Selling, general and administrative expenses	137,919		13.0	%	180,702		19.8	%	(42,783)		(23.7)	%
Asset impairment	1,601		0.2	%	1,548		0.2	%	53		3.4	%
Gain on sale of assets	(2,240)		(0.2)	%	(4,109)		(0.5)	%	(1,869)		(45.5)	%
Other operating expense	4,326		0.4	%	6,968		0.8	%	(2,642)		(37.9)	%
Total operating expense	141,606		13.4	%	185,109		20.3	%	(43,503)		(23.5)	%

Operating profit	200,800		19.0	%	116,625		12.8	%	84,175		72.2	%

Other expenses:
Interest expense, net	110,851		10.5	%	94,460		10.4	%	16,391		17.4	%
Change in fair value of earnout liability	85,352		8.1	%	25,800		2.8	%	59,552		*
Change in fair value of warrant liability	—		—	%	26,840		2.9	%	(26,840)		*
Other expense	6,792		0.6	%	149		—	%	6,643		*
Total other expense	202,995		19.2	%	147,249		16.2	%	55,746		37.9	%

Loss before income tax benefit	(2,195)		(0.2)	%	(30,624)		(3.4)	%	28,429		92.8	%

Income tax benefit	(84,243)		(8.0)	%	(690)		(0.1)	%	83,553		*

Net income (loss)	$	82,048	7.7	%	$	(29,934)	(3.3)	%	111,982		*

___________

Note: Fiscal 2023 consisted of 52 weeks compared to fiscal 2022, which consisted of 53 weeks.

(1) Percent calculated as a percentage of revenues and may not total due to rounding.

*Represents a change equal to or in excess of 100% or one that is not meaningful.

Revenues: For fiscal 2023, revenues totaled $1,058,790 and represented an increase of $147,085, or 16%, over the prior fiscal year. The Company’s revenues for fiscal 2023 as compared to fiscal 2022 increased by 12% on a same-store basis. The overall increase in revenues is due to the continued organic growth, positive market conditions, and the impact of 16 centers added through current year acquisitions, all of which were partially offset by the additional week in fiscal 2022. If fiscal 2022 had not included an additional week, the increase in revenues for fiscal 2023 as compared to fiscal 2022 would have been higher by approximately $14,921 and would have increased by $162,006 or 18%, and increased by 12% on a same-store basis. The following table summarizes the increase in the Company’s revenues on a same-store-basis for fiscal 2023 compared to fiscal 2022 (including the additional week):

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	Fiscal Year Ended
(in thousands)	July 2, 2023		July 3, 2022		Change		% Change
Center revenues on a same-store basis	$	925,143	$	823,277	$	101,866	12	%
Revenues for media, new and closed centers	133,647		88,428		45,219		51	%
Total revenues	$	1,058,790	$	911,705	$	147,085	16	%

Same-store revenues includes revenues from centers that are open in periods presented (open in both the current period and the prior period being reported) and excludes revenues from centers that are not open in periods presented such as acquired new centers or centers closed for upgrades, renovations or other such reasons, as well as media revenues. The increase in same-store revenues during the year ended July 2, 2023 reflects, among other factors, continued favorable demand for our products and services and price increases.

Cost of Revenues: Our cost of revenues includes costs that are not variable or are less variable with changes in revenues, such as depreciation, amortization, rent and property taxes, as well as more variable costs that include labor, food and beverage costs, prize funds, supplies, utilities, production expenses, and amusement costs. The overall increase in cost of revenues of $106,413, or 17%, corresponds to the increase in revenues, as well as higher costs due to inflation, partially offset with one week less in fiscal 2023 as compared to fiscal 2022. Increases in costs were in most areas and include higher costs with labor, utilities, food and beverage, as well as increases in depreciation, insurance and other operational costs such as security and supplies. Labor costs were higher because of additional staffing and higher labor pay rates to support growing business. Depreciation costs increased because of added depreciation from acquisitions of businesses and capital expenditures. Cost of revenues as a percent of revenues was nearly flat when comparing fiscal year 2023 to fiscal year 2022. Additionally, we have increased prices in an effort to address the impact of higher costs and to support margin and profit levels.

Gross Profit: Our gross profit increased $40,672, or 13%, to $342,406, primarily due to the $147,085 increase in revenues, partially offset by the 80 basis point decrease in gross profit margin (gross profit divided by revenues). The decrease in gross profit margin reflects the impact of unusually high inflation.

Selling, general and administrative expenses (“SG&A”): SG&A expenses include employee-related costs, such as payroll and benefits, as well as depreciation and amortization (excluding those related to our center operations), media and promotional expenses. SG&A expenses decreased $42,783, or 24%, to $137,919, mainly due to the $68,405 in transaction costs during the prior fiscal year related to the Business Combination, which were partially offset by increases during the current fiscal period in various SG&A costs not directly associated with the Business Combination. The increases in SG&A costs not directly associated with the Business Combination include compensation costs and increases in other costs, including professional fees and insurance. Increases in compensation and benefits were $11,583, equity compensation increased $7,783, professional fees increased $3,330, and insurance costs increased $702. The increase in compensation costs not associated with the Business Combination mainly reflects rebuilding staff after the interruption caused by the pandemic, increases in pay rates and higher staffing to support the increase in business and the costs we incur as a public reporting company. The increase in share-based compensation costs not associated with the Business Combination reflects equity awards to key members of management as an incentive to motivate and retain associates. The increases in insurance costs and professional fees not directly related to the Business Combination include higher costs associated with the growth in our business, costs associated with being a public reporting company and higher costs due to inflation. Total SG&A expenses as a percent of revenues for fiscal 2023 was approximately 13.0%, as compared to approximately 20% during the corresponding period last fiscal year. Excluding the impact of the transaction costs associated with the Business Combination, SG&A costs as a percentage of revenues increased from 12% to 13.0% mainly due to costs increasing at a higher rate than revenues.

Interest expense, net: Interest expense primarily relates to interest on debt and finance leases. Interest expense increased $16,391, or 17%, to $110,851. The higher interest expense is primarily the result of higher interest rates and an increase in our debt and lease obligations during fiscal 2023 as compared to fiscal 2022.

Change in fair value of earnouts and warrants: Changes in the fair value of the earnout liabilities are recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact. The estimated fair value of the earnout liability is determined using a Monte-Carlo simulation model. Inputs that have a significant effect on the valuation include the expected volatility, stock price, expected term, risk-free interest rate and performance hurdles. The unfavorable impact on the statement of operations during the year ended July 2, 2023 is a non-cash expense and was due to the increase in the fair value of the earnouts, which mainly reflects the increase in the Company’s stock price. On March 2, 2023, Bowlero’s closing stock price of Class A common stock equaled or exceeded $15.00 for 10 trading days within a 20-trading day period. As a result, 11,418,361 Earnout Shares were fully vested, settled into equity and are no longer included in the Earnout liability on the consolidated balance sheet.

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As a result of the completion of the redemption of the warrants in fiscal 2022, the Company no longer has any warrants outstanding. Therefore, there were no changes in the fair value of warrants during fiscal 2023.

Other expense: Other expenses include various cost related to specific transactions that are not considered ongoing or frequently recurring activities as part of the Company’s operations. The increase in other expenses is mainly due to the $6,786 in costs that were expensed associated with the refinancing of the First Lien Credit Facility Term Loan and Incremental Term Loan.

Income Taxes: Income tax benefit and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position.

The income tax benefit for fiscal 2023 is mainly due to the non-cash income tax benefit resulting from the release of a significant portion of the valuation allowances for deferred tax assets, as well as the favorable impact resulting from changes in estimates associated with certain income tax credits and tax deductible expenses, which were partially offset by state income tax expense, due to higher income and certain non-deductible expenses. As of July 2, 2023, a large portion of our U.S. federal, state and foreign deferred tax assets, net of deferred tax liabilities, were no longer subject to valuation allowances based on our cumulatively positive financial results (considered to be objectively verifiable) and estimates of our future income, with the exception of any potentially remaining net operating losses subject to potential limitation, including limitations under Internal Revenue Code Section 382 or 383, separate return loss year rules, or state tax loss limitations. The release of the valuation allowances was a $135,061 non-cash income tax benefit in our consolidated statement of operations and the favorable impact of federal income tax credits was approximately $7,708, all of which were partially offset by, among other things, $41,901 in write-off of net operating losses (NOLs) mainly due to Section 382 limitations and non-deductible expenses, including $17,924 in business combination, earnouts and asset acquisition items. The $41,901 of NOL write off had been fully reserved with a valuation allowance in prior periods. The associated valuation allowance was also written off and is included in the $135,061 valuation allowance non cash income tax benefit. The prior year income tax benefit was mainly driven by the release of a portion of the valuation allowance for deferred tax assets resulting from recording of deferred tax liabilities associated with accounting for the acquisition of Bowl America, which was partially offset by increases in income tax expense due to higher taxable income with improved operating results and income from the sale of certain Bowl America non-operating assets.

The amount of income taxes the Company pays is subject to audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of our tax positions and accrues estimated amounts for applicable tax positions. Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, liabilities for applicable tax positions are adjusted as necessary. The Company currently has open income tax audits in Mexico and in one state.

Non-GAAP measure

Adjusted EBITDA is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. The Company believes certain financial measures which meet the definition of non-GAAP financial measures provide important supplemental information. The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as Interest, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Centers, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Changes in the value of earnouts and warrants, and Other. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA and trailing twelve month Adjusted EBITDA do not reflect:

•every expenditure, future requirements for capital expenditures or contractual commitments;

•changes in our working capital needs;

•the interest expense, or the amounts necessary to service interest or principal payments, on our outstanding debt;

•income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate;

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•non-cash equity compensation, which will remain a key element of our overall equity based compensation package; and

•the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.

Refer to notes below for additional details concerning the respective items for Adjusted EBITDA.

The following table provides a reconciliation from net income (loss) to Adjusted EBITDA for the fiscal years ended July 2, 2023 and July 3, 2022:


(in thousands)	July 2, 2023		July 3, 2022
Net income (loss)	$	82,048	$	(29,934)
Adjustments:
Interest expense	112,160		94,460
Income tax benefit	(84,243)		(690)
Depreciation, amortization and impairment charges	117,281		108,505
Share-based compensation	15,742		50,236
Closed center EBITDA (1)	3,319		1,480
Foreign currency exchange (gain) loss	(53)		5
Asset disposition gain	(2,240)		(4,109)
Transactional and other advisory costs (2)	23,635		43,512
Changes in the value of earnouts and warrants (3)	85,352		52,789
Other, net (4)	1,343		121
Adjusted EBITDA	$	354,344	$	316,375

Adjusted EBITDA represents Net income (loss) before Interest, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Centers, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Changes in the value of earnouts and warrants and Other. Refer to notes below for additional details concerning the respective items for Adjusted EBITDA.

Notes to Adjusted EBITDA:

(1)The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers closed for renovation or rebranding and conversion. If a center is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the center is closed on the first day of the reporting period for permanent closure, the center will be considered closed for that reporting period.

(2)The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated.

(3)The adjustment for changes in the value of earnouts and warrants is to remove of the impact of the revaluation of the earnouts and warrants. As a result of the Business Combination, the Company recorded liabilities for earnouts and warrants. Changes in the fair value of the earnout and warrant liabilities are recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact. The adjustment also includes realized costs associated with the settlement of warrants during past reporting periods.

(4)Other includes the following related to transactions that do not represent ongoing or frequently recurring activities as part of the Company’s operations: (i) non-routine expenses, net of recoveries for matters outside the normal course of business and (ii) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation.

Liquidity and Capital Resources

We manage our liquidity through assessing available cash-on-hand, our ability to generate cash and our ability to borrow or otherwise raise capital to fund operating, investing and financing activities. The Company remains in a positive financial position with available cash balances.

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A core tenet of our long-term strategy is to grow the size and scale of the Company in order to improve our operating profit margins through leveraging our fixed costs. As such, one of the Company’s known cash requirements is for capital expenditures related to the construction of new centers and upgrading and converting existing centers. We believe our financial position, generation of cash, available cash on hand, existing credit facility, and access to potentially obtain additional financing from sale-lease-back transactions or other sources will provide sufficient capital resources to fund our operational requirements, capital expenditures, and material short and long-term commitments for the foreseeable future. However, there are a number of factors that may hinder our ability to access these capital resources, including but not limited to our degree of leverage and potential borrowing restrictions imposed by our lenders. See “Risk Factors” for further information.

On February 8, 2023, we entered into an Eighth Amendment (the “Eighth Amendment”) to the First Lien Credit Agreement. The Eighth Amendment provided for a new $900,000 term loan maturing on February 8, 2028 (the “Amendment No. 8 Term Loan”). Proceeds of the Amendment No. 8 Term Loan were used to refinance the existing First Lien Credit Facility Term Loan, to repay all amounts outstanding on the Revolver, and for general corporate purposes. The Amendment No. 8 Term Loan bore interest at a rate per annum equal to the Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus 3.50%.

On June 13, 2023, the Company entered into a Ninth Amendment (the “Ninth Amendment”) to the First Lien Credit Agreement. The Ninth Amendment provided for an incremental term loan in the amount of $250,000 (the “Incremental Term Loan”) to the Amendment No. 8 Term Loan for an aggregate principal amount of $1,150,000. Proceeds of the Incremental Term Loan were used to repay all amounts outstanding on the Revolver and for general corporate purposes. In addition, the Ninth Amendment increased the Amendment No. 8 Term Loan quarterly principal payments beginning on September 29, 2023 from $2,250 to $2,875.

Under the First Lien Credit Agreement, we have access to a senior secured revolving credit facility (the “Revolver”). The outstanding balance on the Revolver is due on December 15, 2026. Interest on borrowings under the Revolver is based on the Adjusted Term SOFR.

In connection with the Company entering into the Eighth Amendment, the Revolver commitment was increased by $35,000 to an aggregate amount of $200,000, and the amount outstanding as of the Eighth Amendment date of $86,434 was repaid.

In connection with the Company entering into the Ninth Amendment, the Revolver commitment was increased by $35,000 to an aggregate amount of $235,000, and the amount outstanding as of the Ninth Amendment date of $100,000 was repaid.

As of July 2, 2023, no amounts are drawn on the Revolver.

At July 2, 2023, we had approximately $195,633 of available cash and cash equivalents.

Fiscal Year Ended July 2, 2023 Compared To the Fiscal Year Ended July 3, 2022

The following compares the primary categories of the consolidated statements of cash flows for the years ended July 2, 2023 and July 3, 2022:


	Fiscal Year Ended				$ Change		% Change
(in thousands)	July 2, 2023		July 3, 2022
Net cash provided by operating activities	$	217,787	$	177,670	$	40,117	22.58	%
Net cash used in investing activities	(253,218)		(220,345)		(32,873)		(14.92)	%
Net cash provided by (used in) financing activities	98,957		(12,136)		111,093		(915.40)	%
Effect of exchange rate changes on cash	(129)		(46)		(83)		180.43	%
Net change in cash and cash equivalents	$	63,397	$	(54,857)	$	118,254	(215.57)	%

The increase in cash provided by operating activities mainly reflects higher profitability driven by increased revenues. We benefited during fiscal year 2023 from continued positive consumer demand and revenues from recently acquired centers.

Investing activities utilized $253,218, reflecting our acquisitions of businesses and capital expenditures of $111,664 as well as center conversions and related capital expenditures. We expect to continue to invest in accretive acquisitions in future periods as well as center upgrades and conversions.

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Financing activities provided $98,957 in fiscal 2023, reflecting net proceeds of $287,957 from refinancing activities, partially offset by $96,004 utilized for the repurchase of treasury stock, $80,825 for the settlement of Series A preferred stock for cash and scheduled long-term debt payments.

Our contractual obligations primarily include, but are not limited to, debt service, self-insurance liabilities, and leasing arrangements. The Consolidated Financial Statements included in this Annual Report on Form 10-K provide additional information on the timing and amounts of those contractual obligations. We believe our sources of liquidity, namely available cash on hand, positive operating cash flows, and access to capital markets will continue to be adequate to meet our contractual obligations, as well as fund working capital, planned capital expenditures, center acquisitions, and execute purchases under our share repurchase program.

Critical Accounting Estimates

Our results of operations and financial condition as reflected in the consolidated financial statements included in this Annual Report on Form 10-K have been prepared in accordance with U.S. generally accepted accounting principles. Preparation of financial statements requires management to make estimates, judgements, and assumptions affecting the reported amounts of assets, liabilities, revenues, expenses and the disclosures of contingent assets and liabilities. We base these estimates and judgments on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual results, however, may differ from the estimated amounts we have recorded. We regularly evaluate these estimates, judgements and assumptions.

The following discussion provides information on our critical accounting estimates that require management’s most difficult, subjective or complex judgments, and which may result in materially different results under different assumptions and conditions.

Impairment of Long-Lived Assets

Long-lived assets other than goodwill and indefinite-lived intangible assets (such as Bowlero and Professional Bowlers Association trade names), including property and equipment, right-of-use assets and other definite-lived intangibles such as trade names and customer relationships are reviewed for impairment when events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

For long-lived assets, an impairment is indicated when the estimated total undiscounted cash flows associated with the asset or group of assets is less than carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. The Company recognized impairment charges of $1,601 and $1,548 in fiscal years 2023 and 2022, respectively. The impairments primarily relate to long-lived assets for an open center and closed centers. We estimated the fair value of these assets utilizing the business enterprise valuation based on discounted cash flows for the open center, and for the closed centers, the market approach using orderly liquidation values or broker quotes for sale of similar properties. We then compared these fair values to the related carrying value of the long-lived assets.

Impairment of Indefinite-Lived Intangible Assets

Management assesses impairment of indefinite-lived intangible assets, including goodwill, brokered liquor licenses on a quota system and our Bowlero and Professional Bowlers Association trade names, on an annual basis during the fourth quarter or more frequently under certain circumstances.

We assessed macroeconomic conditions, industry and market considerations, cost factors that could have a negative impact, overall financial performance including actual results and trends, and other relevant entity-specific events. For fiscal 2023 and 2022, we performed a qualitative assessment of goodwill and the vast majority of indefinite-lived intangible assets other than goodwill, except for liquor licenses. There were no impairment charges for goodwill, indefinite-lived intangible or liquor licenses recorded in fiscal 2023 or 2022.

Valuation of Earnouts

The estimated fair value of the earnout liability is determined by using a Monte-Carlo simulation model. Inputs that have a significant effect on the valuation include the expected volatility, stock price, expected term, risk-free interest rate and performance hurdles.

Recently Issued Accounting Standards

For a description of recently issued Financial Accounting Standards that we adopted during the year ended July 2, 2023 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 2 - Significant Accounting Policies of the notes to Consolidated Financial Statements of this Annual Report on Form 10-K.

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Emerging Growth Company Accounting Election

The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of Isos’ IPO (March 5, 2026), (b) in which we have total annual gross revenue of at least $1,235,000 or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700,000 as of the end of the second fiscal quarter of that fiscal year; and (2) the date on which we have issued more than $1,000,000 in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in, among other things, interest rates, credit risk, labor costs, health insurance claims and foreign currency exchange rates, which could impact its results of operations and financial condition. We attempt to address our exposure to these risks through our normal operating and financing activities.

Interest Rate Risk

Under our term and revolving credit facilities, we are exposed to a certain level of interest rate risk. Interest on the principal amount of our borrowings under our revolving credit facility loan accrues at the Adjusted Term Secured Overnight Financing Rate or the Alternate Base Rate, as further described in the credit agreement governing our term and revolving credit facilities. An increase or decrease of 1.0% in the effective interest rate would cause an increase or decrease to interest expense of approximately $11,500 over a twelve month period on our outstanding debt without considering the impact of hedging. The Company entered into two hedging transactions effective as of March 31, 2023 for an aggregate notional amount of our Amendment No. 8 Term Loan of $800,000. We designated the collars as a cash flow hedge, and they qualify for hedge accounting because the hedges are highly effective. While we intend to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective, the changes in the fair value of the derivatives used as hedges would be reflected in our earnings. The hedge transactions have a trade and hedge designation date of April 4, 2023. The hedge transactions, each for a notional amount of $400,000, provide for interest rate collars. The interest rate collars establish a floor on SOFR of 0.9429% and 0.9355%, respectively, and a cap on SOFR of 5.50%. The interest rate collars have a maturity date of March 31, 2026.

Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist of cash and temporary investments, and interest rate swaps and caps. We are exposed to credit losses in the event of non-performance by counter parties to our financial instruments. We place cash and temporary investments with various high-quality financial institutions. Although we do not obtain collateral or other security to secure these obligations, we periodically monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on safety and liquidity of principal and secondarily on maximizing yield on those funds.

Commodity Price Risk

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We are exposed to market price fluctuation in food, beverage, supplies and other costs such as energy. Given the historical volatility of certain of our food product prices, including proteins, produce, dairy products, and cooking oil, these fluctuations can materially impact our food costs. While our purchasing commitments partially mitigate the risk of such fluctuations, there is no assurance that supply and demand factors such as disease or inclement weather will not cause the prices of the commodities used in our food operations to fluctuate. Additionally, the cost of purchased materials may be influenced by tariffs and other trade regulations which are outside of our control. To the extent that we do not pass along cost increases to our customers, our results of operations may be adversely affected.

Inflation

We experience inflation and deflation related to our purchase of certain products that we need to operate our business. This price volatility could potentially have a material impact on our financial condition and/or our results of operations. In order to mitigate price volatility, we monitor price fluctuations and may adjust our prices accordingly, however, our ability to recover higher costs through increased pricing may be limited by the competitive environment in which we operate.

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Item 8. Financial Statements and Supplementary Data


Index to the Consolidated Financial Statements		Page

Report of Independent Registered Public Accounting Firm		34

Consolidated Balance Sheets as of July 2, 2023 and July 3, 2022		36
Consolidated Statements of Operations for the years ended July 2, 2023, July 3, 2022 and June 27, 2021		38
Consolidated Statements of Comprehensive Income (Loss) for the years ended July 2, 2023, July 3, 2022 and June 27, 2021		39
Consolidated Statements of Changes in Temporary Equity and Stockholders’ Equity (Deficit) for the years ended July 2, 2023, July 3, 2022 and June 27, 2021		40
Consolidated Statements of Cash Flows for the years ended July 2, 2023, July 3, 2022 and June 27, 2021		42

Notes to Consolidated Financial Statements		43
Note 1	Description of Business	44
Note 2	Significant Accounting Policies	44
Note 3	Business Combinations and Acquisitions	53
Note 4	Goodwill and Other Intangible Assets	57
Note 5	Property and Equipment	58
Note 6	Leases	59
Note 7	Supplemental Cash Flow Information	63
Note 8	Accrued Expenses	63
Note 9	Debt	64
Note 10	Income Taxes	66
Note 11	Commitments and Contingencies	68
Note 12	Warrants	68
Note 13	Earnouts	69
Note 14	Fair Value of Financial Instruments	70
Note 15	Common Stock, Preferred Stock and Stockholders’ Equity	71
Note 16	Stock Based Compensation	73
Note 17	Net Income (Loss) Per Share	77

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Bowlero Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Bowlero Corp. and subsidiaries (the "Company") as of July 2, 2023, the related consolidated statements of operations, comprehensive income (loss), changes in temporary equity and stockholders' equity (deficit), and cash flows, for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 2, 2023 and the results of its operations and its cash flows for the year ended July 2, 2023, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for leases in the year ended July 2, 2023 due to adoption of Accounting Standards Update 2016-02, Leases, using the modified retrospective approach.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Richmond, Virginia

September 11, 2023

We have served as the Company's auditor since 2022.

Table of Contents

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Bowlero Corp.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Bowlero Corp. and subsidiaries (the Company) as of July 3, 2022, the related consolidated statements of operations, comprehensive loss, temporary equity and stockholders’ deficit, and cash flows for the fiscal years ended July 3, 2022 and June 27, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 3, 2022, and the results of its operations and its cash flows for the years ended July 3, 2022 and June 27, 2021, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.


/s/ KPMG LLP

We served as the Company’s auditor from 2002 to 2022.

Richmond, Virginia
September 15, 2022

Bowlero Corp.

Consolidated Balance Sheets

July 2, 2023 and July 3, 2022

(Amounts in thousands)


	July 2, 2023		July 3, 2022
Assets
Current assets:
Cash and cash equivalents	$	195,633	$	132,236
Accounts and notes receivable, net of allowance for doubtful accounts of $551 and $504, respectively	3,092		5,227
Inventories, net	11,470		10,310
Prepaid expenses and other current assets	18,395		12,732
Assets held-for-sale	2,069		8,789
Total current assets	230,659		169,294

Property and equipment, net	697,850		534,721
Internal use software, net	17,914		11,423
Property and equipment under capital leases, net	—		262,703
Operating lease right of use assets, net	449,085		—
Finance lease right of use assets, net	515,339		—
Intangible assets, net	90,986		92,593
Goodwill	753,538		742,669
Deferred income tax asset	73,807		—
Other assets	12,096		41,022
Total assets	$	2,841,274	$	1,854,425

Liabilities, Temporary Equity and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses	$	121,226	$	101,071
Current maturities of long-term debt	9,338		4,966
Current obligations of operating lease liabilities	23,866		—
Other current liabilities	14,281		13,123
Total current liabilities	168,711		119,160

Long-term debt, net	1,138,687		865,090
Long-term obligations under capital leases	—		397,603
Long-term obligations of operating lease liabilities	431,295		—
Long-term obligations of financing lease liabilities	652,450		—
Earnout liability	112,041		210,952
Other long-term liabilities	34,380		54,418
Deferred income tax liabilities	4,160		14,882
Total liabilities	2,541,724		1,662,105

Commitments and Contingencies (Note 11)

Bowlero Corp.

Consolidated Balance Sheets

July 2, 2023 and July 3, 2022

(Amounts in thousands)


	July 2, 2023		July 3, 2022
Temporary Equity
Series A preferred stock	$	144,329	$	206,002

Stockholders’ Equity (Deficit)
Class A common stock	11		11
Class B common stock	6		6
Additional paid-in capital	506,112		335,015
Treasury stock, at cost	(135,401)		(34,557)
Accumulated deficit	(219,659)		(312,851)
Accumulated other comprehensive income (loss)	4,152		(1,306)
Total stockholders’ equity (deficit)	155,221		(13,682)
Total liabilities, temporary equity and stockholders’ equity (deficit)	$	2,841,274	$	1,854,425

See accompanying notes to consolidated financial statements.

Bowlero Corp.

Consolidated Statements of Operations

Fiscal Years Ended July 2, 2023, July 3, 2022 and June 27, 2021

(Amounts in thousands, except share and per share amounts)


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Revenues	$	1,058,790	$	911,705	$	395,234
Costs of revenues	716,384		609,971		374,255
Gross profit	342,406		301,734		20,979

Operating (income) expenses:
Selling, general and administrative expenses	137,919		180,702		78,335
Asset impairment	1,601		1,548		386
Gain on sale of assets	(2,240)		(4,109)		(46)
Other operating expense	4,326		6,968		1,131
Business interruption insurance recoveries	—		—		(20,188)
Total operating expense	141,606		185,109		59,618

Operating profit (loss)	200,800		116,625		(38,639)

Other expenses:
Interest expense, net	110,851		94,460		88,857
Change in fair value of earnout liability	85,352		25,800		—
Change in fair value of warrant liability	—		26,840		—
Other expense	6,792		149		—
Total other expense	202,995		147,249		88,857

Loss before income tax benefit	(2,195)		(30,624)		(127,496)

Income tax benefit	(84,243)		(690)		(1,035)
Net income (loss)	82,048		(29,934)		(126,461)

Series A preferred stock dividends	(23,831)		(10,233)		(8,015)
Earnings allocated to Series A preferred stock	(4,881)		—		—
Net income (loss) attributable to common stockholders	$	53,336	$	(40,167)	$	(134,476)

Net income (loss) per share attributable to Class A and B common stockholders
Basic	$	0.32	$	(0.26)	$	(0.92)
Diluted	$	0.30	$	(0.26)	$	(0.92)

Weighted-average shares used in computing net income (loss) per share attributable to common stockholders
Basic	165,508,879		155,837,154		146,848,329
Diluted	175,821,396		155,837,154		146,848,329

See accompanying notes to consolidated financial statements.

Bowlero Corp.

Consolidated Statements of Comprehensive Income (Loss)

Fiscal Years Ended July 2, 2023, July 3, 2022 and June 27, 2021

(Amounts in thousands)


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Net income (loss)	$	82,048	$	(29,934)	$	(126,461)
Other comprehensive income, net of income tax:
Unrealized gain (loss) on derivatives	3,385		60		(371)
Reclassification to earnings	—		8,809		9,002
Foreign currency translation adjustment	2,073		(771)		977
Other comprehensive income	5,458		8,098		9,608
Total comprehensive income (loss)	$	87,506	$	(21,836)	$	(116,853)

See accompanying notes to consolidated financial statements.

Bowlero Corp.

Consolidated Statements of Changes in Temporary Equity and Stockholders’ Equity (Deficit)

Fiscal Years Ended July 2, 2023, July 3, 2022 and June 27, 2021

(Amounts in thousands)


	Redeemable Class A common stock			Series A preferred stock			Class A common Stock			Class B common Stock			Treasury stock			Additional Paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total stockholders’ equity (deficit)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance, June 28, 2020	2,069,000	$	160,601	106,378	$	133,147	3,842,428	$	1	—	$	—	—	$	—	$	271,776	$	(102,701)	$	(19,012)	$	150,064
Retroactive application of recapitalization	49,328,025	—		2,536,209	—		91,608,875	9		—	—		—	—		—		(9)		—		—
Adjusted balance, beginning of period	51,397,025	$	160,601	2,642,587	$	133,147	95,451,303	$	10	—	$	—	—	$	—	$	271,776	$	(102,710)	$	(19,012)	$	150,064
Net loss	—	—		—	—		—	—		—	—		—	—		—		(126,461)		—		(126,461)
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—	—		—		—		977		977
Unrealized loss on derivatives	—	—		—	—		—	—		—	—		—	—		—		—		(371)		(371)
Reclassification to earnings	—	—		—	—		—	—		—	—		—	—		—		—		9,002		9,002
Accrued dividends on pre-merger Series A preferred stock	—	—		—	8,015		—	—		—	—		—	—		(8,015)		—		—		(8,015)
Change in fair value of redeemable Class A common stock of Old Bowlero	—	304,226		—	—		—	—		—	—		—	—		(304,226)		—		—		(304,226)
Stock based compensation	—	—		—	—		—	—		—	—		—	—		3,164		—		—		3,164
Reclass of negative APIC to accumulated deficit	—	—		—	—		—	—		—	—		—	—		37,301		(37,301)		—		—
Balance, June 27, 2021	51,397,025	$	464,827	2,642,587	$	141,162	95,451,303	$	10	—	$	—	—	$	—	$	—	$	(266,472)	$	(9,404)	$	(275,866)
Net loss	—	—		—	—		—	—		—	—		—	—		—		(29,934)		—		(29,934)
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—	—		—		—		(771)		(771)
Unrealized gain on derivatives	—	—		—	—		—	—		—	—		—	—		—		—		60		60
Reclassification to earnings	—	—		—	—		—	—		—	—		—	—		—		—		8,809		8,809
Reclass of negative APIC to accumulated deficit	—	—		—	—		—	—		—	—		—	—		16,445		(16,445)		—		—
Accrued dividends on pre-merger Series A preferred stock	—	—		—	4,136		—	—		—	—		—	—		(4,136)		—		—		(4,136)
Change in fair value of redeemable Class A common stock of Old Bowlero	—	38,864		—	—		—	—		—	—		—	—		(38,864)		—		—		(38,864)
Stock based compensation	—	—		—	—		93,662	—		—	—		—	—		6,804		—		—		6,804
Merger induced stock based compensation	—	—		—	—		2,529,360	—		5,839,993	1		—	—		42,555		—		—		42,556
Issuance of common stock and preferred stock in connection with Merger Capitalization, net of Bowlero equity issuance costs and fair value of liability-classified warrants and earnout	—	—		95,000	95,000		42,185,233	4		1,074,185	—		—	—		120,805		—		—		120,809
Settlement of pre-merger Series A preferred stock	—	—		(2,642,587)	(145,298)		—	—		—	—		—	—		—		—		—		—
Conversion of Class A common stock of Old Bowlero to Series A preferred stock	—	—		105,000	105,000		(10,499,900)	(1)		—	—		—	—		(104,999)		—		—		(105,000)
Consideration to existing shareholders of Old Bowlero	—	—		—	—		(22,599,800)	(2)		—	—		—	—		(225,998)		—		—		(226,000)
Consideration paid to Old Bowlero optionholders	—	—		—	—		—	—		—	—		—	—		(15,467)		—		—		(15,467)
Exchange of redeemable Class A common stock of Old Bowlero for Class B common stock	(51,397,025)	(503,691)		—	—		—	—		51,397,025	5		—	—		503,686		—		—		503,691
Accrual of paid-in-kind dividends on Series A preferred stock	—	—		—	6,002		—	—		—	—		—	—		(6,002)		—		—		(6,002)
Repurchase of Class A common stock into Treasury stock	—	—		—	—		(3,430,667)	—		—	—		3,430,667	(34,557)		—		—		—		(34,557)
Class A common stock issued in conjunction with exercise of warrants	—	—		—	—		4,266,439	—		—	—		—	—		40,186		—		—		40,186
Conversion of Class B common stock into Class A common stock	—	—		—	—		2,400,000	—		(2,400,000)	—		—	—		—		—		—		—
Balance, July 3, 2022	—	$	—	200,000	$	206,002	110,395,630	$	11	55,911,203	$	6	3,430,667	$	(34,557)	$	335,015	$	(312,851)	$	(1,306)	$	(13,682)

Bowlero Corp.

Consolidated Statements of Changes in Temporary Equity and Stockholders’ Equity (Deficit)

Fiscal Years Ended July 2, 2023, July 3, 2022 and June 27, 2021

(Amounts in thousands)


	Series A preferred stock			Class A common Stock			Class B common Stock			Treasury stock			Additional Paid-in capital		Accumulated deficit		Accumulated other comprehensive income (loss)		Total stockholders’ equity (deficit)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance, July 3, 2022	200,000	$	206,002	110,395,630	$	11	55,911,203	$	6	3,430,667	$	(34,557)	$	335,015	$	(312,851)	$	(1,306)	$	(13,682)
Net income	—	—		—	—		—	—		—	—		—		82,048		—		82,048
Cumulative effect of a change in accounting principle, net of tax	—	—		—	—		—	—		—	—		—		11,144		—		11,144
Unrealized gain on derivatives	—	—		—	—		—	—		—	—		—		—		3,385		3,385
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		2,073		2,073
Share-based compensation	—	—		481,811	—		—	—		—	—		14,322		—		—		14,322
Settlement of Earnout Shares	—	—		4,670,495	—		4,908,234	—		—	—		180,656		—		—		180,656
Settlement of Series A preferred stock	(63,627)	(67,338)		—	—		—	—		—	—		(14,247)		—		—		(14,247)
Dividends on Series A preferred stock	—	—		—	—		—	—		—	—		(3,969)		—		—		(3,969)
Accrual of paid-in-kind dividends on Series A preferred stock	—	5,665		—	—		—	—		—	—		(5,665)		—		—		(5,665)
Repurchase of Class A common stock into Treasury stock	—	—		(7,881,635)	—		—	—		7,881,635	(100,844)		—		—		—		(100,844)
Balance, July 2, 2023	136,373	$	144,329	107,666,301	$	11	60,819,437	$	6	11,312,302	$	(135,401)	$	506,112	$	(219,659)	$	4,152	$	155,221

See accompanying notes to consolidated financial statements.

Bowlero Corp.

Consolidated Statements of Cash Flows

Fiscal Years Ended July 2, 2023, July 3, 2022 and June 27, 2021

(Amounts in thousands)


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Operating activities
Net income (loss)	$	82,048	$	(29,934)	$	(126,461)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Asset impairment	1,601		1,548		386
Depreciation and amortization	109,405		106,957		91,851
Gain on sale of assets, net	(2,240)		(4,109)		(46)
Income from joint venture	(409)		(388)		(223)
Loss on refinance of debt	—		953		—
Loss on repurchase of warrants	—		149		—
Amortization of deferred financing costs	3,238		3,502		3,431
Non-cash interest expense on capital lease obligation	—		5,098		6,986
Non-cash interest expense on finance lease obligation	5,736		—		—
Non-cash operating lease expense	30,796		—		—
Non-cash portion of gain on lease modification	(2,175)		—		—
Amortization of deferred rent incentive	—		(281)		(1,766)
Amortization of deferred sale lease-back gain	—		(1,015)		(1,204)
Deferred income taxes	(86,478)		(6,879)		(1,418)
Share-based compensation	15,742		50,236		3,164
Distributions from joint venture	445		401		210
Change in fair value of earnout liability	85,352		25,800		—
Change in fair value of warrant liability	—		26,840		—
Change in fair value of marketable securities	(852)		—		—
Changes in assets and liabilities, net of business acquisitions:
Accounts receivable and notes receivable, net	(561)		(1,928)		458
Inventories	(1,007)		(1,925)		(137)
Prepaid expenses, other current assets and other assets	(3,106)		(6,301)		(2,184)
Accounts payable and accrued expenses	3,370		(409)		40,073
Other current liabilities	(3,585)		6,677		725
Other long-term liabilities	(19,533)		2,678		44,387
Net cash provided by operating activities	217,787		177,670		58,232

Investing activities
Purchases of property and equipment	(149,331)		(162,371)		(43,137)
Purchases of intangible assets	(206)		(2,427)		(60)
Proceeds from sale of property and equipment	6,931		17,105		1,273
Proceeds from sale of intangibles	200		—		140
Purchase of marketable securities	(44,855)		—		—
Proceeds from sale of marketable securities	45,707		—		—
Acquisitions, net of cash acquired	(111,664)		(72,652)		(4,892)
Net cash used in investing activities	(253,218)		(220,345)		(46,676)

Bowlero Corp.

Consolidated Statements of Cash Flows

Fiscal Years Ended July 2, 2023, July 3, 2022 and June 27, 2021

(Amounts in thousands)


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Financing activities
Repurchase of treasury stock	$	(96,004)	$	(31,463)	$	—
Repurchase of warrants	—		(5,375)		—
Repurchase of Series A preferred stock - Old Bowlero	—		(145,298)		—
Settlement of Series A preferred stock	(80,825)		—		—
Dividends on Series A preferred stock	(3,969)		—		—
Proceeds from issuance of Series A preferred stock	—		95,000		—
Proceeds from issuance of Class A common stock to Isos investors	—		94,413		—
Proceeds from share issuance	590		—		—
Transaction costs related to Merger recapitalization	—		(20,670)		—
Proceeds from PIPE Investment	—		150,604		—
Proceeds from Forward Investment	—		100,000		—
Payment to existing shareholders of Old Bowlero	—		(226,000)		—
Payments for tax withholdings on share-based awards	(5,812)		(503)		—
Consideration paid to existing option holders of Old Bowlero	—		(15,467)		—
Settlement of contingent consideration	1,000		—		—
Proceeds from Amendment No. 8 Term Loan and Incremental Loan	1,150,000		—		—
Proceeds from Revolver draws	100,000		86,434		—
Payoff of First Lien Credit Facility Term Loan	(786,166)		—		—
Payment of long-term debt	(4,861)		(10,263)		(8,211)
Payment on finance leases	(903)		—		—
Payment of First Lien Credit Facility Revolver	—		(39,853)		—
Proceeds from equipment loans	15,418		—		—
Proceeds of Incremental Liquidity Facility	—		—		45,000
Payment of Incremental Liquidity Facility	—		(45,000)		—
Payoff of Revolver	(186,434)		—		—
Proceeds from sale-leaseback financing	10,363		—		—
Payment of deferred financing costs	(13,440)		(977)		(1,984)
Construction allowance receipts	—		2,282		—
Net cash provided by (used in) financing activities	98,957		(12,136)		34,805

Effect of exchange rates on cash	(129)		(46)		27

Net increase (decrease) in cash and cash equivalents	63,397		(54,857)		46,388
Cash and cash equivalents at beginning of period	132,236		187,093		140,705
Cash and cash equivalents at end of period	$	195,633	$	132,236	$	187,093

See accompanying notes to consolidated financial statements.

Table of Contents

Index to Financial Statements

BOWLERO CORP.

Notes to Consolidated Financial Statements

(Amounts in thousands, except share amounts or otherwise noted)

(1) Description of Business

Bowlero Corp., a Delaware corporation, together with its subsidiaries (collectively, the “Company”) is the world’s largest operator of bowling entertainment centers.

The Company operates bowling centers under different brand names, including AMF and Bowlero. The AMF-branded centers are traditional bowling centers and the Bowlero-branded centers offer a more upscale entertainment concept with lounge seating, enhanced food and beverage offerings, and more robust customer service for individuals and group events. Additionally, within the brands, there exists a spectrum where some AMF branded centers are more upscale and some Bowlero branded centers are more traditional. All of our centers, regardless of branding, are managed in a fully integrated and consistent basis since all of our centers are in the same business of operating bowling entertainment. The following summarizes the Company’s centers by country and major brand as of the fiscal year ended July 2, 2023.


Bowlero			203
AMF & other			119
Total centers in the United States			322
Mexico (AMF)			4
Canada (AMF and Bowlero)			2
Total			328

Segment Information

The Company has one operating segment, which consists of operating a bowling entertainment business. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. Management continually assesses the Company’s operating structure, and this structure could be modified based on future circumstances and business conditions. Our CODM assesses performance based on consolidated as well as bowling center-level revenue and operating profit.

The Company attributes revenue to individual countries based on the Company’s bowling center locations. The Company’s bowling centers are located in the United States, Mexico, and Canada. The Company’s revenues generated outside of the United States for fiscal years 2023, 2022 and 2021 were not material. The Company’s long-lived assets located in Mexico and Canada are not material.

(2) Significant Accounting Policies

Basis of Presentation

Reverse Recapitalization: On December 15, 2021, (the “Closing Date”), the Company consummated the previously announced Business Combination pursuant to the Business Combination Agreement (“Business Combination Agreement”) dated as of July 1, 2021, by and among Bowlero Corp. prior to the Closing Date (“Old Bowlero”) and Isos Acquisition Corporation (“Isos”).

Notwithstanding the legal form of the Business Combination pursuant to the Business Combination Agreement, the Business Combination is accounted for as a reverse recapitalization. Under this method of accounting, Isos is treated as the acquired company and Old Bowlero is treated as the acquirer for accounting and financial statement reporting purposes.

Old Bowlero has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•Old Bowlero’s existing stockholders have the greatest voting interest in the Company;

•Old Bowlero’s existing stockholders have the ability to control decisions regarding election and removal of directors and officers of the Company;

•Old Bowlero comprises the ongoing operations of the Company;

Table of Contents

Index to Financial Statements

•Old Bowlero’s relevant measures, such as assets, revenues, cash flows and earnings, are higher than Isos’; and

•Old Bowlero’s existing senior management is the senior management of the Company.

As a result of Old Bowlero being the accounting acquirer, the financial reports filed with the Securities and Exchange Commission (“SEC”) by the Company subsequent to the Business Combination are prepared as if Old Bowlero is the predecessor and legal successor to the Company. The historical operations of Old Bowlero are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Old Bowlero prior to the Business Combination, (ii) the combined results of the Old Bowlero and Isos following the Business Combination on December 15, 2021, (iii) the assets and liabilities of Old Bowlero at their historical cost and (iv) the Company’s post-merger equity structure for all periods presented. The recapitalization of the number of shares of common stock and preferred stock attributable to the purchase of Bowlero Corp. in connection with the Business Combination is reflected retroactively to the earliest period presented and is utilized for calculating earnings per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the transaction as a reverse recapitalization of Isos.

In connection with the Business Combination, Isos changed its name to Bowlero Corp. The Company’s Class A common stock became listed on the NYSE under the symbol BOWL and warrants to purchase the Class A common stock became listed on the NYSE under the symbol BOWL.WS in lieu of the Isos ordinary shares and Isos’s warrants, respectively. Isos’ units automatically separated into the Isos ordinary shares and Isos’ warrants and ceased trading separately on the NYSE following the Closing Date. Prior to the Business Combination, Isos neither engaged in any operations nor generated any revenue. Until the Business Combination, based on Isos’ business activities, it was a shell company as defined under the Exchange Act.

The consolidated assets, liabilities and results of operations prior to the reverse recapitalization are those of the Company, thus the shares and corresponding capital amounts and losses per share, prior to the reverse recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 24.841 established in the Business Combination Agreement.

Principles of Consolidation: The consolidated financial statements and related notes include the accounts of Bowlero Corp. and the subsidiaries it controls. Control is determined based on ownership rights or, when applicable, based on whether the Company is considered to be the primary beneficiary of a variable interest entity. The Company’s interest in 20% to 50% owned companies that are not controlled are accounted for using the equity method, unless the Company does not sufficiently influence the management of the investee. All significant intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year: The Company reports on a fiscal year ending on the Sunday closest to June 30th with each quarter generally comprising thirteen weeks. Fiscal year 2023 contained fifty-two weeks and ended on July 2, 2023. Fiscal year 2022 contained fifty-three weeks and ended on July 3, 2022, and the 53rd week fell within the fourth quarter. Fiscal year 2021 contained fifty-two weeks and ended on June 27, 2021.

Reclassification: Certain amounts reported within our prior year consolidated balance sheet have been reclassified to conform to current year presentation. Accounts payable and Accrued expenses were presented separately within our prior year consolidated balance sheet. Accounts payable and Accrued expenses are now presented in aggregate as Accounts payable and accrued expenses.

Use of Estimates: The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the balance sheets, statement of operations and accompanying notes. Significant estimates made by management include, but are not limited to, cash flow projections; the fair value of assets and liabilities in acquisitions; derivatives with hedge accounting; stock based compensation; depreciation and impairment of long-lived assets; carrying amount and recoverability analyses of property and equipment, assets held for sale, goodwill and other intangible assets; valuation of deferred tax assets and liabilities and income tax uncertainties; and reserves for litigation, claims and self-insurance costs. Actual results could differ from those estimates.

Fair-value Estimates: We have various financial instruments included in our financial statements. Financial instruments are carried in our financial statements at either cost or fair value. We estimate fair value of assets using the following hierarchy using the highest level possible:

Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.

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Level 2: Observable prices that are based on inputs not quoted on active markets, but are corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

Cash and Cash Equivalents: The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents. The Company had cash equivalents of $166,510 and $88,067 at July 2, 2023 and July 3, 2022, respectively. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash equivalents. Amounts due from the banks for these transactions classified as cash equivalents totaled $9,066 and $8,688 at July 2, 2023 and July 3, 2022, respectively.

Marketable Securities: Our investments in marketable equity securities are measured at fair value with the related gains and losses, including unrealized, recognized in other expense.

Accounts Receivable: The Company records accounts receivable at the invoiced amount. Accounts receivable do not bear interest unless specified in a formal agreement. An allowance for doubtful accounts is provided based on management’s best estimate of the amount of probable credit losses in the existing accounts receivable. The Company determines the allowance based on a number of factors, including historical write-off experience and its knowledge of specific customer accounts. Past-due balances meeting specific criteria are reviewed individually for collectability. The Company reviews all other balances on a pooled basis. Accounts are written off once collection efforts have been exhausted and the potential for recovery is considered remote. Actual uncollectable accounts could exceed the Company’s estimates, and changes to estimates are accounted for in the period of change. The Company does not have any off-balance sheet credit exposures to its customers.

Inventories: Inventory, which includes operational items such as food and beverages, is valued at the lower of cost or net realizable value on a first-in, first-out basis.

Prepaid Expenses and Other Current Assets: Prepaid expenses consists primarily of payments made for goods and services to be received in the near future. Prepaid expenses consists of prepaid rents, sales tax, insurance premiums, deposits, and other costs. Other current assets of $5,892 and $676 at July 2, 2023 and July 3, 2022, respectively, are included with prepaid expenses on our consolidated balance sheets.

Property and Equipment: Property and equipment are recorded at cost. Depreciation is calculated principally on the straight-line method based on the estimated useful lives of individual assets or classes of assets.

Leasehold improvements are recorded at cost. Amortization of leasehold improvements is calculated principally on the straight-line method over the lesser of the estimated useful life of the leasehold improvement or the lease term. Renewal periods are included in the lease term when the renewal is determined to be reasonably assured.

Internal costs, including compensation and employee benefits for employees directly associated with capital projects, are capitalized and amortized over the estimated useful life of the asset.

Estimated useful lives of property and equipment are as follows:


Buildings and improvements			2 – 39 years
Leasehold improvements			lesser of asset’s useful life or lease term (1 month– 15 years)
Equipment, furniture, and fixtures			2 – 15 years

Expenditures for routine maintenance and repairs that do not improve or extend the life of an asset are expensed as incurred. Improvements are capitalized and amortized over the lesser of the remaining life of the asset or, if applicable, the lease term. Upon retirement or sale of an asset, its cost and related accumulated depreciation are removed from property and equipment and any gain or loss is recognized.

The Company’s policy is to capitalize interest cost incurred on debt during the construction of major projects. Interest costs are capitalizable for all assets that require a period of time to get them ready for their intended use (an acquisition period). The amount capitalized in an accounting period is determined by applying the capitalization rate to the accumulated expenditures for the asset during the period. The capitalization rate used is based on the rates applicable to borrowings outstanding during the construction period.

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Leases under ASC 842: The Company determines if a contract is or contains a lease at contract inception or on the modification date of an existing contract.

The Company has leasing arrangements that contain both lease and non-lease components. Our lease components primarily include the building and land for bowling entertainment centers, and our non-lease components primarily include common area maintenance and utilities for these real estate leases. We account for both the lease and non-lease components as a single component for all classes of underlying assets.

The Company has three master lease agreements with a single landlord covering over 200 bowling centers. Two of those master leases contain initial terms ending in 2047 with 8 renewal options for 10 years each. The third master lease contains an initial term ending in 2044 with 8 renewal options for 10 years each.

The master lease agreements contain restrictions and covenants such as the following:

a.Requirements to comply with certain covenants, which, if not met, would require the Company to maintain cash security or provide letters of credit in favor of the landlord in amounts up to 1 year in rent, depending on the circumstances.

b.Options that allow the landlord to purchase and lease back the bowling equipment at each site in the event that certain requirements are not met

c.Certain restrictions on investments, payments, and acquisitions, in the event predefined financial metrics aren’t met

Right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date of the lease based on the present value of the future lease payments over the remaining lease term. Only fixed lease payments are included in the lease liability. At the lease commencement, the ROU asset is measured based on the present value of the lease liability plus any initial direct costs and/or prepaid lease payments, and deducting any lease incentives. For business combinations, the right-of-use asset is adjusted based on favorability or unfavorability of acquired leases.

The Company’s fixed lease payments primarily include base rent and lease incentives for tenant improvements. Our leases also include the following variable costs: common area maintenance, utilities, real estate taxes, property insurance, variable payments based on a percentage of sales or based on reaching pre-defined sales thresholds. Some leases contain lease payments that depend on indices or fair market value rent. A change in the index or fair market rent rate does not result in the remeasurement of the lease liability or ROU asset. The additional lease payments related to the index or fair market rent rate increases are recognized as variable payments in the period in which they occur. However, if we remeasure the lease payments, then we are required to remeasure the lease payments that depend on an index or a rate by using the index or fair market rent rate in effect on the remeasurement date.

Outside of the master leases, the initial lease terms for our real estate leases are generally 10-15 years with renewal options for periods up to five years each. The options to extend are generally not considered reasonably certain at lease commencement, however, the Company reevaluates our leases on a regular basis to determine if recent strategic changes or capital expenditures have resulted in incentives or penalties to renew or not renew a particular lease. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet.

In determining the present value of lease payments, the Company utilizes its incremental borrowing rate unless the rate implicit in the lease is readily determinable. For our leases, the rate implicit in the lease is generally not available, so we use the incremental borrowing rate. The incremental borrowing rate represents the estimated interest rate for collateralized borrowings over a similar term in a similar economic environment at the commencement date or modification date for a lease. To calculate the incremental borrowing rate, the Company considers both the credit notching and recovery rate methods and makes adjustments based on benchmarking to our debt instruments.

Operating lease costs are recorded as rent expense, which are primarily included within Cost of Revenues, within the Consolidated Statements of Operations and presented as operating cash outflows within the Consolidated Statements of Cash Flows.

Finance lease costs are recorded as interest expense and amortization expense, which is primarily included within Costs of Revenues within the Consolidated Statements of Operations. Principal payments associated with finance leases are presented as financing cash outflows and cash payments for interest associated with finance leases are presented as operating cash outflows within our Consolidated Statements of Cash Flows.

The current portion of the lease liability is equal to the amount by which the total lease liability will be reduced over the next 12 periods.

The Company’s leases do not contain material residual value guarantees.

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Financing Obligations: When the Company enters into a contract to sell an asset and leases it back from the purchaser under a sale and leaseback transaction, we must determine whether control of the asset has transferred. In cases whereby control has not transferred, we continue to recognize the underlying asset within Property and equipment, net within the Consolidated Balance Sheets, which is then depreciated over the shorter of the remaining useful life or lease term. Additionally, a financial liability is recognized and referred to as a financing obligation and is accounted for similarly to debt or finance leases. The Company recognizes interest expense related to a financing obligation under the effective interest method. Variable payments are recorded as interest expense as incurred. Principal payments associated with financing obligations are presented as financing cash outflows and interest payments associated with financing obligations are presented as operating cash outflows within our Consolidated Statements of Cash Flows. The current portion of the liability is equal to the amount by which the total liability will be reduced over the next 12 periods.

Tenant Improvement Incentives — The Company has leasehold improvement allowances of $14,254 as of July 3, 2022 from landlords recorded as liabilities in other current liabilities and other long-term liabilities and amortized as a reduction of rent expense over the life of the lease prior to the adoption of the new lease accounting standard. Effective as of the adoption date of the new lease accounting standard, the remaining balance of this liability was reclassified into the ROU asset.

Internal Use Software: We capitalize qualifying software costs incurred during the “application development stage” when the preliminary project stage has been completed, management has authorized the project, and it is probable that the project will be completed. The estimated useful life of internal-use software is between three and five years.

Costs related to the development or purchase of internal-use software are capitalized and depreciated over the estimated useful life of the software. Costs that are capitalized include external direct costs of materials and services to develop or obtain the software, interest, and internal costs, including compensation and employee benefits for employees directly associated with a software development project. As of July 2, 2023 and July 3, 2022, the Company has recognized internal use software, net of amortization, of $17,914 and $11,423, respectively.

The following table shows amortization related to internal use software for each reporting period:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Amortization expense	$	3,019	$	3,298	$	2,400

Goodwill and Intangible Assets: Goodwill is recognized for the excess of the purchase price over the fair value of assets acquired and liabilities assumed of businesses acquired.

Indefinite-lived intangible assets include liquor licenses and the Bowlero and Professional Bowlers Association (PBA) trade names. The cost of purchasing liquor licenses in quota controlled states are capitalized as indefinite lived intangible assets. Because the number of liquor licenses in a quota controlled state are based on the population count, the values ascribed to these liquor licenses are primarily dependent on the supply and demand in the particular jurisdictions in which they are issued. Liquor licenses are an intangible asset which are not assigned a useful life and not amortized. Bowlero is the corporate name of the Company and the brand name associated with many of the Company’s bowling centers. Professional Bowlers Association is the brand name of the entity owned by the Company associated with the main sanctioning body for ten-pin bowling. The fair value of the trade names stems from the customer appeal and revenue streams derived from these brands.

Finite-lived intangible assets primarily include AMF and other acquired trade names, customer relationships and management contracts, which have remaining useful lives ranging from 1 to 8 years. Finite-lived intangible assets are amortized based on the pattern in which the economic benefits are used or on a straight-line basis.

Impairment of Goodwill, Intangible and Long-Lived Assets: Goodwill is tested at least annually for impairment at the reporting unit level. The Company has determined it has one reporting unit, operating a bowling entertainment business.

We perform our annual impairment testing on the first day of our fiscal fourth quarter of each year. When evaluating goodwill and tradenames for impairment, the Company first performs a qualitative assessment to determine whether it is more likely than not that its reporting unit or tradenames are impaired. For fiscal 2023, the Company performed a qualitative assessment of goodwill and concluded it was not more likely than not that the fair value of the reporting unit was less than its carrying value. There were no impairment charges for goodwill or indefinite-lived intangible assets, excluding liquor licenses, recorded in fiscal years 2023, 2022 and 2021.

For long-lived assets (such as property and equipment, ROU assets and other definite-lived intangibles), an impairment is indicated whenever events or changes in circumstances indicate that the asset or asset group’s carrying value may not be recoverable. An asset group may not be recoverable if the total estimated undiscounted cash flows associated with the use and eventual disposition of the asset group is less than its carrying value.

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If the asset group isn’t recoverable and the fair value is less than its carrying value, then an impairment exists and an adjustment is made to write down the asset to its fair value. We estimated the fair value of these assets utilizing either an income approach that projects the total cash flows from use and eventual disposition of the asset group discounted using a risk adjusted discount rate, or a market based approach using orderly liquidation values or broker quotes for sale of similar properties.

The following table shows recognized impairment charges related to long-lived assets and liquor license for each reporting period:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Impairment charges	$	1,601	$	1,548	$	386

Derivatives: We are exposed to interest rate risk. To manage this risk, we entered into interest rate collar derivative transactions associated with a portion of our outstanding debt. The interest rate collars, which are designated for accounting purposes as cash flow hedges, establish a cap and floor on the Secured Overnight Financing Rate (SOFR). The Company's interest rate collars expire on March 31, 2026.

For financial derivative instruments that are designated as a cash flow hedge for accounting purposes, the effective portion of the gain or loss on the financial derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction, and in the same period or periods during which the forecasted transaction affects earnings. Gains and losses on the financial derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

The interest rate collar agreements effectively modified our exposure to interest rate risk by converting a portion of our interest payments on floating rate debt to include a cap and floor, thus reducing the impact of interest rate changes on future interest expense. See Note 9 - Debt for more information.

Self-Insurance Programs: The Company is self-insured for a portion of its property, general liability, workers’ compensation and certain health care exposures. We also purchase stop-loss insurance coverage through third-party insurers. The undiscounted costs of these self-insurance programs are accrued based upon estimates of settlements and costs for known and anticipated claims. For claims that exceed the deductible amount, the Company records a receivable representing expected recoveries pursuant to the stop-loss coverage and a corresponding gross liability for its legal obligation to the claimant, since the Company is not legally relieved of our obligation to the claimant. The Company recorded gross estimated liabilities of $18,050 and $15,797 at July 2, 2023 and July 3, 2022, respectively, to cover known general liability, health and workers’ compensation claims, and the estimate of claims incurred but not reported. Corresponding stop-loss receivables for expected recoveries of self-insured claims in the amounts of $4,374 and $4,414 were recorded at July 2, 2023 and July 3, 2022, respectively.

The short-term portion of the self-insurance liabilities is included in accrued expenses in the accompanying consolidated balance sheets. The long-term portion is included in other long-term liabilities in the accompanying consolidated balance sheets. The stop-loss receivable is included in other assets.

Income Taxes: The Company utilizes the asset and liability approach in accounting for income taxes. We recognize income taxes in each of the jurisdictions in which we have a presence. For each jurisdiction, we estimate the amount of income taxes currently payable or receivable, as well as deferred income tax assets and liabilities. Deferred tax assets and liabilities are recorded to recognize the expected future tax benefits or costs of events that have been, or will be, reported in different years for financial statement purposes than tax purposes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which these items are expected to reverse. We review our deferred tax assets to determine if it is more-likely-than-not that they will be realized. If we determine it is not more-likely-than-not that a deferred tax asset will be realized, we record a valuation allowance to reverse the previously recognized tax benefit.

The Company recognizes tax benefits related to uncertain tax positions if we believe it is more likely than not the benefit will be realized. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs.

The U.S. federal, and in general, state and local returns are open to examination for the fiscal year ended June 28, 2020 and thereafter. The net operating loss carryforwards starting from the tax year ended December 31, 2004 and certain tax years thereafter are also open to examination.

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Canada and Mexico income tax returns are open to examination for the tax year ending June 30, 2019 and for the local tax year ended December 31, 2018, respectively.

Excise Tax: On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into Federal law. The IRA provides for, among other things, a new U.S. Federal 1% nondeductible excise tax on certain repurchases of stock by publicly-traded U.S. domestic corporations occurring after December 31, 2022. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased. For purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain stock issuances against the fair market value of stock repurchases during the same taxable year, with certain exceptions. For the fiscal year ended July 2, 2023, we recognized $1,578 in excise tax related to the IRA, which was included in treasury stock due to repurchases and additional paid in capital (“APIC”) for the settlement of preferred stock for cash.

Revenue Recognition: The following table presents the Company’s revenue disaggregated by major revenue categories:


	Fiscal Year Ended
	July 2, 2023		% of revenues		July 3, 2022		% of revenues		June 27, 2021		% of revenues
Major revenue categories:
Bowling	$	518,428	49	%	$	452,349	50	%	$	203,730	52	%
Food and beverage	372,607		35	%	321,441		35	%	128,393		32	%
Amusement and other	144,208		14	%	118,940		13	%	48,414		12	%
Media	23,547		2	%	18,975		2	%	14,697		4	%
Total revenues	$	1,058,790	100	%	$	911,705	100	%	$	395,234	100	%

Bowling revenue — The Company recognizes revenue for providing bowling services to customers in exchange for consideration that is recognized as revenue on the day that the services are performed. Any prepayments for bowling revenue are recognized as deferred revenue and recognized when earned.

Food and beverage revenue — Sales of food and beverages at our bowling centers are recognized at a point-in-time.

Amusement and other revenue — Amusement and other revenue includes amounts earned through arcades and other games, as well as other revenue generating sources that contribute to the entertainment experience through events and other activities. Similar to bowling and food and beverage revenue, almost all of our revenue is earned at a point-in-time.

Media revenue — The Company earns media revenue from sanctioning official PBA tournaments and licensing media content to our customers, which include television networks and multi-year contracts. The Company considers each tournament as a separate performance obligation because each tournament’s pricing is negotiated separately and represents its stand-alone selling price based on the terms of the contract and the relative nature of the services provided. Media revenue is generated through producing and licensing distribution rights to customers, which is recognized at the point-in-time the Company produces and delivers programming for a respective tournament. Tournament revenue includes sponsorships, entry and host fees. Fees received for sponsorships and tournaments are recognized as deferred revenue until the respective tournament occurs, at which point, the Company recognizes those fees as revenue.

Other revenue recognition policies: The Company sells gift and game cards that do not expire. Gift and game card revenue is recognized as gift and game cards or game-play tokens are redeemed by customers. The Company accrues unearned revenue as a liability for the unredeemed tickets that may be redeemed or used in the future. Gift and game card sales are recorded as an unearned gift and game card revenue liability when sold. Unearned gift and game card revenue or deferred revenue is reported in accrued expenses in the consolidated balance sheets and is disclosed in Note 8 - Accounts Payable and Accrued Expenses.

From time to time, the Company offers discount vouchers through outside vendors. Revenue for these vouchers is recognized as revenue when the voucher is redeemed by the guest or as breakage on a pro-rated basis based on historical redemption patterns. Revenue is recognized for the gross amount paid by customers for purchased vouchers. The fee paid to the outside vendors, in the form of the discount, is recognized in cost of revenues. We recognize this revenue on a gross basis, as we are responsible for providing the service desired by the customer.

Costs of Revenues: The Company’s costs of revenues all relate to center operations and are comprised primarily of fixed costs that are not variable or less variable with changes in revenues, and include depreciation, amortization, property taxes, supplies, insurance, fixed rent, and utilities.

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Variable costs included within costs of revenues primarily comprise labor, food and beverage costs, supplies, prize funds, variable rent, tournament production expenses and amusement costs.

Selling, General and Administrative Expenses (“SG&A”): SG&A expenses are comprised primarily of employee costs, media and promotional expenses, and depreciation and amortization (excluding those related to our center operations), and other miscellaneous expenses. A portion of SG&A costs are not variable in nature and do not fluctuate significantly with changes in revenue, and include such expenses as depreciation, amortization and certain compensation.

Other Operating Expenses: Other operating expenses comprise various costs primarily driven by professional fees and transactional related expenses associated with, among other things, business acquisitions, and foreign currency gains/losses.

Share-Based Compensation: Stock based compensation is recorded based on the grant-date fair value. Bowlero Corp. recognizes share-based compensation on a straight-line basis or based on a graded vesting schedule over the requisite service period for time-based awards and recognizes the cost for performance-based awards upon meeting performance targets. The Company does not recognize the effect of forfeitures until they occur. All compensation expense for an award is recognized by the time it becomes fully vested. Stock based compensation is recorded in cost of revenues and selling, general and administrative expenses in the consolidated statements of operations based on the employees’ respective functions. The Company records deferred tax assets for awards that may result in deductions on the Company’s income tax returns, based on the amount of compensation cost recognized and the Company’s statutory tax rate in the jurisdiction in which it will receive a deduction.

Advertising and Television Costs: Costs for advertising are expensed when incurred and recorded as operating expenses. Advertising expense is included within costs of revenues on the consolidated statements of operations. Television spending, including costs associated with bowling tournaments that are televised, are capitalized as prepaid costs and expensed at the time the event takes place.

The following table shows advertising expense for each reporting period:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Advertising expense	$	7,016	$	3,942	$	3,576

Foreign Currency Translation: The Company’s financial statements are reported in U.S. dollars. Our foreign subsidiaries maintain their records in the currency of the country in which they operate.

Assets and liabilities of foreign subsidiaries are translated into U.S. dollars using rates of exchange at the balance sheet date. Translation adjustments are recorded in other comprehensive income (loss). Revenues and expenses are translated at rates of exchange in effect during the year. Transaction gains and losses are recorded in net income (loss).

Commitments and contingencies: Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Business Interruption Insurance: The Company recognized $20,188 of business interruption insurance recoveries as other operating income in the consolidated statement of operations during fiscal year 2021, as a result of the insured claim resulting from the temporarily suspension of operations in compliance with local, state, and federal governmental restrictions to prevent the spread of the COVID-19.

Series A Preferred Stock: As part of the reverse recapitalization, the Company issued redeemable Preferred Stock that is classified in temporary equity as certain redemption provisions are not solely within the control of the Company. The pre-merger preferred stock was classified as temporary equity and settled on the Closing Date. Please refer to Note 15 - Common Stock, Preferred Stock and Stockholders' Equity for more details.

Net Income (Loss) Per Share Attributable to Common Stockholders: We compute net loss per share of Class A common stock and Class B common stock under the two-class method. Holders of Class A common stock and Class B common stock have equal rights to the earnings of the Company. Our participating securities include the redeemable convertible preferred stock that have a non-forfeitable right to dividends in the event that a dividend is paid on common stock, but do not participate in losses, and thus are not included in a two-class method in periods of loss. For those periods in which the Company has reported net losses, all potentially dilutive securities have been excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect is antidilutive and accordingly, basic and diluted net loss per share attributable to common stockholders is the same for those periods presented. Dilutive securities include convertible preferred stock, warrants, earnouts, stock options, and restricted stock units (“RSUs”).

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See Note 17 - Net Income (Loss) Per Share.

Earnouts: Following the Closing Date, Isos and Bowlero equity holders at the effective time of the Business Combination have the contingent right to receive shares of Class A common stock if, from the Closing Date until the fifth anniversary thereof, the reported closing trading price of the Class A common stock exceeds certain thresholds. As of the Closing Date, since earnouts are subject to change in control acceleration provisions, that result in settlement value not fully indexed to share price, the earnout shares are reported as a liability in the consolidated balance sheets. Changes in the value of earnouts are recorded as a non-operating item in the consolidated statements of operations. Those earnout shares not classified as a liability are classified as equity compensation to employees. The fair value of the earnout shares are estimated by utilizing a Monte-Carlo simulation model. Inputs that have a significant effect on the earnout shares valuation include the expected volatility, stock price, expected term, risk-free interest rate and the performance hurdles. The Company evaluated its earnouts under FASB Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that they do not meet the criteria to be classified in stockholders’ equity. Since these earnouts meet the definition of a derivative under ASC 815, the Company records these earnouts as long-term liabilities on the balance sheet at fair value upon the Closing Date, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date. See Note 13 - Earnouts and Note 14 - Fair Value of Financial Instruments for further information.

Warrants: Previously outstanding warrants consisted of public warrants and private warrants, including warrants issued by Isos which continued to exist following the Closing Date and warrants issued by the Company on the Closing Date. The outstanding warrants were accounted for as freestanding financial instruments and were classified as liabilities on the Company’s consolidated balance sheets. The estimated fair value of the warrants is described in Note 12 - Warrants . Changes in the value of warrants were recorded as a non-operating item in the statements of operations. The Company evaluated its warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that they did not meet the criteria to be classified in stockholders’ equity. Since these warrants met the definition of a derivative under ASC 815, the Company recorded these warrants as long-term liabilities on the balance sheet at fair value upon the Closing Date, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date. The Company completed the redemption of all outstanding publicly traded and privately held warrants on May 16, 2022.

Emerging Growth Company Status: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Recently Adopted Accounting Standards: In February 2016, the FASB issued ASU No. 2016-02, Leases (“Topic 842”). Following ASU 2016-02, the Financial Accounting Standards Board (“FASB”) issued subsequent guidance and amendments including ASU 2017-13, 2018-01, 2018-11, 2018-20, 2019-01, and 2020-05 (collectively, including ASU 2016-02, “Topic 842” or “ASC 842”). Topic 842 replaced the guidance in Topic 840. The main objectives are to increase transparency and comparability among organizations by recognizing right-of-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The right-of-use asset reflects the lessee’s right to direct the use of and obtain substantially all the economic benefits from that asset over the lease term, and it will be based on the lease liability at commencement, subject to certain adjustments such as accrued rent, lease incentives, lease intangibles, initial direct costs and prepaid rent. The lease liability reflects the obligation to make payments for the right to use that asset, which is the present value of future payments. Operating leases will remain being expensed on the straight-line basis of the lease, and finance leases will retain their front-loaded expense pattern, similar to current capital leases.

The Company adopted this new accounting standard using the modified retrospective method as of the effective date of July 4, 2022. We applied the new standard to all leases through a cumulative-effect adjustment to beginning retained earnings. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods.

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The Company elected the package of practical expedients, which permits us to not reassess our prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect to use the hindsight or the land easement practical expedient.

The new standard also provides ongoing practical expedients such as the short-term lease recognition exemption, which will primarily be applied to our non-real estate leases. This means that for those leases that qualify, we will not recognize ROU assets or lease liabilities. We will also elect to not separate lease and non-lease components for all classes of underlying assets

Adoption of the new standard had a material impact on the Company’s consolidated balance sheet, but did not materially impact the Company’s consolidated operating results and had no impact on the Company’s cash flows.

The adoption of the new standard as of July 4, 2022, resulted in an after-tax cumulative effect change to retained earnings of $11,144. Total assets and liabilities increased $450,029 and $438,885, respectively, primarily driven from adding operating leases.

Recently Issued Accounting Standards: The Company reviewed the accounting pronouncements that were issued and/or that became effective for our fiscal year 2023. We determined that either they were not applicable, or they would not have a material impact on the consolidated financial statements.

(3) Business Combinations and Acquisitions

Business Combination: For accounting purposes, the Business Combination was treated as the equivalent of Bowlero Corp. issuing stock for the net assets of Isos, accompanied by a recapitalization. The following summarizes the elements of the Business Combination to the consolidated statement of cash flows, including the transaction funding, sources and uses of cash, and merger-related earnouts and warrants:


	Recapitalization
Cash-Isos Acquisition Corporation Trust	$	254,851
Less: Isos transaction costs paid from Trust	(23,869)
Less: Redemptions of existing shareholders of Isos	(136,569)
Net cash proceeds from SPAC shareholders	$	94,413

Cash-PIPE issuance	$	150,604
Cash-Forward issuance	100,000
Net cash proceeds from SPAC shareholders	94,413
Cash-Preferred issuance	95,000
Less: Bowlero transaction costs	(20,670)
Total cash received, net of transaction costs	419,347

Payoff of preferred stock and accumulated dividends	(145,298)
Consideration to existing Bowlero shareholders	(226,000)
Consideration to Bowlero option holders	(15,467)
Total distributions	(386,765)
Net cash received	$	32,582

Earnout liability	$	181,113
Warrant liability	22,426
Total liabilities recognized	$	203,539

After making adjustments to the issuance of the Business Combination consideration shares, the redemption of the Isos ordinary shares, the consummation of the PIPE Offerings and the Forward Purchase Contract, the roll-over of vested options and the withholding of 1,068,884 shares for tax obligations from certain current and former employees and the conversion of common shares to preferred shares, there were 165,378,145 shares of the Common Stock issued and outstanding as of the Closing Date, of which 107,066,302 shares were Class A common stock and 58,311,203 shares were Class B common stock.

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There were 17,225,692 warrants outstanding as of the Closing Date.

In fiscal year 2022, the Company expensed $2,956 in transaction costs for amounts allocated to that portion of the earnouts related to Bowlero rather than as an offset to equity.

Acquisitions: The Company continually evaluates potential acquisitions, which can be either business combinations or asset purchases, that strategically fit within the Company’s existing portfolio of centers as a key part of the Company’s overall growth strategy in order to expand our market share in key geographic areas, and to improve our ability to leverage our fixed costs.

Acquisitions that meet the definition of a business under ASC 805, “Business Combinations,” are accounted for using the acquisition method of accounting. The Company estimates the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date for business combinations and utilizes valuation specialists to assist in doing so. For business combinations, we will continue to evaluate and refine the estimates used to record the fair value of the assets acquired and liabilities assumed throughout the permitted measurement period, which may result in corresponding offsets to goodwill in future periods. We expect to finalize the valuations as soon as possible, but no later than one year from the acquisition dates.

The goodwill acquired in the business combinations represents:

•the value of an assembled workforce

•future earnings and cash flow potential of these businesses, and

•the complementary strategic fit and resulting synergies these businesses bring to existing operations

From the business acquisitions during fiscal year 2023 and 2022, $11,422 and $8,097, respectively, of the goodwill recognized is deductible for tax purposes.

Acquisitions that do not meet the definition of a business under ASC 805 are accounted for as an asset acquisition, using a cost accumulation model. Assets acquired and liabilities assumed are recognized at cost, which is the consideration the acquirer transfers to the seller, including direct transaction costs, on the acquisition date. The cost of the acquisition is then allocated to the assets acquired based on their relative fair values. Goodwill is not recognized in an asset acquisition.

The Company’s accounting for the allocations of the purchase price for the acquisitions of bowling businesses that were treated as business combinations at the dates of the respective acquisitions is based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources.

2023 Business Acquisitions: The Company acquired sixteen bowling entertainment centers in fiscal year 2023 for aggregate consideration of $111,664. The Company’s consolidated financial statements reflect final and preliminary allocations of the purchase price of each acquisition to its assets and liabilities assumed based on respective fair values as of the date of each acquisition. The aggregate consideration of acquisitions with final purchase price allocations was $83,454. Three business acquisitions occurred in the fourth quarter of fiscal 2023 for which only preliminary purchase allocations are available. The aggregate consideration for these acquisitions was $28,210. The Company’s preliminary estimate of the fair value of specifically identifiable assets acquired and liabilities assumed as of the date those acquisitions is subject to change upon finalizing its valuation analysis. The remaining fair value estimates to finalize include working capital, intangibles, and property and equipment. The final determination, which is expected to be finalized in fiscal year 2024, may result in changes in the fair value of certain assets and liabilities as compared to these preliminary estimates.

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The following table summarizes the final and preliminary purchase price allocations for the fair values of the identifiable assets acquired, components of consideration transferred and the transactional related expenses using the acquisition method of accounting:


Identifiable assets acquired and liabilities assumed	Final		Preliminary		Total
Current assets	$	122	$	29	$	151
Property and equipment	70,565		24,221		94,786
Operating Lease ROU	5,031		—		5,031
Finance Lease ROU	6,445		—		6,445
Identifiable intangible assets	4,680		770		5,450
Goodwill	7,901		3,308		11,209
Total assets acquired	94,744		28,328		123,072

Current liabilities	(974)		(118)		(1,092)
Operating Lease Liabilities	(3,871)		—		(3,871)
Finance Lease Liabilities	(6,445)		—		(6,445)
Total liabilities assumed	(11,290)		(118)		(11,408)
Total fair value, net of cash acquired of $81	$	83,454	$	28,210	$	111,664

Components of consideration transferred
Cash	$	80,339	$	27,245	$	107,584
Holdback	3,115		965		4,080
Total consideration transferred	$	83,454	$	28,210	$	111,664
Transaction expenses included in “other operating expense” in the consolidated statement of operations for fiscal year 2023	$	571	$	377	$	948

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2022 Business Acquisitions: The Company acquired eight bowling businesses (“2022 Business Combination”) in fiscal year 2022 for a total consideration of $72,737. The balance sheets reflect assets acquired and liabilities assumed recorded at fair values and resulting recognition of goodwill.

The following table summarizes the purchase price allocation for the fair values of the identifiable assets acquired, components of consideration transferred and the transactional related expenses using the acquisition method of accounting:


Identifiable assets acquired and liabilities assumed	Total
Current assets	$	2,547
Property and equipment	50,011
Identifiable intangible assets	4,020
Goodwill	16,706
Total assets acquired	73,284

Current liabilities	(547)
Total liabilities assumed	(547)
Total fair value, net of cash acquired of $49	$	72,737

Components of consideration transferred
Cash	$	69,259
Holdback	2,008
Contingent consideration	1,470
Total	$	72,737
Transaction expenses included in "other operating expense" in the consolidated statement of operations for fiscal year 2022	$	1,121

2022 Asset Acquisitions: The following table summarizes the application of the cost accumulation model to acquired bowling centers treated as asset acquisitions:


Identifiable assets acquired and liabilities assumed	Bowl America		Other Asset Acquisition		Total
Current assets	$	2,949	$	5	$	2,954
Property and equipment	40,121		8,564		48,685
Identifiable intangible assets	1,099		1,136		2,235
Assets held for sale	10,985		—		10,985
Current liabilities	(1,426)		(81)		(1,507)
Deferred tax liability	(9,107)		—		(9,107)
Total consideration transferred	$	44,621	$	9,624	$	54,245

The following summarizes key valuation approaches and assumptions utilized in calculating the fair values for Business Combinations and Asset Acquisitions, which are accounted for under the acquisition method of accounting and cost accumulation model, respectively:

Property and equipment — Buildings, improvements, and equipment are valued using the cost approach and land is valued at its highest and best use by the market or sales comparison approach. The fair value of tangible personal property was determined primarily using variations of the cost approach. Certain assets with an active secondary market were valued using the market approach. The current use of certain nonfinancial assets acquired differed from their highest and best use, due to local market conditions, the value of the land exceeding the combined fair values of the land and building, and zoning and commercial viability of the surrounding area. The valuation inputs used to determine the fair value of the land and building are based on level 3 inputs, including discount rates, sales projections, and future cash flows.

Assets held for sale — We utilize a valuation specialist to assist with our determination of the assets held for sale estimated fair value less costs to sell, using a market approach. These inputs are classified as level 2 fair value measurements.

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Intangible assets — We acquired intangible assets including trade names, non-competition agreements, customer relationships, and liquor licenses.

–Trade names: Trade names are recognized during Business Combinations and Asset Acquisitions using the relief-from-royalty method, which is considered a Level 3 fair value measurement due to the use of unobservable inputs. Significant assumptions used in the calculation include: revenue projections, a royalty rate based on qualitative factors and the market-derived royalty rates, discount rate based on the Company’s weighted average cost of capital (WACC) adjusted for risks commonly inherent in trade names.

–Non-Competition: Non-compete agreements are recognized during Business Combinations and Asset Acquisitions. The Company records the fair value of non-competition agreements using the differential discounted cash flow method income approach, a Level 3 fair value measurement due to the use of unobservable inputs. Significant assumptions used in the fair value calculations for non-competition agreements include: potential competitor impact on revenue and expense projections, discount rate based on the Company’s WACC adjusted for risks commonly inherent in intangible assets, specifically non-compete agreements.

–Customer relationships: The Company records customer relationships for bowling leagues for Business Combinations and Asset Acquisitions based on the fair value of relationships using the excess earnings income approach and discounted cash flow method, which are considered Level 3 fair value measurements due to the use of unobservable inputs. Significant assumptions used in the fair value calculations for relationships include: revenue and expense projections, customer retention rate for leagues, discount rate based on the Company’s WACC adjusted for risks inherent in intangible assets, specifically customer relationships and the remaining useful life.

–Liquor licenses: The Company records the fair value of brokered liquor licenses acquired in Business Combinations and Asset Acquisitions using the market approach. Significant assumptions used in the calculation include approximation based on recent sales of liquor licenses in the respective jurisdictions and assignment of an indefinite useful life as licenses do not expire and can be sold to third parties.

Contingent Consideration — A business combination during fiscal year 2022 included $1,470 of contingent consideration. The contingency depends on approvals by the local township that requires us to transfer real property in the event of certain decisions being made. During the fiscal year ended July 2, 2023, we settled the contingent consideration for $1,000. The contingent consideration was classified as level 3 on the fair value hierarchy.

Deferred Tax Liability – Since the Bowl America acquisition was a non-taxable stock acquisition, the Company recorded deferred tax liabilities for the difference between the tax carryover basis and the book value of the opening balances, which were recorded and allocated based on fair values to the respective assets acquired.

Notable 2024 Acquisition Agreement: In May 2023, the Company entered into a definitive agreement to acquire substantially all of the assets of Lucky Strike Entertainment, LLC (“Lucky Strike”) in an all-cash transaction valued at approximately $90,000 that is expected to close in fiscal year 2024.

(4) Goodwill and Other Intangible Assets

Goodwill:

The changes in the carrying amount of goodwill for the fiscal years ended July 2, 2023 and July 3, 2022:


Balance as of June 27, 2021	$	726,156
Goodwill resulting from acquisitions during fiscal year 2022	16,706
Adjustments to preliminary fair values for prior year acquisitions	(193)
Balance as of July 3, 2022	742,669
Goodwill resulting from acquisitions during fiscal year 2023	11,209
Adjustments to preliminary fair values for prior year acquisitions	(340)
Balance as of July 2, 2023	$	753,538

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Intangible Assets:


	July 2, 2023							July 3, 2022
	Weighted average life (in years)	Gross carrying amount		Accumulated amortization		Net carrying amount		Weighted average life (in years)	Gross carrying amount		Accumulated amortization		Net carrying amount
Finite-lived intangible assets:
AMF trade name	1	$	9,900	$	(9,253)	$	647	2	$	9,900	$	(8,593)	$	1,307
Bowlmor trade name	0	6,500		(6,500)		—		0	6,500		(6,500)		—
Other acquisition trade names	3	2,630		(1,423)		1,207		4	1,761		(651)		1,110
Customer relationships	2	23,712		(18,755)		4,957		2	21,112		(13,989)		7,123
Management contracts	2	1,800		(1,726)		74		2	1,800		(1,443)		357
Non-compete agreements	4	3,211		(1,572)		1,639		2	2,450		(1,067)		1,383
PBA member, sponsor & media relationships	7	1,400		(627)		773		8	1,400		(504)		896
Other intangible assets	3	921		(377)		544		4	921		(133)		788
	3	50,074		(40,233)		9,841		4	45,844		(32,880)		12,964
Indefinite-lived intangible assets:
Liquor licenses		11,145		—		11,145			9,629		—		9,629
PBA trade name		3,100		—		3,100			3,100		—		3,100
Bowlero trade name		66,900		—		66,900			66,900		—		66,900
		81,145		—		81,145			79,629		—		79,629
		$	131,219	$	(40,233)	$	90,986		$	125,473	$	(32,880)	$	92,593

The following table shows amortization expense for finite-lived intangible assets for each reporting period:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Amortization expense	$	7,354	$	9,461	$	6,030

The estimated aggregate amortization expense for finite-lived intangibles included in intangible assets in our consolidated Balance Sheet for the next five fiscal years is as follows:


	2024		2025		2026		2027		2028		Thereafter
Amortization expense	$	6,040	$	1,607	$	999	$	602	$	293	$	300

(5) Property and Equipment

As of July 2, 2023 and July 3, 2022, property and equipment consists of:


	July 2, 2023		July 3, 2022
Land	$	98,896	$	77,006
Buildings and improvements	139,402		69,219
Leasehold improvements	383,444		349,534
Equipment, furniture, and fixtures	472,146		375,780
Construction in progress	43,271		15,638
	1,137,159		887,177
Accumulated depreciation	(439,309)		(352,456)
Property and equipment, net of accumulated depreciation	$	697,850	$	534,721

The following table shows depreciation expense related to property and equipment for each reporting period:

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	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Depreciation expense	$	89,558	$	77,471	$	67,934

Assets held for sale:

Total assets held for sale at July 2, 2023 and July 3, 2022 of $2,069 and $8,789, included liquor licenses of $115 and $315, respectively. Assets held for sale are valued at the lower of their carrying value or its fair value less the costs to sell.

(6) Leases

Disclosures under the New Lease Accounting Standard:

As described in Note 2 - Significant Accounting Policies , the Company adopted the new leasing standard, ASC 842 on July 4, 2022 using the modified retrospective method. As a result of the method used, the Company’s comparative financial information as for the years ended July 3, 2022 and June 27, 2021 or as of July 3, 2022 has not been restated and continues to be reported under ASC 840, the lease accounting standard in effect for those periods.

Master Lease Modifications

In October 2022, the Company had a modification event that impacted two of our master leases. This modification event was due to the termination of a lease component and change in consideration in the contract. As a result, we removed a lease component with an immaterial gain on termination, reassessed classification of the remaining lease components, and remeasured the lease liability with a corresponding adjustment to the right-of-use asset for the remaining lease components. We reassessed the economic factors supporting the lease term assessment, and concluded it was reasonably certain we will exercise one of the remaining eight renewal options for all of the assets included within the two master leases, thereby extending the lease term for accounting purposes from 2047 to 2057. Using the updated lease term, we remeasured the lease liability and recorded a corresponding adjustment to the right of use asset. The lease liability was adjusted by $102,321 with a corresponding adjustment to the right-of-use assets. As a result of reassessing classification and increasing our assessment of the lease term, it resulted in certain lease components (primarily land) switching classification from operating to finance. Substantially all of the building components remained classified as finance leases. In total, $33,135 of right-of-use assets changed from operating to finance and $31,413 lease liabilities changed from operating to finance.

In December 2022, we executed a sale-leaseback with our master lease landlord by adding two bowling entertainment centers into the master leases and adjusted the consideration in the contract. The modification was not accounted for as a separate contract. We concluded the sale-leaseback was not a sale as control of the underlying assets was not transferred from the Company, and therefore, we recognized a financing obligation of $10,363. For the other lease components impacted by the modification, we remeasured the lease liability and recorded a corresponding adjustment to the right of use asset. In total, the lease liability was adjusted by $5,403 with a corresponding adjustment to the right-of-use assets.

In February 2023, we obtained a rent reduction from our master lease landlord for two of our master leases, which resulted in a modification event due to a change in the consideration in the contract. We remeasured the lease liability and recorded a corresponding adjustment to the right of use asset. In total, the lease liability was adjusted by $40,764 with a corresponding adjustment to the right-of-use assets. This modification event resulted in certain lease components (primarily land) switching classification from operating to finance, which was primarily due to updating our estimate of the IBR as of the modification date. In total, $28,609 of right-of-use assets changed from operating to finance and $27,206 lease liabilities changed from operating to finance.

Due to constructing significant capital improvements at several bowling centers within our third master lease, the Company had a reassessment event which resulted in updating our assessment of the lease term. We concluded it is reasonably certain that we will exercise one of the remaining eight renewal options for substantially all the assets included in the master lease, thereby extending the lease term for accounting purposes from 2044 to 2054. Using an updated lease term, we remeasured the lease liability and recorded a corresponding adjustment to the right- of-use asset. In total, the lease liability was adjusted by $76,561 with a corresponding adjustment to the right-of-use assets. As a result of reassessing classification and increasing our assessment of the lease term, it resulted in certain lease components (primarily land) switching classification from operating to finance. Substantially all of the building components remained classified as finance leases. In total, $63,652 of right-of-use assets changed from operating to finance and $63,634 lease liabilities changed from operating to finance.

Other Modification Events

For our non-master leases, there was a resolution of a contingency whereby previously variable rent for a real estate lease became fixed. This was due to the activation of a minimum annual guarantee clause and rent floors in future periods that fixed previously variable lease payments. We concluded that this event resulted in a remeasurement of the operating lease liability, with a corresponding decrease to our lease liability and right-of-use asset of $21,475.

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The following table summarizes the components of the net lease cost for the fiscal year ended July 2, 2023:

Lease Costs:

Location on Consolidated Statements of Operations

July 2, 2023

Operating Lease Costs:

Operating lease costs associated with master leases (1)

Primarily cost of revenues

21,357

Operating lease costs associated with non-master leases (2)

Primarily cost of revenues

41,057

Gains from modifications to operating leases

Other operating expense

(871)

Finance Lease Costs:

Amortization of right-of-use assets

Primarily cost of revenues

12,743

Interest on lease liabilities

Interest expense, net

42,378

Gains from modifications to finance leases

Primarily cost of revenues

(3,320)

Financing Obligation Costs:

Interest expense

Interest expense, net

223

Gains from modifications to financial liabilities

Interest expense, net

(1,309)

Variable lease cost (3)

Primarily cost of revenues

59,315

Short-term lease cost (4)

Cost of revenues; SG&A

643

Sublease income

Revenues

(5,116)

Total net lease costs

167,100

(1)As a result of the modification events described above for our master leases, previous rent expense associated with the land components is now being recorded as interest and amortization expense for finance leases.

(2)This excludes fixed lease costs associated with our master leases

(3)This includes variable leases costs such as utilities, common area maintenance, property insurance, real estate taxes, and percentage rent

(4)Sublease income primarily represents short-term leases with pro-shops and various retail tenants

Supplemental cash flow information related to leases for the year ended July 2, 2023:


	July 2, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows paid for operating leases	$	52,605
Operating cash flows paid for interest portion of finance leases	36,509
Financing cash flows paid for principal portion of finance leases	892
Operating cash flows paid for interest portion of financing obligations	223
Financing cash flows paid for principal portion of finance obligations	11

Other:
Operating cash inflows from landlord contributions	490
Purchases of operating lease assets	755

Lease liabilities arising from ROU assets: (1)
Operating leases	591,333
Finance leases	656,000

(1)The change in lease assets is substantially the same as the change in lease liabilities.

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Supplemental balance sheet information related to leases as of July 2, 2023:

Balance Sheet Location

July 2, 2023

Operating leases:

ROU Assets, net

Operating lease ROU assets, net

449,085

Lease liabilities, Short-term

Operating lease liabilities, ST

23,866

Lease liabilities, Long-term

Operating lease liabilities, LT

431,295

Finance leases:

ROU Assets, net

Finance lease ROU assets, net

515,339

Lease liabilities, Short-term

Other current liabilities

3,296

Lease liabilities, Long-term

Finance lease liabilities, LT

652,450

Financing Obligations:

Financing obligation, long-term

Other long-term liabilities

9,005

The following table summarizes the weighted average remaining lease term and weighted average remaining discount rate for operating and finance leases as of July 2, 2023:


Weighted average remaining lease terms in years						July 2, 2023
Operating leases						20.38
Finance leases						32.24
Financing obligations						33.91

Weighted average discount rate
Operating leases						7.35
Finance leases						7.54
Financing obligations						4.84

The following table summarizes the maturity of our operating leases, finance leases, and financing obligations as of July 2, 2023:


	Operating leases		Finance leases		Financing obligations
2024	$	46,896	$	45,696	$	411
2025	55,343		46,979		381
2026	51,890		43,148		320
2027	51,492		44,936		344
2028	52,822		49,637		386
Thereafter:	690,973		1,652,345		22,712
Total lease payments	949,416		1,882,741		24,554
Less: imputed interest	(494,255)		(1,226,995)		(15,549)
Present value of lease liability:	455,161		655,746		9,005
Less: Short-term lease liability	(23,866)		(3,296)		—
Long-term lease liability	$	431,295	$	652,450	$	9,005

Leases that have yet to commence

The Company has leases with build-out provisions for which the Company is generally not deemed to control the asset under construction. Therefore, the Company will determine the lease classification upon lease commencement. Our future lease obligations for these are $33,223.

Disclosures under the previous Lease Accounting Standard ASC 840:

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Operating Leases: We recorded accrued rent of $26,417 within other current liabilities and other long-term liabilities on the consolidated balance sheets as of July 3, 2022.

In addition to previously received rent concessions, in response to the economic effects of the COVID-19 pandemic, in March 2022, the Company received a rent concession related to an operating lease in the form of a rent abatement retroactive to April 1, 2020 for amounts which had been previously recognized as rent expense. We elected to not account for this concession as a modification in accordance with the relief provided by the FASB staff. As a result, we recognized rent abatements of $7,470 ($5,603 allocated to cost of revenues and $1,867 allocated to selling, general and administrative expenses) as a reduction of rent expense during fiscal year 2022.

Capital Leases: We had $47,298 in accumulated amortization on property and equipment under capital leases as of July 3, 2022.

The following table summarizes the Company’s costs for operating and capital leases for the fiscal year ended, July 3, 2022:


	July 3, 2022		June 27, 2021
Operating Leases
Rent expense	$	55,189	$	58,114

Capital Leases
Interest expense	$	39,514	$	35,599
Amortization expense	12,940		12,870
Total capital lease cost	$	52,454	$	48,469

Under the previous lease accounting guidance, maturities of operating and capital lease liabilities were as follows as of July 3, 2022:


	Operating leases		Capital leases
2023	$	49,783	$	41,261
2024	46,800		42,524
2025	50,345		42,551
2026	47,767		37,426
2027	48,269		39,989
Thereafter	525,028		995,185
Total rent payments	$	767,992	1,198,936
Less: Imputed interest payments for capital leases			(798,306)
Present value of capital lease obligation			$	400,630

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(7) Supplemental Cash Flow Information

The table below presents supplemental cash flow information for each reporting period:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Cash paid during the period for:
Interest	$	104,167	$	88,292	$	81,685
Income taxes, net of refunds	6,640		3,898		818
Noncash investing and financing transactions:
Settlement of earnout obligation	184,437		—		—
Capital expenditures in accounts payable	24,937		8,895		4,193
Change in fair value of interest rate swap and collars	4,608		8,869		8,631
Unsettled treasury stock trade payable	7,118		3,094		—
Accrual of paid-in-kind dividends on Series A preferred stock	5,665		6,002		—
Excise tax liability accrued on stock repurchases	1,578		—		—
Capital lease assets obtained in exchange for capital lease liabilities	—		7,463		5,401
Modifications of capital lease assets and liabilities	—		(15,001)		6,971
Issuance of warrants in Business Combination	—		22,426		—
Issuance of earnout obligation in Business Combination	—		181,113		—
Warrant redemption	—		(40,156)		—

See Note 6 - Leases for supplementary information relating to leasing transactions for Fiscal Year 2023.

(8) Accounts Payable and Accrued Expenses

As of July 2, 2023 and July 3, 2022, accounts payable and accrued expenses consist of:


	July 2, 2023		July 3, 2022
Accounts payable	$	53,513	$	38,217
Compensation	14,670		15,746
Taxes and licenses	13,076		11,568
Customer deposits	12,703		10,728
Deferred revenue	7,144		6,384
Insurance	6,168		5,229
Utilities	4,607		4,185
Professional fees	4,307		3,062
Interest	904		498
Deferred rent	96		3,252
Other	4,038		2,202
Total accounts payable and accrued expenses	$	121,226	$	101,071

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(9) Debt

The following table summarizes the Company’s debt structure as of July 2, 2023 and July 3, 2022:


	July 2, 2023		July 3, 2022
Amendment No. 8 Term Loan and Incremental Term Loan (Maturing February 8, 2028 and bearing variable rate interest; 8.65% at July 2, 2023)	$	1,150,000	$	—
First Lien Credit Facility Term Loan (Maturing July 3, 2024 and bore variable rate interest of 5.17% at July 3, 2022	—		790,271
Revolver (Maturing December 15, 2026 and bearing variable rate interest; 4.13% at July 3, 2022)	—		86,434
Other Equipment Loans	14,662		—
	1,164,662		876,705
Less:
Unamortized financing costs	(16,637)		(6,649)
Current portion of unamortized financing costs	3,123		3,245
Current maturities of long-term debt	(12,461)		(8,211)
Total long-term debt	$	1,138,687	$	865,090

As of July 2, 2023, minimum repayments of debt by fiscal year were as follows:


2024	$	12,457
2025	12,520
2026	12,585
2027	12,655
2028	1,105,221
Thereafter	9,224
	$	1,164,662

First Lien Credit Facility Term Loan: The First Lien Credit Facility Term Loan was repaid on a quarterly basis in principal payments of $2,053. The First Lien Credit Facility Term Loan bore interest at a rate per annum equal to LIBOR plus 3.50%. Interest on First Lien Credit Facility Term Loan was due quarterly.

Amendment No. 8 Term Loan and Incremental Term Loan: On February 8, 2023, the Company entered into an Eighth Amendment (the “Eighth Amendment”) to the First Lien Credit Agreement. The Eighth Amendment provided for a new $900,000 term loan maturing on February 8, 2028 (the “Amendment No. 8 Term Loan”). Proceeds of the Amendment No. 8 Term Loan were used to refinance the existing First Lien Credit Facility Term Loan, to repay all amounts outstanding on the Revolver, and for general corporate purposes. The Company accounted for this transaction as a debt modification, which was not substantial. Therefore, the Company did not incur any gain or loss relating to the modification. The Amendment No. 8 Term Loan is repaid on a quarterly basis in principal payments of $2,250 beginning on September 29, 2023. The Amendment No. 8 Term Loan bears interest at a rate per annum equal to the Adjusted Term SOFR plus 3.50%. Interest on the Amendment No. 8 Term Loan is due on the last day of the interest period. The interest period, as agreed upon between the Company and its lender, can be either one, three, or six months in length. As of July 2, 2023, the interest period is one month.

On June 13, 2023, the Company entered into a Ninth Amendment (the “Ninth Amendment”) to the First Lien Credit Agreement. The Ninth Amendment provided for an incremental term loan in the amount of $250,000 (the “Incremental Term Loan”) to the Amendment No. 8 Term Loan for an aggregate principal amount of $1,150,000. In addition, the Ninth Amendment increased the Amendment No. 8 Term Loan quarterly principal payments beginning on September 29, 2023 from $2,250 to $2,875. Proceeds of the Incremental Term Loan were used to repay all amounts outstanding on the Revolver and for general corporate purposes. The Company accounted for this transaction as a debt modification, which was not substantial. Therefore, the Company did not incur any gain or loss relating to the modification.

Revolver: Under the First Lien Credit Agreement, the Company has access to a senior secured revolving credit

facility (the “Revolver”). The outstanding balance on the Revolver is due on December 15, 2026. Interest on borrowings under the Revolver is based on the Adjusted Term SOFR.

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Index to Financial Statements

As of July 2, 2023, no amounts are drawn on the Revolver.

First Lien Credit Agreement Covenants: Obligations owed under the First Lien Credit Agreement are secured by a first priority security interest on substantially all assets of Bowlero Corp. and the guarantor subsidiaries. The First Lien Credit Agreement contains customary events of default, restrictions on indebtedness, liens, investments, asset dispositions, dividends and affirmative and negative covenants. The Company is subject to a financial covenant requiring that the First Lien Leverage Ratio (as defined in the First Lien Credit Agreement) not exceed 6.00:1.00 as of the end of any fiscal quarter if amounts outstanding on the Revolver exceed an amount equal to 35% of the aggregate Revolver commitment (subject to certain exclusions) at the end of such fiscal quarter. In addition, payment of borrowings under the Revolver may be accelerated if there is an event of default, and Bowlero would no longer be permitted to borrow additional funds under the Revolver while a default or event of default were outstanding.

Letters of Credit: Outstanding standby letters of credit as of July 2, 2023 and July 3, 2022 totaled $10,386 and 9,136, respectively, and are guaranteed by JP Morgan Chase Bank, N.A. The available amount of the Revolver is reduced by the outstanding standby letters of credit.

Other Equipment Loans: On August 19, 2022, the Company entered into an equipment loan agreement for a principal amount of $15,350 with JP Morgan Chase Bank, N.A. The loan matures August 19, 2029 and bears a fixed interest rate of 6.24%. The loan is repaid on a monthly basis in fixed payments of $153 plus a final payment at maturity. The loan obligation is secured by a lien on the equipment.

Covenant Compliance: The Company was in compliance with all debt covenants as of July 2, 2023.

Interest rate collars: The Company entered into two interest rate collars effective as of March 31, 2023 for an aggregate notional amount of our Amendment No. 8 Term Loan of $800,000. The collar hedging strategy stabilizes interest rate fluctuations by setting both a floor and a cap. The hedge transactions have a trade and hedge designation date of April 4, 2023. The hedge transactions, each for a notional amount of $400,000, provide for interest rate collars. The interest rate collars establish a floor on SOFR of 0.9429% and 0.9355%, respectively, and a cap on SOFR of 5.50%. The interest rate collars have a maturity date of March 31, 2026.

The fair value of the collar agreements as of July 2, 2023 was an asset of $4,608, and is included within other current assets and other assets in the consolidated balance sheet.

Since SOFR was within the collar cap and floor rates, there was no interest impact for the fiscal year ended July 2, 2023.

The reclassifications from accumulated other comprehensive income (“AOCI”) into income for the interest rate swap and cap agreements which expired in fiscal year 2022 were as follows for each reporting period:


	July 2, 2023		July 3, 2022		June 27, 2021
Interest expense reclassified from AOCI into net loss	$	—	$	8,809	$	9,002

For our previously entered into swaps and caps that have expired, the fair value of the hedging transactions excluded accrued interest and took into consideration current interest rates and current likelihood of the counterparties’ compliance with its contractual obligations. There were no income taxes related to the amounts recorded to AOCI in prior years due to tax credits and the full valuation allowance on deferred taxes.

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Index to Financial Statements

(10) Income Taxes

Total loss before income taxes consists of:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Loss before tax:
U.S.	$	(7,054)	$	(31,388)	$	(123,360)
Foreign	4,859		764		(4,136)
Total loss before tax	$	(2,195)	$	(30,624)	$	(127,496)

Income tax benefit consists of the following:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Current income tax provision:
Federal	$	(1,772)	$	2,481	$	—
State and local	3,694		3,601		505
Foreign	313		107		(122)
Total current provision	2,235		6,189		383

Deferred income tax provision:
Federal	(67,871)		(6,307)		9
State and local	(18,007)		(895)		(1,707)
Foreign	(600)		323		280
Total deferred provision	(86,478)		(6,879)		(1,418)
Total income tax benefit	$	(84,243)	$	(690)	$	(1,035)

The provision for income taxes differs from the amount computed by applying the statutory rate to the loss before income taxes primarily due to the changes in the valuation allowance, state and local taxes and for 2022, items associated with the Business Combination and asset acquisitions and other differences.


	Fiscal Year Ended
	July 2, 2023		July 3, 2022		June 27, 2021
Federal statutory rate	$	(459)	$	(6,431)	$	(26,774)
State and local tax net of federal benefit	3,212		6,675		(6,190)
Deferred tax asset valuation allowance	(135,061)		(29,901)		34,060
Business Combination and asset acquisition items, including earnouts	17,924		10,800		—
Compensation limited by section 162(m) of the Internal Revenue Code	2,826		17,590		—
Uncertain tax positions	(27)		1		2
Foreign tax rate difference	369		65		(1,251)
Tax credit impact	(7,708)		—		—
Write-off of NOL generally due to S382 limitations	41,901		—		—
NOL and S163(J) increase due to change in estimate	(8,221)		—		—
Other	1,001		511		(882)
Effective tax rate	$	(84,243)	$	(690)	$	(1,035)

The Company’s effective tax rate was impacted by the $135,061 release of the valuation allowances due to the Company’s review of all positive and negative evidence regarding the realization of deferred tax assets.

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Index to Financial Statements

The effective tax rate was favorably impacted by the realization and availability of federal income tax credits totaling approximately $7,708, of which $2,274 relate to fiscal 2023 and the remainder of the credits dating back to fiscal year 2019. These credits were identified in the current year as the Company developed an appropriate data retrieval process for the current and open tax years. Also, favorably impacting the effective tax rate was a change of estimate on the Company’s filed federal income tax return which increased the Company’s NOL and interest carryforward attributes by a net $8,221 tax benefit. The Company’s effective tax rate was increased by disallowed expenses associated with the earn out expense, S162(m) limitations, the write off of tax losses expected to expire due to Section 382 limitations, state and foreign income tax expenses and other items.

As of July 2, 2023, the Company had a net consolidated income tax receivable of $2,507 reflected in other current assets and a current consolidated income tax payable of $267 reflected in other current liabilities. As of July 3, 2022, the Company had a net consolidated income tax receivable of $147 reflected in other current assets, a current consolidated income tax payable of $2,417 reflected in other current liabilities and a non-current consolidated income tax payable of $27 reflected in other long-term liabilities.

The tax effects of temporary differences and carryforwards that give rise to significant components of deferred income tax assets and liabilities consist of:


	July 2, 2023		July 3, 2022
Deferred income tax assets:
Reserves not currently deductible	$	9,227	$	21,961
Finance lease liability	40,527		105,157
Net operating loss, interest, and tax credit carryforwards	47,945		109,504
Subtotal	97,699		236,622
Less: Valuation allowance	884		138,605
Total net deferred income tax assets	96,815		98,017

Deferred income tax liabilities:
Property and equipment	8,405		83,994
Favorable and unfavorable leases	195		7,827
Goodwill and intangibles	18,568		21,078
Total deferred income tax liabilities	27,168		112,899
Net deferred income tax asset (liabilities)	$	69,647	$	(14,882)

As of July 2, 2023, the Company has U.S. tax credit carryforwards of $6,205, U.S. federal net operating loss carryforwards (NOLs) of $143,277, and interest carryforward of $36,203. As of July 3, 2022, the Company has U.S. tax credit carryforwards of $209, federal NOLs of $460,572, and interest carryforward of $20,825. The majority of the tax credits were generated in tax years ending June 30, 2019 and thereafter with remaining credits generated in the July 1, 2007 and June 29, 2008 tax years. The credits have a 20-year federal carryover period and will begin to expire starting in the fiscal year ending 2027. Certain NOL carryforwards will begin to expire in 2023. The interest carryforward and $35,653 of NOL carryforwards do not expire.

Realization of deferred tax assets associated with deductible temporary differences, net operating losses and other carryforwards is dependent on generating sufficient future taxable income. Under Sections 382 and 383 of the Code, the Company’s federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in the ownership of the Company’s stock. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or group of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three year period. The Company’s ability to utilize certain net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes. Similar rules may apply under state laws. It is currently estimated that $36,745 of the Company’s NOLs are subject to limitation due to the changes in ownership that occurred in 2004. During 2023, the Company expensed $208,697 of tax losses that will expire unused due to the 2004 ownership change limitation, even if there is sufficient taxable income to absorb such NOLs. These losses were offset by valuation allowances in previous years. The Company has not experienced an ownership change, as defined under Sections 382 and 383, since July 2017.

The Company regularly evaluates the realization of our net deferred tax assets. During the most recent quarterly period ending July 2, 2023, the Company released $135,061 of valuation allowances in several jurisdictions based on reviews of all positive and negative evidence. In particular, the Company has experienced additional positive evidence of recent improved profitability to reach a conclusion on a more likely than not basis that the deferred tax assets could be realized and that certain valuation allowances are no longer required.

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Index to Financial Statements

The valuation allowances were further reduced by a net of $2,660 due to the OCI impact on the implementation of FAS 842 and foreign exchange/other adjustments, respectively. The remaining valuation allowance of $884 as of July 2, 2023 is attributed to certain state tax losses that are limited and federal tax credits nearing their expiration date.

A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:


	July 2, 2023		July 3, 2022		June 27, 2021
Balance at beginning of year	$	27	$	26	$	22
Additions for tax positions of prior years	—		1		4
Reductions for tax positions of prior years	(27)		—		—
Balance at end of year	$	—	$	27	$	26

The amount of unrecognized tax benefits that impacted the effective tax rate at July 2, 2023 was $27.

As of July 2, 2023 and July 3, 2022, the Company had not recorded an income tax liability on certain undistributed earnings of its foreign subsidiaries. It is expected that these earnings will be permanently reinvested in the operations within the respective country. The Company has not calculated the deferred tax liability that would come due if the earnings were distributed to the U.S., which the Company believes that any deferred tax liability recognized would not be material.

(11) Commitments and Contingencies

Litigation and Claims: The Company is currently, and from time to time may be, subject to claims and actions arising in the ordinary course of its business, including general liability, fidelity, workers’ compensation, employment claims, and Americans with Disabilities Act (“ADA”) claims. The Company has insurance to cover general liability and workers’ compensation claims and reserves for claims and actions in the ordinary course. The insurance is subject to a self-insured retention. In some actions, plaintiffs request punitive or other damages that may not be covered by insurance.

There is currently a group of approximately 73 pending claims, filed with the Equal Employment Opportunity Commission (the “EEOC”) between 2016 and 2019, generally relating to claims of age discrimination. To date, the EEOC issued determinations of probable cause as to 55 of the charges, which the Company contests and intends to defend vigorously. The EEOC has also alleged a pattern or practice of age discrimination, which resulted in a determination of probable cause and, on August 22, 2022, the EEOC submitted a proposal for the Company to participate in the conciliation process. The EEOC’s proposal included a demand for monetary and non-monetary remedies. On April 11, 2023, the EEOC provided notice to the Company that its conciliation efforts were unsuccessful; moreover, the Company continues to contest the determinations issued by the EEOC with respect to all charges and intends to defend vigorously. The Company cannot estimate reasonably possible range of loss, if any, associated with these EEOC matters.

(12) Warrants

Warrant activity from the Closing Date to July 3, 2022 is as follows:


	Warrants outstanding at Closing Date	Repurchased	Exercised (a)	Redeemed	Warrants outstanding at July 3, 2022
Publicly traded warrants	11,827,864	(2,690,272)	(9,128,891)	(8,701)	—
Private placement warrants	3,778,480	—	(3,778,480)	—	—
Unvested private placement warrants	1,619,348	—	(1,619,348)	—	—
Total	17,225,692	(2,690,272)	(14,526,719)	(8,701)	—

_____________

a - As a result of exercising the warrants, 4,266,439 shares of Class A common stock were issued, of which 475,440 shares that were issued in exchange for unvested private placement warrants are subject to additional earnout provisions. Please refer to Note 13 - Earnouts for more details on the additional Earnout Shares.

Redemption and Retirement of Public and Private Placement Warrants: On April 14, 2022, the Company announced that it would redeem all of its outstanding publicly traded and privately held warrants to purchase shares of its Class A common stock as of May 16, 2022 (the “Redemption Date”) for a redemption price of $0.10 per warrant (the “Redemption Price”).

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Index to Financial Statements

After the announcement and prior to the Redemption Date, holders of the warrants could choose to elect to exercise their warrants on a “cashless basis” by receiving a number of shares of Class A common stock based on the volume weighted average price of the Class A common stock for the ten trading days immediately following on the third trading day prior to the date on which notice of redemption was delivered to holders (the “Redemption Fair Market Value”), which was $12.0985 per warrant. As a result, holders who exercised their warrants on a “cashless” basis before the Redemption Date received 0.2936 shares of Class A common stock per warrant exercised.

As a result of the completion of the redemption and retirement of the warrants, the Company issued 4,266,439 shares of Class A common stock after 9,128,891 publicly traded warrants and 5,397,828 privately held warrants were exercised on a cash or cashless basis. The Company redeemed 8,701 publicly traded warrants at the redemption price of $0.10 per warrant. The amount of cash generated from the exercise of warrants and the amount of cash paid at the redemption price of $0.10 per warrant was not material. In connection with the warrant redemption, the warrants ceased trading on the NYSE and were delisted. The change in value of the warrants was recorded through earnings through the settlement date. The Company no longer has any warrants outstanding.

(13) Earnouts

The following table shows the number of unvested earnout shares outstanding as of the year ended July 2, 2023 and July 3, 2022:


	Fiscal Year Ended
	July 2, 2023	July 3, 2022
Number of unvested earnout shares outstanding	11,418,357	22,836,718

Old Bowlero’s stockholders and option holders received additional shares of Bowlero common stock (the “Earnout Shares”). Earnout Shares vest during the period from and after the Closing Date until the fifth anniversary of the Closing Date (the “Earnout Period”). The following tranches of Earnout Shares were issued to Old Bowlero stockholders:

(a)10,375,000 Earnout Shares, if the closing share price of Bowlero’s Class A common stock, par value $0.0001 per share (Class A common stock) equals or exceeds $15.00 per share for any 10 trading days within any consecutive 20-trading day period that occurs after the Closing Date and

(b)10,375,000 Earnout Shares, if the closing share price of Class A common stock equals or exceeds $17.50 per share for any 10 trading days within any consecutive 20-trading day period.

During the Earnout Period, if Bowlero experiences an Acceleration Event, which as detailed in the Business Combination Agreement includes a change of control, liquidation or dissolution of the Company, bankruptcy or the assignment for the benefit of creditors the appointment of a custodian, receiver or trustee for all or substantially all the assets or properties of the Company, then any Earnout Shares that have not been previously issued by Bowlero (whether or not previously earned) to the Bowlero stockholders or holders of Options or Earnout shares issued but not vested will be deemed earned and issued or vested by Bowlero as of immediately prior to the Acceleration Event, unless, in the case of an Acceleration Event, the value of the consideration to be received by the holders of Bowlero common stock in such change of control transaction is less than the applicable stock price thresholds described above. If the consideration received in such Acceleration Event is not solely cash, Bowlero’s Board of Directors will determine the treatment of the Earnout Shares.

As part of the Sponsor Support Agreement, the Sponsor and LionTree were issued 1,611,278 Earnout Shares which vest during the period from and after the Closing Date until the fifth anniversary of the Closing Date: (a) 805,639 Earnout Shares if the closing share price of Bowlero’s Class A common stock equals or exceeds $15.00 per share for any 10 trading days within any consecutive 20-trading day period that occurs after the Closing Date and (b) 805,639 Earnout Shares, if the closing share price of Class A common stock equals or exceeds $17.50 per share for any 10 trading days within any consecutive 20-trading day period. As a result of the cashless exercise of their unvested private placement warrants, the Sponsor and LionTree were issued 475,440 additional Earnout Shares, which vest during the period from and after the Closing Date until the fifth anniversary of the Closing Date: (a) 237,721 Earnout Shares if the closing share price of Bowlero’s Class A common stock equals or exceeds $15.00 per share for any 10 trading days within any consecutive 20-trading day period that occurs after the Closing Date and (b) 237,719 Earnout Shares, if the closing share price of Class A common stock equals or exceeds $17.50 per share for any 10 trading days within any consecutive 20-trading day period.

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Index to Financial Statements

On March 2, 2023, Bowlero’s closing stock price of Class A common stock equaled or exceeded $15.00 for 10 trading days within a 20-trading day period. As a result, 11,418,361 Earnout Shares were fully vested and are no longer subject to the applicable vesting restrictions. These Earnout Shares settled into equity and are no longer included in the Earnout liability on the consolidated balance sheet as of July 2, 2023.

All but 55,152 of the unvested Earnout Shares are classified as a liability and changes in the fair value of the Earnout Shares in future periods will be recognized in the statement of operations. Those Earnout Shares not classified as a liability are classified as equity compensation to employees and recognized as compensation expense on a straight-line basis over the expected term or upon the contingency being met.

(14) Fair Value of Financial Instruments

Debt

The fair value and carrying value of our debt as of July 2, 2023 and July 3, 2022 are as follows:


	July 2, 2023		July 3, 2022
Carrying value	$	1,164,662	$	876,705
Fair value	1,158,912		841,637

The fair value of our debt is estimated based on trading levels of lenders buying and selling their participation levels of funding (Level 2).

There were no transfers in or out of any of the levels of the valuation hierarchy in fiscal years 2023 and 2022.

Items Measured at Fair Value on a Recurring Basis

The Company holds certain assets and liabilities that are required to be measured at fair value on a recurring basis. The following table is a summary of fair value measurements and hierarchy level as of July 2, 2023 and July 3, 2022:


	July 2, 2023
	Level 1		Level 2		Level 3		Total
Interest rate collars	$	—	$	4,608	$	—	$	4,608
Total assets	$	—	$	4,608	$	—	$	4,608

Earnout shares	$	—	$	—	$	112,041	$	112,041
Total liabilities	$	—	$	—	$	112,041	$	112,041


	July 3, 2022
	Level 1		Level 2		Level 3		Total
Earnout shares	$	—	$	—	$	210,952	$	210,952
Contingent consideration	—		—		1,470		1,470
Total liabilities	$	—	$	—	$	212,422	$	212,422

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Index to Financial Statements

The fair value of earn-out shares was established using a Monte Carlo simulation Model (level 3 inputs). The key inputs into the Monte Carlo simulations as of July 2, 2023 and July 3, 2022 were as follows:


	July 2, 2023		July 3, 2022
Expected term in years	3.45		4.45
Expected volatility	65%		55%
Risk-free interest rate	4.41%		2.87%
Stock price	$	11.64	$	11.00
Dividend yield	—		—

The following table sets forth a summary of changes in the estimated fair value of the Company's Level 3 Earnout liability for the years ended July 2, 2023 and July 3, 2022:


	Fiscal Year Ended
	July 2, 2023		July 3, 2022
Balance as of beginning of period	$	210,952	$	—
Issuances	174		185,152
Settlements*	(184,437)		—
Changes in fair value	85,352		25,800
Balance as of end of period	$	112,041	$	210,952

*This represents the settlement of the $15.00 tranche of Earnout Shares. The $17.50 tranche of Earnout Shares has not vested and is still subject to the applicable vesting restrictions See Note 13 - Earnouts.

Items Measured at Fair Value on a Non-Recurring Basis

The Company’s assets measured at fair value on a non-recurring basis subsequent to their initial recognition include assets held for sale. We utilize third party broker estimate of value amounts to record the assets held for sale at their fair value less costs to sell. These inputs are classified as Level 2 fair value measurements.

Other Financial Instruments

Other financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses. The financial statement carrying amounts of these items approximate the fair value due to their short duration.

(15) Common Stock, Preferred Stock and Stockholders’ Equity

The Company is authorized to issue three classes of stock to be designated, respectively, Class A common stock, Class B common stock (together with Class A common stock, the “Common Stock”) and Preferred Stock. The total number of shares of capital stock which the Company shall have authority to issue is 2,400,000,000, divided into the following:

Class A common stock:

•Authorized: 2,000,000,000 shares, with a par value of $0.0001 per share as of July 2, 2023 and July 3, 2022.

•Issued and Outstanding: 107,666,301 shares (inclusive of 1,595,930 shares contingent on certain stock price thresholds but excluding 11,312,302 shares held in treasury) as of July 2, 2023 and 110,395,630 shares (inclusive of 3,209,972 shares contingent on certain stock price thresholds but excluding 3,430,667 shares held in treasury) as of July 3, 2022.

Class B common stock:

•Authorized: 200,000,000 shares, with a par value of $0.0001 per share as of July 2, 2023 and July 3, 2022.

•Issued and Outstanding: 60,819,437 and 55,911,203 shares as of July 2, 2023 and July 3, 2022, respectively.

Preferred Stock:

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•Authorized: 200,000,000 shares, with a par value of $0.0001 per share as of July 2, 2023 and July 3, 2022.

•Issued and Outstanding: 136,373 and 200,000 shares as of July 2, 2023 and July 3, 2022, respectively.

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to conversion and voting. Shares of Class B common stock are convertible into an equivalent number of shares (one-for-one) of Class A common stock automatically upon transfer, or upon the earliest to occur of the 15th anniversary of the Closing Date, or terms associated with Thomas F. Shannon, which consists of his death or disability, ceasing to beneficially own at least 10% of the outstanding shares of Class A common stock and Class B common stock or his employment as our CEO for being terminated for cause. Holders of Class B common stock may convert their shares into shares of Class A common stock at any time at their option. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Any dividends paid to the holders of Class A common stock and Class B common stock will be paid out in cash, property, or shares. On a liquidation event, any distribution to common stockholders is made on a pro rata basis to the holders of the Class A common stock and Class B common stock.

Series A Preferred Stock

Holders of Preferred Stock have voting rights in certain matters that require vote or consent of holders representing a majority of the outstanding shares of the Preferred Stock. There are no other voting rights associated with the Preferred Stock as long as management holds over 50% of the equity voting power.

Regular dividends on the Preferred Stock accumulate on a cumulative basis on a 360-day year commencing from the issue date. The dividend rate is fixed at 5.5% per annum on the current liquidation preference per share of the Preferred Stock. The initial liquidation preference was $1,000 per share. Payment dates are June 30 and December 31 of each year with a record date of June 15 for the June 30 payment date and December 15 for the December 31 payment date. Declared dividends will be paid in cash if the Company declares the dividend to be paid in cash. If the Company does not pay all or any portion of the dividends that have accumulated as of any payment date, then the dollar amount of the dividends not paid in cash will be added to the liquidation preference and deemed to be declared and paid in-kind. As of July 2, 2023, the Company has declared and paid a cash dividend in the amount of $29.10 per share of Preferred Stock, in the aggregate amount of $3,969. For the fiscal years ended July 2, 2023 and July 3, 2022, accumulated dividends in the amount of $5,665 and $6,002, respectively, were added to the liquidation preference and deemed to be declared and paid in-kind.

During the year ended July 2, 2023, 63,627 shares of Preferred Stock were settled for cash of $80,823. All of the repurchased shares were then cancelled in accordance with the Preferred Stock Certificate of Designations.

The Preferred Stock is redeemable if a Fundamental Change occurs and each holder will have the right to require the Company to repurchase such holders’ shares of Preferred Stock or any portion thereof for a cash purchase price. A Fundamental Change includes events such as a person or a group becoming direct or indirect owners of shares of the Company’s Common Stock representing more than 50% of the voting power, consummation of a transaction with which all the Common Stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive cash or other property, Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company, or the Company’s Common Stock ceases to be listed on any of the NYSE or The Nasdaq Global Market or The Nasdaq Global Select Market (or any of their respective successors).

The Preferred Stock has conversion options providing (1) the holder the right to submit all, or any whole number of shares that is less than all, of their shares of Preferred Stock pursuant to an Option Conversion and (2) the Company has the right to exercise at its election a Mandatory Conversion settled in Common Stock with the exception of the payment of cash in lieu of any fractional shares following the second anniversary of the initial issue date, if the closing price of the stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period. Additionally, the Company may, from time to time, repurchase Preferred Stock in the open market purchases or in negotiated transactions without delivering prior notice to holders of Preferred Stock.

The Company has classified the Preferred Stock as temporary equity as the shares have certain redemption features that are not solely in the control of the Company. The Preferred Stock is not currently redeemable because the deemed liquidation provision is considered a substantive condition that is contingent on the event and it is not currently probable that it will become redeemable.

Shares and Warrant Repurchase Program

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The share repurchase plan does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase plan at any time.

As of July 2, 2023, the remaining balance of the repurchase plan was $159,499. For the fiscal year ended July 2, 2023, 7,881,635 shares of Class A common stock were repurchased for a total of $100,027, for an average purchase price per share of $12.69, and bringing the cumulative total shares repurchased to 11,312,302 for a total of $134,585 at an average per share price of $11.90. On May 16, 2023, the Board of Directors authorized the initial replenishment of the remaining balance of the share and warrant repurchase program to $200,000. On September 6, 2023, the Board of Directors authorized a second replenishment of the share and warrant repurchase program to $200,000.

(16) Stock Based Compensation

The Company has three stock plans: the 2017 Stock Incentive Plan (“2017 Plan”), the Bowlero Corp. 2021 Omnibus Incentive Plan (“2021 Plan”) and the Bowlero Corp. Employee Stock Purchase Plan (“ESPP”). These stock incentive plans are designed to attract and retain key personnel by providing them the opportunity to acquire equity interest in the Company and align the interest of key personnel with those of the Company’s stockholders.

2017 Stock Incentive Plan

The 2017 Plan was approved on September 29, 2017 and is a broad-based plan that provides for the grant of non-qualified stock options to our executives and certain other employees for up to a maximum of 16,316,506 shares (retroactively stated for application of the recapitalization). The 2017 Plan was subsequently amended on January 7, 2020 to 50,581,181 shares (retroactively stated for application of the recapitalization). As of the Closing Date, no additional options are available to be granted under the 2017 Plan. The 2017 Plan was administered by the Board of Directors, which approved grants to individuals, number of options, terms, conditions, performance measures, and other provisions of the award. Awards were generally granted based on the individual’s performance. Stock options granted under the 2017 Plan had a maximum contractual term of twelve years from the date of grant, an exercise price not less than the fair value of the stock on the grant date and generally vested over four years in equal quarterly installments for the time-based options and upon occurrence of a liquidity event for the performance-based options.

A summary of the 2017 Plan stock options outstanding at July 2, 2023, July 3, 2022 and June 27, 2021, and changes during the years then ended is presented below:


	Number of Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at June 28, 2020	49,789,060	$	8.53	9.00
Granted	68,513	3.25
Forfeited and cancelled	(526,093)	3.12
Outstanding at June 27, 2021	49,331,480	$	8.58	9.13
Exercised - stock	(10,436,555)	3.25			$	70,576
Repurchased - cash	(639,122)	—			$	4,362
Forfeited and cancelled	(17,962,453)	13.53
Outstanding at July 3, 2022	20,293,350	$	7.16	9.48
Exercised - stock	(227,424)	3.15			$	2,494
Outstanding at July 2, 2023	20,065,926	$	7.20	8.49	$	89,005
Vested as of July 2, 2023	20,065,926	7.20		8.49	$	89,005
Exercisable as of July 2, 2023	20,065,926	7.20		8.49	$	89,005

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The fair value of options at the date of grant was estimated using the Black-Scholes model with the following ranges of weighted average assumptions:


	Options granted during the fiscal year ended June 27, 2021
Expected term in years	5.00
Interest rate	0.54	%
Volatility	71.5	%
Dividend yield	—

The expected volatility is based on historical volatilities of companies considered comparable to the Company. The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The average expected life represents the weighted average period of time that options granted are expected to be outstanding

2021 Stock Incentive Plan

The 2021 Plan was effective December 14, 2021 and provides for the grant of equity awards to an individual employed by the Company or Subsidiary, a director or officer of the Company or Subsidiary, a consultant or advisor to the Company or an Affiliate or to a prospective employee, director, officer, consultant or director who has accepted an offer of employment or service from the Company. Equity awards include incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, RSUs and other stock based awards granted under the 2021 Plan. Shares to be granted under the 2021 Plan shall be not more than 26,446,033 shares of common stock, subject to an annual increase on the first day of each calendar year beginning January 1, 2022. As of July 2, 2023, the Company had 30,781,879 shares of common stock authorized under the 2021 plan. The Compensation Committee of the Board of Directors or subcommittee thereof, administers the 2021 Plan. The Compensation Committee may delegate all or any portion of its responsibilities and powers to any person(s) selected by it, except for grants of Awards to persons who are non-employee members of the Board or are otherwise subject to Section 16 of the Exchange Act. Any such delegation may be revoked by the Committee at any time. The Board may at any time and from time to time grant awards and administer the 2021 Plan with respect to such awards. In any such case, the Board shall have all the authority granted to the Compensation Committee under the 2021 Plan. The Compensation Committee approves grants to individuals, number of options, terms, conditions, performance measures, and other provisions of the award. Stock options granted under the 2021 Plan have a maximum contractual term of ten years from the date of grant, unless trading is prohibited by the Company’s insider-trading policy or a Company-imposed blackout period, in which case the terms shall be extended automatically, and an exercise price not less than the fair value of the stock on the grant date. The manner and timing of vesting and expiration are determined by the Compensation Committee.

During the year ended July 3, 2022, the Company recorded $3,323 in compensation cost recognized for 665,912 fully vested options and $14,228 in compensation cost for 1,422,813 shares for a share-based bonus.

The Company issued fully vested and unvested stock options to certain employees. The unvested stock options vest based on a service condition. The average expected life represents the weighted average period of time that options granted are expected to be outstanding. The following table presents the significant assumptions used in the Black-Scholes model with the following range of weighted average assumptions for options granted in the fiscal years ended July 2, 2023 and July 3, 2022:


	July 2, 2023		July 3, 2022
Expected term in years	10.00		6.68
Interest rate	3.39	%	1.39	%
Volatility	50.0	%	55.6	%
Dividend yield	—		—

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A summary of stock options outstanding under the 2021 Plan at July 2, 2023 and July 3, 2022, and changes during the period then ended is presented below:


	Number of Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at June 28, 2021	—	$	—
Granted	9,415,912	13.72
Outstanding at July 3, 2022	9,415,912	$	13.72	9.45
Granted	444,115	17.50
Outstanding at July 2, 2023	9,860,027	$	13.89	8.51	$	3,962
Vested as of July 2, 2023	1,249,246	$	10.00	9.53	$	2,049
Exercisable as of July 2, 2023	1,249,246	$	10.00	9.53	$	2,049

The Company issued RSUs to employees and board members that vest based on service conditions (Service based RSUs). The Company measures the grant-date fair value based on the price of the Company's shares on the grant date. The following table presents a summary of RSUs subject to time-based service conditions and changes during the period then ended is presented below as of July 2, 2023 and July 3, 2022:


	Number of Units	Weighted Average Grant Date Fair Value Per Share
Outstanding at June 28, 2021	—	$	—
Granted	947,325	9.72
Forfeited	(29,700)	9.67
Outstanding at July 3, 2022	917,625	$	9.72
Granted	275,679	13.24
Vested	(394,875)	9.79
Forfeited	(82,560)	10.30
Outstanding at July 2, 2023	715,869	$	10.97

The Company issued earnout RSUs to employees that vest upon the achievement of market conditions with a 5-year expiration date (Earnout RSUs). The fair value of the earnout RSUs was determined based on a Monte-Carlo simulation method reflecting those market conditions, and the Company recognizes compensation expense evenly over the 5-year service period. The following table presents a summary of the earnout RSUs subject to market conditions and changes during the period then ended as of July 2, 2023 and July 3, 2022:


	Number of Units	Weighted Average Grant Date Fair Value Per Share
Outstanding at June 28, 2021	—	$	—
Granted	152,370	8.16
Forfeited	(23,034)	8.16
Outstanding at July 3, 2022	129,336	$	8.16
Vested	(61,414)	8.45
Forfeited	(12,770)	8.16
Outstanding at July 2, 2023	55,152	$	7.86

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The Company issued RSUs to employees and board members that vest based upon the achievement of market and service conditions (market and service based RSUs). The fair value of those RSUs was determined using a Monte-Carlo simulation method reflecting those market conditions. The following table presents a summary those RSUs subject to market and service conditions, and changes during the period then ended as of July 2, 2023 and July 3, 2022:


	Number of Units	Weighted Average Grant Date Fair Value Per Share
Outstanding at June 28, 2021	—	$	—
Granted	266,775	6.64
Forfeited	(9,900)	6.64
Outstanding at July 3, 2022	256,875	$	6.64
Granted	69,449	10.51
Forfeited	(34,520)	7.16
Outstanding at July 2, 2023	291,804	$	7.50

As of July 2, 2023, the total compensation cost not yet recognized is as follows:


	Award Plan	Unrecognized Compensation Cost		Weighted Average Remaining Period of Recognition
Stock options	2021 Plan	$	31,032	3.41
Service based RSUs	2021 Plan	5,743		1.78
Market and service based RSUs	2021 Plan	1,351		1.89
Earnout RSUs	2021 Plan	300		3.45
Employee stock purchase plan		378		0.50
Total unrecognized compensation cost		$	38,804	3.11

Share-based compensation recognized in the consolidated statement of operations is as follows:


		Fiscal Year Ended
	Award Plan	July 2, 2023		July 3, 2022		June 27, 2021
Performance-based options	2017 Plan	$	—	$	24,516	$	—
Time-based options	2017 Plan	—		952		3,164
Stock options	2021 Plan	9,708		8,505		—
Service based RSUs	2021 Plan	4,267		1,711		—
Market and service based RSUs	2021 Plan	630		208		—
Earnout RSUs	2021 Plan	538		116		—
Share-based bonus	—	—		14,228		—
ESPP	—	599		—		—
Total stock based compensation expense		$	15,742	$	50,236	$	3,164

The Company did not have any recognized income tax benefits, net of valuation allowances, related to our share-based compensation plans.

Employee Stock Purchase Plan

On December 14, 2021, the Board of Directors approved the ESPP, subject to stockholder approval. The ESPP became effective July 1, 2022, and purchase rights may be granted under the ESPP prior to stockholder approval, but no purchase rights may be exercised unless and until stockholder approval is obtained. The maximum number of shares of the Company’s Class A common stock available for sale under the ESPP shall not exceed an aggregate of 4,926,989 shares, subject to an annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the least of (i) 1% of the aggregate number of Shares outstanding on the final day of the immediately preceding calendar year, (ii) 1,753,487 Shares and (iii) such number of shares as is determined by the Board.

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If the aggregate funds available for purchase of the Shares would cause an issuance of Shares in excess of the Shares then available for issuance under the ESPP, the Committee will proportionately reduce the number of Shares that would otherwise be purchased by each participant to eliminate the excess. Under the ESPP, employees are offered the option to purchase discounted shares of Class A common stock during offering periods designated by the administrator. Each offering period will be one year commencing each January 1 and ending on December 31 with the exception of the initial offering period, which commenced on July 1, 2022 and will end on December 31, 2022. Shares are purchased on the applicable exercise dates, which is the last trading day of each purchase period. The Company uses the Black-Scholes option pricing model to determine the grant date fair values of ESPP awards.

(17) Net Income (Loss) Per Share

Net income (loss) per share calculations for all periods prior to the Closing Date have been retrospectively adjusted for the equivalent number of shares outstanding immediately after the Closing Date to effect the reverse recapitalization. The computation of basic and diluted net income (loss) per Class A and B common share is as follows:


	Fiscal Year Ended
	July 2, 2023						July 3, 2022						June 27, 2021
	Class A		Class B		Total		Class A		Class B		Total		Class A		Class B		Total
Numerator
Net income (loss) allocated to common stockholders	$	34,805	$	18,531	$	53,336	$	(32,198)	$	(7,969)	$	(40,167)	$	(134,476)	$	—	$	(134,476)

Denominator
Weighted-average common shares outstanding	108,006,545		57,502,334		165,508,879		124,920,063		30,917,091		155,837,154		146,848,329		—		146,848,329

Net income (loss) per share, basic	$	0.32	$	0.32	$	0.32	$	(0.26)	$	(0.26)	$	(0.26)	$	(0.92)	$	—	$	(0.92)

For the fiscal year ended July 2, 2023, weighted-average Series A preferred stock of 15,147,840 (as converted) was used in the calculation for the allocation of undistributed earnings between Class A, Class B, and Series A preferred stock.

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	Fiscal Year Ended
	July 2, 2023						July 3, 2022						June 27, 2021
	Class A		Class B		Total		Class A		Class B		Total		Class A		Class B		Total
Numerator
Net income (loss) allocated to common stockholders	$	34,805	$	18,531	$	53,336	$	(32,198)	$	(7,969)	$	(40,167)	$	(134,476)	$	—	$	(134,476)

Denominator
Weighted-average common shares outstanding	108,006,545		57,502,334		165,508,879		124,920,063		30,917,091		155,837,154		146,848,329		—		146,848,329
Impact of incremental shares	2,998,686		7,313,831		10,312,517		*		*		*		*		*		*
Total	111,005,231		64,816,165		175,821,396		124,920,063		30,917,091		155,837,154		146,848,329		—		146,848,329

Net income (loss) per share, diluted	$	0.31	$	0.29	$	0.30	$	(0.26)	$	(0.26)	$	(0.26)	$	(0.92)	$	—	$	(0.92)

Anti-dilutive shares excluded from diluted calculation*											16,116,589						9,647,657

*The impact of potentially dilutive convertible preferred stock, service based RSUs, market and service based RSUs, stock options, and purchases of shares under our ESPP were excluded from the diluted per share calculations because they would have been antidilutive.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

During the last two fiscal years, we have had no disagreements with our accountants on accounting and financial disclosure. On December 14, 2022, Deloitte & Touche LLP was ratified as the Company’s independent registered public accounting firm for the fiscal year ending July 2, 2023 during the Company’s 2022 Annual Meeting of Stockholders. The Company had been previously audited by KPMG LLP.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and CFO, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as amended, as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO have concluded that these disclosure controls and procedures were effective as of July 2, 2023.

Previously Reported Material Weaknesses

The following material weaknesses, as previously disclosed in Part II, Item 9A. Controls and Procedures in the Company’s Form 10-K for the fiscal year ended July 3, 2022, have been remediated as of July 2, 2023:

•We did not design and maintain effective controls over certain financial reporting processes, including acquisition accounting, accounting for fixed assets, and certain financial reporting disclosures.

•We did not design and maintain effective controls over system access controls to establish segregation of duties for those with roles and responsibilities for the general ledger.

Throughout fiscal year 2023, management has implemented measures designed to remediate the identified material weaknesses. The Company’s remediation efforts included the following:

•We hired additional technical accounting staff and augmented our staff with third-party specialists with the experience and capabilities to effectively perform controls over certain financial reporting processes, including acquisition accounting, accounting for fixed assets, and certain financial reporting disclosures.

•We implemented a training program for our accounting staff to ensure a robust understanding of policies, procedures, and related controls.

•We implemented a control to ensure the timely identification of capitalizable costs and the timely close-out of construction in progress and subsequent depreciation of such assets upon completion.

•We designed and implemented controls to identify, document and monitor user access and segregation of duties conflicts.

Throughout fiscal year 2023, the Company completed the testing of the design and operating effectiveness of the above controls. Management has determined that the material weaknesses identified in the prior year have been remediated as of July 2, 2023, however, completion of remediation does not provide assurance that our remediated controls will continue to operate effectively in the future or that our financial statements will be free from error.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with GAAP. All systems of internal control over financial reporting, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of July 2, 2023, based on the framework in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included documenting, evaluating, and testing the design and operating effectiveness of our internal control over financial reporting. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of July 2, 2023.

Attestation Report of our Independent Registered Public Accounting Firm

Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting for as long as we are an emerging growth company pursuant to the provisions of the JOBS Act.

Changes in Internal Control Over Financial Reporting

During the quarter ended July 2, 2023, except for the remediation of previously reported material weaknesses described above, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Appointment of Principal Accounting Officer

We are reporting the following information in this Item 9B in lieu of filing such information on a Current Report on Form 8-K under Item 5.02 “Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers.”

Effective September 8, 2023, the Company’s Chief Financial Officer and Treasurer, Robert Lavan, 41, has, in addition to his current responsibilities, assumed the role of principal accounting officer from Jeff Kostelni. Mr. Lavan will not receive any additional compensation related to this appointment.

Prior to joining the Company in May 2023, Mr. Lavan was Chief Financial Officer and an executive of the finance team of NYSE-listed Bally’s Corporation (NYSE:BALY) since May 2021. Prior to joining Bally's, Mr. Lavan was Chief Financial Officer of NYSE listed Turning Point Brands (NYSE:TPB). Before Turning Point Brands, he was Chief Financial Officer of General Wireless Operations and held various analyst and portfolio manager roles on Wall Street. Mr. Lavan has a B.S. in Engineering from the University of Pennsylvania.

As previously disclosed, Mr. Lavan has no familial relationships with any executive officer or director of the Company. There have been no transactions in which the Company has participated and in which Mr. Lavan had a direct or indirect material interest that would be required to be disclosed under Item 404(a) of Regulation S-K.

Rule 10b5-1 Trading Plans

On June 15, 2023, Thomas Shannon, the Company's Chief Executive Officer, adopted a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (a “10b5-1 Plan”). Mr. Shannon’s 10b5-1 Plan provides for the potential sale of up to 2,300,000 shares of Class A common stock and will expire on the earlier of April 30, 2025 and the date when all shares under the 10b5-1 Plan are sold.

On June 16, 2023, Brett Parker, the Company's Executive Vice Chairman, terminated a 10b5-1 Plan. Following the termination of the previous 10b5-1 Plan, on June 17, 2023, Mr. Parker adopted a new 10b5-1 Plan. Mr. Parker’s new 10b5-1 Plan provides for the potential sale of up to 4,389,120 shares of Class A common stock, which include 4,079,120 options shares and 310,000 shares of common stock, and will expire on the earlier of May 31, 2024 and the date when all shares under the 10b5-1 Plan are sold.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

Not applicable.

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Part III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated by reference to our definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end.

Code of Conduct and Business Ethics

We have adopted a Code of Conduct and Ethics, which is applicable to all directors, officers and employees, including our Chief Executive Officer and Chief Financial Officer. Our Code of Conduct and Business Ethics is posted on our Investor Relations website at https://ir.bowlerocorp.com/ on the Governance page of the website. To the extent required by SEC rules, we intend to disclose any amendments to our code of conduct and ethics, and any waiver of a provision of the code with respect to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on our web site referred to above within four business days following any such amendment or waiver, or within any other period that may be required under SEC rules from time to time.

Item 11. Executive Compensation

The information required by this Item is incorporated by reference to our definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end.

Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters

The information required by this Item is incorporated by reference to our definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference to our definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end.

Item 14. Principal Accounting Fees and Services

The information required by this Item is incorporated by reference to our definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end.

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Part IV

Item 15. Exhibits, Financial Statement Schedules

Financial Statements

See index to consolidated financial statements on page 33.

Financial Statement Schedules

Financial statement schedules have been omitted because they are inapplicable or not required or the required information is shown in the consolidated financial statements or Notes thereto under “Part II — Item 8. Financial Statements and Supplementary Data.”

Exhibits Required by Item 601 of SEC Regulation S-K


Exhibit No.						Description
2.1						Business Combination Agreement dated as of July 1, 2021, by and between Isos Acquisition Corporation and Bowlero Corp. (incorporated by reference to Exhibit 2.1 to Isos Acquisition Corporation’s Current Report on Form 8-K filed with the SEC on July 1, 2021).*
2.2						Amendment to Business Combination Agreement dated as of November 1, 2021, by and between Isos Acquisition Corporation and Bowlero Corp. (incorporated by reference to Exhibit 2.2 to Isos Acquisition Corporation’s Current Report on Form 8-K filed with the SEC on November 1, 2021).*
3.1						Amended and Restated Certificate of Incorporation of Bowlero Corp. (incorporated by reference to Exhibit 3.1 to Bowlero Corp’s registration statement on Form 8-A filed with the SEC on December 15, 2021). (File No. 001-40142).
3.2						Amended and Restated Bylaws of Bowlero Corp. (incorporated by reference to Exhibit 3.2 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
3.3						Certificate of Designations of Series A convertible preferred stock (incorporated by reference to Exhibit 3.3 to Bowlero Corp’s registration statement on Form 8-A filed with the SEC on December 15, 2021). (File No. 001-40142).
4.1						Specimen Class A common stock certificate (incorporated by reference to Exhibit 4.1 to the Amendment No. 2 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on October 15, 2021). (File No. 333-258080).
4.2						Specimen Class B common stock certificate (incorporated by reference to Exhibit 4.2 to the Amendment No. 2 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on October 15, 2021). (File No. 333-258080).
4.3						Form of Sponsor Support Agreement (incorporated by reference to Exhibit 10.5 to Isos Acquisition Corporation’s Current Report on Form 8-K filed with the SEC on July 1, 2021).
4.4						Stockholders Agreement, by and among Isos Acquisition Corporation, A-B Parent, LLC, Cobalt Recreation LLC, Thomas F. Shannon and Atairos Group, Inc., dated as of July 1, 2021 (incorporated by reference to Exhibit 10.8 to the Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on July 22, 2021). (File No. 333-258080).
4.5+						Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.
10.1						Form of Indemnification Agreement (incorporated by reference to Exhibit 10.2 to Bowlero Corp.’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.2						Registration Rights Agreement, dated March 2, 2021, by and among Isos Acquisition Corporation and certain security holders (incorporated by reference to Exhibit 10.3 to Isos Acquisition Corporation’s Current Report on Form 8-K filed with the SEC on March 5, 2021).
10.3						Form of Common Subscription Agreement (incorporated by reference to Exhibit 10.1 to Isos Acquisition Corporation’s Current Report on Form 8-K filed with the SEC on July 1, 2021).
10.4						Form of Preferred Subscription Agreement (incorporated by reference to Exhibit 10.2 to Isos Acquisition Corporation’s Current Report on Form 8-K filed with the SEC on July 1, 2021).
10.5						First Lien Credit Agreement, dated as of July 3, 2017, among A-B Merger Sub II LLC (to be merged with and into Kingpin Intermediate Holdings LLC), A-B Merger Sub I Inc. (to be merged with and into Bowlmor AMF Corp.), the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.10 to Amendment No. 1 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on September 20, 2021). (File No. 333-258080).

Table of Contents

Index to Financial Statements


Exhibit No.						Description
10.6						First Incremental Amendment to the First Lien Credit Agreement, dated as of March 28, 2018, among Kingpin Intermediate Holdings LLC, Bowlero Corp. (f/k/a Bowlmor AMF Corp.), the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.11 to Amendment No. 1 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on September 20, 2021). (File No. 333-258080).
10.7						Second Amendment to the First Lien Credit Agreement, dated as of July 5, 2018, among Kingpin Intermediate Holdings LLC, Bowlero Corp., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.12 to Amendment No. 1 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on September 20, 2021). (File No. 333-258080).
10.8						Third Incremental Amendment to the First Lien Credit Agreement, dated as of November 20, 2019, among Kingpin Intermediate Holdings LLC, Bowlero Corp., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.13 to Amendment No. 1 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on September 20, 2021). (File No. 333-258080).
10.9						Fourth Amendment to the First Lien Credit Agreement, dated as of June 10, 2020, among Kingpin Intermediate Holdings LLC, Bowlero Corp., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.14 to Amendment No. 1 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on September 20, 2021). (File No. 333-258080).
10.10						Fifth Amendment to the First Lien Credit Agreement, dated as of September 25, 2020, among Kingpin Intermediate Holdings LLC, Bowlero Corp., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.15 to Amendment No. 1 to Isos Acquisition Corporation’s Registration Statement on Form S-4 filed with the SEC on September 20, 2021). (File No. 333-258080).
10.11						Sixth Amendment to the First Lien Credit Agreement, dated as of July 3, 2017, by and among Bowlero Corp., Kingpin Intermediate Holdings LLC, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders from time to time party thereto, dated December 15, 2021 (incorporated by reference to Exhibit 10.13 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.12						Seventh Amendment to the First Lien Credit Agreement, dated as of July 3, 2017, by and among Bowlero Corp., Kingpin Intermediate Holdings LLC, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders from time to time party thereto, dated December 17, 2021 (incorporated by reference to Exhibit 10.14 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.13						Eighth Amendment to the First Lien Credit Agreement, dated as of July 3, 2017, by and among Bowlero Corp., Kingpin Intermediate Holdings LLC, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders from time to time party thereto, dated February 8, 2023 (incorporated by reference to Exhibit 10.1 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on February 8, 2023).
10.14						Ninth Amendment to the First Lien Credit Agreement, dated as of July 3, 2017, by and among Bowlero Corp., Kingpin Intermediate Holdings LLC, as the borrower, JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders from time to time party thereto, dated June 13, 2023 (incorporated by reference to Exhibit 10.1 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on June 13, 2023).
10.15†						2017 Bo w l mor A MF Corp. Stock Incentive Plan (incorporated by reference to Ex hibit 10.3 to Bowlero Corp.’s Registration Statement on Form S-8 filed with the SEC on March 1, 2022 ).
10.16†						Bowlero Corp. 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.17 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.17†						Bowlero Corp. Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.18 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.18†						Employment Agreement, dated as of December 15, 2021, by and between Bowlero Corp. and Thomas F. Shannon (incorporated by reference to Exhibit 10.19 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.19†+						Amended and Restated Employment Agreement, dated as of July 17, 2023, by and between Bowlero Corp. and Brett I. Parker.
10.20†						Form of Option Award Agreement (Initial Option) for Thomas F. Shannon and Brett I. Parker under the Bowlero Corp. 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.21 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).

Table of Contents

Index to Financial Statements


Exhibit No.						Description
10.21†						Form of Option Award Agreement (Reallocated Option) for Thomas F. Shannon and Brett I. Parker under the Bowlero Corp. 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
10.22†+						Employment Agreement, dated as of May 5, 2023, by and between Bowlero Corp. and Robert M. Lavan.
10.23†+						F orm of Option Award Agreement for Robert M. Lavan under the Bowlero Corp. 2021 Omnibus Incentive Plan.
16.1						Response Letter from Marcum, LLP (incorporated by reference to Exhibit 16.1 to Bowlero Corp’s Current Report on Form 8-K filed with the SEC on December 21, 2021).
21.1+						Subsidiaries of Bowlero Corp.
23.1+						Consent of KPMG LLP.
23.2+						Consent of Delo itte and Touche LLP.
31.1+						Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2+						Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1+						Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2+						Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover Page Interactive Data File (embedded within the Inline iXBRL document).

____________

*Certain of the exhibits and schedules to this Exhibit 2.1 and 2.2 have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of any of the omitted exhibits and schedules to the SEC upon its request.

†Indicates management contract or compensatory plan.

+ Filed herewith.

Item 16. Form 10-K Summary

None.

Table of Contents

Index to Financial Statements

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		BOWLERO CORP.

Date:	September 11, 2023	By:	/s/ Thomas F. Shannon
		Name:	Thomas F. Shannon
		Title:	Chairman, Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Thomas F. Shannon

Chairman, Chief Executive Officer and President; Director

September 11, 2023

Thomas F. Shannon

(Principal Executive Officer)

/s/ Robert M. Lavan

Chief Financial Officer and Treasurer

September 11, 2023

Robert M. Lavan

(Principal Financial Officer & Principal Accounting Officer)

/s/ Brett I. Parker

Director

September 11, 2023

Brett I. Parker

/s/ Michael J. Angelakis

Director

September 11, 2023

Michael J. Angelakis

/s/ Robert J. Bass

Director

September 11, 2023

Robert J. Bass

/s/ Sandeep Mathrani

Director

September 11, 2023

Sandeep Mathrani

/s/ Alberto Perlman

Director

September 11, 2023

Alberto Perlman

/s/ Rachael A. Wagner

Director

September 11, 2023

Rachael A. Wagner

/s/ Michelle Wilson

Director

September 11, 2023

Michelle Wilson

/s/ John A. Young

Director

September 11, 2023

John A. Young

EX-4.5 2 descriptionoftheregistrant.htm EX-4.5 Document

Exhibit 4.7

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

In this document, the “Company,” “Bowlero,” “we,” “us” and “our” refer to Bowlero Corp., a Delaware corporation. The following description of our capital stock summarizes certain provisions of our amended and restated certificate of incorporation (the “certificate of incorporation”) and our amended and restated bylaws (the “bylaws”). The description is intended as a summary, and is qualified in its entirety by reference to our certificate of incorporation and our bylaws, copies of which have been filed as exhibits to this Annual Report on Form 10-K.

Authorized and Outstanding Capital Stock

Our certificate of incorporation authorizes the issuance of 2,400,000,000 shares of all classes of Bowlero’s capital stock, consisting of:

• 2,000,000,000 shares of Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”);

• 200,000,000 shares of Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”); and

• 200,000,000 shares of preferred stock (the “Preferred Stock”), par value $0.0001 per share.

As of September 6, 2022, there were 110,122,265 issued and outstanding shares of Class A Common Stock, 55,911,203 issued and outstanding shares of Class B Common Stock (collectively, “Bowlero common stock”), and 200,000 issued and outstanding shares of Preferred Stock.

Common Stock

We have two classes of authorized common stock: Class A Common Stock and Class B Common Stock. Generally, Class B Common Stock can only be issued to, transferred to, and held by Thomas F. Shannon and Cobalt Recreation LLC, a Delaware limited liability company (“TS”), or trusts or legal entities through which the right to vote the shares of Class B Common Stock held thereby is exercised exclusively by Thomas F. Shannon or TS (Thomas F. Shannon, TS and any trust or legal entity, an “Eligible Holder”). Each outstanding share of Class B Common Stock will automatically convert into one share of Class A Common Stock upon the earliest to occur of: (i) Mr. Shannon ceasing to beneficially own at least 10% of Bowlero common stock, (ii) death or disability of Mr. Shannon, (iii) Mr. Shannon being terminated for cause as the Chief Executive Officer and (iv) the 15th anniversary of the issuance of Class B Common Stock.

Voting Rights

Class A Common Stock

Holders of Class A Common Stock are entitled to one (1) vote for each share of Class A Common Stock held of record by such holder on all matters voted upon by stockholders.

Class B Common Stock

Holders of Class B Common Stock are entitled to ten (10) votes for each share of Class B Common Stock held of record by such holder on all matters voted upon by stockholders.

Doc#: US1:16440125v3

Stockholder Votes

Holders of Bowlero common stock generally vote together as a single class on all matters submitted to a vote of Bowlero’s stockholders (including the election and removal of directors), unless otherwise provided in Bowlero’s certificate of incorporation or required by applicable law. Any action or matter submitted to a vote of Bowlero’s stockholders will be approved if the number of votes cast in favor of the action or matter exceeds the number of votes cast in opposition to the action or matter, except that Bowlero’s directors will be elected by a plurality of the votes cast. Holders of Class A Common Stock are not be entitled to cumulate their votes in the election of Bowlero’s directors.

Delaware law could require holders of a class of Bowlero’s capital stock to vote separately as a class on any proposed amendment of Bowlero’s certificate of corporation if the amendment would increase or decrease the par value of the shares of that class or would alter or change the powers, preferences or special rights of the shares of that class in a manner that affects them adversely.

Stockholder Action by Written Consent

The certificate of incorporation prohibits stockholders to act by written consent if Class B Common Stock represents less than 50% of the voting power of Bowlero’s outstanding capital stock entitled to vote in the election of directors at an annual meeting of stockholders. In such circumstances, any action required or permitted to be taken by Bowlero’s stockholders must be effected at a duly called annual or special meeting of stockholders and may not be taken or effected by written consent.

Special Meetings of Stockholders

The certificate of incorporation provides that, except as otherwise required by applicable law, special meetings of Bowlero’s stockholders may be called only by our board of directors, the Chairperson of our board of directors, Bowlero’s Chief Executive Officer or President, or, at any time that Class B Common Stock represents at least 50% of the voting power of Bowlero’s outstanding capital stock entitled to vote in the election of directors at an annual meeting of stockholders, the holders of shares representing a majority of the voting power of all of the outstanding shares of capital stock of Bowlero.

Economic Rights

Except as otherwise expressly provided in Bowlero’s certificate of incorporation or required by applicable law, shares of each class of Bowlero common stock has the same rights, powers and preferences and rank equally, share ratably and be identical in all respects as to all matters, including the following:

Dividends and Distributions; Rights upon Liquidation

Subject to the rights of holders of any outstanding series of Preferred Stock, the holders of shares of each class of Bowlero common stock are entitled to receive ratably, on a per share basis, any dividend or distribution (including upon the liquidation, dissolution or winding up of Bowlero) paid by Bowlero, except that, if a dividend or distribution is paid in the form of shares (or options, warrants or other rights to acquire shares) of Bowlero common stock, then holders of Class A Common Stock will receive shares (or options, warrants or other rights to acquire shares) of Class A Common Stock and holders of Class B Common Stock will receive shares (or options, warrants or other rights to acquire shares) of Class B Common Stock.

Subdivisions, Combinations and Reclassifications

If Bowlero subdivides or combines any class of Bowlero common stock with any other class of Bowlero common stock, subject to the rights of holders of any outstanding series of Preferred Stock, then each class of Bowlero common stock must be subdivided or combined in the same proportion and manner.

Conversion

Optional Conversion

Holders of Class B Common Stock will have the right to convert shares of their Class B Common Stock into fully paid and non-assessable shares of Class A Common Stock, on a one-to-one basis, at the option of the holder at any time.

Automatic Conversion

Generally, shares of Class B Common Stock will convert automatically into Class A Common Stock upon (i) Thomas F. Shannon ceasing to beneficially own, at least 10% of the number of shares of Bowlero common stock outstanding at such time; (ii) the death or disability of Thomas F. Shannon; (iii) the employment of Thomas F. Shannon as the Chief Executive of Bowlero being terminated for cause; and (iv) the 15th anniversary of the effective time of the Business Combination.

Conversion Policies and Procedures

Bowlero may establish from time to time certain restrictions, policies and procedures relating to the general administration of its multi-class structure and the conversion of Class B Common Stock to Class A Common Stock.

Registration Rights

Certain stockholders are party to a Registration Rights Agreement with Bowlero, dated as of March 2, 2021 (the “Registration Rights Agreement”) that grants such stockholders the right to require, subject to certain conditions and limitations, that Bowlero register for resale securities held by such stockholders and certain “piggyback” registration rights with respect to registrations initiated by Bowlero. Certain PIPE investors also hold registration rights pursuant to PIPE subscription agreements. On January 31, 2022 Bowlero’s Registration Statement on Form S-1 was declared effective, pursuant to which the stockholders who are party to the Registration Rights Agreement may resell such shares of Class A Common Stock without restriction under the Securities Act of 1933, as amended.

Other Rights

Bowlero’s certificate of incorporation and the bylaws do not provide for any preemptive or subscription rights with respect to Bowlero common stock, and there are no redemption or sinking fund provisions applicable to Bowlero common stock. All the shares of Bowlero common stock outstanding as of September 6, 2022 have been validly issued, fully paid and non-assessable.

Preferred Stock

Bowlero’s certificate of incorporation authorizes our board of directors, to the fullest extent permitted by applicable law, to issue up to an aggregate of 200,000,000 shares of preferred stock in one or more series from time to time by resolution, without further action by Bowlero’s stockholders, and to fix the powers (which may include full, limited or no voting power), designations, preferences and relative, participating, optional or other special rights, if any, of the shares of each such series (which rights may be greater than the rights of any or all of the classes of Bowlero common stock) and any qualifications, limitations or restrictions thereto.

The issuance of additional shares of Preferred Stock could adversely affect the voting power of holders of our Class A Common Stock and the likelihood that such holders will receive dividend payments or payments upon liquidation. In addition, the issuance of Preferred Stock could have the effect of delaying, deterring or preventing a change of control or other corporate action.

As of September 6, 2022, 200,000 shares of Preferred Stock have been issued and are outstanding.

Dividends

Holders of the Preferred Stock are entitled to receive, when, as and if declared by our board of directors, out of funds legally available for such dividends, cumulative cash dividends at an annual rate of 5.5% on the stated amount per share plus the amount of any accrued and unpaid dividends on such share, accumulating on a daily basis and payable semi-annually on June 30 and December 31, respectively, in each year. Such a dividend will accumulate, whether or not declared. Any dividends not paid in cash will be added to the liquidation value of the Preferred Stock.

Holders of the Preferred Stock are also entitled to such dividends paid to holders of Bowlero common stock to the same extent as if such holders of Preferred Stock had converted their shares of Preferred Stock into Bowlero common stock (without regard to any limitations on conversions) and had held such shares of Bowlero common stock on the record date for such dividends and distributions. Such payments will be made concurrently with the dividend or distribution to the holders of the Bowlero common stock.

Holders of the Preferred Stock are entitled to vote together as a single class with the holders of Bowlero common stock, with each such holder entitled to cast the number of votes equal to the number of votes such holder would have been entitled to cast if such holder were the holder of a number of shares of Bowlero common stock equal to the whole number of shares of Bowlero common stock that would be issuable upon conversion of such holder’s shares of Preferred Stock.

So long as any shares of Preferred Stock are outstanding, a vote or the consent of at least two holders not affiliated with each other, representing a majority of the Preferred Stock will be required for (i) effecting or validating any amendment, modification or alteration to the certificate of incorporation that would authorize or create, or increase the authorized amount of, any shares of any class or series or any securities convertible into shares of any class or series of capital stock that would rank senior or pari passu to the Preferred Stock with respect to dividend payments or upon the occurrence of a liquidation, (ii) effecting or validating any amendment, alteration or repeal or change to the rights, preferences, or privileges of the Preferred Stock, (iii) effecting or validating any amendment, alteration or repeal of any provision of the certificate of incorporation or the bylaws that would have an adverse effect on the rights, preferences, privileges or voting power of Preferred Stock or the holders thereof in any material respect, or (iv) any action or inaction that would constitute a Fundamental Change (as defined in the Certificate of Designations filed with the Secretary of State of the Delaware on December 15, 2021, as amended (the “Certificate of Designations”)), with certain exceptions.

Liquidation

Upon liquidation, Preferred Stock will rank senior to the Bowlero common stock, and will have the right to be paid, out of the assets of the Company legally available for distribution to its stockholders, an amount equal to the Liquidation Preference (as defined in the Certificate of Designations) per share of Preferred Stock.

Other Rights

Bowlero will have a right to effect a mandatory conversion of Preferred Stock after the second anniversary of the issuance date if the last reported price per share of the Bowlero common stock exceeds 130% of the conversion price on each of at least 20 trading days during a 30-day consecutive trading days period.

EX-10.19 3 amendedandrestatedemployme.htm EX-10.19 Document

Execution Version

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 17th day of July, 2023 (the “Effective Date”), by and between Bowlero Corp., a Delaware corporation (the “Company”), and Brett I. Parker (the “Executive”).

THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts, understandings and intentions:

A. The Executive is currently employed by the Company, pursuant to that certain Employment Agreement, dated as of December 15, 2021, as modified as of May 18, 2023 (the “Prior Employment Agreement”).

B. Effective as of the Effective Date, this Agreement shall govern the employment relationship between the Executive and the Company and shall supersede the Prior Employment Agreement.

C. The Executive desires to be employed by the Company on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the above recitals incorporated herein and the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties agree as follows:

1.Retention and Duties.

1.1Retention. The Company hereby hires, engages and employs the Executive for the Period of Employment (as such term is defined in Section 2) on the terms and conditions expressly set forth in this Agreement. The Executive does hereby accept and agree to such hiring, engagement and employment, on the terms and conditions expressly set forth in this Agreement.

1.2Duties. During the Period of Employment, the Executive shall serve the Company as its Executive Vice Chairman and shall report directly to the Chief Executive Officer of the Company (the “CEO”).

(a)During the period (the “First Period”) beginning on the first day of the Period of Employment ending on the earlier of (i) the two-year anniversary of the Effective Date and (ii) the Termination Date (as defined in Section 5.3), the Executive will (A) serve as an executive officer of the Company, (B) have oversight of the Company’s M&A and legal functions, (C) support the CEO on strategic initiatives and (D) initially serve as a member of the Board and subsequently be nominated to serve on the Board and, if elected, shall serve as a member of the Board, in each case, without any additional compensation therefor.

(b)If the Executive remains employed hereunder through the two-year anniversary of the Effective Date, then during the period (the “Second Period”) beginning on the day after the two-year anniversary of the Effective Date and ending on the earlier of (i) the three-year anniversary of the Effective Date and (ii) the Termination Date, the Executive will serve in an advisory position supporting the CEO on strategic initiatives.

1.3No Other Employment; Minimum Time Commitment. During the Period of Employment, the Executive shall devote to the performance of the Executive’s duties for the Company such portion of his business time, energy and skill as described below, and shall hold no other employment. The parties anticipate that the Executive will devote to the performance of his duties for the Company (a) an average of approximately 80 hours per month and 960 hours per year during the First Period and (b) reduced hours during the Second Period as mutually agreed to by the Executive and the CEO, based on the duties to be performed by the Executive during such period. If, during the First Period, the Company requests that the Executive devote additional time to the performance of his duties to the Company, the parties agree to discuss in good faith additional compensation for the Executive. During the Period of Employment, the Executive may continue to serve on no more than three (3) for-profit boards of directors (or similar body) of other business entities on which he serves as of the Effective Date, unless otherwise permitted by the Board. The Executive’s service on any additional for-profit boards of directors (or similar body) of other business entities is subject to the prior written approval of the Board, which approval shall not unreasonably be withheld or delayed. Nothing herein shall preclude the Executive from (i) engaging in a reasonable level of charitable activities and community affairs, including serving on non-profit boards of directors or the equivalent, and (ii) managing his personal and family investments and affairs, provided that such activities do not materially interfere with the effective discharge of his duties and responsibilities to the Company. The Company shall have the right (upon written notice and subject to the Executive fulfilling his fiduciary obligations as a member of the applicable board or body) to require the Executive to resign from any board or similar body (including, without limitation, any association, corporate, civic or charitable board or similar body) on which the Executive may then serve (or reduce his involvement) if the Board reasonably determines in good faith that any business related to such service is then in competition with any business of the Company or any Subsidiaries (as such term is defined in Exhibit A). In the event any such resignation (or reduction in involvement) is required of the Executive, the Executive shall so resign (or reduce his involvement) as soon as he can practicably do so without violating any fiduciary duty he may have to such other organization.

1.4No Breach of Contract. The Executive hereby represents to the Company that the execution and delivery of this Agreement by the Executive after execution and delivery by the Company, and the performance by the Executive of the Executive’s duties hereunder, do not and shall not constitute a breach of, conflict with, or otherwise contravene or cause a default under, the terms of any other agreement or policy to which the Executive is a party or otherwise bound or any judgment, order or decree to which the Executive is subject.

1.5Location. The Executive may work remotely from any location; provided that the Executive acknowledges and agrees to travel as necessary in performing the Executive’s duties for the Company, including travel to the Company’s headquarters and other locations as necessary.

2.Period of Employment. The “Period of Employment” shall be a period commencing on the Effective Date and ending at the close of business on the third (3rd) anniversary of the Effective Date. Notwithstanding the foregoing, the Period of Employment is subject to earlier termination as provided below in this Agreement.

3.Compensation.

3.1Base Salary. During the Period of Employment, and for the Executive’s services to the Company, the Company shall pay the Executive a base salary (the “Base Salary”), which shall be paid in accordance with the Company’s regular payroll practices in effect from time to time, but not less frequently than in semi-monthly installments. The Executive’s Base Salary shall be at an annualized rate of $500,000 for each year during the First Period and $400,000 for the Second Period.

3.2Annual Bonus. For fiscal year 2023 (which ended on July 3, 2023), the Executive will remain eligible to receive his annual bonus in accordance with the terms of the Prior Employment Agreement. During the Period of Employment, for each of fiscal years 2024 and 2025, the Executive shall have the opportunity to earn an annual bonus (the “Annual Bonus”). The target amount of the Annual Bonus (the “Target Bonus”) shall equal no less than 75% of the Base Salary, and the maximum amount of the Annual Bonus shall equal no less than 130% of the Base Salary. The actual amount of the Annual Bonus earned for a fiscal year shall be based on the achievement of performance targets established by the Compensation Committee of the Board (the “Committee”) in accordance with the terms of the Company’s annual incentive plan, with overall corporate performance goals consistent with those applicable to other senior executives. Any Annual Bonus earned for a fiscal year shall be paid to the Executive no later than two and a half (2.5) months after the end of such fiscal year. For fiscal year 2026, Executive shall have the opportunity to earn an annual bonus, the amount of which, if any, shall be determined in the sole discretion of the Committee.

3.3Equity Awards.

(a)Reference is made herein to the following options to purchase shares of Class A Common Stock of the Company (“Shares”) held by the Executive as of immediately prior to the Effective Date:

(i)the option (the “Rollover Option”) to purchase 4,079,120 Shares granted on January 1, 2020 under the 2017 Bowlmor AMF Corp. Stock Incentive Plan (the “2017 Plan”), with an exercise price per Share of $7.92;

(ii)the option (the “Reallocated Option”) to purchase 183,128 Shares granted on December 15, 2021 under the Bowlero Corp. 2021 Omnibus Incentive Plan (the “2021 Plan”), with an exercise price per Share of $10; and

(iii)the option (the “Initial Option”) to purchase 1,968,750 Shares granted on December 15, 2021 under the 2021 Plan, with an exercise price per Share of $10 for 20% of the Initial Option (“Tranche 1”), $12 for 20% of the Initial Option (“Tranche 2”), $14 for 20% of the Initial Option (“Tranche 3”), $16 for 20% of the Initial Option (“Tranche 4”), and $18 for 20% of the Initial Option (“Tranche 5”).

(b)The Rollover Option and the Reallocated Option, each of which is fully vested and exercisable, will remain exercisable in accordance with the terms set forth in the 2017 Plan or the 2021 Plan, as applicable, and the applicable option award agreement. In addition, the parties agree to discuss in good faith the possibility of the Executive being provided with the ability to transfer the Rollover Option for value, taking into consideration all relevant factors impacting the Company and the Executive.

(c)As of the Effective Date, each of Tranche 3, Tranche 4 and Tranche 5, and 50% of Tranche 2, are hereby cancelled without payment. For clarity, the cancellation of 50% of Tranche 2 applies on a prorated basis to each of the three installments of Tranche 2, such that 50% of Tranche 2 will be scheduled to vest and become exercisable on December 15 of each of 2023, 2024 and 2025. Tranche 1, and the 50% portion of the Tranche 2 that is not so cancelled, will vest and become exercisable on the applicable vesting dates, and subject to the terms, set forth in the 2021 Plan and the applicable option award agreement, subject to Executive’s continued employment with the Company through each applicable vesting date, except as otherwise set forth in such option award agreement.

4.Benefits.

4.1Retirement, Welfare and Fringe Benefits. During the Period of Employment, the Executive shall be entitled to participate in all employee pension and welfare benefit plans and programs, and fringe and any other employee benefit plans and programs, made available by the Company to its executive officers generally, in accordance with the generally applicable eligibility and participation provisions of such plans at a level commensurate with his position, and as such plans or programs may be in effect from time to time. Notwithstanding the foregoing, if the Executive’s participation in any of the Company’s health or welfare plans on the same basis as full-time or part-time employees is prohibited by the terms of such plan or applicable law due to the Executive’s part-time employment status as contemplated by Section 1.3, the Company will use commercially reasonable efforts, following consultation with the Executive, to provide the Executive with benefits that are comparable to the benefits provided to full-time employees under such plan at a comparable cost to the Executive as to full-time employees, including without limitation by (a) reimbursing the Executive for the employer portion of the premium for continued coverage under the Company’s health plan under COBRA (subject to the Executive’s timely election for such COBRA coverage) or (b) providing the Executive with a taxable cash payment in an amount sufficient to permit the Executive to purchase individual coverage.

4.2Company Aircraft Usage. During the Period of Employment, the Executive shall be entitled to reasonable use of the Company’s aircraft for non-business travel for up to 15 hours per calendar year in accordance with the terms of the Company’s corporate aircraft policy as in effect from time to time. The Executive shall not be required to reimburse the Company for the cost of the travel; provided that the cost of such travel shall be imputed as income to the Executive based on the standard industry fare level (SIFL) rates to the extent required by applicable tax laws.

4.3Reimbursement of Business Expenses. The Company shall reimburse the Executive for all reasonable business expenses the Executive incurs during the Period of Employment in connection with carrying out the Executive’s duties for the Company under this Agreement, subject to the Company’s expense reimbursement policies in effect from time to time. In addition, the Company shall reimburse the Executive for or pay the reasonable legal fees incurred by the Executive, in an amount not to exceed $25,000, relating to the negotiation and preparation of this Agreement.

4.4Vacation and Other Leave. During the Period of Employment, the Executive shall accrue and be entitled to take paid vacation at a rate of four (4) weeks per year (or such greater vacation benefits as may be provided under the vacation policies applicable to the Company’s senior executives in effect from time to time), subject to the Company’s policies regarding vacation accruals, including any policy which may limit vacation accruals and/or limit the amount of accrued but unused vacation to carry over from year to year. The Executive shall also be entitled to all other holiday and leave pay generally available to other executives of the Company.

5.Termination.

5.1Termination by the Company. The Executive’s employment by the Company, and the Period of Employment, may be terminated at any time by the Company: (a) with Cause (as such term is defined in Exhibit A); or (b) upon not less than thirty (30) days prior written notice to the Executive, without Cause; or (c) in the event of the Executive’s death; or (d) in the event that it is determined that the Executive has a Disability (as such term is defined in Exhibit A). The Company may, if it so chooses, place the Executive on paid leave of absence for any such thirty (30) day notice period referred to in clause (b) above (or any portion of such period).

5.2Termination by the Executive. The Executive’s employment by the Company, and the Period of Employment, may be terminated by the Executive, with or without Good Reason, upon not less than thirty (30) days prior written notice to the Company; provided, however, that in the case of a termination for Good Reason (as such term is defined in Exhibit A), the Executive may provide immediate written notice of termination once the applicable cure period (as contemplated by the definition of Good Reason) has lapsed if the Company has not reasonably cured the circumstances that gave rise to the basis for the Good Reason termination.

5.3Benefits Upon Termination. If the Executive’s employment by the Company is terminated during the Period of Employment for any reason by the Company or by the Executive, or upon or following the expiration of the Period of Employment (in any case, the date that the Executive’s employment by the Company terminates is referred to as the “Termination Date”), the Company shall have no further obligation to make or provide to the Executive, and the Executive shall have no further right to receive or obtain from the Company, any payments or benefits except as follows:

(a)The Company shall pay the Executive (or, in the event of the Executive’s death, the Executive’s estate) any Accrued Obligations (as such term is defined in Exhibit A).

(b)If, during the Period of Employment, the Executive’s employment with the Company is terminated by the Company without Cause (and other than due to the Executive’s death or Disability), or as a result of a resignation by the Executive for Good Reason, the Company shall continue to pay the Executive (in addition to the Accrued Obligations) the Base Salary and the Annual Bonuses (assuming target performance) that would have been payable to the Executive for the period beginning on the day after the Termination Date and ending on the three-year anniversary of the Effective Date, had the Executive’s employment continued through such three-year anniversary.

(c)If, during the Period of Employment, the Executive’s employment with the Company is terminated due to his death or Disability, the Executive (or his estate) will be entitled to receive the Annual Bonus for the fiscal year of termination, determined based on actual performance for such fiscal year, as prorated based on the number of days employed during such fiscal year, payable on the date that annual bonuses for such fiscal year are paid to the Company’s other senior executives.

(d)Notwithstanding the foregoing provisions of this Section 5.3, if the Executive materially breaches, at any time, either the Executive’s obligations under Sections 6.1, 6.4, 6.5 or 6.6 of this Agreement or any other material provisions under Section 6 of this Agreement, from and after the date of such breach and not in any way in limitation of any right or remedy otherwise available to the Company, the Executive shall no longer be entitled to, and the Company shall no longer be obligated to pay, any remaining unpaid portion of the payments under Section 5.3(b) or 5.3(c), as applicable; provided, however, that, if the Executive provides the Release contemplated by Section 5.4, in no event shall the Executive be entitled to a payment, as applicable, of less than $5,000, which amount the parties agree is good and adequate consideration, in and of itself, for the Executive’s Release contemplated by Section 5.4.

(e)The foregoing provisions of this Section 5.3 shall not affect: (i) the Executive’s receipt of benefits otherwise due terminated employees under group insurance coverage consistent with the terms of the applicable Company welfare benefit plan; (ii) the Executive’s rights under COBRA to continue participation in medical, dental, hospitalization and life insurance coverage; (iii) the Executive’s receipt of benefits otherwise due in accordance with the terms of the Company’s 401(k) plan (if any) or any other retirement or pension plan; and (iv) any right to indemnification the Executive may have from the Company or the Executive’s right to be covered under any applicable insurance policy, with respect to any liability the Executive incurred or might incur as an employee, officer or director of the Company or its affiliates, including, without limitation, pursuant to Section 19 hereof.

5.4Release; Exclusive Remedy.

(a)This Section 5.4 shall apply notwithstanding anything else contained in this Agreement to the contrary. As a condition precedent to any Company obligation to the Executive pursuant to Section 5.3, the Executive (or his estate or personal representative, as applicable) shall, upon or promptly following his last day of employment with the Company, provide the Company with a valid, executed written release agreement in the form attached hereto as Exhibit B (with such changes as may be reasonably required to such form in order to make the release enforceable and otherwise compliant with applicable law) (the “Release”), and such Release shall have not been revoked by the Executive pursuant to any revocation rights afforded by applicable law. The Company shall provide the Release to the Executive not later than seven (7) days following the Termination Date, and the Executive shall be required to execute and return the Release to the Company within twenty-one (21) days (or forty-five (45) days if such longer period of time is required to make the Release maximally enforceable under applicable law) after the Company provided the form of Release to the Executive.

(b)The Executive agrees that the payments and benefits contemplated by Section 5.3 shall (if the Release contemplated by Section 5.4(a) is signed and becomes effective and the amounts are paid in accordance with their terms) constitute the exclusive and sole remedy for any termination of the Executive’s employment and, in such case, the Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment; provided, however, that nothing herein shall affect the Executive’s rights as a stockholder of the Company (or the rights of any stockholder in which the Executive has a direct or indirect beneficial interest). The Company and the Executive acknowledge and agree that there is no duty of the Executive to mitigate damages under this Agreement, and there shall be no offset against any amounts due to the Executive under this Agreement on account of any remuneration attributable to any subsequent employment that the Executive may obtain. All amounts paid to the Executive pursuant to Section 5.3 shall be paid without regard to whether the Executive has taken or takes actions to mitigate damages. The Executive agrees to resign, on the Termination Date, as an officer and director of the Company and any Affiliate, and as a fiduciary of any benefit plan of the Company or any Affiliate, and to promptly execute and provide to the Company any further documentation, as reasonably required by the Company, to confirm such resignation.

5.5Notice of Termination; Paid Leave. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other parties. This notice of termination must be delivered in accordance with Section 17 and must indicate the specific provision(s) of this Agreement relied upon in effecting the termination. If the Company terminates the Executive’s employment pursuant to clause (b) of Section 5.1, or if the Executive provides notice of termination pursuant to Section 5.2, the Company may place the Executive on paid administrative leave during the applicable notice period and such leave shall not constitute grounds for a resignation by the Executive for Good Reason.

5.6Section 280G. In the event that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, the Executive under any other plan or agreement (such payments or benefits are collectively referred to as the “Benefits”) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), in connection with any transaction, then the Company shall cause to be determined, before any amounts of the Benefits are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an

after-tax basis, of the greater amount of the Benefits notwithstanding that all or some portion of the Benefits may be subject to the Excise Tax: (a) payment in full of the entire amount of the Benefits (a “Full Payment”), or (b) payment of only a part of the Benefits so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”), and the Executive shall be entitled to payment of whichever amount shall result in a greater after-tax amount for the Executive. For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, the reduction in payments and/or benefits shall occur in the following order: (1) first, reduction of cash payments, in reverse order of scheduled payment date (or if necessary, to zero), (2) then, reduction of non-cash and non-equity benefits provided to the Executive, on a pro rata basis (or if necessary, to zero) and (3) then, cancellation of the acceleration of vesting of equity award compensation in the reverse order of the date of grant of the Executive’s equity awards.

A determination as to whether any Excise Tax would be imposed on the Benefits and, if so, whether a Full Payment or a Reduced Payment would result in a greater after-tax amount for the Executive, shall be made by the Company’s independent public accountants or another certified public accounting firm or executive compensation consulting firm of national reputation designated by the Company (the “Firm”) at the Company’s expense. The Firm shall provide its determination, together with detailed supporting calculations and documentation to the Company and the Executive within ten (10) business days of the date of termination of the Executive’s employment, if applicable, or such other time as reasonably requested by the Company or the Executive.

6.Protective Covenants.

6.1Confidential Information. The Executive agrees that he will not disclose or use at any time, either during the Executive’s employment with the Company or thereafter, any Confidential Information (as defined below) of which the Executive is or becomes aware, whether or not such information is developed by the Executive, except to the extent that such disclosure or use is directly related to the good faith performance of the Executive’s duties for the Company. The Executive agrees that he will take all reasonable and appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft. Notwithstanding the foregoing, the Executive may truthfully respond to a lawful and valid subpoena, court order or other legal process, but the Executive agrees, to the extent he is permitted under applicable law and the relevant request for disclosure: (i) to first give the Company the earliest possible notice thereof, (ii) to, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other reasonable information sought, and (iii) to assist the Company and such counsel (at the Company’s expense) in resisting or otherwise responding to such process, subject to the Executive’s other commitments. As used in this Agreement, the term “Confidential Information” means information that is not generally known to the public and that is used, developed or obtained by the Company or any Subsidiary in connection with its business, including, but not limited to, information, observations and data obtained by the Executive while employed by the Company or any predecessors thereof (including those obtained prior to the date of this Agreement) concerning (i) the business or affairs of the Company or any Subsidiary (including each of their respective predecessors), (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists, (xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all similar and related information in whatever form. Confidential Information will not be deemed to have been published merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination. The Executive further understands that Confidential Information does not include any of the foregoing or other items that have become publicly known or made generally available through no wrongful act (or failure to act) of the Executive or, to the knowledge of the Executive, of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof or is available, or becomes available, to the Executive on a non-confidential basis, but only if the source of the information is not, to the Executive’s knowledge, prohibited from transmitting the information to the Executive by a contractual, legal, fiduciary or other obligation. The Executive acknowledges that, as between the Executive and the Company, all Confidential Information shall be the sole and exclusive property of the Company and its assigns. Further, this Section 6.1 shall not prevent the Executive from disclosing Confidential Information in connection with any litigation, arbitration or mediation involving the Executive’s employment or termination thereof, including, but not limited to, enforcing this Agreement, provided that such disclosure is reasonably necessary for the Executive to assert any claim or defense in such proceeding. Nothing in this Section 6.1 or any other provision of this Agreement shall prohibit the Executive from: reporting possible violations of law or regulation to any governmental agency or entity including but not limited to Department of Justice, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Commission, and any Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal, state or local law or regulation. The Executive does not need the prior authorization of the Company to make any such reports or disclosures and the Executive is not required to notify the Company that Executive has made such reports or disclosures.

6.2Inventions.

(a)Inventions Retained and Licensed. The Executive has attached hereto, as Exhibit C, a list describing all inventions, original works of authorship, developments, improvements and trade secrets that were made, conceived or first reduced to practice by the Executive prior to his employment with the Company (collectively referred to as “Prior Inventions”), which belong to the Executive or a third party (such as a former employer), which relate to the Company’s (or any Subsidiary’s) actual or proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, the Executive represents that there are no such Prior Inventions. If disclosure of any such Prior Invention would cause the Executive to violate any prior confidentiality agreement, the Executive understands that he is not to list such Prior Inventions in Exhibit C but is only to disclose a cursory name for each such invention, a listing of the party(ies) to whom it belongs and the fact that full disclosure as to such inventions has not been made for that reason. A space is provided on Exhibit C for such purpose. If, in the course of the Executive’s employment with the Company the Executive incorporates into a Company or Subsidiary product, material, process, machine or service, a Prior Invention owned by the Executive or in which he has an interest, the Executive hereby grants to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, make derivative works of, use, disclose, reproduce, distribute, offer to sell, sell, have sold, import and otherwise exploit such Prior Invention as part of or in connection with such product, material, process, machine or service, and to practice any method related thereto. Notwithstanding the foregoing, the Executive agrees that he will not incorporate, or permit to be incorporated, Prior Inventions in any Company or Subsidiary product, material, process, machine or service without the Company’s prior written consent.

(b)Assignment of Inventions. The Executive agrees that he will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company and hereby assigns to the Company, or its designee, all the Executive’s right, title and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, mask works, prototypes, models, materials, discoveries, ideas, processes, formulas, data, know-how, techniques, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which the Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the entire period of time the Executive is in the employ of the Company, whether before or after the execution of this Agreement, except as provided in Section 6.2(f) below (collectively referred to as “Inventions”). Notwithstanding anything to the contrary contained herein, for purposes of this Agreement, Inventions shall not include inventions created by the Executive during non-business hours that are not related in any respect to the business (or any portion thereof) of the Company. The Executive further acknowledges that all original works of authorship that are made by the Executive (solely or jointly with others) within the scope of and during the period of his employment with the Company (whether before or after the execution of this Agreement) and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act. Additionally, any assignment of copyright hereunder includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights” (collectively “Moral Rights”). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, the Executive hereby waives such Moral Rights and consents to any action of the Company that would violate such Moral Rights in the absence of such consent. The Executive will confirm any such waivers and consents from time to time as requested by the Company. The Executive understands and agrees that the decision whether or not to commercialize or market any invention developed by the Executive solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to the Executive as a result of the Company’s efforts to commercialize or market any such invention.

(c)Inventions Assigned to the United States. The Executive agrees to assign to the United States government all the Executive’s right, title and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company, on the one hand, and the United States or any of its agencies, on the other hand.

(d)Maintenance of Records. The Executive agrees to keep and maintain adequate and current written records of all Inventions made by the Executive (solely or jointly with others) during the term of his employment with the Company. The records will be in the form of notes, notebooks, sketches, drawings or any other format that may be reasonably specified by the Company. The records will be available to, and remain the sole property of the Company at all times.

(e)Registrations and Enforcement. The Executive agrees to reasonably assist the Company, or its designee, at the Company’s expense, in every proper way to secure, maintain, defend and enforce the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company or any successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. The Executive further agrees that his obligation to execute or cause to be executed, when it is in his power to do so, any such instrument or papers shall continue after the termination of this Agreement, but the Company shall compensate the Executive at a reasonable rate after his termination for the time actually spent by him at the Company’s request on such assistance. If the Company is unable because of the Executive’s mental or physical incapacity or for any other reason to secure his signature in connection with any of the foregoing actions (including as necessary to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above), then the Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney in fact, to act for and in his behalf and stead (including to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon) with the same legal force and effect as if executed by the Executive. The Executive hereby waives and quitclaims to the Company any and all claims, of any nature whatsoever, which the Executive now or may hereafter have for infringement of any Inventions assigned hereunder to the Company.

(f)Obligation to Keep Company Informed. During the Period of Employment and for six (6) months after the Executive’s Termination Date, the Executive will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by the Executive, either alone or jointly with others. In addition, the Executive will promptly disclose to the Company all patent applications filed by him or on his behalf within a year after the Termination Date.

6.3Cooperation. For five (5) years following the Executive’s last day of employment by the Company, the Executive shall reasonably cooperate with the Company and the Subsidiaries in connection with: (a) any internal or governmental investigation or administrative, regulatory, arbitral or judicial proceeding involving any of them with respect to matters relating to the Executive’s employment with or service as a member of the Board or the board of directors of any Subsidiary; or (b) any audit of the financial statements of the Company or any Subsidiary with respect to the period of time when the Executive was employed by the Company. The Company shall reimburse the Executive for reasonable travel expenses incurred in connection with providing the services under this Section 6.3, including lodging and meals, upon the Executive’s submission of receipts.

6.4Restriction on Competition. The Executive agrees that if the Executive were to become employed by, or substantially involved in, the business of a competitor of the Company or any of the Subsidiaries during the Restricted Period (defined below), it would be very difficult for the Executive not to rely on or use the Company’s or the Subsidiaries’ trade secrets and confidential information. Thus, to avoid the inevitable disclosure of such trade secrets and confidential information, and to protect such trade secrets and confidential information and the Company’s and the Subsidiaries’ relationships and goodwill with customers, during the Restricted Period, except in the good faith performance of his duties hereunder, the Executive shall not directly or indirectly through any other Person engage in, enter the employ of, render any services to, have any ownership interest in, nor participate in the financing, operation, management or control of, any Competing Business. For purposes of this Agreement, “Restricted Period” means the Period of Employment and two (2) years after the Termination Date. For purposes of this Agreement, the phrase “directly or indirectly through any other Person engage in” shall include, without limitation, any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, member, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, director, officer, licensor of technology or otherwise. For purposes of this Agreement, “Competing Business” means any Person anywhere in the United States and any other country in which the Company or any of the Subsidiaries operates (or plans to commence operations) that at any time during the Period of Employment is engaged in (or has plans to engage in), or at any time during the six (6) month period following the Termination Date is engaged in (or has plans to engage in) a business related to bowling or the operation of bowling centers. Nothing herein shall prohibit the Executive from (i) investing in mutual funds and stocks, bonds, or other securities in any business if such stocks, bonds, or other securities are listed on any securities exchange or are publicly traded in an over the counter market, and such investment does not exceed, in the case of any capital stock of any one issuer, two percent (2%) of the issued and outstanding capital stock or in the case of bonds or other securities, two percent (2%) of the aggregate principal amount thereof issued and outstanding, or (ii) being employed in a senior management role of a conglomerate (or a portion of a conglomerate) that engages in a Competing Business so long as the Executive does not perform services to or otherwise actively participate in the business unit engaged in the Competing Business.

6.5Soliciting Customers. During the Restricted Period, the Executive shall not directly or indirectly through any other Person influence or attempt to influence customers, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants, agents, or partners of the Company or any of the Subsidiaries to divert their business away from the Company or such Subsidiary to a Competing Business, and the Executive shall not otherwise interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company or any of the Subsidiaries, on the one hand, and any of its or their customers, suppliers, vendors, lessors, licensors, joint venturers, associates, officers, employees, consultants, managers, partners, members or investors, on the other hand in an effort to benefit a Competing Business. The foregoing shall not be violated by general advertising of a customary nature not targeted at such persons or entities, nor by serving as a reasonable and customary reference upon request.

6.6Soliciting Employees and Consultants. During the Restricted Period, except in the good faith performance of his duties hereunder, the Executive shall not directly or indirectly through any other Person (a) induce or attempt to induce any officer, other key employee or independent contractor of the Company or any of the Subsidiaries to leave the employ or service, as applicable, of the Company or such Subsidiary, or in any way interfere with the relationship between the Company or any Subsidiary, on the one hand, and any officer, other key employee or independent contractor thereof, on the other hand, or (b) hire any person who was an officer or other key employee of the Company or any of the Subsidiaries until six (6) months after such individual’s employment relationship with the Company or such Subsidiary has been terminated. For purposes of this Section 6.6, any employee of the Company or any of the Subsidiaries whose compensation for the year in which such event occurs is or is reasonably expected to be greater than $80,000 shall be presumed to be a “key employee.” The foregoing shall not be violated by general advertising of a customary nature not targeted at such persons or entities, nor by serving as a reasonable and customary reference upon request.

6.7Understanding of Covenants.

(a)The Executive acknowledges that, in the course of the Executive’s employment with the Company and/or its Subsidiaries and their predecessors, the Executive has become familiar, or will become familiar, with the Company’s and the Subsidiaries’ and their predecessors’ trade secrets and with other confidential and proprietary information concerning the Company, the Subsidiaries and their respective predecessors and that the Executive’s services have been and will be of special, unique and extraordinary value to the Company and the Subsidiaries. The Executive agrees that the foregoing covenants set forth in Sections 6.1 through 6.6 (together, the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and the Subsidiaries’ trade secrets and other confidential and proprietary information, good will, stable workforce, and customer relations.

(b)Without limiting the generality of the Executive’s agreement in the preceding paragraph, the Executive (i) represents that the Executive is familiar with and has carefully considered the Restrictive Covenants, (ii) represents that the Executive is fully aware of the Executive’s obligations hereunder, (iii) agrees to the reasonableness of the length of time, scope and geographic coverage, as applicable, of the Restrictive Covenants, and (iv) agrees that the Restrictive Covenants shall continue in effect for the applicable periods set forth above in this Section 6 regardless of whether the Executive is then entitled to receive severance pay or benefits from the Company. The Executive understands that the Restrictive Covenants may limit the Executive’s ability to earn a livelihood in a business similar to the business of the Company, and the Subsidiaries, but the Executive nevertheless believes that the Executive has received and will receive sufficient consideration and other benefits as an employee of the Company to justify such restrictions and that such restrictions would prevent the Executive from otherwise earning a living. The Executive acknowledges and agrees that the Restrictive Covenants do not confer a benefit upon the Company and the Subsidiaries disproportionate to the detriment of the Executive; are not greater than is required to protect the legitimate and valid business interests and goodwill of the Company and the Subsidiaries; are reasonably necessary to prevent unfair competition; and are not injurious to the public.

6.8Enforcement and Venue for Enforcement. The Executive agrees that the Executive’s services are unique and that the Executive has access to the Company’s and the Subsidiaries’ trade secrets and other confidential and proprietary information. Accordingly, the Executive agrees that a breach by the Executive of any of the covenants in this Section 6 would cause immediate and irreparable harm to the Company that would be difficult or impossible to measure, and that damages to the Company for any such injury would therefore be an inadequate remedy for any such breach. Therefore, the Executive agrees that in the event of any breach or threatened breach of any provision of this Section 6, the Company shall be entitled, in addition to and without limitation upon all other remedies that either of them may have under this Agreement, at law or otherwise, to obtain specific performance, injunctive relief and/or other appropriate relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Section 6. The Executive further agrees that the applicable period of time any Restrictive Covenant is in effect following the Termination Date, as determined pursuant to the foregoing provisions of this Section 6, shall be extended by the same amount of time that the Executive is in breach of any Restrictive Covenant. The Executive further understands and agrees that any court action brought pursuant to this Section 6.8 will be brought in federal or state court of New York, and hereby expressly consents to the jurisdiction of such courts for that purpose.

6.9Return of Company Materials. The Executive agrees that, at the time of leaving the employ of the Company, the Executive will deliver to the Company (and will not keep in the Executive’s possession, recreate or deliver to anyone else) any and all devices, records, data, notes, notebooks, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, prototypes, samples, models and other documents or property, or reproductions of any aforementioned items developed by the Executive pursuant to his employment with the Company or otherwise belonging to the Company, any Subsidiary, or their respective successors or assigns; provided that the Executive may retain his telephone directories, compensation related documents and other personal property.

7.Withholding Taxes Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

8.Successors and Assigns This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company, its successors and, other than as set forth below, shall not be assignable by the Company without the prior written consent of the Executive. The obligations under this Agreement shall be assignable by the Company to, and only to, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company; provided that the Company shall require such successor to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such assignment had taken place; if such successor fails to assume and agree to perform this Agreement in such manner and to such extent, such failure shall be grounds for the Executive to terminate his employment hereunder for Good Reason. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor thereto which assumes and agrees to perform this Agreement by operation of law or otherwise.

9.Number and Gender; Examples Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates.

10.Section Headings The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.

11.Governing Law THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

12.Severability It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn (as to geographic scope, period of duration or otherwise) so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

13.Entire Agreement On and following the Effective Date, (i) this Agreement, including its attachments and exhibits (together, the “Integrated Document”), embodies the entire agreement of the parties hereto respecting the matters within its scope, (ii) the Integrated Document supersedes all prior and contemporaneous agreements of the parties hereto that directly or indirectly bears upon the subject matter hereof, including, without limitation, the Prior Employment Agreement, (iii) any prior negotiations, correspondence, agreements, proposals or understandings relating to the subject matter hereof shall be deemed to have been merged into the Integrated Document, and to the extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or understandings shall be deemed to be of no force or effect, and (iv) there are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter hereof, except as expressly set forth herein or in the Integrated Document.

14.Modifications This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto. The Executive may not consent to any such amendment, modification or change on behalf of the Company.

15.Waiver Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

16.Arbitration; Waiver of Jury Trial.

16.1Arbitration. The Executive and the Company hereby agree that any and all controversies, claims or disputes with anyone arising out of, relating to or resulting in any manner from the Executive’s employment with the Company or the termination of the Executive’s employment with the Company, including any breach of this Agreement, (including any dispute with any employee, officer, shareholder, affiliate or benefit plan of the Company in their capacity as such or otherwise) shall be subject to binding arbitration under the arbitration rules set forth in applicable state or federal law (the “Rules”). Disputes which the parties agree to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, claims of harassment, discrimination or wrongful termination and any statutory claims.

16.2Procedure. The parties hereby agree that any arbitration will be administered by a sole arbitrator (the “Arbitrator”) selected from Judicial Arbitration & Mediation Services, Inc., New York, New York, or its successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration Association, and such selection shall be in a manner consistent with the JAMS rules applicable to employment disputes. Any arbitration pursuant to this Section 16 shall take place in New York, New York. The parties agree that the Arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. The parties also agree that the Arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available under applicable law. The Company agrees that it will pay for any administrative or hearing fees unique to arbitration, including any filing fees or arbitrator fees associated with any arbitration brought under this Section 16. The Arbitrator shall administer and conduct any arbitration in a manner consistent with the Rules and that to the extent that the JAMS rules applicable to employment disputes conflict with the Rules, the Rules shall take precedence. The decision of the Arbitrator shall be in writing and shall set forth the bases for the Arbitrator’s decision.

16.3Remedy. Except as provided by the Rules and this Agreement, arbitration shall be the sole, exclusive and final remedy for any dispute between the Executive and the Company. Accordingly, except as provided for by the Rules and this Agreement, the Executive and the Company will not be permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the Arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the Arbitrator shall not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted. The decision of the Arbitrator on any issue, dispute, claim or controversy submitted for arbitration, shall be final and binding upon the parties and that judgment may be entered on the award of the Arbitrator in any court having proper jurisdiction.

16.4Availability of Injunctive Relief. In addition to the right under the Rules to petition the court for provisional relief, the parties agree that any party may also petition the court for injunctive relief in aid of arbitration where either party alleges or claims a violation of this Agreement or any other agreement between the Executive, on the one hand, and the Company, on the other hand, regarding trade secrets or confidential information. The Executive understands that any breach or threatened breach of such an agreement will cause irreparable injury and that money damages will not provide an adequate remedy therefor, and both parties hereby consent to the issuance of an injunction. In the event either party seeks injunctive relief, the prevailing party shall be entitled to recover reasonable costs and attorneys’ fees to the extent permitted by applicable law.

16.5Administrative Relief. The Executive understands that this Agreement does not prohibit the Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Equal Employment Opportunity Commission or the state Workers’ Compensation board. This Agreement does, however, preclude the Executive from pursuing court action regarding any such claim.

16.6Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

17.Notices Any notice provided for in this Agreement must be in writing and must be either personally delivered, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, five days after deposit in the U.S. mail and one day after deposit with a reputable overnight courier service.

if to the Company:

Bowlero Corp.
Attention: Chief Legal Officer
7313 Bell Creek Road
Mechanicsville, VA 23111

if to the Executive, to the address most recently on file in the Company’s payroll records, with a copy to:

Proskauer Rose LLP
11 Times Square
New York, NY 10036
Attn: Ira Bogner, Esq.

18.Section 409A.

18.1If the Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Executive’s Separation from Service, the Executive shall not be entitled to any payment or benefit pursuant to Section 5.3 until the earlier of (i) the date which is six (6) months after the Executive’s Separation from Service for any reason other than death, or (ii) the date of the Executive’s death. The provisions of this Section 18.1 shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise payable to the Executive upon or in the six (6) month period following the Executive’s Separation from Service that are not so paid by reason of this Section 18.1 shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Executive’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Executive’s death).

18.2Except to the extent any reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A of the Code, any such reimbursement or in-kind benefit due to the Executive hereunder (A) shall be paid to the Executive on or before the last day of the Executive’s taxable year following the taxable year in which the related expense was incurred, and (B) shall not be subject to liquidation or exchange for another benefit and the amount of such reimbursement or in-kind benefit that the Executive receives in one taxable year shall not affect the amount of such benefits and reimbursements that the Executive receives in any other taxable year. The Executive agrees to promptly submit and document any reimbursable expenses in accordance with the Company’s expense reimbursement policies to facilitate the timely reimbursement of such expenses.

18.3It is intended that any amounts payable under this Agreement, and the Company’s and the Executive’s exercise of authority or discretion hereunder, shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This Agreement shall be construed and interpreted consistent with that intent.

18.4For purposes of Section 409A of the Code, the Executive’s right to receive any installment payment under this Agreement shall be treated as a right to receive a series of separate and distinct payments.

18.5Notwithstanding anything to the contrary herein, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a Separation from Service and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean Separation from Service.

19.Indemnification.

19.1The Company agrees that (i) if the Executive is made a party, or is threatened to be made a party, to any threatened or actual action, suit or proceeding whether civil, criminal, administrative, investigative, appellate or other (a “Proceeding”) by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee, agent, manager, consultant or representative of another person or (ii) if any claim, demand, request, investigation, controversy, threat, discovery request or request for testimony or information (a “Claim”) is made, or threatened to be made, that arises out of or relates to the Executive’s service in any of the foregoing capacities, whether arising before or after the Effective Date, then the Executive shall promptly be indemnified and held harmless by the Company to the fullest extent legally permitted and authorized by the Company’s charter, bylaws or Board resolutions against any and all costs, expenses, liabilities and losses (including, without limitation, attorney’s fees, judgments, interest, expenses of investigating, defending or obtaining indemnity with respect to any Proceeding or Claim, penalties, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if he has ceased to be a director, officer or employee of the Company or a director, officer, member, employee, agent, manager, consultant or representative of such other person and shall inure to the benefit of the Executive’s heirs, executors and administrators. To the extent permitted by law, the Company shall advance to the Executive all costs and expenses incurred by him in connection with any such Proceeding or Claim within thirty (30) days after receiving written notice requesting such an advance. Such notice shall include an undertaking by the Executive to repay the amount advanced if he is ultimately determined not to be entitled to indemnification against such costs and expenses.

19.2Neither the failure of the Company (including its Board, independent legal counsel or stockholders) to have made a determination in connection with any request for indemnification or advancement under Section 19.1 that the Executive has satisfied any applicable standard of conduct, nor a determination by the Company (including its Board, independent legal counsel or stockholders) that the Executive has not met any applicable standard of conduct, shall create a presumption that the Executive has not met an applicable standard of conduct.

19.3During the Period of Employment and for a period of six (6) years thereafter, the Company shall keep in place a directors and officers’ liability insurance policy (or policies) providing comprehensive coverage to the Executive if and to the extent that the Company provides such coverage for any other present or former senior executive or director of the Company.

19.4The provisions of this Section 19 shall apply to the estate, executor, administrator, heirs, legatees or devisees of the Executive and shall survive any termination of this Agreement.

20.Counterparts This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

21.Legal Counsel; Mutual Drafting Each party recognizes that this is a legally binding contract and acknowledges and agrees that such party has had the opportunity to consult with legal counsel of such party’s choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such language. The Executive agrees and acknowledges that the Executive has read and understands this Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this Agreement and has had ample opportunity to do so.

22.Further Assurances Each party shall execute and cause to be delivered to each other party hereto such documents and other instruments and take such further actions as may be reasonably necessary to carry out the provisions hereof.

[The remainder of this page has intentionally been left blank.]

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first above written.

“COMPANY”

Bowlero Corp., a Delaware corporation

By: /s/ Thomas Shannon
Name: Thomas Shannon
Title: Chairman & CEO

“EXECUTIVE”

/s/ Brett I. Parker
Brett I. Parker

Signature Page to Amended and Restated Employment Agreement

EXHIBIT A

Certain Definitions

For purposes of this Agreement the following terms have the following meanings:

“Accrued Obligations” means:

(i) any Base Salary that had accrued but had not been paid (including accrued and unpaid vacation time) on or before the Termination Date;

(ii) other than in the event of the Executive’s termination by the Company for Cause or by the Executive without Good Reason, any Annual Bonus payable pursuant to Section 3.2 with respect to the fiscal year immediately preceding the fiscal year in which the Termination Date occurs that had not previously been paid, paid when Annual Bonus payments are made to active employees but in no event later than December 31 of the calendar year in which the Termination Date occurs;

(iii) any reimbursement due to the Executive pursuant to Section 4.2 for expenses incurred by the Executive through the Termination Date; and

(iv) any other amounts or benefits required to be paid or provided by law or under any employee benefit plan, program, policy or practice of the Company.

Subject to Section 18, all amounts in (i) and (iii) shall be paid promptly after the Termination Date, the amount in (ii) shall be paid in accordance with (ii), and the amounts and benefits in (iv) shall be paid or provided in accordance with their terms.

“Affiliate” means a Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. As used in this definition, the term “control,” including the correlative terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or any partnership or other ownership interest, by contract or otherwise) of a Person.

“Cause” shall mean that, during the Period of Employment, any of the following events exists or has occurred:

(i) the Executive is convicted of, or pleads guilty or nolo contendre to, a felony (under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction);

(ii) the Executive willfully commits an act of fraud, dishonesty or other act of willful misconduct in the course of the Executive’s duties hereunder that has an adverse impact on the Company or any Affiliate that is not immaterial, after the Company has delivered to the Executive a written notice which describes the basis for the Board’s belief that the Executive has willfully committed such act;

(iii) the Executive willfully fails to perform the Executive’s duties under this Agreement and/or willfully fails to comply with reasonable directives of the Board, in either case after the Company has delivered to the Executive a written demand for performance which describes the basis for the Board’s belief that the Executive has violated the Executive’s obligations to the Company, or failed to comply with any such directives, as applicable, and the Executive fails to cure

such alleged violation or failure within thirty (30) days after receipt of such notice; or

(iv) any material breach by the Executive of (A) this Agreement or (B) any material Company policy that was communicated to the Executive in writing that, in either case, (x) has or could reasonably be expected to have an adverse impact on the Company or any Affiliate that is not immaterial and (y) after the Company has delivered to the Executive a written notice which describes the basis for the Board’s belief that the Executive has materially breach this Agreement or such policy, and the Executive fails to cure such alleged breach within thirty (30) days after receipt of such notice.

However, no act or failure to act, on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company. A determination by the Board that Cause exists shall be effective only if approved by at least a majority of the Board (not counting the Executive if he is then a member of the Board) voting in person or virtually at a meeting at which the Executive is entitled to be present (with counsel) and respond to any basis that may be asserted as constituting Cause.

“Disability” means a physical or mental impairment which has rendered the Executive unable to perform the essential functions of his employment with the Company (with or without reasonable accommodation) for more than 180 calendar days in any 12-month period, unless a longer period is required by federal or state law, in which case that longer period would apply. The determination of whether or not a Disability exists for purposes of this Agreement shall be based upon the findings of a qualified medical doctor reasonably agreed to by the Company and the Executive (or, in the event of the Executive’s incapacity, his legal representative). In the absence of agreement between the Company and the Executive, each party shall nominate a qualified medical doctor, and the two doctors so nominated shall select a third qualified medical doctor, who shall make the determination as to Disability. The Company shall bear the costs of any such determinations.

“Good Reason” means a resignation by the Executive after the occurrence (without the Executive’s consent) of any one or more of the following conditions caused by the Company:

(i) a diminution in the Executive’s rate of Base Salary from the rate then in effect or any diminution in compensation due to the Executive pursuant to Section 3.1 or 3.2 hereof (for clarity, other than any diminution provided pursuant to such Sections);

(ii) a material diminution in the Executive’s authority, duties, responsibilities or status, including, without limitation, any change in title or position such that the Executive is no longer the Executive Vice Chairman of the Company; provided that the Company ceasing to be a publicly traded company will not, in and of itself, constitute a material diminution in the Executive’s authority, duties, responsibilities or status;

(iii) any failure to nominate the Executive for reelection to the Board during the First Period;

(iv) the failure of the Company to obtain the assumption in writing of its obligations to perform this Agreement by any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company as contemplated by Section 8 hereof;

(v) any requirement that the Executive not be permitted to work remotely (other than travel as necessary in performing the Executive’s duties for the Company, including travel to the Company’s headquarters and other locations as necessary); or

(vi) a material breach by the Company of this Agreement;

provided, however, that the existence of the condition or conditions described in provisions (i) through (vi) above, each as applicable, shall not constitute Good Reason unless both (x) the Executive provides written notice to the Company of the condition claimed to constitute Good Reason within sixty (60) days after the Executive has (or reasonably should have) knowledge of the initial existence of such condition(s), and (y) the Company fails to remedy such condition(s) within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of the Executive’s employment with the Company shall not constitute a termination for Good Reason unless such termination occurs not more than one hundred and twenty (120) days after the Executive has (or reasonably should have) knowledge of the initial existence of the condition claimed to constitute Good Reason.

“Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

“Separation from Service” means a “separation from service” (within the meaning of Section 409A of the Code).

“Subsidiary” means any corporation or entity in which the Company owns or controls directly or indirectly fifty percent (50%) or more of the voting power or economic interests of such corporation or entity.

1.EXHIBIT B

Form of Mutual Release

1. Release by the Executive. Brett I. Parker (the “Executive”), on his own behalf and on behalf of his descendants, dependents, heirs, executors, administrators, assigns and successors, and each of them, hereby acknowledges full and complete satisfaction of and releases and discharges and covenants not to sue Bowlero Corp. (the “Company”), its divisions, subsidiaries, parents, or affiliated corporations, past and present, and each of them, as well as its and their assignees, successors, directors, officers, stockholders, partners, representatives, attorneys, agents or employees, past or present, or any of them (individually and collectively, “Releasees”), from and with respect to any and all claims, agreements, obligations, demands and causes of action, known or unknown, suspected or unsuspected, arising out of or in any way connected with the Executive’s employment or any other relationship with or interest in the Company, and each of them, or the termination thereof, including without limiting the generality of the foregoing, any claim for severance pay, profit sharing, bonus or similar benefit, pension, retirement, life insurance, health or medical insurance or any other fringe benefit, or disability, or any other claims, agreements, obligations, demands and causes of action, known or unknown, suspected or unsuspected resulting from any act or omission by or on the part of Releasees committed or omitted prior to the date of this General Release Agreement (this “Agreement”) set forth below, including, without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, or any other federal, state or local law, regulation or ordinance (collectively, the “Claims”); provided, however, that the Executive does not waive or release Claims with respect to any of the following: (1) Claims arising from any breach by the Company of this Agreement or the Executive’s right to enforce this Agreement; (2) Claims arising with respect to those provisions of the Employment Agreement dated as of December 15, 2021 by and between the Company and the Executive (the “Employment Agreement”) that are intended to survive the termination of the Executive’s employment with the Company, including without limitation, Sections 5 and 19 thereof; (3) any equity-based awards previously granted by the Company to the Executive, to the extent that such awards continue after the termination of the Executive’s employment with the Company in accordance with the applicable terms of such awards; (4) any vested right the Executive may have under any employee benefit plan, including, without limitation, any incentive or bonus plan or policy of the Company; (5) any right to indemnification (including the advancement of legal fees) that the Executive may have pursuant to the Employment Agreement, the bylaws or corporate charter of the Company, or under any written indemnification agreement with the Company (or any corresponding provision of any parent, subsidiary or affiliate of the Company) with respect to any loss, damages or expenses (including but not limited to attorneys’ fees to the extent otherwise provided) that the Executive may incur with respect to his service as an employee, officer or director of the Company, or any of its parents, subsidiaries or affiliates; (6) with respect to any rights that the Executive may have to insurance coverage for such losses, damages or expenses under any Company (or parent, subsidiary or affiliate) directors and officers liability insurance policy (in the future or previously in force); (7) any rights the Executive may have to workers’ compensation benefits or unemployment benefits under state law, or to continued medical and dental coverage under COBRA; (8) any rights to payment of benefits that the Executive may have under a retirement plan sponsored or maintained by the Company that is intended to qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended; or (9) any rights the Executive may have as a stockholder of the Company (or the rights of any stockholder in which the Executive has a direct or indirect beneficial interest). In the interest of clarity, in connection with the forgoing, the Executive acknowledges and agrees that he will not provide information to others that would support any claims against the Company or encourage or participate in any such claims. In addition, this release does not cover any Claim that cannot be so released as a matter of applicable law. The Executive acknowledges and agrees that he has received any and all leave and other benefits that he has been and is entitled to pursuant to the Family and Medical Leave Act of 1993. This release does not prevent the Executive from filing a charge with or participating in an investigation by a governmental administrative agency or cooperating as required by law with any governmental inquiry or investigation or judicial proceeding; provided, however, that the Executive waives any right to receive any monetary award resulting from such a charge or investigation, including, without limitation, interest, penalties, fines, and attorneys’ fees.

B-1

2. Release by the Company. In consideration of the Executive’s release of claims as set forth above, the Company, on behalf of itself and its parents, divisions, subsidiaries, parents, or affiliated corporations, hereby unconditionally and irrevocably releases and forever discharge the Executive, his descendants, dependents, heirs, executors, administrators, assigns and successors, past, present and future, from all Claims arising out of or in any way connected with the Executive’s employment or any other relationship with or interest in the Company, and each of them, or the termination thereof; provided, however, that the foregoing release does not apply to (1) any obligation of the Executive pursuant to this Agreement or Section 6 of the Employment Agreement, (2) any act of fraud or material dishonesty by the Executive, (3) any act or activity by the Executive that constitutes a crime under applicable law, or (4) any claims or rights related to, or arising under, that certain Stockholders’ Agreement, dated as of July 1, 2021, by and among (i) the Company, (ii) A-B Parent LLC, a Delaware limited liability company, (iii) Cobalt Recreation LLC, a Delaware limited liability company, (iv) the Thomas F. Shannon and (v) Atairos Group, Inc., a Cayman Islands exempted company, or that certain Stockholder Support Agreement attached as Exhibit I to the BCA (as defined in the Employment Agreement).

3. Release of Unknown Claims. It is the intention of each of the parties hereto in executing this Agreement that the same shall be effective as a bar to each and every claim, demand and cause of action hereinabove specified. In furtherance of this intention, each such party hereby expressly waives any and all rights and benefits conferred upon him or it by any law, statute, or legal doctrine that would otherwise prevent the release of unknown claims and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those related to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action hereinabove specified. Each such party acknowledges that he or it may hereafter discover claims or facts in addition to or different from those which such party now knows or believes to exist with respect to the subject matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected this settlement. Nevertheless, each such party hereby waives any right, claim or cause of action that might arise as a result of such different or additional claims or facts. Each such party acknowledges that he or it understands the significance and consequence of such release and waiver.

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4. ADEA Waiver. The Executive expressly acknowledges and agrees that by entering into this Agreement, he is waiving any and all rights or claims that he may have arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), which have arisen on or before the date of execution of this Agreement. The Executive further expressly acknowledges and agrees that:

(a) In return for this Agreement, he will receive consideration beyond that which he was already entitled to receive before entering into this Agreement;

(b) He is hereby advised in writing by this Agreement to consult with an attorney before signing this Agreement;

(c) He was given a copy of this Agreement on [ ] and informed
that he had [twenty-one (21)/forty-five (45) days] within which to consider this Agreement and that if he wished to execute this Agreement prior to expiration of such [21/45]-day period, he should execute the Acknowledgement and Waiver attached hereto as Exhibit B-1;

(d) Nothing in this Agreement prevents or precludes the Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless specifically authorized by federal law; and

(e) He was informed that he has seven (7) days following the date of execution of this Agreement in which to revoke this Agreement, and this Agreement will become null and void if the Executive elects revocation during that time. Any revocation must be in writing and delivered in accordance with the notice provisions of the Employment Agreement, and must be received by the Company during the seven-day revocation period. In the event that the Executive exercises his right of revocation, neither the Company nor the Executive will have any obligations under this Agreement.

5. No Transferred Claims. The Executive represents and warrants to the Company that he has not heretofore assigned or transferred to any person not a party to this Agreement any released matter or any part or portion thereof.

6. Non-Disparagement. For three (3) years following the termination of the Executive’s employment, (i) the Executive will not disparage or defame the Company or any of its directors or officers in any medium to any person, and (ii) the Company and its officers and directors will not disparage or defame the Executive in any medium to any person; provided, however, that the foregoing shall not prohibit any party from (A) giving truthful testimony in any legal proceeding pending before any agency or court of the United States or state government or in any arbitration proceeding relating to this Agreement or otherwise required by law or any administrative or legislative body or (B) responding to incorrect, disparaging or derogatory public statements to the extent necessary to correct or refute such public statements.

7. Waiver of Reemployment or Reinstatement. The Executive waives reemployment or reinstatement and agrees not to apply for employment or otherwise seek to be hired, rehired, employed, reemployed, or reinstated by any Releasee. The Executive agrees that the Releasees have no obligation, contractual or otherwise, to reemploy or reinstate him in the future.

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8. Miscellaneous. The following provisions shall apply for purposes of this Agreement:

(a) Successors. This Agreement is personal to the Executive and shall not be assignable by the Executive. This Agreement shall inure to the benefit of and be binding upon the Company, the Releasees, and their respective successors and assigns.

(b) Number and Gender. Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders.

(c) Section Headings. The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.

(d) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

(e) Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn (as to geographic scope, period of duration or otherwise) so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

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(f) Modifications. This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.

(g) Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

(h) Arbitration; Waiver of Jury Trial. The Executive and the Company agree that any controversy or claim arising out of or relating to this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, or any other controversy or claim arising out of the Executive’s employment, including, but not limited to, any state or federal statutory claims, shall be submitted to arbitration in accordance with the arbitration and dispute resolution provisions set forth in the Employment Agreement. WITHOUT LIMITING THE PRECEDING SENTENCE, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(i) Additional Actions. The Executive agrees to cooperate fully and to execute any and all supplementary documents and to take all additional reasonable actions that may be necessary or appropriate to give full force to the basic terms and intent of this Agreement and that are not inconsistent with its terms.

(j) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

(k) Legal Counsel; Mutual Drafting. Each party recognizes that this is a legally binding contract and acknowledges and agrees that such party has had the opportunity to consult with legal counsel of such party’s choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against either

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party on the basis of that party being the drafter of such language. The Executive agrees and acknowledges that the Executive has read and understands this Agreement, is entering into it freely and voluntarily without coercion, and has been advised to seek counsel prior to entering into this Agreement and has had ample opportunity to do so.

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The undersigned have read and understand the consequences of this Agreement and voluntarily sign it. The undersigned declare under penalty of perjury under the laws of the State of New York that the foregoing is true and correct.

EXECUTED this ________ day of ________ 20___, at _____________________ County, ________.

“EXECUTIVE”

Brett I. Parker

EXECUTED this ________ day of ________ 20___, at _____________________ County, ________.

“COMPANY”

BOWLERO CORP.

By:
Name:
Title:

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EXHIBIT B-1

ACKNOWLEDGMENT AND WAIVER

I, Brett I. Parker, hereby acknowledge that I was given [21/45] days to consider the foregoing General Release Agreement and voluntarily chose to sign the General Release Agreement prior to the expiration of the [21/45]-day period.

I declare under penalty of perjury under the laws of the State of New York that the foregoing is true and correct.

EXECUTED this ___ day of ____________ 20___, at ________ County, _______.

Brett I. Parker

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2.EXHIBIT C

Prior Inventions

1. Except as listed in Section 2 below, the following is a complete list of all inventions, original works of authorship, developments, improvements and trade secrets which relate to the Company’s or any Subsidiary’s actual or proposed business, products or research and development that were made, conceived or first reduced to practice by me prior to my employment with the Company:

No inventions or improvements

See below (please provide identifying number, if applicable, and a short description):

Additional Sheets Attached

2. Due to a prior confidentiality agreement, I cannot provide a full disclosure under Section 1 above with respect to inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies):

Invention or Improvement Party(ies) Relationship

Additional Sheets Attached

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EX-10.22 4 employmentagreement-lavan.htm EX-10.22 Document

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 5th day of May, 2023, by and between Bowlero Corp., a Delaware corporation (the “Company”), and Robert Lavan (the “Executive”).

THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts, understandings and intentions:

A.Effective as of the Effective Date (as defined in Section 2), this Agreement shall govern the employment relationship between the Executive and the Company.

B.The Executive desires to be employed by the Company on the terms and conditions set forth in this Agreement.

1.Retention and Duties.

1.2Duties; Location. For a transition period (the “Transition Period”) beginning on the Effective Date (as such term is defined in Section 2) and ending on the date on which the Company files with the Securities and Exchange Commission its quarterly report on Form10-Q for the fiscal quarter ended April 2, 2023, the Executive shall (a) serve the Company as its Chief Financial Officer Designate, (b) report directly to the President, Vice Chairman and Chief Financial Officer of the Company and (c) have such duties as may reasonably assigned by the Chief Financial Officer. For the period beginning on the day immediately following the last day of the Transition Period and ending on the last day of the Period of Employment (as such term is defined in Section 2), the Executive shall (i) serve the Company as its Chief Financial Officer, (ii) have the powers, authorities, duties and obligations of management usually vested in the office of the Chief Financial Officer of a company of a similar size and similar nature of the Company, and such other powers, authorities, duties and obligations commensurate with such position as the Company’s Board of Directors (the “Board”) may reasonably assign from time to time, and (iii) report directly to the President and Vice Chairman of the Company. The Executive may work remotely from any location; provided that the Executive acknowledges and agrees to travel as necessary in performing the Executive’s duties for the Company, including travel to the Company’s headquarters and other locations as necessary.

1.3No Other Employment; Minimum Time Commitment. During the Period of Employment, the Executive shall devote substantially all of his business time, energy and skill to the performance of the Executive’s duties for the Company, and shall hold no other employment.

2.Period of Employment. The Executive’s employment with the Company will commence on a date to be mutually agreed between the parties, but in no event later than May 11, 2023 (the actual date on which Executive’s employment commences, the “Effective Date”), and will end at the close of business on the second (2nd) anniversary of the Effective Date (such anniversary date, the “Expiration Date”). The “Period of Employment” shall mean the period beginning on the Effective Date and ending on the Expiration Date. Notwithstanding the foregoing, the Period of Employment is subject to earlier termination as provided below in this Agreement.

3.Compensation.

3.1Base Salary. During the Period of Employment, and for the Executive’s services to the Company, the Company shall pay the Executive a base salary at an annualized rate of $625,000 (the “Base Salary”), which shall be paid in accordance with the Company’s regular payroll practices in effect from time to time.

3.2Annual Bonus. During the Period of Employment, for each fiscal year commencing with fiscal year 2023 (which commenced on July 4, 2022), the Executive shall have the opportunity to earn an annual bonus (the “Annual Bonus”). The target amount of the Annual Bonus shall equal 75% of the Base Salary. The actual amount of the Annual Bonus earned for a fiscal year shall be based on the achievement of performance targets established by the Compensation Committee of the Board in accordance with the terms of the Company’s annual incentive plan. Any Annual Bonus earned for a fiscal year shall be paid to the Executive no later than two and a half (2.5) months after the end of such fiscal year. Notwithstanding the foregoing, any Annual Bonus earned for fiscal year 2023 shall be prorated to reflect the number of calendar days in such fiscal year beginning with the Effective Date.

3.3Equity Awards. On the Effective Date, the Company shall grant to the Executive, pursuant to the Bowlero Corp. 2021 Omnibus Incentive Plan and a stock option award agreement substantially in the form attached hereto as Annex 1, an option to purchase a number of shares of Class A Common Stock of the Company, which number of shares shall be determined by the Company based on a target option value of $2,000,000 as of the Expiration Date. The Executive shall also be eligible to receive additional awards under the Company’s long-term equity incentive program as in effect from time to time.

4.Benefits.

4.1Retirement, Welfare and Fringe Benefits. During the Period of Employment, the Executive shall be entitled to participate in all employee retirement and welfare benefit plans and programs, and fringe and any other employee benefit plans and programs, made available by the Company to employees generally, in accordance with the generally applicable eligibility and participation provisions of such plans, and as such plans or programs may be in effect from time to time.

4.2Reimbursement of Business Expenses. The Company shall reimburse the Executive for all reasonable business expenses the Executive incurs during the Period of Employment in connection with carrying out the Executive’s duties for the Company under this Agreement, subject to the Company’s expense reimbursement policies in effect from time to time.

5.Termination.

5.1Termination by the Company. The Executive’s employment by the Company, and the Period of Employment, may be terminated at any time by the Company: (a) with Cause (as such term is defined in Exhibit A); or (b) upon not less than thirty (30) days prior written notice to the Executive, without Cause; or (c) in the event of the Executive’s death. The Company may, if it so chooses, place the Executive on paid leave of absence for any such thirty (30) day notice period referred to in clause (b) above (or any portion of such period). This provision supersedes Section 1 of the Confidentiality Agreement (as such term is defined in Section 6.1 hereof).

5.3Benefits Upon Termination. If the Executive’s employment by the Company is terminated during the Period of Employment for any reason by the Company or by the Executive (in any case, the date that the Executive’s employment by the Company terminates is referred to as the “Termination Date”), the Company shall have no further obligation to make or provide to the Executive, and the Executive shall have no further right to receive or obtain from the Company, any payments or benefits except as follows:

(a)The Company shall pay the Executive (or, in the event of the Executive’s death, the Executive’s estate) any Accrued Obligations (as such term is defined in Exhibit A).

(b)Subject to Section 5.3(c), if, during the Period of Employment, the Executive’s employment is terminated by the Company without Cause, or as a result of a resignation by the Executive for Good Reason, the Company shall pay the Executive (in addition to the Accrued Obligations) the following:

(i)subject to tax withholding and other authorized deductions, an amount (the “Severance Benefit”) equal to 100% of the Executive’s Base Salary at the rate in effect on the Termination Date. Subject to Section 18.1, the Company shall pay the Severance Benefit to the Executive in equal monthly installments (rounded down to the nearest whole cent) over a period of) twelve (12) consecutive months with the first installment payable on (or within ten (10) days following) the sixtieth (60th) day following the Executive’s Separation from Service (as such term is defined in Exhibit A) (and which amount shall include payment of any amounts that would otherwise be due prior thereto); and

(ii)if the Executive and any of the Executive’s eligible dependents, in each case, who participate in the Company’s (or any Affiliate’s) medical, dental, vision and prescription drug plans as of the Termination Date, timely elect coverage under Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for such plans, the Company shall pay directly, or reimburse the Executive for, such COBRA premiums (on a monthly basis) for twelve (12) months; provided that in no event shall the Company’s obligations pursuant to this paragraph extend beyond the period in which the Company (or any Affiliate) is required to provide COBRA coverage to the Executive and/or any of his eligible dependents; and provided, further, that the first payment or reimbursement shall be made on the sixtieth (60th) day following the Executive’s Separation from Service (and which amount shall include payment of any amounts that would otherwise be due prior thereto).

(c)If, during the Change in Control Period (as such term is defined in Exhibit A), the Executive’s employment with the Company is terminated by the Company without Cause, or as a result of a resignation by the Executive for Good Reason, the Company shall pay the Executive (in addition to the Accrued Obligations) the following:

(i)subject to tax withholding and other authorized deductions, an amount (the “CIC Severance Benefit”) equal to 100% of the Executive’s Base Salary at the rate in effect on the Termination Date. Subject to Section 18.1, the Company shall pay the CIC Severance Benefit to the Executive in a lump sum on (or within ten (10) days following) the sixtieth (60th) day following the Executive’s Separation from Service; and

(ii)if the Executive and any of the Executive’s eligible dependents, in each case, who participate in the Company’s (or any Affiliate’s) medical, dental, vision and prescription drug plans as of the Termination Date, timely elect coverage under COBRA for such plans, the Company shall pay directly, or reimburse the Executive for, such COBRA premiums (on a monthly basis) for twelve (12) months; provided that in no event shall the Company’s obligations pursuant to this paragraph extend beyond the period in which the Company (or any Affiliate) is required to provide COBRA coverage to the Executive and/or any of his eligible dependents; and provided, further, that the first payment or reimbursement shall be made on the sixtieth (60th) day following the Executive’s Separation from Service (and which amount shall include payment of any amounts that would otherwise be due prior thereto).

(d)Notwithstanding the foregoing provisions of this Section 5.3, if the Executive materially breaches, at any time, the Executive’s obligations under the Confidentiality Agreement (as such term is defined in Section 6.1) or Section 6.2 of this Agreement, from and after the date of such breach and not in any way in limitation of any right or remedy otherwise available to the Company, the Executive shall no longer be entitled to, and the Company shall no longer be obligated to pay, any remaining unpaid portion of the Severance Benefit under Section 5.3(b) or the CIC Severance Benefit under Section 5.3(c); provided, however, that, if the Executive provides the Release contemplated by Section 5.4, in no event shall the Executive be entitled to a Severance Benefit or CIC Severance Benefit payment, as applicable, of less than $5,000, which amount the parties agree is good and adequate consideration, in and of itself, for the Executive’s Release contemplated by Section 5.4.

5.4Release; Exclusive Remedy.

(a)This Section 5.4 shall apply notwithstanding anything else contained in this Agreement to the contrary. As a condition precedent to any Company obligation to the Executive pursuant to Section 5.3, the Executive shall provide the Company with a valid, executed customary written separation and release agreement in the form provided by the Company (the “Release”) following such last day of employment, and the Release shall have not been revoked by the Executive pursuant to any revocation rights afforded by applicable law. The Executive shall be required to execute and return the Release to the Company within twenty-one (21) days (or forty-five (45) days if such longer period of time is required to make the Release maximally enforceable under applicable law) after the Company provided the form of Release to the Executive.

(b)The Executive agrees that the payments contemplated by Section 5.3 shall (if the Release contemplated by Section 5.4(a) is signed and becomes effective and the severance amounts are paid in accordance with their terms) constitute the exclusive and sole remedy for any termination of the Executive’s employment and, in such case, the Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment; provided, however, that nothing herein shall affect the Executive’s rights as a stockholder of the Company (or the rights of any stockholder in which the Executive has a direct or indirect beneficial interest). The Company and the Executive acknowledge and agree that there is no duty of the Executive to mitigate damages under this Agreement, and there shall be no offset against any amounts due to the Executive under this Agreement on account of any remuneration attributable to any subsequent employment that the Executive may obtain. All amounts paid to the Executive pursuant to Section 5.3 shall be paid without regard to whether the Executive has taken or takes actions to mitigate damages. The Executive agrees to resign, on the Termination Date, as an officer and director of the Company and any Affiliate, and as a fiduciary of any benefit plan of the Company or any Affiliate, and to promptly execute and provide to the Company any further documentation, as reasonably required by the Company, to confirm such resignation.

5.5Notice of Termination; Paid Leave. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other parties. This notice of termination must be delivered in accordance with Section 17 and must indicate the specific provision(s) of this Agreement relied upon in effecting the termination, as well as the effective date of termination. If the Company terminates the Executive’s employment pursuant to clause (b) of Section 5.1, or if the Executive provides notice of termination pursuant to Section 5.2, the Company may place the Executive on paid administrative leave during the applicable notice period and such leave shall not constitute grounds for a resignation by the Executive for Good Reason.

6.Protective Covenants.

6.1Confidentiality Agreement. As a condition to the Executive’s employment by the Company hereunder, effective as of the Effective Date, the Executive hereby agrees to enter into a Confidential Information and Work Product Assignment Agreement (the “Confidentiality Agreement”).

6.2Cooperation. For five (5) years following the Executive’s last day of employment by the Company, the Executive shall reasonably cooperate with the Company and the Subsidiaries (as such term is defined in Exhibit A) in connection with: (a) any internal or governmental investigation or administrative, regulatory, arbitral or judicial proceeding involving any of them with respect to matters relating to the Executive’s employment with or service as a member of the Board or the board of directors of any Subsidiary; or (b) any audit of the financial statements of the Company or any Subsidiary with respect to the period of time when the Executive was employed by the Company. The Company shall reimburse the Executive for reasonable travel expenses incurred in connection with providing the services under this Section 6.2, including lodging and meals, upon the Executive’s submission of receipts.

7.Withholding Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

8.Successors and Assigns. This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company, its successors and, other than as set forth below, shall not be assignable by the Company without the prior written consent of the Executive. The obligations under this Agreement shall be assignable by the Company to, and only to, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company; provided, that the Company shall require such successor to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such assignment had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor thereto which assumes and agrees to perform this Agreement by operation of law or otherwise.

9.Number and Gender; Examples. Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates.

10.Section Headings. The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.

11.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

12.Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn (as to geographic scope, period of duration or otherwise) so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

13.Entire Agreement. On and following the date hereof, (i) this Agreement, including its attachments and exhibits (together, the “Integrated Document”), embodies the entire agreement of the parties hereto respecting the matters within its scope, (ii) the Integrated Document supersedes all prior and contemporaneous agreements of the parties hereto that directly or indirectly bears upon the subject matter hereof, including, without limitation, that certain letter agreement, dated as of March 24, 2023, by and between the parties, (iii) any prior negotiations, correspondence, agreements, proposals or understandings relating to the subject matter hereof shall be deemed to have been merged into the Integrated Document, and to the extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or understandings shall be deemed to be of no force or effect, and (iv) there are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter hereof, except as expressly set forth herein or in the Integrated Document.

14.Modifications. This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto. The Executive may not consent to any such amendment, modification or change on behalf of the Company.

15.Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

16.Arbitration; Waiver of Jury Trial.

16.2Procedure. The parties hereby agree that any arbitration will be administered by a sole arbitrator (the “Arbitrator”) selected from Judicial Arbitration & Mediation Services, Inc., New York, New York, or its successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration Association, and such selection shall be in a manner consistent with the JAMS rules applicable to employment disputes. Any arbitration pursuant to this Section 16 shall take place in New York, New York. The parties agree that the Arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. The parties also agree that the Arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available under applicable law. The Company agrees that it will pay for any administrative or hearing fees unique to arbitration, including any filing fees or arbitrator fees associated with any arbitration brought under this Section 16. The Arbitrator shall administer and conduct any arbitration in a manner consistent with the Rules and that to the extent that JAMS rules applicable to employment disputes conflict with the Rules, the Rules shall take precedence. The decision of the Arbitrator shall be in writing and shall set forth the bases for the Arbitrator’s decision. This provision supersedes paragraph 22 of the Confidentiality Agreement.

16.4Availability of Injunctive Relief. In addition to the right under the Rules to petition the court for provisional relief, the parties agree that any party may also petition the court for injunctive relief in aid of arbitration where either party alleges or claims a violation of this Agreement or any other agreement between the Executive, on the one hand, and the Company, on the other hand, regarding trade secrets or confidential information. The Executive understands that any breach or threatened breach of such an agreement will cause irreparable injury and that money damages will not provide an adequate remedy therefore, and both parties hereby consent to the issuance of an injunction. In the event either party seeks injunctive relief, the prevailing party shall be entitled to recover reasonable costs and attorneys’ fees to the extent permitted by applicable law.

16.6Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

if to the Company:

Bowlero Corp.
Attention: Chief Legal Officer
7313 Bell Creek Road
Mechanicsville, VA 23111

if to the Executive, to the address most recently on file in the Company’s payroll records.

18.Section 409A.

19.Indemnification.

19.1The Company agrees that (i) if the Executive is made a party, or is threatened to be made a party, to any threatened or actual action, suit or proceeding whether civil, criminal, administrative, investigative, appellate or other (a “Proceeding”) by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee, agent, manager, consultant or representative of another person or (ii) if any claim, demand, request, investigation, controversy, threat, discovery request or request for testimony or information (a “Claim”) is made, or threatened to be made, that arises out of or relates to the Executive’s service in any of the foregoing capacities, whether arising before or after the date hereof, then the Executive shall promptly be indemnified and held harmless by the Company to the fullest extent legally permitted and authorized by the Company’s charter, bylaws or Board resolutions against any and all costs, expenses, liabilities and losses (including, without limitation, attorney’s fees, judgments, interest, expenses of investigating, defending or obtaining indemnity with respect to any Proceeding or Claim, penalties, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if he has ceased to be a director, officer or employee of the Company or a director, officer, member, employee, agent, manager, consultant or representative of such other person and shall inure to the benefit of the Executive’s heirs, executors and administrators. To the extent permitted by law, the Company shall advance to the Executive all costs and expenses incurred by him in connection with any such Proceeding or Claim within thirty (30) days after receiving written notice requesting such an advance. Such notice shall include an undertaking by the Executive to repay the amount advanced if he is ultimately determined not to be entitled to indemnification against such costs and expenses.

19.4The provisions of this Section 19 shall apply to the estate, executor, administrator, heirs, legatees or devisees of the Executive and shall survive any termination of this Agreement.

[The remainder of this page has intentionally been left blank.]

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first above written.

“COMPANY”

Bowlero Corp., a Delaware corporation

By: /s/ Brett I. Parker
Name: Brett I. Parker
Title: President and Vice Chairman

“EXECUTIVE”

/s/ Robert Lavan
Robert Lavan

Signature Page to Employment Agreement

EXHIBIT A

Certain Definitions

For purposes of this Agreement the following terms have the following meanings:

“Accrued Obligations” means:

(i) any Base Salary that had accrued but had not been paid (including accrued and unpaid vacation time) on or before the Termination Date;

(iii) any reimbursement due to the Executive pursuant to Section 4.2 for expenses incurred by the Executive through the Termination Date; and

(iv) any other amounts or benefits required to be paid or provided by law or under any employee benefit plan, program, policy or practice of the Company.

“Cause” shall mean that, during the Period of Employment, any of the following events exists or has occurred:

Ex. A-1

such alleged violation or failure within thirty (30) days after receipt of such notice; or

(iv) any material breach by the Executive of (A) this Agreement, (B) the Confidentiality Agreement or (C) any material Company policy that was communicated to the Executive in writing that, in each case, (x) has or could reasonably be expected to have an adverse impact on the Company or any Affiliate that is not immaterial and (y) after the Company has delivered to the Executive a written notice which describes the basis for the Board’s belief that the Executive has materially breach this Agreement or such policy, and the Executive fails to cure such alleged breach within thirty (30) days after receipt of such notice.

“Change in Control” has the meaning assigned to it in the Bowlero Corp. 2021 Omnibus Incentive Plan.

“Change in Control Period” means the 24-month period immediately following a Change in Control.

“Good Reason” means a resignation by the Executive after the occurrence (without the Executive’s consent) of any one or more of the following conditions caused by the Company:

(i)a material diminution in the Executive’s authority, duties, responsibilities or status; provided that the Company ceasing to be a publicly traded company will not, in and of itself, constitute a material diminution in the Executive’s authority, duties, responsibilities or status; or

(ii)A reduction in Executive’s Base Salary that is in excess of 10% of Executive’s Base Salary unless such reduction is part of a broader reduction in salaries impacting other senior executives of the Company; or

(iii)a change in the Executive’s reporting line such that the Executive no longer reports to the President, Vice Chairman, Chief Executive Officer, or Board of the Company; or

(iv) any requirement that the Executive not be permitted to work remotely (other than travel as necessary in performing the Executive’s duties for the Company, including travel to the Company’s headquarters and other locations as necessary);

provided, however, that the existence of the condition or conditions described in provisions (i) and (ii) above shall not constitute Good Reason unless both (x) the Executive provides written notice to the Company of the condition claimed to constitute Good Reason within sixty (60) days after the Executive has (or reasonably should have) knowledge of the initial existence of such condition(s), and (y) the Company fails to remedy such condition(s) within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of the Executive’s employment with the Company shall not constitute a termination for Good Reason unless such termination occurs not more than one hundred and twenty (120) days after the Executive has (or reasonably should have) knowledge of the initial existence of the condition claimed to constitute Good Reason.

Ex. A-2

“Separation from Service” means a “separation from service” (within the meaning of Section 409A of the Code).

Ex. A-3

Annex 1

BOWLERO CORP.

2021 OMNIBUS INCENTIVE PLAN

OPTION AWARD AGREEMENT

Pursuant to the Notice of Option Grant (“Grant Notice”) and this Option Award Agreement (this “Award Agreement”), Bowlero Corp. (together with its Subsidiaries, whether existing or thereafter acquired or formed, and any and all successor entities, the “Company”) has granted the Participant an Option (the “Option”) under the Bowlero Corp. 2021 Omnibus Incentive Plan (the “Plan”) with respect to the number of Shares indicated in the Grant Notice. The Option represents the right to purchase the number of Shares indicated in the Grant Notice, on the terms and conditions set forth in this Award Agreement and the Plan. The Option is granted to the Participant effective as of the Date of Grant. Capitalized terms not defined in this Award Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

1.Vesting; Exercise.

(a)Vesting. The Option will vest and become exercisable as follows:

(i)Tranche 1 will vest and become exercisable in one-half installments on each of the first and second anniversaries of the Date of Grant.

(ii)Tranche 2 will vest and become exercisable in one-half installments on each of the first and second anniversaries of the Date of Grant.

(iii)Tranche 3 will vest and become exercisable in one-half installments on each of the first and second anniversaries of the Date of Grant.

(b)Method of Exercise and Form of Payment. No Shares will be delivered pursuant to any exercise of the Option until the Participant has paid in full to the Company the exercise price and an amount equal to any U.S. federal, state, local and non-U.S. income and employment taxes required to be withheld. The Option may be exercised by delivery of written or electronic notice of exercise to the Company or its designee (including a third-party administrator) in accordance with the terms hereof. The exercise price and all applicable required withholding taxes will be payable (i) in cash, check, cash equivalent and/or in shares of Common Stock valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of shares in lieu of actual delivery of such shares to the Company); provided that such shares are not subject to any pledge or other security interest, (ii) if there is a public market for the Shares at such time, subject to the Company’s Securities Trading Policy and applicable law, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the exercise price and all applicable required withholding taxes, or (iii) by such other method as the Committee may permit, including without limitation: (A) in other property having a Fair Market Value equal to the exercise price and all applicable required withholding taxes or (B) by means of a “net exercise” procedure effected by withholding the minimum number of Shares otherwise deliverable in respect of an Option that are needed to pay for the exercise price and all applicable required withholding taxes. Any fractional Shares resulting from the application of this Section 1(b) will be settled in cash.

Annex 1

A-1

2.Termination of Employment.

(a)Subject to Section 2(b), if the Participant’s employment with the Company terminates at any time, the unvested portion of the Option will be canceled immediately and the Participant will not be entitled to receive any payments with respect thereto.

(b)If, during the Change in Control Period, the Participant’s employment is terminated by the Company without Cause (and other than due to the Participant’s death or Disability), or as a result of a resignation by the Participant for Good Reason, the Option will become fully vested and exercisable as of immediately prior to such termination. “Change in Control Period”, “Cause” and “Good Reason” have the meanings assigned to them in the Employment Agreement, dated as of [●], 2023, by and between the Company and the Participant.

3.Expiration.

(a)Option Period. In no event will all or any portion of the Option be exercisable after the tenth anniversary of the Date of Grant (such ten-year period, the “Option Period”); provided, that if the Option Period would expire at a time when trading in the Shares is prohibited by the Company’s Securities Trading Policy (or a Company-imposed “blackout period”), the Option Period will be automatically extended until the 30th day following the expiration of such prohibition (so long as such extension will not violate Section 409A of the Code).

(b)Post-Termination Exercise.

(i)If, prior to the end of the Option Period, the Participant’s employment is terminated by the Company without Cause or by the Participant for any reason, then the Option will expire on the earlier of the last day of the Option Period and the date that is 90 days after the date of such termination; provided, however, that if the Participant is subsequently rehired, reappointed or reengaged by the Company or any Affiliate within 90 days following such termination and prior to the expiration of the Option, the Participant will not be considered to have undergone a termination of employment.

(ii)If (A) the Participant’s employment with the Company is terminated prior to the end of the Option Period on account of the Participant’s Disability, (B) the Participant dies while still employed by the Company or (C) the Participant dies following a termination described in subsection (A) above but prior to the expiration of the Option, the Option will expire on the earlier of the last day of the Option Period and the first anniversary of the date of death or termination on account of Disability, as applicable.

(iii)If the Participant’s employment is terminated by the Company for Cause, the Option will expire immediately on such termination.

4.Rights as a Stockholder. The Participant will have no voting rights with respect to the Option unless and until the Participant becomes the record owner of the Shares subject to the Option.

5.Tax Withholding. The Participant will be solely responsible for any applicable taxes (including, without limitation, income and excise taxes) and penalties, and any interest that accrues thereon, that the Participant incurs in connection with the receipt, vesting or exercise of the Option. Without limiting Section 1(b), the Company will be authorized to withhold from the Option the amount (in cash or Shares, or any combination thereof) of applicable withholding taxes due in respect of the Option, its exercise or any payment or transfer under the Option and to take such other action (including providing for elective payment of such amounts in cash or other property by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes; provided, however, that no Shares will be withheld with a value exceeding the maximum statutory rates in the applicable tax jurisdictions.

Annex 1

A-2

6.Clawback; Forfeiture; Detrimental Conduct. The Option will be subject to the clawback, forfeiture and detrimental conduct provisions set forth in Section 14(t) of the Plan.

7.No Repricing. The Option will be subject to the prohibition on repricing set forth in Section 13(b) of the Plan.

8.Miscellaneous.

(a)Compliance with Legal Requirements. The granting of the Option, and any other obligations of the Company under this Award Agreement, will be subject to all applicable U.S. federal, state and local laws, rules and regulations, all applicable non-U.S. laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Participant agrees to take all steps that the Committee or the Company determines are reasonably necessary to comply with all applicable provisions of U.S. federal and state securities law and non-U.S. securities law in exercising the Participant’s rights under this Award Agreement.

(b)Transferability. The Option will be subject to the transfer restrictions set forth in Section 14(b) of the Plan.

(c)Participant’s Employment or Other Service Relationship. Nothing in the Option will confer upon the Participant any right to continue the Participant’s employment or other service relationship with the Company or any of its Affiliates or interfere in any way with the right of the Company or any of its Affiliates or stockholders, as applicable, to terminate the Participant’s employment or other service relationship with the Company or its Affiliates or to increase or decrease the Participant’s compensation at any time. The grant of the Option is a one-time benefit and does not create any contractual or other right to receive any other grant of other Awards under the Plan in the future. The grant of the Option does not form part of the Participant’s entitlement to compensation or benefits in terms of the Participant’s employment or other service relationship with the Company or its Affiliates.

(d)Waiver. No amendment or modification of any provision of this Award Agreement will be effective unless signed in writing by or on behalf of the Company and the Participant, except that the Company may amend or modify this Award Agreement without the Participant’s consent in accordance with the provisions of the Plan or as otherwise set forth in this Award Agreement. No waiver of any breach or condition of this Award Agreement will be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Award Agreement, or any waiver of any provision of this Award Agreement, will be effective only in the specific instance and for the specific purpose for which made or given.

(e)Section 409A. The Option is not intended to be subject to Section 409A of the Code. This Award Agreement is intended to comply with the requirements of Section 409A of the Code, and the provisions of this Award Agreement will be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and this Award Agreement will be operated accordingly. If any provision of this Award Agreement or any term or condition of the Option would otherwise conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. Notwithstanding the foregoing, the tax treatment of the benefits provided under this Award Agreement is not warranted or guaranteed, and in no event will the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code.

Annex 1

A-3

(f)Notices. All notices, requests and other communications under this Award Agreement will be in writing and will be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested to the contact details below. The parties may use e-mail delivery, so long as the message is clearly marked, sent to the e-mail address(es) set forth below.

if to the Company, to:

Bowlero Corp.
Attention: Chief Legal Officer
7313 Bell Creek Road

Mechanicsville, VA 23111

if to the Participant, to the address, facsimile number or e-mail address that the Participant most recently provided to the Company, or to such other address, facsimile number or e-mail address as such party may hereafter specify for the purpose by notice to the other parties hereto.

(g)Severability. The invalidity or unenforceability of any provision of this Award Agreement will not affect the validity or enforceability of any other provision of this Award Agreement, and each other provision of this Award Agreement will be severable and enforceable to the extent permitted by law.

(h)Successors. The terms of this Award Agreement will be binding upon and inure to the benefit of the Company and its successors and assigns, and of the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.

(i)Entire Agreement. The Participant acknowledges receipt of a copy of the Plan and represents that the Participant is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts the grant of the Option and agrees to be bound by its contractual terms as set forth herein and in the Plan. The Participant acknowledges and agrees that the grant of the Option constitutes additional consideration to the Participant for the Participant’s continued and future compliance with any restrictive covenants in favor of the Company by which the Participant is otherwise bound. The Participant hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Committee regarding any questions relating to the Option. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of this Award Agreement, the Plan terms and provisions will prevail. This Award Agreement, including the Plan, constitutes the entire agreement between the Participant and the Company on the subject matter hereof and supersedes all proposals, written or oral, and all other communications between the parties relating to such subject matter, including, without limitation, that certain letter agreement, dated as of March 24, 2023, by and between the parties.

(j)Governing Law. This Award Agreement will be construed and interpreted in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Delaware.

Annex 1

A-4

(k)Electronic Signature and Delivery. This Award Agreement may be accepted by return signature or by electronic confirmation. By accepting this Award Agreement, the Participant consents to the electronic delivery of prospectuses, annual reports and other information required to be delivered by U.S. Securities and Exchange Commission rules (which consent may be revoked in writing by the Participant at any time upon three business days’ notice to the Company, in which case subsequent prospectuses, annual reports and other information will be delivered in hard copy to the Participant).

(l)Electronic Participation in Plan. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

[Remainder of page intentionally blank]

Annex 1

A-5

BOWLERO CORP.

2021 OMNIBUS INCENTIVE PLAN

NOTICE OF OPTION GRANT

Participant: Robert Lavan

# of Shares Subject to Option: [●]1 shares of Class A Common Stock of the Company, par value $0.0001 per share (the “Shares”).

Date of Grant: [●], 20232

Exercise Price Per Share: $[●]3 for one-third of the Option (“Tranche 1”)

$[●]4 for one-third of the Option (“Tranche 2”)

$[●]5 for one-third of the Option (“Tranche 3”)

Vesting Schedule: The Option will vest in accordance with the terms of the Award Agreement attached hereto as Annex I. On vesting, the Option will no longer be subject to cancellation pursuant to Section 2(a) of the Award Agreement.

Type of Option: Nonqualified Stock Option

By signing your name below, you accept the Option and acknowledge and agree that the Option is granted under and governed by the terms and conditions of the Bowlero Corp. 2021 Omnibus Incentive Plan and the Option Award Agreement set forth on Annex I, each of which are hereby made a part of this document. The Option is not intended to qualify as an Incentive Stock Option.

Participant Bowlero Corp.

By:

Title:

1 Note to Draft: Insert number of shares as determined by the Company based on a target option value of $2,000,000 as of the second anniversary of the grant date.

2 Note to Draft: Insert start date of Mr. Lavan’s employment.

3 Note to Draft: Insert closing price of share on grant date plus $2.00.

4 Note to Draft: Insert closing price of share on grant date plus $4.00.

5 Note to Draft: Insert closing price of share on grant date plus $6.50.

Annex 1

A-6

EX-10.23 5 formofoptionagreement-2021.htm EX-10.23 Document

BOWLERO CORP.

2021 OMNIBUS INCENTIVE PLAN

NOTICE OF OPTION GRANT

Participant: [●]

# of Shares Subject to Option: [●]1 shares of Class A Common Stock of the Company, par value $0.0001 per share (the “Shares”).

Date of Grant: [●], 20232

Exercise Price Per Share: $[●]3 for one-third of the Option (“Tranche 1”)

$[●]4 for one-third of the Option (“Tranche 2”)

$[●]5 for one-third of the Option (“Tranche 3”)

Type of Option: Nonqualified Stock Option

Participant Bowlero Corp.

By:

Name:

Title:

1 Note to Draft: Insert number of shares as determined by the Company.

2 Note to Draft: Insert start date of employment.

3 Note to Draft: Insert closing price of share on grant date plus $[●].

4 Note to Draft: Insert closing price of share on grant date plus $[●].

5 Note to Draft: Insert closing price of share on grant date plus $[●].

ANNEX I

BOWLERO CORP.

2021 OMNIBUS INCENTIVE PLAN

OPTION AWARD AGREEMENT

1.Vesting; Exercise.

(a)Vesting. The Option will vest and become exercisable as follows:

(i)Tranche 1 will vest and become exercisable in one-half installments on each of the first and second anniversaries of the Date of Grant.

(ii)Tranche 2 will vest and become exercisable in one-half installments on each of the first and second anniversaries of the Date of Grant.

(iii)Tranche 3 will vest and become exercisable in one-half installments on each of the first and second anniversaries of the Date of Grant.

2.Termination of Employment.

3.Expiration.

(b)Post-Termination Exercise.

(iii)If the Participant’s employment is terminated by the Company for Cause, the Option will expire immediately on such termination.

4.Rights as a Stockholder. The Participant will have no voting rights with respect to the Option unless and until the Participant becomes the record owner of the Shares subject to the Option.

6.Clawback; Forfeiture; Detrimental Conduct. The Option will be subject to the clawback, forfeiture and detrimental conduct provisions set forth in Section 14(t) of the Plan.

7.No Repricing. The Option will be subject to the prohibition on repricing set forth in Section 13(b) of the Plan.

8.Miscellaneous.

(b)Transferability. The Option will be subject to the transfer restrictions set forth in Section 14(b) of the Plan.

if to the Company, to:

Bowlero Corp.
Attention: Chief Legal Officer
7313 Bell Creek Road

Mechanicsville, VA 23111

[Remainder of page intentionally blank]

EX-21.1 6 bowl-ex211x070322subsidiar.htm EX-21.1 Document

Exhibit 21.1


SUBSIDIARIES OF BOWLERO CORP.

Name of Subsidiary						Jurisdiction of Organization
AMF Bowling Centers, Inc.						Virginia

Not included above are other subsidiaries which, if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary, as such term is defined by Rule 1-02(w) of Regulation S-X

EX-23.1 7 bowlerofy23kpmgconsent.htm EX-23.1 Document

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (No. 333-262179) on Form S-3 and (No. 333-263146) on Form S-8 of our report dated September 15, 2022, with respect to the consolidated financial statements of Bowlero Corp. and subsidiaries.


/s/ KPMG LLP

Richmond, Virginia
September 11, 2023

EX-23.2 8 dtconsentofindependentregi.htm EX-23.2 Document

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333- 262179 on Form S-3 and Registration Statement No. 333-263146 on Form S-8 of our report dated September 11, 2023, relating to the financial statements of Bowlero Corp. appearing in this Annual Report on Form 10-K for the year ended July 2, 2023.

/s/ Signature

Richmond, Virginia

September 11, 2023

EX-31.1 9 bowl-ex311xfy2310k.htm EX-31.1 Document

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas F. Shannon, certify that:

1.I have reviewed this Annual Report on Form 10-K of Bowlero Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: September 11, 2023			/s/ Thomas F. Shannon
			Thomas F. Shannon
			Chairman, Chief Executive Officer and President
			Bowlero Corp.

EX-31.2 10 bowl-ex312xfy2310k.htm EX-31.2 Document

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert M. Lavan, certify that:

1.I have reviewed this Annual Report on Form 10-K of Bowlero Corp.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: September 11, 2023			/s/ Robert M. Lavan
			Robert M. Lavan
			Chief Financial Officer
			Bowlero Corp.

EX-32.1 11 bowl-ex321xfy2310k.htm EX-32.1 Document

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Bowlero Corp. (the “Company”) for the fiscal year ended July 2, 2023, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Thomas F. Shannon, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: September 11, 2023			/s/ Thomas F. Shannon
			Thomas F. Shannon
			Chairman, Chief Executive Officer and President
			Bowlero Corp.

The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the U.S. Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing).

EX-32.2 12 bowl-ex322xfy2310k.htm EX-32.2 Document

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Bowlero Corp. (the “Company”) for the fiscal year ended July 2, 2023, as filed with the U.S. Securities and Exchange Commission (the “Report”), I, Robert M. Lavan, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: September 11, 2023			/s/ Robert M. Lavan
			Robert M. Lavan
			Chief Financial Officer
			Bowlero Corp.