References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer toAusterlitz Acquisition Corporation I , formerly known as Foley Trasimene Acquisition Corporation III. References to our "management" or our "management team" refer to our officers and directors, references to the "Sponsor" refer to Austerlitz Acquisition Sponsor, LP I. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Special Note Regarding Forward-Looking Statements This Quarterly Report includes "forward-looking statements" that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's final prospectus for its IPO filed with theSEC onFebruary 25, 2021 and Part II, Item 1A "Risk Factors" below. The Company's securities filings can be accessed on the EDGAR section of theSEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview We are a blank check company incorporated onDecember 21, 2020 as aCayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses. We intend to effectuate a Business Combination using cash from the proceeds of our IPO and the Private Placements, the proceeds of the sale of our shares in connection with a Business Combination, shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. The registration statement for our Initial Public Offering was declared effective onFebruary 25, 2021 . OnMarch 2, 2021 , we completed our IPO of 69,000,000 Units sold to the public, including the issuance of 9,000,000 Units as a result of the underwriters' exercise in full of its over-allotment option, at the price of$10.00 per Unit, generating gross proceeds of$690,000,000 . Each Unit consists of one Class A ordinary share of the Company and one-fourth of one redeemable warrant. Each whole Public Warrant entitles the holder to purchase one of our Class A ordinary shares at an exercise price of$11.50 per share, subject to adjustment. Simultaneously with the closing of our IPO, we completed the sale to the Sponsor of an aggregate of 10,533,333 Private Placement Warrants at a price of$1.50 per Private Placement Warrant, generating gross proceeds of approximately$15,800,000 . Each Private Placement Warrant is exercisable for one Class A ordinary share at a price of$11.50 per share, subject to adjustment. The proceeds from the Private Placement Warrants were added to the net proceeds from the IPO held in the Trust Account. Following our IPO, the full exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of$690,000,000 was placed in the Trust Account. We incurred$38,680,632 in transaction costs, including$13,800,000 of underwriting fees,$24,150,000 of deferred underwriting fees and$730,632 of other offering costs. Offering costs of$1,623,874 were allocated to warrant liabilities and expensed as incurred. The Company's management has broad discretion with respect to the specific application of the net proceeds of its IPO and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company's initial business combination must be with one or more operating businesses or assets that together have an aggregate fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time the Company signs a definitive agreement in connection with an initial business combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise is not required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. 19 -------------------------------------------------------------------------------- Table of Contents Refer to Note 1 to the financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of the Pending Business Combination. Unless explicitly stated, this Quarterly Report does not assume the closing of the Pending Business Combination. InMarch 2020 , theWorld Health Organization classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on our results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy continue to be impacted for an extended period, our ability to complete our initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit our ability to have meetings with potential investors or affect the ability of a potential target company's personnel, vendors and service providers to negotiate and consummate our initial Business Combination in a timely manner. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our IPO and, after completing our IPO, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after completion of a Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective Business Combination candidates. Additionally, we recognize non-cash gains and losses with other income (expense) related to changes in recurring fair value measurement of our Warrant liabilities at each reporting period. For the quarter endedJune 30, 2021 , we had a net loss of$7,883,116 , which consists of non-cash losses of$3,728,757 related to changes in the fair value of the Warrants and Backstop Agreement, expenses of$3,450,000 related to the Backstop Placement Fee and operating costs of$704,359 . For the six-months endedJune 30, 2021 , we had a net loss of$13,635,235 , which consists of non-cash losses of$7,827,590 related to changes in the fair value of the Warrants and Backstop Agreement,$1,605,246 related to offering costs allocated to warrant liabilities, expenses of$3,450,000 related to the Backstop Placement Fee and operating costs of$752,399 . Liquidity and Capital Resources As ofJune 30, 2021 , we had cash of$379,503 outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, and structure, negotiate and complete a Business Combination. In order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to$1,500,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of$1.50 per warrant at the option of the lender. We do not currently believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking due diligence and negotiating a Business Combination are more than we estimate, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. 20 -------------------------------------------------------------------------------- Table of Contents For the six months endedJune 30, 2021 , cash used in operating activities was$1,304,218 . Net loss of$13,635,235 was affected by non-cash losses of$7,827,590 related to changes in the fair value of warrant and backstop liabilities, losses of$1,605,246 related to offering costs allocated to warrant liabilities, expenses of$3,450,000 related to the payable for the Backstop Placement Fee and changes in operating assets and liabilities, which used$551,819 of cash from operating activities. As ofJune 30, 2021 , we had cash and marketable securities of$690,000,000 held in the Trust Account. We intend to use substantially all of the funds held in the Trust Account (less taxes paid and deferred underwriting commissions) to complete our initial Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. Off-Balance Sheet Financing Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as ofJune 30, 2021 orDecember 31, 2021 . We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay Cannae a monthly fee up to$5,000 for office space and administrative support services. We began incurring these fees onMarch 2, 2021 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and our liquidation. Refer to Note 6 to the financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of our obligations under the Registration Rights Agreement andFPA . In connection with the signing of the Business Combination Agreement, the Company and Cannae entered into a mutual termination agreement to terminate theFPA . Refer to Note 1 to the financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of the terms and obligations of the Company under the Business Combination Agreement, Backstop Agreement, and Amended and Restated Sponsor Agreement entered into onMay 10, 2021 . The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially$10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company's warrants. The Class A ordinary shares are recorded at redemption value and classified as temporary equity, in accordance with ASC Topic 480 Distinguishing Liabilities from Equity . Critical Accounting Estimates The preparation of unaudited condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted inthe United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and expenses during the period reported. Actual results could materially differ from those estimates. We have identified the following critical accounting estimates effecting our financial statements: Warrant and Backstop Liability The Company accounts for the Warrants and Backstop Agreement as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the Warrants and Backstop Agreement and the applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the Warrants and Backstop Agreement are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the Warrants and Backstop Agreement are indexed to the Company's own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and execution of the Backstop Agreement and as of each subsequent quarterly period end date while the Warrants and Backstop Agreement are outstanding. For issued or modified instruments such as warrants and forward purchases of equity that meet all of the criteria for equity classification, such instruments are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified instruments that do not meet all the criteria for equity classification, such instruments are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of liability-classified instruments are recognized as a non-cash gain or loss on the unaudited condensed consolidated statements of operations. The Company accounts for the Warrants and Backstop Agreement in accordance with ASC 815-40 under which the Warrants and Backstop Agreement do not meet the criteria for equity classification and must be recorded as liabilities. The liabilities for the Warrants and Backstop Agreement are included in Warrant liability and Backstop liability, respectively, on the condensed consolidated balance sheet as ofJune 30, 2021 . See Note 8 to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of the pertinent terms of the Warrants and Note 9 for further discussion of the methodology used to determine the fair value of the Company's liabilities for the Warrants and Backstop Agreement. 21 -------------------------------------------------------------------------------- Table of Contents Class A Ordinary Shares Subject to Possible Redemption We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders' equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders' equity section of our unaudited condensed consolidated balance sheet. Net Income (Loss) per Ordinary Share We apply the two-class method in calculating net loss per share. Net income per ordinary share, basic and diluted, for the Class A redeemable ordinary shares is calculated by dividing any interest income earned on the Trust Account, net of applicable taxes, by the weighted average number of Class A ordinary shares outstanding for the period. Net loss per ordinary share, basic and diluted, for Class B and Class C non-redeemable ordinary shares is calculated by dividing the net loss for the period, less income attributable to the Class A redeemable ordinary shares, by the weighted average number of Class B and Class C non-redeemable ordinary shares outstanding for the period. Non-redeemable ordinary shares include the Class B Founder Shares and the ClassC Alignment Shares, as these shares do not have any redemption features and do not participate in the income earned on the investments held in the Trust Account. Refer to Note 2 to the condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of our net income (loss) per ordinary share. Refer to Note 2 to our condensed consolidated financial statements included in Item 1 of Part 1 of this Quarterly Report for discussion of management's consideration of recently issued accounting pronouncements.
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