References in this Quarterly Report on Form 10-Q to "we," "us" or the "Company" refer toThayer Ventures Acquisition Corporation . References to the "sponsor" refer toThayer Ventures Acquisition Holdings LLC . The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Special Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, 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 our 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 our Annual Report on Form 10-K, as amended, for the period endedDecember 31, 2020 , or the Amended Annual Report, filed with theU.S. Securities and Exchange Commission , or theSEC , onMay 19, 2021 . Our securities filings can be accessed on the EDGAR section of theSEC's website at www.sec.gov. Except as expressly required by applicable law, we disclaim 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 inDelaware onJuly 31, 2020 . We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, or the initial business combination. We are 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 (the "JOBS Act") and, as such, we are subject to all of the risks associated with early stage and emerging growth companies. As ofSeptember 30, 2021 , we had not commenced any operations. All activity for the period fromJuly 31, 2020 (inception) throughSeptember 30, 2021 relates to our formation and our initial public offering, or IPO. We will not generate any operating revenues until after the consummation of our initial Business Combination, at the earliest. We generate non-operating income in the form of income earned on investments held in Trust on cash and cash equivalents from the proceeds derived from the IPO. We have selectedDecember 31 as our fiscal year end. Our sponsor isThayer Ventures Acquisition Holdings LLC , aDelaware limited liability company. The registration statement for our IPO was declared effective onDecember 10, 2020 . OnDecember 15, 2020 , we closed the IPO and issued 17,250,000 units, which included 2,250,000 additional units to cover an over-allotment option we granted to the underwriters, at$10.00 per unit, generating gross proceeds of$172.5 million , and incurring offering costs of$9.2 million , inclusive of$6.9 million in deferred underwriting commissions and net of reimbursement from underwriters of$1.7 million . We refer to the shares of Class A common stock included in the units as the public shares. Simultaneously with the closing of the IPO, we consummated a private placement of 7,175,000 warrants, at a price of$1.00 per private placement warrant, to our sponsor, generating proceeds of$7.2 million . 23 -------------------------------------------------------------------------------- Table of Contents Upon the closing of the IPO and the private placement,$176.0 million ($10.20 per unit) of the net proceeds of the IPO and certain of the proceeds from the private placement were placed in a trust account located inthe United States withContinental Stock Transfer & Trust Company acting as trustee, which will be invested only inU.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in directU.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the trust account as described below. If we are unable to complete a business combination beforeJune 15, 2022 , which is 18 months from the closing of our IPO, and our stockholders have not amended our certificate of incorporation to extend such date, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less taxes payable and up to$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders' rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate and dissolve, subject in each case, to our obligations underDelaware law to provide for claims of creditors and the requirements of other applicable law. Proposed Business Combination OnJune 30, 2021 ,Thayer Ventures Acquisition Corporation , aDelaware corporation ("TVAC" or "Thayer"),Passport Merger Sub I Inc. , aDelaware corporation and wholly-owned subsidiary of TVAC ("Blocker Merger Sub 1"),Passport Merger Sub II Inc. , aDelaware corporation and wholly-owned subsidiary of TVAC ("Blocker Merger Sub 2"),Passport Merger Sub III Inc. , aDelaware corporation and wholly-owned subsidiary of TVAC ("Blocker Merger Sub 3" and, together with Blocker Merger Sub 1 and Blocker Merger Sub 2, the "Blocker Merger Subs", and together with the Company Merger Sub (as defined below), the "Merger Subs"),KPCB Investment I, Inc. , aDelaware corporation ("KPCB Blocker"),Inspirato Group, Inc. , aDelaware corporation ("IVP Blocker"),W Capital Partners III IBC, Inc. , aDelaware corporation ("W Capital Blocker", and together with KPCB Blocker and the IVP Blocker, the "Blockers"),Passport Company Merger Sub, LLC aDelaware limited liability company ("Company Merger Sub", and together with TVAC and the Blocker Merger Subs, the "TVAC Parties"), andInspirato LLC , aDelaware limited liability company ("Inspirato"), entered into a business combination agreement (the "Business Combination Agreement"), pursuant to which (i) KPCB Blocker will merge with and into Blocker Merger Sub 1, with Blocker Merger Sub 1 as the surviving company and wholly-owned subsidiary of TVAC (the "KPCB Blocker Merger"), (ii) IVP Blocker will merge with an into Blocker Merger Sub 2, with Blocker Merger Sub 2 as the surviving company and wholly-owned subsidiary of TVAC (the "IVP Blocker Merger"), (iii)W Capital Blocker will merge with and into Blocker Merger Sub 3, with Blocker Merger Sub 3 as the surviving company and wholly-owned subsidiary of TVAC (the "W Capital Blocker Merger," and together with the KPCB Blocker Merger and the IVP Blocker Merger and any mergers involving blockers that are not party to the Business Combination Agreement (if any), the "Blocker Mergers") and (iv) immediately following the Blocker Mergers, Company Merger Sub will merge with and intoInspirato , withInspirato as the surviving company ("Surviving Company"), resulting inInspirato becoming a subsidiary of TVAC (the "Company Merger," together with the Blocker Mergers, the "Mergers" and together with the other transactions related thereto, the "Proposed Transactions"). Transaction Consideration Upon the consummation of the Mergers, the aggregate consideration to be paid or issued in exchange for the units ofInspirato will be (i) approximately$1.07 billion (the "Valuation") of equity consideration, payable in the form of shares of TVAC Class A Common Stock, in the case of the Blockers, orNew Company Units and shares of TVAC Class V Common Stock in the case of all other unitholders ofInspirato , (ii) an amount in cash (if any), to be determined by theInspirato prior to the closing of the Proposed Transactions (the "Closing"), subject to the limitations set forth in the Business Combination Agreement, and (iii) certain rights under the Tax Receivables Agreement (as described below). The Valuation will be adjusted upward on a dollar-for-dollar basis by (a) the amount by whichInspirato's net cash at the Closing exceeds$20 million , and (b) the amount by which TVAC's transaction expenses exceeds$15 million . The aggregate equity and cash consideration payable in the Mergers will be allocated among the Blockers and other unitholders ofInspirato in accordance with his, her or its respective pro rata share. Options to purchase Common Units ofInspirato will be converted into options to purchase shares of TVAC Class A Common Stock at an exchange ratio based on the value of equity and cash consideration (but excluding the value of any rights payable under the Tax Receivables Agreement) payable to the unitholders ofInspirato , and will be subject to the same terms and conditions, including vesting. 24 -------------------------------------------------------------------------------- Table of Contents Refer to the Company's current report on Form 8-K, filed with theSEC onJune 30, 2021 , for more information. Liquidity and Capital Resources As ofSeptember 30, 2021 , we had$396,000 outside of the trust account and$74,000 of working capital (not taking into account approximately$174,000 in tax obligations that may be paid using investment income classified in the Trust Account). Our liquidity needs to date have been satisfied through a payment of$25,000 from our sponsor to cover certain on our IPO in exchange for the issuance of the founder shares, and loan proceeds from the sponsor of$400,000 under a promissory note. We repaid the promissory note in full onDecember 15, 2020 , concurrent with the closing of our IPO. Subsequent to the closing of the IPO, our liquidity needs have been satisfied through the net proceeds from the IPO and the private placement that are held outside of the trust account. Based on the foregoing, we believe that we will have sufficient working capital and borrowing capacity from our sponsor, or an affiliate of our sponsor, or certain of our officers and directors, to meet our needs through the earlier of the consummation of an initial business combination or one year from the filing of this Quarterly Report on Form 10-Q. Over this time period, we intend to use these funds to pay existing accounts payable, identify and evaluate prospective initial business combination candidates, perform due diligence on prospective target businesses, pay for travel expenditures, select a target business to merge with or acquire, and structure, negotiate and consummate the initial business combination. Results of Operations Our entire activity since inception throughSeptember 30, 2021 , related to our formation, the preparation for the IPO, and since the closing of the IPO, the search for a prospective initial business combination. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of income earned on investments held in the Trust account. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. For the three months endedSeptember 30, 2021 , we had net income of$1.9 million , which consisted of approximately$2.4 million change in fair value of derivative warrant liabilities, approximately$5,000 earned on investments held in Trust Account of approximately, partially offset by general and administrative expenses of approximately$480,000 and$50,000 of franchise tax expense. For the nine months endedSeptember 30, 2021 , we had net loss of$3.7 million , which consisted of$1.3 million in general and administrative costs, approximately$148,000 of franchise tax expense and approximately$2.3 million change in fair value of derivative warrant liabilities, partially offset by income earned on investments held in Trust Account of approximately$38,000 . For the period fromJuly 31, 2020 (inception) throughSeptember 30, 2020 , we had net loss of$53,000 , which consisted of$20,000 in general and administrative costs and approximately$33,000 of franchise tax expense. Contractual Obligations Registration Rights The holders of the founder shares and private placement warrants are entitled to registration rights pursuant to a registration rights agreement we entered into in connection with our IPO. The holders of these securities are entitled to make up to three demands that we register such securities, subject to specified conditions. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the consummation of the business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. 25 -------------------------------------------------------------------------------- Table of Contents Underwriting Agreement The underwriters were entitled to an underwriting discount of$0.20 per unit, or$3.45 million in the aggregate, paid upon the closing of the IPO. The underwriters also made a payment to us in an amount equal to 1.0% of the gross proceeds of the IPO, or$1.7 million in the aggregate to reimburse certain of our expenses. An additional fee of$0.40 per unit, or$6.9 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete our initial business combination, subject to the terms of the underwriting agreement. Deferred Consulting Fees InSeptember 2020 , we entered into an engagement letter with a consultant to obtain advisory services in connection with our search for a business combination target, pursuant to which we agreed to pay a$10,000 initial fee upon execution and a deferred success fee of$50,000 upon the consummation of our initial business combination. Critical Accounting Policies and Estimates Management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America , orU.S. GAAP. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies: Derivative Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, "Derivatives and Hedging" ("ASC 815"). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. In accordance with ASC Topic 825-10 "Financial Instruments", offering costs attributable to the issuance of the derivative warrant liabilities have been allocated based on their relative fair value of total proceeds and are recognized in the statement of operations as incurred. The warrants to purchase Class A common stock issued in connection with the IPO (the "Public Warrants") and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company's statement of operations. The initial fair value of the Public Warrants have been measured at fair value using a Monte Carlo simulation model and the Private Placement Warrants were estimated using Black-Scholes. The fair value of the Public Warrants as ofSeptember 30, 2021 is based on observable listed prices for such warrants. As the transfer of Private Placement Warrants to anyone who is not a permitted transferee would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. 26 -------------------------------------------------------------------------------- Table of Contents Class A Common Stock Subject to Possible Redemption We account for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption (if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely our control) are classified as temporary equity. At all other times, Class A common stock is classified as stockholders' equity. Our Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of the Initial Public Offering, 17,250,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders' equity section of our condensed balance sheets. Effective with the closing of the Initial Public Offering, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Net Income (Loss) Per Share of Common Stock We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period. The calculation of diluted net income (loss) per common stock does not consider the effect of the warrants issued in connection with the Initial Public Offering (including exercise of the over-allotment option) and the Private Placement to purchase an aggregate of 15,800,000 shares of Class A common stock in the calculation of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the three and nine months endedSeptember 30, 2021 and for the period fromJuly 31, 2020 (inception) throughSeptember 30, 2020 . Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. Recent Adopted Accounting Standards InAugust 2020 , theFinancial Accounting Standards Board , or FASB, issued Accounting Standards Update, or ASU, No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity , which simplifies accounting for convertible instruments by removing major separation models required underU.S. GAAP. This ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. We early adopted the ASU onJanuary 1, 2021 using the modified retrospective method for transition. Adoption of the ASU did not impact our financial position, results of operations or cash flows. We do not believe that any recently issued, but not yet effective, ASUs, if currently adopted, would have a material effect on our financial statements. 27 -------------------------------------------------------------------------------- Table of Contents Off-Balance Sheet Arrangements As ofSeptember 30, 2021 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. JOBS Act The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by thePublic Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.
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