References to "we", "us", "our" or the "Company" are to CF Finance Acquisition Corp. III, except where the context requires otherwise. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Report.

Cautionary Note Regarding Forward-Looking Statements

This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SECfilings.





Overview


We are a blank check company incorporated in Delaware on March 15, 2016 for the purpose of effecting an initial business combination. Our sponsor is CF Finance Holdings III, LLC.

Although we are not limited to a particular industry or sector for purpose of consummating an initial business combination, we are focusing our search on companies operating in the financial services, healthcare, real estate services, technology and software industries. We are an early stage and emerging growth company and, as such, subject to all of the risks associated with early stage and emerging growth companies.

Our registration statement for our initial public offering became effective on November 12, 2020. On November 17, 2020, we consummated the initial public offering of 23,000,000 units, including 3,000,000 units sold upon the exercise of the underwriters' overallotment option in full, at a purchase price of $10.00 per unit, generating gross proceeds of $230,000,000. Each unit consists of one share of Class A common stock and one-third of one redeemable warrant. Each whole warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50. Each warrant will become exercisable on the later of 30 days after the completion of the initial business combination or until November 17, 2021 and will expire 5 years after the completion of the initial business combination, or earlier upon redemption or liquidation.

Simultaneously with the closing of the initial public offering, we consummated the sale of 500,000 units at a price of $10.00 per private placement unit to the sponsor in a private placement, generating gross proceeds of $5,000,000.

Following the closing of the initial public offering and sale of private placement units on November 17, 2020, an amount of $230,000,000 ($10.00 per unit) from the net proceeds of the sale of the units in the initial public offering and the sale of the private placement units was placed in a trust account located in the United States at J.P. Morgan Chase Bank, N.A., with Continental acting as trustee, which may be invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the trust account, as described below.

We have until May 17, 2021 or prior to the expiration of the applicable four-month extension period, as described below, to consummate an initial business combination (the "Combination Period"). If we are unable to complete an initial business combination by the end of the Combination Period, 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 earned on the funds held in the trust account and not previously released to the Company to pay taxes (less 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), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete an initial business combination within the Combination Period.





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If we anticipate that we may not be able to consummate an initial business combination by May 17, 2021, and subject to the sponsor depositing additional funds into the trust account as set out below, the time to consummate an initial business combination shall be extended for an additional four months up to four times, for a total of up to 22 months to complete an initial business combination. The stockholders will not be entitled to vote or redeem their shares in connection with any such extension. Pursuant to the terms of the Charter and the trust agreement entered into between us and Continental, in order for the time available for us to consummate an initial business combination to be extended, the sponsor or its affiliates or permitted designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $2,300,000 ($0.10 per public unit), on or prior to the date of the applicable deadline, for each of the available four month extensions providing a total possible business combination period of 22 months at a total payment value of $9,200,000 ($0.10 per public unit). Any such payments would be made in the form of a non-interest bearing loan which would be due and payable on the consummation of the initial business combination out of the proceeds of the trust account released to us. If we do not complete an initial business combination, we may repay such loans solely from assets not held in the trust account, if any. The sponsor and its affiliates or designees intend, but are not obligated, to fund the trust account to extend the time for us to complete our initial business combination.

Liquidity and Capital Resources

As of December 31, 2020, we had $1,250 of cash in our operating account, working capital deficit of approximately $45,900, and approximately $800 of interest income in the trust account available to pay franchise and income taxes.

Our liquidity needs through December 31, 2020 have been satisfied through a contribution of $25,000 from the sponsor in exchange for the issuance of the founder shares, a loan of approximately $140,000 from the sponsor pursuant to a promissory note (the "Pre-IPO Note"), the proceeds from the consummation of the private placement with the sponsor not held in the trust account, and the Sponsor Loan (as defined below). We fully repaid the Pre-IPO Note upon completion of the initial public offering. In addition, in order to finance transaction costs in connection with an initial business combination, our sponsor has committed up to $1,750,000 to be provided to us to fund our expenses relating to investigating and selecting a target business and other working capital requirements after the initial public offering and prior to the Company's initial business combination (the "Sponsor Loan"). If the Sponsor Loan is insufficient, the sponsor or an affiliate of the sponsor, or certain of our officers and directors intend, but are not obligated to, provide us additional loans. As of December 31, 2020, there was approximately $428,000 outstanding under the Sponsor Loan.

Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from the sponsor to meet our needs through the earlier of the consummation of an initial business combination or one year from the date of this Report. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective target businesses, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the initial business combination. It is the current intention of the sponsor to exercise, at a minimum, two four month extensions should an initial business combination not occur, as noted above, such that the life of the Company will be at least one year and one day from the issuance of the Report.





Results of Operations


Our entire activity from inception through December 31, 2020 related to our formation, the preparation for the initial public offering, and since the closing of the initial public offering, 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 will generate non-operating income in the form of interest income on investments held in 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 year ended December 31, 2020, we incurred a net loss of approximately $153,000, which consisted of approximately $116,000 in general and administrative expenses, $14,000 in administrative expenses paid to the sponsor and approximately $24,000 of franchise tax expense, which was partially offset by an approximately $800 interest income on investments held in the trust account.





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For the year ended December 31, 2019, we incurred a net loss of approximately $500, which consisted of approximately $100 in general and administrative expenses and $400 of franchise tax expense.





Contractual Obligations


Business Combination Marketing Agreement

We engaged Cantor, an affiliate of the sponsor, as an advisor in connection with the Company's initial business combination to assist us in holding meetings with our stockholders to discuss the initial business combination and the target business' attributes, introduce us to potential investors that are interested in purchasing the Company's securities, assist us in obtaining stockholder approval for the initial business combination and assist us with our press releases and public filings in connection with the initial business combination. We will pay Cantor a cash fee ("Marketing Fee") for such services upon the consummation of the initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the base offering in the initial public offering, and 5.5% of the gross proceeds from the full exercise of the underwriters' over-allotment option.





Related Party Loans


In order to finance transaction costs in connection with an intended initial business combination, the sponsor has committed up to $1,750,000 in the Sponsor Loan to be provided to us to fund expenses relating to investigating and selecting a target business and other working capital requirements, including $10,000 per month for office space, administrative and shared personnel support services that will be paid to the sponsor, after the initial public offering and prior to the Company's initial business combination. As of December 31, 2020, we had borrowed approximately $428,000 under the Sponsor Loan.

The sponsor pays expenses on our behalf. We reimburse the sponsor for such expenses paid on our behalf. As of December 31, 2020, we had accounts payable outstanding to the sponsor for such expenses paid on our behalf of approximately $4,300.

Critical Accounting Policies and Estimates

The Company has identified the following as its critical accounting polices:





Use of Estimates


The preparation of financial statements and related disclosures in conformity with U.S. GAAP 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 income and expenses during the periods reported. Actual results could materially differ from those estimates.





Emerging Growth Company



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.

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A common stock (including Class A common stock 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, shares of Class A common stock are classified as stockholders' equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of December 31, 2020, 22,531,950 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders' equity section of our balance sheet.





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Net Income (Loss) Per Common Share

We comply with accounting and disclosure requirements of ASC Topic 260, "Earnings Per Share." Net income per common share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. We have not considered the effect of the warrants sold in the initial public offering and the concurrent private placement to purchase an aggregate of 7,833,333 shares of Class A common stock in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted earnings per common share is the same as basic earnings per common share for the period.

Our statement of operations includes a presentation of income per share for common stock subject to redemption in a manner similar to the two-class method of income per share. Net income per share, basic and diluted for shares of Class A common stock are calculated by dividing the interest income (loss) earned on cash equivalents and investments and held in the trust account, net of applicable taxes available to be withdrawn from the trust account, by the weighted average number of shares of Class A common stock outstanding for the applicable period, excluding 500,000 shares of Class A common stock held by the sponsor, which is not subject to redemption. Net loss per share, basic and diluted for shares of Class B common stock is calculated by dividing the net income, less income attributable to the shares of redeemable Class A common stock by the weighted average number of shares of Class B common stock and 500,000 shares of Class A common stock held by the sponsor outstanding for the applicable period.

Off-Balance Sheet Arrangements and Contractual Obligations

As of December 31, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

Recent Accounting Pronouncements

Our management does not believe there are any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, that would have a material effect on our financial statements.

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