References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Austerlitz 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 the SEC
on March 1, 2021 and Part II, Item 1A "Risk Factors" below. The Company's
securities filings can be accessed on the EDGAR section of the SEC'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 on December 21, 2020 as a Cayman
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 Placement,
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 on February 25, 2021. On March 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.

                                       24
--------------------------------------------------------------------------------
  Table of Contents
In March 2020, the World 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 and negotiating and working to
consummate the Pending Business Combination. We do not expect to generate any
operating revenues until after completion of a Business Combination. 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 and the asset or liability for
the Backstop Agreement at each reporting period.
For the quarter ended September 30, 2021, we had net income of $4,035,669, which
consists of $2,326,673 in operating costs, offset by
non-cash
gains of $1,111,334 and $5,251,008 related to changes in the fair value of the
Warrant liability and Backstop Agreement, respectively.
For the nine-months ended September 30, 2021, we had a net loss of $9,599,566,
which consists of
non-cash
losses of $3,677,499 related to change in the fair value of the Warrants,
$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
$3,079,072, partially offset by a
non-cash
gain on the change in fair value of the Backstop Agreement of $2,212,251.
Liquidity and Capital Resources
As of September 30, 2021, we had cash of $176,462 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.
For the nine months ended September 30, 2021, cash used in operating activities
was $1,062,193. Net loss of $9,599,566 was affected by a
non-cash
loss of $3,677,499 related to changes in the fair value of warrants, a
non-cash
gain of $2,212,251 related to changes in the fair value of the backstop
agreement, 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 an
aggregate of $2,016,879 of cash from operating activities.
As of September 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.
                                       25
--------------------------------------------------------------------------------
  Table of Contents
Off-Balance
Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of September 30, 2021 or December 31, 2020. 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 on March 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 7 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.
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 on May 10, 2021 and Note 11
to the financial statements for discussion of the termination of such agreements
subsequent to September 30, 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
in the 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 Liabilities and Backstop Agreement Asset
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 assets or liabilities. The
liability for the Warrants and asset for the Backstop Agreement are included in
Warrant liability and Backstop asset, respectively, on the condensed
consolidated balance sheet as of September 30, 2021. See Note 9 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 10
for further discussion of the methodology used to determine the fair value of
the Company's liability for the Warrants and asset for the Backstop Agreement.

                                       26
--------------------------------------------------------------------------------
  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' deficit section of
our unaudited condensed consolidated balance sheet.
Net Income (Loss) per Ordinary Share
The Company has three classes of shares, one for each of its Class A, Class B,
and Class C ordinary shares. Income and losses are shared pro rata between the
three classes of shares. Net loss per ordinary share is computed by dividing net
loss by the weighted average number of ordinary shares outstanding during the
period. We apply the
two-class
method in calculating earnings per share. Refer to Note 3 to our condensed
consolidated financial statements included in Item 1 of Part 1 of this Quarterly
Report for further discussion of the calculation of our net loss per share.
Recently Issued Accounting Pronouncements
Refer to Note 3 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.
Revision of Previously Issued Financial Statements
Refer to Note 2 to our condensed consolidated financial statements included in
Item 1 of Part 1 of this Quarterly Report for discussion of revisions to the
Company's previously issued financial statements related to our accounting for
the value of our redeemable Class A ordinary shares presented in temporary
equity and our calculation of net loss per ordinary share.

© Edgar Online, source Glimpses