References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer toE.Merge Technology Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors, references to the "Sponsor" refer to E.Merge Technology Sponsor LLC . The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed 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 Factor's section of the Company's Annual Report on Form 10-K/A filed with theU. S. Securities and Exchange Commission (the "SEC"). 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. This Management's Discussion and Analysis of Financial Condition and Results of Operations has been amended and restated to give effect to the revision of our financial statements as ofMarch 31 ,
2021 and
2021 and for the period fromMay 22, 2020 (inception) throughDecember 31, 2021 . Management identified errors made in its historical financial statements where, at the closing of the Company's Initial Public Offering, the Company improperly valued its Class A common stock subject to possible redemption. The Company previously classified as temporary equity the Class A common stock subject to possible redemption to be equal to the redemption value of$10.00 per share of Class A common stock while also taking into consideration a redemption cannot result in temporary equity being less than$5,000,001 . Accordingly, a certain amount of Class A common stock was classified in stockholders' equity in order to meet this interpretation of net tangible assets. In the current quarter, Management determined that the Class A common stock issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company's control. Therefore, management concluded that the redemption value should include all shares of Class A common stock subject to possible redemption, resulting in the Class A common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification error related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock. Overview We are a blank check company incorporated onMay 22, 2020 as aDelaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses. While our efforts to identify a target business may span many industries and regions worldwide, we focus our search for prospects within the software and internet technology industries. We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering and the private placement of the Private Units, the proceeds of the sale of our shares in connection with our initial 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. We expect to continue to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to complete our initial Business Combination will be successful. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception throughSeptember 30, 2021 were organizational activities, those necessary to prepare for our Initial Public Offering, described below, and, after our Initial Public Offering, identifying a target company for an initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial 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 for due diligence expenses. For the three months endedSeptember 30, 2021 , we had a net income of$5,141,392 , which consists of a change in the fair value of the warrant liabilities$5,512,000 and interest income on marketable securities held in the Trust Account of$25,475 , offset by general and administrative expenses of$396,083 . For the nine months endedSeptember 30, 2021 , we had a net income of$15,812,132 , which consists of a change in the fair value of the warrant liabilities$16,540,000 and interest income on marketable securities held in the Trust Account of$102,903 , offset by general and administrative expenses of$830,384 . For the three months endedSeptember 30, 2020 , we had a net income of$3,283,486 , which consists of interest earned on marketable securities held in Trust Account of$42,647 and change in fair value of warrant liability of$4,896,000 , offset by formation and operational costs of$353,645 , transaction cost related to warrant liability of$1,299,560 and provision for income taxes of$1,956 . 18 -------------------------------------------------------------------------------- Table of Contents For the period fromMay 22, 2020 (Inception) throughSeptember 30, 2020 , we had a net income of$3,282,486 , which consists of interest earned on marketable securities held in Trust Account of$42,647 and change in fair value of warrant liability of$4,896,000 , offset by formation and operational costs of$354,645 , transaction cost related to warrant liability of$1,299,560 and provision for income taxes of$1,956 . Liquidity and Capital Resources OnAugust 4, 2020 , we consummated our Initial Public Offering of 52,200,000 units (the "Units" and, with respect to the shares of Class A common stock included in the units sold, the "Public Shares") at a price of$10.00 per Unit, at$10.00 per Unit, generating gross proceeds of$522,000,000 . Simultaneously with the closing of our Initial Public Offering, we consummated the sale of 1,200,000 units (each, a "Placement Unit" and collectively, the "Placement Units") to E.Merge Technology Sponsor LLC , aDelaware limited liability company (the "Sponsor"), at a price of$10.00 per Placement Unit, generating gross proceeds of$12,000,000 . OnSeptember 4, 2020 , in connection with the underwriters' election to partially exercise of their option to purchase additional Units, we consummated the sale of an additional 7,800,000 Units, generating total gross proceeds of$78,000,000 . Following our Initial Public Offering, the partial exercise of the over-allotment option and the sale of the Placement Units, a total of$600,000,000 was placed in the Trust Account. We incurred$33,039,544 in transaction costs, including$9,840,000 of underwriting fees,$22,560,000 of deferred underwriting fees and$639,544 of other offering costs. For the nine months endedSeptember 30, 2021 , cash used in operating activities was$623,341 . Net income of$15,812,132 was offset by a change in fair value of warrant liabilities$16,540,000 , interest earned on marketable securities held in the Trust Account of$102,896 and changes in operating assets and liabilities, which provided$207,422 of cash from operating activities. For the period fromMay 22, 2020 (inception) throughSeptember 30, 2020 , cash used in operating activities was$470,679 . Net income of$3,282,486 was offset by a change in fair value of warrant liabilities$4,896,000 , interest earned on marketable securities held in the Trust Account of$42,647 , transaction cost related to warrant liability of$1,299,560 and changes in operating assets and liabilities, which used$114,078 of cash from operating activities. As ofSeptember 30, 2021 , we had investments of$600,103,396 held in the Trust Account. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes paid and deferred underwriting commissions) to complete our initial Business Combination. We may withdraw interest to pay taxes. ThroughSeptember 30, 2021 , we have withdrawn$118,816 of interest earned on the Trust Account for the payment of franchise and income taxes. 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. As ofSeptember 30, 2021 , we had cash of$445,319 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, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial 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 our initial 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 units identical to the Placement Units, at a price of$10.00 per unit 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 in-depth due diligence and negotiating our initial Business Combination are less than the actual amount necessary to do so, 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. Going Concern In connection with the Company's assessment of going concern considerations in accordance with FASB's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that if the Company is unable to raise additional funds to alleviate liquidity needs, obtain approval for an extension of the deadline or complete a Business Combination byAugust 4, 2022 , then the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate afterAugust 4, 2022 . The Company intends to complete a Business Combination before the mandatory liquidation date or obtain approval for an extension. 19 -------------------------------------------------------------------------------- Table of Contents Off-Balance Sheet Financing Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as ofSeptember 30, 2021 . We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. 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 an affiliate of the Sponsor a monthly fee up to$15,000 for office space, utilities and secretarial and administrative support services. We began incurring these fees onJuly 30, 2020 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation. The underwriters are entitled to a deferred fee of$22,560,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Critical Accounting Policies The preparation of unaudited condensed 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 income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies: Warrant Liability We account for our warrants in accordance with the guidance contained in Accounting Standards Codification ("ASC") 815-40 under which the warrants that do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify our warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of our placement warrants was determined using a Black-Scholes option pricing model. The public warrants for periods where no observable traded price was available are valued using a Monte Carlo simulation model. For periods subsequent to the detachment of the public warrants from the Units, the public warrant quoted market price was used as the fair value as of each relevant date. 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 ASC Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including 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 within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders' equity section of our unaudited condensed balance sheets. Net Loss per Common Share 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. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. 20 -------------------------------------------------------------------------------- Table of Contents Recent Accounting Standards InAugust 2020 , theFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 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)("ASU 2020-06") to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity's own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effectiveJanuary 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . We adopted ASU 2020-06 effectiveJanuary 1, 2021 . The adoption of ASU 2020-06 did not have an impact on our financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
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