References in this Quarterly Report on Form 10-Q (the "Quarterly Report") to "we," "us," "our" or the "Company" refer to Empowerment & Inclusion Capital I Corp. References to our "management" refer to our officers and directors. The following discussion and analysis of the Company's 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. 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" within the meaning of Section 27A of the Securities Act and Section 21E of 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 the Company's financial position and business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "may," "plan," "intend," "estimate," "seek" or the negative of these terms and variations and similar words and expressions are intended to identify such forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these 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. The following include some, but not all, of the factors that could cause actual results or events to differ materially from those anticipated: (i) our ability to select an appropriate target business or businesses; (ii) our ability to complete our initial Business Combination; (iii) our expectations around the performance of the prospective target business or businesses; (iv) our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial Business Combination; (v) our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial Business Combination, as a result of which they would then receive expense reimbursements; (vi) our potential ability to obtain additional financing to complete our initial Business Combination; (vii) our pool of prospective target businesses; (viii) the ability of our officers and directors to generate a number of potential Business Combination opportunities; (ix) our public securities' potential liquidity and trading; (x) the lack of a market for our securities; (xi) the use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance; (xii) the Trust Account not being subject to claims of third parties; or (xiii) our financial performance following our Initial Public Offering.

For additional risk factors, please refer to the Risk Factors section of our Annual Report on Form 10-K, which was filed with the SEC on March 29, 2021 (the "Form 10-K"), our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, which was filed with the SEC on May 28, 2021 (the "First Quarter Form 10-Q"), our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, which was filed with the SEC on August 10, 2021 (the "Second Quarter Form 10-Q"), and Item 1A. "Risk Factors" of this Quarterly Report. 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 initially formed as a Delaware limited liability company on May 29, 1999 under the name of PHX Capital LLC. On September 17, 2020, we converted to a Delaware C Corporation and changed our name to Empowerment & Inclusion Capital I Corp. for the purpose of effecting a Business Combination.

We are a special purpose acquisition company driven by a unique and critical mission: to use our significant experience and resources to acquire a diverse-led business or a business focused on promoting an inclusive economy and society and provide strategic advice in support of its ongoing growth and success to create enduring shareholder value. To share in that value creation, our Sponsors, PNC Investment and Jefferies, intend to each donate all of their respective Founders Shares and Warrants to initiatives supporting the economic empowerment and inclusion of underrepresented groups. It is our and our Sponsors' core belief that by empowering diverse or inclusive businesses and by our Sponsors using their profits and at-risk capital to reinvest in our communities, we and our Sponsors can deliver significant shareholder value while also promoting racial equity and a shift to a more inclusive economy and society.



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On January 12, 2021, we consummated the Initial Public Offering of 27,600,000 Units, which included the full exercise by the underwriter of its over-allotment option in the amount of 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276,000,000. Each Unit consists of one Class A ordinary share and one-half of one Public Warrant. Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 7,520,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to PNC Investment, Jefferies and our CEO, generating gross proceeds of $7,520,000.

On January 7, 2021, we issued the Working Capital Promissory Notes in favor of our Sponsors, pursuant to which we may borrow up to an aggregate principal amount of $1,000,000 for working capital. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsors or an affiliate of the Sponsors, or certain of our officers and directors, may but are not obligated to provide us with Working Capital Loans.

On August 20, 2021, we drew aggregate of $275,000 on the Working Capital Promissory Notes. The Working Capital Promissory Notes are non-interest bearing and payable upon the consummation of a Business Combination. The Working Capital Promissory Notes are convertible, at the lender's option, into warrants to purchase shares of common stock at a conversion price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

If we complete a Business Combination, we expect to repay the Working Capital Loans, including the Working Capital Promissory Notes, out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

We intend to effectuate our Business Combination using the net cash from the Initial Public Offering and sale of Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt, including proceeds from the Working Capital Loans.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

The issuance of additional shares of our stock in a Business Combination:

may significantly dilute the equity interest of investors, which dilution would

? increase if the anti-dilution provisions in the Class B common stock resulted

in the issuance of Class A common stock on a greater than one-to-one basis upon

conversion of the Class B common stock;

may subordinate the rights of holders of Class A common stock if shares of

? preferred stock are issued with rights senior to those afforded our Class A

common stock;

could cause a change in control if a substantial number of shares of our Class

? A common stock are issued, which may affect, among other things, our ability to

use our net operating loss carry forwards, if any, and could result in the

resignation or removal of our present officers and directors;

may have the effect of delaying or preventing a change of control of us by

? diluting the share ownership or voting rights of a person seeking to obtain

control of us; and

? may adversely affect prevailing market prices for our shares and/or Warrants.

Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:

? default and foreclosure on our assets if our operating revenues after an

initial Business Combination are insufficient to repay our debt obligations;

acceleration of our obligations to repay the indebtedness even if we make all

? principal and interest payments when due if we breach certain covenants that

require the maintenance of certain financial ratios or reserves without a

waiver or renegotiation of that covenant;

? our immediate payment of all principal and accrued interest, if any, if the

debt is payable on demand;

our inability to obtain necessary additional financing if the debt contains

? covenants restricting our ability to obtain such financing while the debt is

outstanding;

? our inability to pay dividends on our Class A common stock;




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increased vulnerability to adverse changes in general economic, industry and

competitive conditions and adverse changes in government regulation; and

? limitations on our ability to borrow additional amounts for expenses, capital

expenditures, acquisitions, debt service requirements, execution of our

strategy and other purposes, and other disadvantages compared to our

competitors who have less debt.

Results of Operations

Since our inception on May 29, 1999 through September 30, 2021, we have only engaged in activities related to our organization, our Initial Public Offering, post-Initial Public Offering public company related activities for legal, financial reporting, accounting and auditing compliance, and the identification and evaluation of target businesses for a Business Combination. We have neither engaged in any operations nor generated any revenues to date. We do not expect to generate any operating revenues until after the completion of a Business Combination. We generate small amounts of non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. We will continue to incur public company expenses, as well as expenses for due diligence activities until we complete a Business Combination.

For the three months ended September 30, 2021, we had a net loss of $116,310, which consisted of a loss on the change in the fair value of Warrant liabilities of $213,200, offset by interest income on marketable securities held in the Trust Account of $6,958, change in the fair value of the Working Capital Promissory Notes of $89,000 and operating income of $932.

For the nine months ended September 30, 2021, we had a net loss of $1,166,203, which consisted of operating costs of $641,613 and transaction costs attributable to Warrant liabilities of $633,329, partially offset by interest income on marketable securities held in the Trust Account of $19,739 and change in the fair value of the Working Capital Promissory Notes of $89,000.

For the three and nine months ended September 30, 2020, we had a net loss of $1,000, which consisted of operating costs.

Liquidity and Capital Resources

Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of common stock by the Sponsors of $25,000 and up to $300,000 in loans available from our Sponsors, which were repaid upon our Initial Public Offering.

Following the Initial Public Offering, the full exercise of the over-allotment option by the underwriters' and the sale of the Private Placement Warrants, a total of $276,000,000 was placed in the Trust Account. We incurred $16,316,186 in transaction costs, including $5,520,000 of underwriting fees, $9,660,000 of deferred underwriting fees, $415,804 of deferred legal fees and $720,382 of other offering costs. During the quarter ended September 30, 2021, the Company paid $150,000 in settlement of the outstanding deferred legal fee.

For the nine months ended September 30,2021, cash used in operating activities was $1,079,410. Net loss of $1,166,203 was affected by interest earned on marketable securities held in the Trust Account of $19,739, change in the fair value of Working Capital Promissory Notes of $89,000 and transaction costs attributable to Warrant liabilities of $633,329. Changes in operating assets and liabilities used $437,797 of cash for operating activities. We used $276,000,000 in investing activities to fund our Trust Account, and we generated $277,158,814 in financing activities from our Initial Public Offering, sale of Private Placement Warrants and proceeds from the Working Capital loans, net of underwriting fees, offering costs and the repayment of the Promissory Notes - related party.

For the nine months ended September 30, 2020, cash used in operating activities was $0, which consists of net loss of $1,000 and changes in operating assets and liabilities, which used $1,000 of cash from operating activities.

As of September 30, 2021, we had marketable securities held in the Trust Account of $276,019,739 (including approximately $19,739 of interest) consisting of U.S. Treasury Bills with a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through September 30, 2021, we have not withdrawn any interest earned from 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 income taxes payable), to complete a Business Combination. To the extent that our capital stock or debt is used, in whole



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or in part, as consideration to complete a 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 of September 30, 2021, we had $79,404 of cash held outside the Trust Account. We intend to use the funds held outside the Trust Account and any proceeds from the Working Capital Loans as described below and in Note 1 primarily to pay public company related expenses, 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 a Business Combination.

Based on the foregoing, management believes that we will have sufficient working capital due to the borrowing capacity from the Working Capital Loans to meet the Company's needs through the earlier of the consummation of the initial Business Combination or one year from this filing.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsors or an affiliate of the Sponsors, or certain of the Company's officers and directors may provide us with Working Capital Loans, of which up to $1,000,000 have been committed by our Sponsors. We drew an aggregate of $275,000 on the Working Capital Loans during the quarter ended September 30, 2021.

If we complete a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or at the lender's discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity. Such warrants would be identical to the Private Placement Warrants.

We do not 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 a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to a Business Combination. Moreover, we may need to obtain additional financing either to complete a Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of a 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 a Business Combination. If we are unable to complete a 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 a Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2021.

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 PNC Investment a total of $10,000 per month for office space, utilities, and secretarial and administrative support. We began incurring these fees on January 12, 2021 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company's liquidation.

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $9,660,000 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.



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Critical Accounting Policies

The preparation of condensed financial statements and related disclosures in conformity with 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. We have identified the following critical accounting policies:

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 480. Class A common stock subject to mandatory redemption is classified as a liability instrument and 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 the Company's control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. The Company's Class A common stock features certain redemption rights that are considered to be outside of the Company's control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021 Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders' equity section of the Company's condensed balance sheet.

Net Income (Loss) Per Common Share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

Warrant Liabilities

We account for the Warrants in accordance with ASC 815-40 under which the Warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, with changes in fair value recognized in the statement of operations in the period of change.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

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