References to the "Company," "our," "us" or "we" refer to Marquee Raine
Acquisition Corp. 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
report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
Cautionary 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, 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 SEC filings.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on October 16, 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 (the "Business Combination"). We are an
emerging growth company and, as such, we are subject to all of the risks
associated with emerging growth companies.
On April 28, 2021, we entered into an Agreement and Plan of Merger (the "Merger
Agreement") with MRAC Merger Sub Corp., a wholly owned subsidiary of the Company
("Merger Sub") and Enjoy Technology Operating Corp. (f/k/a Enjoy Technology
Inc.), a Delaware corporation ("Legacy Enjoy"). The Merger Agreement was
subsequently amended on July 23, 2021 and September 13, 2021 and the
domestication transactions contemplated by the Merger Agreement were completed
on October 14, 2021. As such, we filed a notice of deregistration with the
Cayman Islands Registrar of Companies, together with the necessary accompanying
documents, and filed a certificate of incorporation and a certificate of
corporate domestication with the Secretary of State of the State of Delaware,
under which the Company was domesticated and continues as a Delaware
corporation, changing its name to "Enjoy Technology, Inc." (the
"Domestication"). After the Domestication, the Company is referred to as "New
Enjoy."
As a result of and upon the effective time of the Domestication, among other
things, (1) each then issued and outstanding Class A ordinary share, par value
$0.0001 per share, of the Company (the "MRAC Class A Ordinary Shares"),
converted automatically, on a
one-for-one
basis, into a share of common stock, par value $0.0001 per share, of New Enjoy
(the "New Enjoy Common Stock"); (2) each then issued and outstanding Class B
ordinary share, par value $0.0001 per share, of the Company (the "MRAC Class B
Ordinary Shares") converted automatically, on a
one-for-one
basis, into a share of New Enjoy Common Stock; (3) each then issued and
outstanding warrant of the Company (the "MRAC Warrants") converted automatically
into a warrant to acquire one share of New Enjoy Common Stock (the "New Enjoy
Warrants") pursuant to the Warrant Agreement, dated December 17, 2020, between
the Company and Continental Stock Transfer & Trust Company ("Continental"), as
warrant agent; and (4) each then issued and outstanding unit of the Company (the
"MRAC Units") was separated and converted automatically into one share of New
Enjoy Common Stock and
one-fourth
of one New Enjoy Warrant. No fractional shares were issued upon exercise of the
New Enjoy Warrants.
On October 15, 2021 (the "Closing Date"), as contemplated by the Merger
Agreement, New Enjoy consummated the merger transaction contemplated by the
Merger Agreement, following approval at an extraordinary general meeting of the
shareholders of the Company held on October 13, 2021 (the "Special Meeting"),
whereby Merger Sub merged with and into Legacy Enjoy, the separate corporate
existence of Merger Sub ceasing and Legacy Enjoy being the surviving corporation
and a wholly owned subsidiary of New Enjoy (the "Merger" and, together with the
Domestication, the "Business Combination").
Immediately prior to the effective time of the Merger, (1) each share of Legacy
Enjoy's (a) Series A preferred stock, par value $0.00001 per share, (b) Series B
preferred stock, par value $0.00001 per share, and (c) Series C preferred stock,
par value $0.00001 per share (collectively, the "Legacy Enjoy Preferred Stock"),
converted into one share of common stock, par value $0.00001 per share, of
Legacy Enjoy (the "Legacy Enjoy Common Stock" and, together with Legacy Enjoy
Preferred Stock, the "Legacy Enjoy Capital Stock") (such conversion, the "Legacy
Enjoy Preferred Conversion") and (2) all of the outstanding warrants to purchase
shares of Legacy Enjoy Capital Stock were exercised in full, with the exception
of the warrant to purchase 336,304 shares of Legacy Enjoy Preferred Stock held
by TriplePoint Venture Growth BDC Corporation, which was converted into a
warrant to purchase 115,875 shares of New Enjoy Common Stock at an exercise
price of $6.90 per share ("TriplePoint Warrant").

                                       18
--------------------------------------------------------------------------------
  Table of Contents
In connection with the execution of the Merger Agreement, we entered into
subscription agreements (the "Subscription Agreements") with certain investors
(collectively, the "PIPE Investors") pursuant to which the PIPE Investors agreed
to purchase, in the aggregate, approximately 8 million shares of New Enjoy
Common Stock at $10.00 per share for an aggregate commitment amount of
approximately $80 million (the "PIPE Investment"). Pursuant to the Subscription
Agreements, New Enjoy agreed to provide the PIPE Investors with certain
registration rights with respect to the shares purchased as part of the PIPE
Investment. The PIPE Investment was consummated substantially concurrently with
the closing of the Business Combination (the "Closing").
On the Closing Date, certain investors (the "Backstop Investors") purchased, in
the aggregate, 5,500,906 shares of New Enjoy Common Stock (the "Backstop
Shares"), for a purchase price of $10.00 per share and an aggregate purchase
price of approximately $55,009,060, pursuant to the backstop agreements, dated
September 13, 2021 (the "Backstop Agreements"). Pursuant to the Backstop
Agreements, New Enjoy agreed to provide certain registration rights to the
Backstop Investors with respect to the Backstop Shares.
Results of Operations
Our entire activity from inception through September 30, 2021 relates to our
formation, the Initial Public Offering and, since the closing of the Initial
Public Offering, a search for a Business Combination candidate. We will not be
generating any operating revenues until the closing and completion of our
Business Combination at the earliest.
For the three months ended September 30, 2021, we had a net loss of
approximately $3.4 million, which consisted of approximately $2.4 million of
general and administrative expenses, and a loss of approximately $940,000 from
changes in fair value of derivative warrant liabilities.
For the nine months ended September 30, 2021, we had a net loss of approximately
$2.0 million, which consisted of approximately $8.3 million of general and
administrative expenses, partially offset by a gain of approximately
$6.3 million gain from changes in fair value of derivative warrant liabilities.
Contractual Obligations
Proposed Business Combination
See discussion of obligations under agreements relating to the Proposed Business
Combination above under "Proposed Business Combination."
Registration and Shareholder Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of working capital loans (and any Class A Ordinary
Shares issuable upon the exercise of the Private Placement Warrants and warrants
that may be issued upon conversion of working capital loans) were entitled to
registration rights pursuant to a registration and shareholder rights agreement
signed upon completion of the Initial Public Offering. These holders were
entitled to certain demand and "piggyback" registration rights. However, the
registration and shareholder rights agreement provide that the Company will not
permit any registration statement filed under the Securities Act to become
effective until the termination of the applicable
lock-up
period for the securities to be registered. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriter a
45-day
option from the date of the final prospectus relating to the Initial Public
Offering to purchase up to 4,875,000 additional Units to cover over-allotments,
if any, at the Initial Public Offering price less the underwriting discounts and
commissions. On December 15, 2020, the underwriter fully exercised its
over-allotment option.
The underwriter was entitled to an underwriting discount of $0.20 per unit, or
approximately $7.5 million in the aggregate, paid upon the closing of the
Initial Public Offering. The underwriter also reimbursed approximately
$3.0 million to the Company to cover for expenses in connection with the Initial
Public Offering.
In addition, $0.35 per unit, or approximately $13.1 million in the aggregate
will be payable to the underwriter for deferred underwriting commissions and
$0.01 per unit, or approximately $0.5 million in the aggregate will be payable
to the attorneys for deferred legal fees. The deferred fees will become payable
to the underwriter and attorneys 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 financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States 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 as our critical accounting policies:

                                       19
--------------------------------------------------------------------------------
  Table of Contents
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to the
Financial Accounting Standards Board's ("FASB") Accounting Standards
Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity" ("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.
The warrants issued in connection with the Initial Public Offering (the "Public
Warrants") and the Private Placement Warrants are recognized as derivative
warrant liabilities in accordance with ASC 815. Accordingly, we recognize the
warrant instruments as liabilities at fair value and adjusts 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 unaudited condensed consolidated statements of operations. The
fair value of the Public Warrants issued in connection with the Public Offering
and Private Placement Warrants were initially measured at fair value using a
Monte Carlo simulation model. The fair value of Public Warrants issued in
connection with the Initial Public Offering have subsequently been measured
based on the listed market price of such warrants. The fair value of the Private
Placement Warrants has been subsequently estimated based on the listed market
price of the Public Warrants.
Class A Ordinary Shares Subject to Possible Redemption
Class A Ordinary Shares subject to mandatory redemption (if any) are classified
as liability instruments and are measured at fair value. Conditionally
redeemable Class A Ordinary Shares (including Class A 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, Class A
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,
at September 30, 2021 and December 31, 2020, 37,375,000 Class A Ordinary Shares
subject to possible redemption are presented at redemption value as temporary
equity, outside of the shareholders' equity section of the Company's unaudited
condensed consolidated 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 Loss per Ordinary Shares
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 ordinary shares and Class B ordinary shares. Income and losses are
shared pro rata between the two classes of shares. Net loss per ordinary share
is calculated by dividing the net loss by the weighted average shares of
ordinary shares outstanding for the respective period.
The calculation of diluted net loss does not consider the effect of the warrants
underlying the Units sold in the Initial Public Offering (including the
consummation of the Over-allotment) and the private placement warrants to
purchase an aggregate of 15,660,417 shares of Class A ordinary shares in the
calculation of diluted income (loss) per share, because their exercise is
contingent upon future events. Accretion associated with the redeemable Class A
ordinary shares is excluded from earnings per share as the redemption value
approximates fair value.
Recent Issued Accounting Standards
In August 2020, the FASB issued Accounting Standard Update (the "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 under current U.S. GAAP. The 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. The Company early adopted the ASU on
January 1, 2021. Adoption of the ASU did not impact the Company's financial
position, results of operations or cash flows.
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on the
accompanying unaudited condensed consolidated financial statements.
Off-Balance
Sheet Arrangements
As of September 30, 2021, we did not have any
off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K.

                                       20
--------------------------------------------------------------------------------
  Table of Contents
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (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 the
PCAOB 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 CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no
longer an "emerging growth company," whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule
12b-2
of the Exchange Act and are not required to provide the information otherwise
required under this item. As of September 30, 2021, we were not subject to any
market or interest rate risk. The net proceeds of the Initial Public Offering,
including amounts in the Trust Account, will be invested in U.S. government
securities with a maturity of 185 days or less or in money market funds that
meet certain conditions under Rule
2a-7
under the Investment Company Act of 1940, as amended, that invest only in direct
U.S. government treasury obligations. Due to the short-term nature of these
investments, we believe there will be no associated material exposure to
interest rate risk.
We have not engaged in any hedging activities since our inception and we do not
expect to engage in any hedging activities with respect to the market risk to
which we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of our disclosure controls and procedures as of
the fiscal quarter ended September 30, 2021, as such term is defined in Rules
13a-15(e)
and
15d-15(e)
under the Exchange Act. Based upon that evaluation and in light of the
Securities and Exchange Commission ("SEC") Staff Statement, our Certifying
Officers concluded that our disclosure controls and procedures were effective as
of September 30, 2021.
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial officer or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2021 covered by this
Quarterly Report on Form
10-Q
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting. The material weakness discussed below
was remediated during the quarter ended September 30, 2021.
Remediation of a Material Weakness in Internal Control over Financial Reporting
We designed and implemented remediation measures to address the material
weakness previously identified in the second quarter of 2021 and enhance our
internal control over financial reporting. In light of the material weakness, we
enhanced our processes to identify and appropriately apply applicable accounting
requirements to better evaluate and understand the nuances of the complex
accounting standards that apply to our condensed consolidated financial
statements, including providing enhanced access to accounting literature,
research materials and documents and increased communication among our personnel
and third-party professionals with whom we consult regarding complex accounting
applications. The foregoing actions, which we believe remediated the material
weakness in internal control over financial reporting, were completed as of the
date of September 30, 2021.

                                       21

--------------------------------------------------------------------------------


  Table of Contents
PART
II-OTHER
INFORMATION

© Edgar Online, source Glimpses