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 otherSEC filings. Overview We are a blank check company incorporated as aCayman Islands exempted company onOctober 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. OnApril 28, 2021 , we entered into an Agreement and Plan of Merger (the "Merger Agreement") withMRAC Merger Sub Corp. , a wholly owned subsidiary of the Company ("Merger Sub") andEnjoy Technology Operating Corp. (f/k/aEnjoy Technology Inc. ), aDelaware corporation ("Legacy Enjoy"). The Merger Agreement was subsequently amended onJuly 23, 2021 andSeptember 13, 2021 and the domestication transactions contemplated by the Merger Agreement were completed onOctober 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 theState of Delaware , under which the Company was domesticated and continues as aDelaware 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, datedDecember 17, 2020 , between the Company andContinental 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. OnOctober 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 onOctober 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 thePIPE 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 thePIPE Investors with certain registration rights with respect to the shares purchased as part of thePIPE 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, datedSeptember 13, 2021 (the "Backstop Agreements"). Pursuant to the Backstop Agreements, New Enjoy agreed to provide certain registration rights to theBackstop Investors with respect to the Backstop Shares. Results of Operations Our entire activity from inception throughSeptember 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 endedSeptember 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 endedSeptember 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. OnDecember 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 inthe 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 theFinancial 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, atSeptember 30, 2021 andDecember 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 InAugust 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 currentU.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 onJanuary 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 ofSeptember 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 ofSeptember 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 inU.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 directU.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 endedSeptember 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 theSecurities and Exchange Commission ("SEC") Staff Statement, our Certifying Officers concluded that our disclosure controls and procedures were effective as ofSeptember 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 theSEC'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 endedSeptember 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 endedSeptember 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 ofSeptember 30, 2021 . 21
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Table of Contents PART II-OTHER INFORMATION
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