References to the "Company," "BowX Acquisition Corp.," "BowX," "our," "us" or
"we" refer to BowX Acquisition Corp. The following discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the unaudited interim condensed consolidated 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 U.S. Securities
and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a Delaware corporation on May 19,
2020. We were 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 (the "Business Combination"). We are not
limited to a particular industry or sector for purposes of consummating a
Business Combination. As of September 30, 2021, we were an emerging growth
company and, as such, we were subject to all of the risks associated with
emerging growth companies.
Our sponsor is BowX Sponsor, LLC, a Delaware limited liability company of which
Vivek Ranadivé, the Company's Chairman and
Co-Chief
Executive Officer, and Murray Rode, our
Co-Chief
Executive Officer and Chief Financial Officer, are the managing members (the
"Sponsor"). The registration statement for the initial public offering (the
"Initial Public Offering") was declared effective on August 4, 2020. On
August 7, 2020, we consummated our Initial Public Offering of 42,000,000 units
(the "Units" and, with respect to the Class A common stock included in the Units
being offered, the "Public Shares") at $10.00 per Unit, generating gross
proceeds of $420.0 million, and incurring offering costs of approximately
$23.7 million, inclusive of $14.7 million in deferred underwriting commissions.
On August 10, 2020, the underwriter exercised the over-allotment option to
purchase an additional of 6,300,000 Units at the Initial Public Offering price
at $10.00 per Unit and we consummated the sale of such Units on August 13, 2020,
generating additional gross proceeds of $63.0 million, and incurring additional
offering costs of approximately $3.5 million, inclusive of approximately
$2.2 million in deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 6,933,333 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants")
at a price of $1.50 per Private Placement Warrant in a private placement to
certain of the initial stockholders and certain funds and accounts managed by
subsidiaries of BlackRock, Inc (the "Private Placement Warrants Purchasers"),
generating gross proceeds of $10.4 million, and incurring offering costs of
approximately $8,000. In connection with the consummation of the sale of
additional Units pursuant to the underwriter's over-allotment option on
August 13, 2020, we sold an additional 840,000 Private Placement Warrants to the
Private Placement Warrants Purchasers, generating additional gross proceeds of
approximately $1.3 million.
Upon the closing of the Initial Public Offering and the Private Placement
(including the exercise of the over-allotment) $483.0 million ($10.00 per Unit)
of the net proceeds of the sale of the Units in the Initial Public Offering and
the Private Placement were placed in a trust account ("Trust Account") located
in the United States with Continental Stock Transfer & Trust Company acting as
trustee, and held as cash or invested only in U.S. "government securities,"
within the meaning set forth in Section 2(a)(16) of the Investment Company Act,
with a maturity of 185 days or less, or in money market funds meeting certain
conditions under the Investment Company Act, which invest only in direct U.S.
government treasury obligations, as determined by us, until the earlier of:
(i) the completion of a Business Combination and (ii) the distribution of the
Trust Account as described below.

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Consummated Business Combination
On October 20, 2021, we, BowX Merger Subsidiary Corp., a newly formed wholly
owned subsidiary of us, and WeWork Inc., a Delaware corporation ("WeWork"),
consummated the previously announced merger pursuant to that certain Agreement
and Plan of Merger, dated March 25, 2021. See the
Form 8-K,
filed with the SEC on October 26, 2021, for additional information.
Liquidity and Capital Resources
As of September 30, 2021, we had approximately $242,000 in cash and working
capital deficit of approximately $5.8 million.
Through September 30, 2021, our liquidity needs were satisfied through a payment
of $25,000 from the Company's Chairman and
Co-Chief
Executive Officer to cover for certain offering costs in exchange for the
issuance of the Founder Shares, and the loan under the Note of approximately
$150,000 to us to cover for offering costs in connection with the Initial Public
Offering. Subsequent to the consummation of the Initial Public Offering on
August 7, 2020, the liquidity needs have been satisfied through the net proceeds
from the consummation of the Private Placement not held in the Trust Account. We
fully repaid the Note on August 7, 2020.
Results of Operations
Our entire activity since inception through September 30, 2021, was in
preparation for our formation, the Initial Public Offering, and, since the
closing of our Initial Public Offering, a search for business combination
candidates including due diligence on the WeWork transaction. We will not be
generating any operating revenues until the closing and completion of our
initial Business Combination.
For the three months ended September 30, 2021, we had a net income of
approximately $6.9 million, which consisted of approximately $9.8 million in
change in fair value of warrant liabilities and approximately $7,000 of interest
income from investments held in Trust Account, partially offset by approximately
$2.8 million in general and administrative expenses and approximately $50,000 in
franchise tax expense.
For the nine months ended September 30, 2021, we had net loss of approximately
$9.9 million, which consisted of approximately $6.9 million in general and
administrative expenses, approximately $2.9 million in change in fair value of
warrant liabilities and approximately $150,000 in franchise tax expense,
partially offset by approximately $66,000 of interest income from investments
held in Trust Account.
For the three months ended September 30, 2020, we had net loss of approximately
$1.3 million, which consisted of approximately $93,000 in general and
administrative expenses, approximately $1.2 million in change in fair value of
warrant liabilities, approximately $49,000 in franchise tax expense and
approximately $10,000 offering costs associated with private placement warrants,
partially offset by approximately $84,000 of interest income from investments
held in Trust Account.
For the period from May 19, 2020 (inception) through September 30, 2020, we had
net loss of approximately $1.3 million, which consisted of approximately $93,000
in general and administrative expenses, approximately $1.2 million in change in
fair value of warrant liabilities, approximately $72,000 in franchise tax
expense, approximately $2,000 of income tax expense, and approximately $10,000
offering costs associated with private placement warrants, partially offset by
approximately $84,000 of interest income from investments held in Trust Account.

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Related Party Transactions
Founder Shares
On May 26, 2020, we issued 10,062,500 shares of Class B common stock to our
Company's Chairman and
Co-Chief
Executive Officer in exchange for a payment of $25,000 for offering costs made
by our Sponsor on behalf of our company (the "Founder Shares"). In July 2020,
the Chairman and
Co-Chief
Executive Officer transferred certain Founder Shares to our directors and
officers as well as to certain third parties. On August 4, 2020, we effected a
stock dividend of 0.2 shares of Class B common stock for each share of Class B
common stock outstanding, resulting in an aggregate of 12,075,000 Founder Shares
outstanding. All shares and associated amounts have been retroactively restated
to reflect the share dividend. On August 13, 2020, the underwriters exercised
their 15% over-allotment option in full; thus, the Founder Shares were no longer
subject to forfeiture.
The initial stockholders have agreed, subject to limited exceptions, not to
transfer, assign or sell any of the Founder Shares until the earlier to occur
of: (A) one year after the completion of the initial Business Combination and
(B) subsequent to the initial Business Combination, (x) if the last reported
sale price of the Class A common stock equals or exceeds $12.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 days after the initial Business Combination,
or (y) the date on which we complete a liquidation, merger, capital stock
exchange, reorganization or other similar transaction that results in all of our
stockholders having the right to exchange their shares of common stock for cash,
securities or other property.
Related Party Loans
On May 26, 2020, our Chairman and
Co-Chief
Executive Officer agreed to loan us up to an aggregate of $150,000 pursuant to
an unsecured promissory note (the "Note") to cover expenses related to the
Initial Public Offering. This loan was payable without interest upon the
completion of the Initial Public Offering. We borrowed up to the full amount of
the Note and received additional advances of approximately $45,000 advancement
of funds from such officer, for a total outstanding loan of approximately
$195,000. We fully repaid the Note and the advances to such officer on August 7,
2020.
In order to fund working capital deficiencies or finance transaction costs in
connection with an intended initial Business Combination, the initial
stockholders, officers and directors and their affiliates may, but are not
obligated to, loan us funds as may be required (the "Working Capital Loans"). Up
to $1.5 million of such Working Capital Loans may be convertible into warrants
of the post-Business Combination entity at a price of $1.50 per warrant at the
option of the lender. Such warrants would be identical to the Private Placement
Warrants. Except for the foregoing, the terms of such loans, if any, have not
been determined and no written agreements exist with respect to such loans to
date. To date, we did not have any borrowings under the Working Capital Loans.
Contractual Obligations
Registration Rights
The initial stockholders and holders of the Private Placement Warrants are
entitled to registration rights pursuant to a registration rights agreement. The
initial stockholders and holders of the Private Placement Warrants will be
entitled to make up to three demands, excluding short form registration demands,
that we register such securities for sale under the Securities Act. In addition,
these holders will have "piggy-back" registration rights to include their
securities in other registration statements filed by us. We 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 to purchase up to 6,300,000 additional Units to cover any
over-allotments, at the Initial Public Offering price less the underwriting
discounts and commissions. On August 10, 2020, the underwriter fully exercised
the over-allotment option.
The underwriter was entitled to an underwriting discount of $0.20 per unit, or
$8.4 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, $0.35 per unit, or $14.7 million in the aggregate was
paid to the underwriter for deferred underwriting commissions. The deferred fee
was paid to the underwriter from the amounts held in the Trust Account in
accordance with the terms of the underwriting agreement.

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In connection with the consummation of the sale of Units pursuant to the over-allotment option on August 13, 2020, the underwriter received an aggregate of $1.26 million in underwriting fees and additional deferred underwriting commissions of approximately $2.2 million. Contingent Fees

We entered into certain consulting arrangements for due diligence, a transaction advisory agreement, and a placement agent arrangement in connection with our search for a prospective initial Business Combination. A portion of the fees in connection with the services rendered as of September 30, 2021 have been deferred and were contingent upon the closing of a Business Combination and therefore not included as liabilities on the accompanying condensed balance sheet. As of September 30, 2021, these fees were approximately $28.9 million.




Critical Accounting Policies
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account is comprised of U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act, with a maturity of 185 days or less, or investments in
money market funds that invest in U.S. government securities and generally have
a readily determinable fair value, or a combination thereof. When the
investments held in the Trust Account are comprised of U.S. government
securities, the investments are classified as trading securities. When the
investments held in the Trust Account are comprised of money market funds, the
investments are recognized at fair value. Trading securities and investments in
money market funds are presented on the balance sheets at fair value at the end
of each reporting period. Gains and losses resulting from the change in fair
value of these securities are included in net gain from investments held in
Trust Account in the accompanying unaudited condensed consolidated statements of
operations. The estimated fair values of investments held in the Trust Account
are determined using available market information.
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." Shares of Class A common stock subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value. Shares
of conditionally redeemable Class A common stock (including Class A common stock
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,
shares of Class A common stock are classified as stockholders' equity. Our
Class A common stock features certain redemption rights that are considered to
be outside of our control and subject to the occurrence of uncertain future
events. Accordingly, as of September 30, 2021 and December 31, 2020, 48,300,000
shares of Class A common stock subject to possible redemption are presented as
temporary equity, outside of the stockholders' equity section of the
accompanying condensed consolidated balance sheet.
Net Income (Loss) per Share of Common Stock
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 common stock and Class B common stock. Income and losses are shared pro
rata between the two classes of shares. Net income (loss) per share of common
stock is calculated by dividing the net income (loss) by the weighted average
number of common stock outstanding for the respective period.
The calculation of diluted net income (loss) per share of common stock does not
consider the effect of the warrants underlying the Units sold in the Initial
Public Offering (including exercise of the over-allotment option) and the
Private Placement Warrants to purchase 23,873,333 shares of Class A common stock
in the calculation of diluted loss per share, because their exercise is
contingent upon future events. As a result, diluted net loss per share of common
stock is the same as basic net loss per share of common stock for the three and
nine months ended September 30, 2021, and for the three months ended
September 30, 2020 and the period from May 19, 2020 (inception) through
September 30, 2020. Accretion associated with the redeemable Class A common
stock is excluded from earnings per share as the redemption value approximates
fair value.

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Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of its financial instruments, including
issued shares purchase warrants, to determine if such instruments are
derivatives or contain features that qualify as embedded derivatives, pursuant
to 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.
We account for the warrants issued in connection with the Private Placement 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 statements of operations. The fair value of warrants issued by
us in connection with the Private Placement has been estimated using Public
Warrant trading prices at each measurement date. The determination of the fair
value of the warrant liability may be subject to change as more current
information becomes available and accordingly the actual results could differ
significantly. Derivative warrant liabilities are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use
of current assets or require the creation of current liabilities.
Recent Accounting Pronouncements
Our management does not believe there are any recently issued, but not yet
effective, accounting pronouncements, if currently adopted, that would have a
material effect on our 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.
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. As of September 30, 2021, we qualified as an
"emerging growth company" and under the JOBS Act were allowed to comply with new
or revised accounting pronouncements based on the effective date for private
(not publicly traded) companies. We elected to delay the adoption of new or
revised accounting standards, and as a result, we may not have complied with new
or revised accounting standards on the relevant dates on which adoption of such
standards was required for
non-emerging
growth companies. As a result, the unaudited condensed financial statements may
not be comparable to companies that complied with new or revised accounting
pronouncements as of public company effective dates.
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.

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