Business context and reporting period
This is Aurora Acquisition Corp.’s unaudited Form 10-Q for the quarter ended June 30, 2021—not an operating-company 10-Q filed by Better Home & Finance Holding Co. Aurora was a blank-check company that had agreed to merge with Better HoldCo, Inc.; the agreement, announced in May 2021, implied approximately $6.9 billion of equity value for Better and $7.7 billion post-money equity value. Aurora had not completed the business combination by quarter-end.
Financial results and position
| Metric | Reported amount |
|---|---|
| Revenue | None; Aurora reported no operating revenue. |
| Net loss | $7.64 million for the six months ended June 30, 2021; $5.41 million for the three months ended June 30, 2021. |
| Operating costs | $1.31 million for six months; $1.21 million for the quarter. |
| Warrant fair-value loss | $6.04 million for six months; $4.20 million for the quarter. The non-cash remeasurement was the largest stated contributor to net loss. |
| Cash flow | Operating cash use of $2.09 million; investing cash use of $278.00 million; financing cash inflow of $280.33 million for the six months. |
| Cash and trust assets | $243,972 cash outside the trust account and $278.01 million held in the trust account at June 30. |
| Liquidity and liabilities | Management reported working capital of $111,653. Current liabilities were $875,242, including a $462,295 related-party loan. Other significant liabilities included $20.95 million of warrant liabilities and $8.51 million of deferred underwriting fees. |
| Equity | $20.57 million shareholders’ equity; 24.30 million Class A shares were classified as subject to possible redemption at $228.09 million. |
Margins are not meaningful because Aurora had no operating revenue. The filing does not present operating-company revenue, profit, cash flow, or debt metrics for Better.
Changes versus the prior comparable period
Aurora completed its IPO and related private placements in March 2021, placing approximately $278.00 million in the trust account by June 30. The filing gives no prior-year operating comparison; its activity began in October 2020 and was limited to formation, fundraising, public-company costs, and pursuing a business combination. The increase in reported loss primarily reflects warrant-liability fair-value changes after issuance and is not a direct measure of operating performance.
Outlook, risks, contingencies, and unusual items
- Aurora expected to incur further public-company and transaction-search costs and would not generate operating revenue before a business combination. It had until 24 months after the IPO closing to complete one; otherwise, it generally had to redeem public shares and liquidate.
- Management stated that available capital was sufficient to fund operations through the earlier of a business combination or one year from the filing date, but warned that underestimated search or transaction costs could leave insufficient funds. The trust account was restricted primarily to funding a business combination or shareholder redemptions.
- Aurora was a co-defendant in litigation filed in July 2021 concerning Better’s interpretation of a side letter and a proposed repurchase of approximately 1.9 million Better Series A preferred shares for $1. Aurora denied liability and intended to defend the case; the outcome was uncertain.
- Management said COVID-19 could adversely affect the company’s financial position, operations, or target search, but the impact was not determinable.
- The company reported that disclosure controls were effective. It also described remediation of a previously identified material weakness involving complex warrant accounting, including third-party valuation support and a restatement of March 31 financial statements.
- Warrants were recorded as liabilities and remeasured through earnings. The reported loss therefore includes significant valuation effects based on market prices and model assumptions.
Important facts for investors to verify
- Confirm the filing entity and scope: this is Aurora’s SPAC filing, not Better’s operating-company financial statements.
- Review subsequent filings for the merger’s completion, financing, redemptions, dilution, and the final transaction terms.
- Reconcile liquidity disclosures: the balance sheet shows $243,972 of cash and $742,923 of prepaid assets outside the trust, while MD&A describes $1,418,516 of proceeds available outside the trust; the filing does not clearly reconcile these figures.
- Assess the Better-related litigation’s status and potential effect on the proposed transaction.
- Check the warrant valuation assumptions and the effect of future fair-value changes on reported earnings.