Business context and reporting period
This is Fifth Wall Acquisition Corp. I’s unaudited Form 10-Q for the quarter ended March 31, 2021—not an operating-company quarterly report from SmartRent, Inc. Fifth Wall was a SPAC formed to pursue a business combination and had not commenced operating activities as of quarter-end. It completed its IPO on February 9, 2021.
Financial results and liquidity
- Revenue: No operating revenue; the company expected operating revenue, if any, only after a business combination.
- Net loss: $252,806, comprising $217,417 in general and administrative expense and $48,269 in franchise tax expense, partly offset by $12,880 of trust investment income. Basic and diluted loss per nonredeemable share was $0.03.
- Cash flow: Operating cash used was $1.80 million. IPO and private-placement financing provided $348.38 million net of offering costs; $345.0 million was deposited in the trust. Quarter-end cash outside the trust was $1.58 million.
- Assets and liquidity: Total assets were $348.17 million, including $345.01 million in trust investments and $3.16 million in current assets. Management reported working capital of approximately $2.5 million and said it expected available working capital and potential sponsor-related borrowing capacity to meet needs through a business combination or one year from filing.
- Liabilities and debt: Total liabilities were $12.78 million, including $12.08 million of deferred underwriting commissions payable only if a business combination closes. No working-capital loans were outstanding; a prior sponsor note was repaid in February.
- Margins: Not meaningful because there was no operating revenue. No comparable prior-year quarter is presented.
Changes and significant developments
The quarter reflects the February IPO and related private placement; therefore, the December 31, 2020 balance sheet is not a comparable operating period. The IPO raised $345.0 million gross, and the sponsor’s private placement raised approximately $10.5 million. Offering costs were approximately $19.8 million, including deferred underwriting commissions of approximately $12.1 million.
After quarter-end, on April 21, 2021, Fifth Wall signed a merger agreement with SmartRent.com, Inc. and agreed to a concurrent $155 million PIPE financing at $10 per share. The proposed transaction remained subject to customary conditions, including approvals, regulatory clearance and a minimum $5,000,001 in net tangible assets. Fifth Wall said it would change its name to SmartRent, Inc. upon closing.
Outlook, risks and other matters
- The SPAC had until February 9, 2023 to complete a business combination, subject to any extension. Failure to do so would generally require it to cease operations and redeem public shares from the trust, subject to stated deductions and creditor claims.
- Management said COVID-19 could adversely affect its financial position, operations or target search, but the specific impact was not determinable.
- The trust was invested in short-term U.S. government securities or qualifying money-market funds. The filing warned that negative interest rates could reduce redemption proceeds below $10 per public share.
- No material pending legal proceedings or off-balance-sheet arrangements were reported. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
- No operating-company revenue, profit, margin guidance or SmartRent-specific outlook is provided in this filing.
Investor facts to verify
- Confirm that this filing is for Fifth Wall Acquisition Corp. I, not SmartRent, Inc.; the SmartRent transaction was a subsequent event and was not yet completed at quarter-end.
- Verify the merger’s closing status, final terms, conditions and the PIPE financing’s completion.
- Check the trust balance, redemption terms and any changes to the February 9, 2023 business-combination deadline.
- Review the deferred underwriting commission, redemption exposure and final capitalization after any redemptions and transaction issuances.