Business Context and Reporting Period
Fifth Wall Acquisition Corp. I filed this Form 8-K on August 17, 2021 under Item 8.01. The filing concerns its proposed business combination with SmartRent.com, Inc.; it is not a historical operating-results filing by SmartRent, Inc. The SEC declared the related Form S-4 effective on August 6, 2021, and FWAA scheduled a special stockholder meeting for August 23, 2021.
Key Financial Metrics and Prospective Information
The filing supplements SmartRent’s prospective financial information. These figures are projections, not reported historical results, and amounts are in thousands except for unit counts.
| Forecast year | 2021E | 2022E | 2023E | 2024E |
|---|---|---|---|---|
| Total units booked | 205 | 518 | 838 | 1,261 |
| Units deployed | 161 | 391 | 786 | 1,175 |
| Total revenue | $118,959 | $342,312 | $781,968 | $1,308,135 |
| Adjusted EBITDA | $(22,428) | $8,945 | $78,262 | $190,188 |
| Unlevered after-tax free cash flow | $(29,496) | $(39,038) | $50,377 | $45,737 |
Projected revenue comprises hardware, professional services, and hosted services. Revenue is projected to increase from $119.0 million in 2021E to $1.31 billion in 2024E. Adjusted EBITDA is projected to turn positive in 2022E, while unlevered after-tax free cash flow is projected to remain negative through 2022E and positive thereafter.
The filing does not provide current historical revenue, profit, cash, debt, liquidity, or margin figures. Moelis’s DCF analysis used a 25.9% estimated cash tax rate, an 8.5% to 12.5% WACC range, and terminal value multiples of 5.5x to 7.0x enterprise value/revenue and 12.0x to 14.0x enterprise value/gross profit. Terminal value represented approximately 100% of total DCF net present value. SmartRent’s NOLs were estimated to represent approximately 0.3% to 0.6% of DCF net present value and were assumed to be fully utilized in 2024.
Material Changes Versus the Prior Comparable Period
- This filing does not report a comparable-period change in actual operating or financial results.
- It supplements the definitive proxy statement/prospectus with additional disclosure regarding FWAA’s acquisition process, SmartRent’s DCF assumptions, and revised prospective financial information.
- FWAA stated that it reviewed approximately 24 potential acquisition targets, met with representatives of approximately 11, and conducted additional diligence on eight.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
The projections imply rapid growth in booked and deployed units, revenue, and adjusted EBITDA. The filing cautions that projections are inherently uncertain, increasingly less reliable over longer periods, and should not be regarded as reliable predictions of future events. Projected figures, including revenue derived from committed units, are for illustrative purposes and may not reflect actual results.
A purported FWAA stockholder filed David Dang v. Fifth Wall Acquisition Corp. I, et al. in the Superior Court of California, alleging inadequate disclosure and breaches of fiduciary duty. The plaintiff seeks injunctive relief, damages, and legal and expert fees. FWAA denies the allegations and stated that it voluntarily provided supplemental disclosure to moot the claims, avoid potential expense and delays, and provide additional information to stockholders. The filing does not state a settlement or quantify a potential loss.
Key transaction risks include failure to obtain stockholder or regulatory approvals, failure to complete the merger or private placement, stockholder redemptions, inability to satisfy Nasdaq listing standards, failure to realize anticipated merger benefits, execution and competitive risks at SmartRent, COVID-19 effects, transaction costs, legal proceedings, financing and equity issuance risks, and deviations from projected results and assumptions.
Investor Verification Items
- Verify whether FWAA stockholders approved the proposed merger at the August 23, 2021 meeting and whether the transaction ultimately closed.
- Compare actual SmartRent results with the 2021E–2024E revenue, unit, adjusted EBITDA, and free-cash-flow projections.
- Review the definitive proxy statement/prospectus and its supplements for the complete DCF assumptions, capital structure, debt, cash, redemption assumptions, and PIPE financing terms.
- Monitor the status and potential financial impact of the Dang litigation and any related proceedings.
- Assess the sensitivity of valuation to the 8.5%–12.5% discount-rate range and terminal multiples, given that terminal value comprised approximately 100% of DCF value.
- Confirm SmartRent’s actual liquidity, debt obligations, cash-burn profile, customer commitments, and future unit deployment performance, none of which are clearly quantified as current historical values in this filing.