References to the "Company," "us," "our" or "we" refer toE.Merge Technology Acquisition Corp. . The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes included herein. In this Amendment No. 2, we are restating (i) the Post IPO Balance Sheet, as previously restated in the First Amended Filing, (ii) the unaudited financial statements included in our Quarterly Report on Form 10-Q for the quarterly period endedSeptember 30, 2020 , as previously restated in the First Amended Filing, and (iii) the financial statements included in our Original Filing as previously restated in the First Amended Filing. We have re-evaluated our application of ASC 480-10-S99-3A to our accounting and classification of the Public Shares, issued as part of the units sold in the initial public offering onAugust 4, 2020 . Historically, a portion of the Public Shares was classified as permanent equity to maintain stockholders' equity greater than$5 million on the basis that we will not redeem our Public Shares in an amount that would cause our net tangible assets to be less than$5,000,001 , as described in the Charter. Pursuant to such re-evaluation, our management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Charter. In addition, in connection with the change in presentation for the Public Shares, management determined it should restate earnings per share calculation to allocate income and losses shared pro rata between the two classes of common stock. This presentation contemplates an initial business combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income and losses of our Company. OnDecember 22, 2021 , the Audit Committee concluded, after discussion with the Company's management and consultation with Withum, our independent registered accounting firm, that our previously issued (i) Post IPO Balance sheet, as previously restated in the First Amended Filing, (ii) the unaudited financial statements for the quarterly period endedSeptember 30, 2020 , as previously restated in the First Amended Filing, (iii) the financial statements as of and for the year endedDecember 31, 2020 as previously restated in the First Amended Filing, (iv) unaudited financial statements included in our Quarterly Report on Form 10-Q for the quarterly period endedMarch 31, 2021 , filed with theSEC onJuly 14, 2021 and (v) unaudited financial statements included in our Quarterly Report on Form 10-Q for the quarterly period endedJune 30, 2021 , filed with theSEC onAugust 13, 2021 , should be restated to report all Public Shares as temporary equity and the Company also determined it should restate its earnings per share calculation to allocate income and losses shared pro rata between the two classes of common stock should no longer be relied upon. As such, the Company is restating the financial statements for the Affected Periods in 2020 herein and intends to restate the financial statements for the Affected Periods in 2021 in the Q3 Form 10-Q/A. The restatement does not have an impact on our cash position. Our management has concluded that in light of the classification error described above, a material weakness exists in our internal control over financial reporting and that our disclosure controls and procedures were not effective. In connection with the restatement, our management reassessed the effectiveness of our disclosure controls and procedures for the periods affected by the restatement. As a result of that reassessment, we determined that our disclosure controls and procedures for such periods were not effective with respect to our internal controls around the proper accounting and classification of complex financial instruments. For more information, see Item 9A included in this Amendment No. 2. The restatement is more fully described in Note 2 of the notes to the financial statements included herein. Overview We are a blank check company incorporated onMay 22, 2020 as aDelaware corporation and 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. While our efforts to identify a target business may span many industries and regions worldwide, we focus our search for prospects within the software and internet technology industries. We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering and the private placement of the Private Units, the proceeds of the sale of our shares in connection with our initial Business Combination, shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We expect to continue to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to complete our initial Business Combination will be successful. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception throughDecember 31, 2020 were organizational activities, those necessary to prepare for our Initial Public Offering, described below, and, after our Initial Public Offering, identifying a target company for an initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Accounts. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. For the period fromMay 22, 2020 (inception) throughDecember 31, 2020 , we had a net loss of$8,519,343 , which consists of operating costs of$587,861 , a change in fair value of warrant liability of$6,744,000 , transaction costs allocable to warrants of$1,299,560 , and a provision for income taxes of$7,231 , offset by interest income on investments held in the Trust Accounts of$119,309 . As a result of the restatement described in Note 2 of the notes to the financial statements included herein, we classify the Warrants issued in connection with our Initial Public Offering and private placement as liabilities at their fair value and adjust the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. 24 -------------------------------------------------------------------------------- Table of Contents Liquidity and Capital Resources OnAugust 4, 2020 , we consummated our Initial Public Offering of 52,200,000 Units at a price of$10.00 per Unit, at$10.00 per Unit, generating gross proceeds of$522,000,000 . Simultaneously with the closing of our Initial Public Offering, we consummated the sale of 1,200,000 Placement Units to the Sponsor at a price of$10.00 per Unit, generating gross proceeds of$12,000,000 . OnSeptember 4, 2020 , in connection with the underwriters' election to partially exercise of their option to purchase additional Units, we consummated the sale of an additional 7,800,000 Units, generating total gross proceeds of$78,000,000 . Following our Initial Public Offering, the partial exercise of the over-allotment option and the sale of the Placement Units, a total of$600,000,000 was placed in the Trust Accounts. We incurred$33,039,544 in transaction costs, including$9,840,000 of underwriting fees,$22,560,000 of deferred underwriting fees and$639,544 of other offering costs. For the period fromMay 22, 2020 (inception) throughDecember 31, 2020 , cash used in operating activities was$595,604 . Net loss of$8,519,343 was impacted by interest earned on marketable securities held in the Trust Accounts of$119,309 , change in fair value of warrant liability of$6,744,000 , transaction costs allocable to warrants of$1,299,560 , and changes in operating assets and liabilities, which used$512 of cash from operating activities. As ofDecember 31, 2020 , we had investments of$600,119,309 held in the Trust Accounts. We intend to use substantially all of the funds held in the Trust Accounts, including any amounts representing interest earned on the Trust Accounts (less taxes paid and deferred underwriting commissions) to complete our initial Business Combination. We may withdraw interest to pay taxes. During the period endedDecember 31, 2020 , we did not withdraw any interest earned on the Trust Accounts. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Accounts will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. As ofDecember 31, 2020 , we had cash of$949,852 outside of the Trust Accounts. We intend to use the funds held outside the Trust Accounts primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete our initial Business Combination. In order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Accounts to repay such loaned amounts but no proceeds from our Trust Accounts would be used for such repayment. Up to$1,500,000 of such loans may be convertible into units identical to the Placement Units, at a price of$10.00 per unit at the option of the lender. We do not currently believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Accounts. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. 25 -------------------------------------------------------------------------------- Table of Contents Off-Balance Sheet Financing Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as ofDecember 31, 2020 . We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee up to$15,000 for office space, utilities and secretarial and administrative support services. We began incurring these fees onJuly 30, 2020 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation. The underwriters are entitled to a deferred fee of$22,560,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Accounts 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 of America 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 critical accounting policies: Warrant Liability We account for the Warrants in accordance with the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of Placement Warrants was determined using a Black-Scholes option pricing model. The Public Warrants for periods where no observable traded price was available are valued using a Monte Carlo simulation model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. 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 is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is 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 occurrence of uncertain future events. Accordingly, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders' equity section of our balance sheet. Effective with the closing of our initial public offering, the Company 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 Income (Loss) per Common Share We comply with accounting and disclosure requirements of theFinancial Accounting Standards Board ("FASB") ASC Topic 260, "Earnings Per Share." We have two classes of common stock, 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 common stock. 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. We did not consider the effect of the warrants issued in connection with the initial public offering and the private placement in the calculation of diluted income (loss) per share of common stock because their exercise is contingent upon future events. As a result, diluted net income (loss) per s is the same as basic net income (loss) per share of common stock. Accretion associated with the redeemable Class A common stock is excluded from income (loss) per share of common stock as the redemption value approximates fair value. Recent Accounting Standards Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements. 26
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