x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
¨ TRANSITION REPORT PURSUANT TO SECTION 13 March 31, 2021
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
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(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
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| 410 N. Scottsdale Road, | Suite 1600 | |||||||||||||
| Tempe, | AZ | 85281 | ||||||||||||
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| Large accelerated filer | Accelerated filer | ☐ | |||||||||
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| Emerging growth company | ☐ | ||||||||||
As
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. II
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2020
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SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. II
Three Months June 30, Six Months June 30, Class A Ordinary Shares Class B Ordinary Shares and Principles of Consolidation additional information. March 4, 2021. Three Months June 30, Six Months June 30, Simultaneously with the closing of the CONDENSED BALANCE SHEETS June 30,
2020 December 31,
2019 (unaudited) ASSETS Current assets Cash $ 987,699 $ — Prepaid expenses 342,117 — Total Current Assets 1,329,816 — Deferred offering costs — 52,673 Cash and Marketable securities held in Trust Account 414,025,917 — TOTAL ASSETS $ 415,355,733 $ 52,673 LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Current liabilities Accrued expenses $ 118,798 $ — Accrued offering costs 18,026 52,673 Advance from related party — 21,631 Total Current Liabilities 136,824 74,304 Deferred underwriting fee payable 14,490,000 — TOTAL LIABILITIES 14,626,824 74,304 Commitments Class A ordinary shares subject to possible redemption, 39,570,413 and no shares at redemption value at June 30, 2020 and December 31, 2019, respectively 395,728,902 — Shareholders’ Equity (Deficit) Preferred shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding — — Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 1,829,587 and none issued and outstanding (excluding 39,570,413 and no shares subject to possible redemption) at June 30, 2020 and December 31, 2019, respectively 183 — Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 10,350,000 and one shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively 1,035 — Additional paid-in capital 5,298,322 — Accumulated deficit (299,533 ) (21,631 ) Total Shareholders’ Equity (Deficit) 5,000,007 (21,631 ) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) $ 415,355,733 $ 52,673 The accompanying notes are an integral part ofunaudited condensed financial statements.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IICONDENSED STATEMENT OF OPERATIONS(Unaudited)
Ended
Ended 2020 2020 Formation and operating costs $ 303,819 $ 303,819 Loss from operations (303,819 ) (303,819 ) Other income: Interest income 25,917 25,917 Net Loss $ (277,902 ) $ (277,902 ) Weighted average shares outstanding, basic and diluted (1) 11,111,082 9,066,530 Basic and diluted net loss per ordinary share (2) $ (0.03 ) $ (0.03 ) (1)Excludes an aggregate of 39,570,413 shares subject to possible redemption.(2)Net loss per ordinary share – basic and diluted excludes income attributable to ordinary shares subject to possible redemption of $24,771 for each ofcontext requires otherwise, references to “Opendoor,” the “Company,” “we,” “us,” and “our,” and similar references refer to Opendoor Technologies Inc. and its wholly owned subsidiaries following the three and six months ended June 30, 2020 (see Note 2).The accompanying notes are an integral part of the unaudited condensed financial statements.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IICONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)THREE AND SIX MONTHS ENDED JUNE 30, 2020(Unaudited) Additional
Paid-in Accumulated Total
Shareholders’
(Deficit) Shares Amount Shares Amount Capital Deficit Equity Balance – January 1, 2020 — $ — 1 $ — $ — $ (21,631 ) $ (21,631 ) Cancellation of Class B ordinary share — — (1 ) — — — — Issuance of Class B ordinary shares to Sponsor (1) — — 10,350,000 1,035 23,965 — 25,000 Net loss — — — — — — — Balance – March 31, 2020 — — 10,350,000 1,035 23,965 (21,631 ) 3,369 Sale of 41,400,000 Units, net of underwriting discount and offering expenses 41,400,000 4,140 — — 391,799,302 — 391,803,442 Sale of 6,133,333 Private Placement Warrants — — — — 9,200,000 — 9,200,000 Ordinary shares subject to redemption (39,570,413 ) (3,957 ) — — (395,724,945 ) — (395,728,902 ) Net loss — — — — — (277,902 ) (277,902 ) Balance – June 30, 2020 1,829,587 $ 183 10,350,000 $ 1,035 $ 5,298,322 $ (299,533 ) $ 5,000,007 (1)Included an aggregate of up to 1,350,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full (see Note 7).The accompanying notes are an integral part of the unaudited condensed financial statements.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IICONDENSED STATEMENT OF CASH FLOWSSIX MONTHS ENDED JUNE 30, 2020(Unaudited)Cash Flows from Operating Activities: Net loss $ (277,902 ) Adjustments to reconcile net loss to net cash used in operating activities: Interest earned on cash and marketable securities held in Trust Account (25,917 ) Changes in operating assets and liabilities: Prepaid expenses (342,117 ) Accrued expenses 118,798 Net cash used in operating activities (527,138 ) Cash Flows from Investing Activities: Investment of cash in Trust Account (414,000,000 ) Net cash used in investing activities (414,000,000 ) Cash Flows from Financing Activities: Proceeds from issuance of Class B ordinary shares to Sponsor 25,000 Proceeds from sale of Units, net of underwriting discounts paid 406,800,000 Proceeds from sale of Private Placement Warrants 9,200,000 Repayment of advances from related parties (21,631 ) Proceeds from promissory note – related party 300,000 Repayment of promissory note – related party (300,000 ) Payment of offering costs (488,532 ) Net cash provided by financing activities 415,514,837 Net Change in Cash 987,699 Cash – Beginning — Cash – Ending $ 987,699 Non-cash investing and financing activities: Initial classification of ordinary shares subject to possible redemption $ 396,006,810 Change in value of ordinary shares subject to possible redemption $ (277,908 ) Deferred underwriting fee $ 14,490,000 Offering costs included in accrued offering costs $ 282,310 The accompanying notes are an integral part of the unaudited condensed financial statements.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONSSocial Capital Hedosophia Holdings Corp. II (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on October 18, 2019. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination the Company intends(as defined herein) and to focus on businesses in the technology industries primarily located in the United States. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.As of June 30, 2020, the Company had not commenced any operations. All activity for the period from October 18, 2019 (inception) through June 30, 2020 relatesOpendoor Labs Inc. prior to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.The registration statements for the Company’s Initial Public Offering became effective on April 27, 2020. On April 30, 2020, the Company consummated the Initial Public Offering of 41,400,000 units (the “Units” and, with respect to the shares of Class A ordinary shares included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriters of the over-allotment option to purchase an additional 5,400,000 Units, at $10.00 per Unit, generating gross proceeds of $414,000,000 which is described in Note 3.Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,133,333 warrants (the “Private Placement Warrants”) atCombination.price of $1.50 per Private Placement Warrant in a private placement to SCH Sponsor II LLC (the “Sponsor”), generating gross proceeds of $9,200,000, which is described in Note 4.Transaction costs amounted to $22,196,558 consisting of $7,200,000 of underwriting fees, $14,490,000 of deferred underwriting fees and $506,558 of other offering costs. In addition, at June 30,2020, cash of $987,699 was held outside of the Trust Account (as defined below) and is available for working capital purposes.Following the closing of the Initial Public Offering on April 30, 2020, an amount of $414,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.The Company will provide the holders of the Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completionresult of the Business Combination either (i)completed on December 18, 2020, Opendoor Labs Inc. share and per share amounts presented in connection with a shareholder meeting calledthis Quarterly Report on Form 10-Q, for periods prior to approve the Business Combination, or (ii)have been retroactively converted by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their shares for a pro rata portionapplication of the amount held inexchange ratio of 1.618. For more information regarding the Trust Account, calculated asbusiness combination, please see “two business days prior toFinancial Condition and Results of Operations – The Business Combination”.completionmeaning of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. The per-share amount to be distributed to the Public Shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)The Company will proceed with a Business Combination only if the Company has net tangible assets, after payment of the deferred underwriting commission, of at least $5,000,001 upon such completion of a Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote and a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rulesSection 27A of the Securities and Exchange Commission (“SEC”Act of 1933, as amended (the “Securities Act”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination or seek to sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, subject to the immediately succeeding paragraph, each public shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 1321E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) will be restricted from redeeming its shares with respect to more. All statements other than 15%statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition; business strategy and plans; expectations regarding the Public Shares withoutimpact of COVID-19; market opportunity and expansion and objectives of management for future operations, including our statements regarding the Company’s prior written consent.The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Sharesbenefits and Public Shares held by it in connection with the completion of a Business Combination (and not seek to sell its shares to the Company in any tender offer the Company undertakes in connection with its initial Business Combination) and (b) not to propose an amendment to the Amended and Restated Memorandum of Articles of Association (i) to modify the substance or timing of the Company’s obligationroll out of new markets, products, or technology; and efforts to redeem 100%remediate our material weaknesses in internal control over financial reporting, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast”, “future”, “intend,” “may,” “might”, “opportunity”, “plan,” “possible”, “potential,” “predict,” “project,” “should,” “strategy”, “strive”, “target,” “will,” or “would”, including their antonyms or other similar terms or expressions may identify forward-looking statements. The absence of the Public Shares if the Companythese words does not completemean that a Business Combination within Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.The Company will have until April 30, 2022 (the “Combination Period”) to consummate a Business Combination. However, if the Company hasstatement is not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount thenforward-looking.deposit in the Trust Account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In the event of a liquidation, the Public Shareholders will be entitled to receive a full pro rata interest in the Trust Account ($10.00 per share, plus any pro rata interest earned on the Trust Fund not previously released to the Company and less up to $100,000 of interest to pay dissolution expenses). There will be no redemption rights or liquidating distributions with respect to the Founder Shares or the Private Placement Warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such lesser amount per Public Share held in the Trust Accountinformation available as of the date of this Quarterly Report on Form 10-Q and current expectations, forecasts and assumptions, which involve a number of judgments, risks and uncertainties, including without limitation, risks related to:liquidationfuture;Trust Account dueregulatory environment and complexities with compliance related to reductionssuch environment;March 31, 2021 December 31, 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,039,876 $ 1,412,665 Restricted cash 143,311 92,863 Marketable securities 58,619 47,637 Mortgage loans held for sale pledged under agreements to repurchase 8,307 7,529 Escrow receivable 19,264 1,494 Real estate inventory, net 840,632 465,936 Other current assets ($414 and $373 carried at fair value) 33,292 24,987 Total current assets 3,143,301 2,053,111 PROPERTY AND EQUIPMENT – Net 31,042 29,228 RIGHT OF USE ASSETS 47,114 49,517 GOODWILL 30,945 30,945 INTANGIBLES – Net 8,104 8,684 OTHER ASSETS ($10,000 and $0 carried at fair value) 11,206 4,097 TOTAL ASSETS (1) $ 3,271,712 $ 2,175,582 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and other accrued liabilities $ 41,413 $ 25,270 Current portion of credit facilities and other secured borrowings 596,563 346,322 Interest payable 1,228 1,081 Lease liabilities, current portion 4,490 20,716 Total current liabilities 643,694 393,389 CREDIT FACILITIES – Net of current portion 136,473 135,467 WARRANT LIABILITIES 62,621 47,349 LEASE LIABILITIES – Net of current portion 45,241 46,625 OTHER LIABILITIES 122 94 Total liabilities (2) 888,151 622,924 COMMITMENTS AND CONTINGENCIES (See Note 17) 0 0 SHAREHOLDERS’ EQUITY: Common stock, $0.0001 par value; 3,000,000,000 shares authorized; 585,691,729 and 540,714,692 shares issued and outstanding, respectively 58 54 Additional paid-in capital 3,697,382 2,596,012 Accumulated deficit (1,313,885) (1,043,449) Accumulated other comprehensive income 6 41 Total shareholders’ equity 2,383,561 1,552,658 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 3,271,712 $ 2,175,582 Three Months Ended March 31, 2021 2020 REVENUE $ 747,274 $ 1,255,795 COST OF REVENUE 650,142 1,164,748 GROSS PROFIT 97,132 91,047 OPERATING EXPENSES: Sales, marketing and operations 69,066 81,689 General and administrative 222,084 29,583 Technology and development 50,677 15,787 Total operating expenses 341,827 127,059 LOSS FROM OPERATIONS (244,695) (36,012) DERIVATIVE AND WARRANT FAIR VALUE ADJUSTMENT (15,272) (1,012) INTEREST EXPENSE (10,999) (27,727) OTHER INCOME – Net 624 2,675 LOSS BEFORE INCOME TAXES (270,342) (62,076) INCOME TAX EXPENSE (94) (120) NET LOSS $ (270,436) $ (62,196) Net loss per share attributable to common shareholders: Basic $ (0.48) $ (0.74) Diluted $ (0.48) $ (0.74) Weighted-average shares outstanding: Basic 565,381 84,027 Diluted 565,381 84,027 Three Months Ended March 31, 2021 2020 NET LOSS $ (270,436) $ (62,196) OTHER COMPREHENSIVE INCOME: Unrealized loss on marketable securities (35) (299) COMPREHENSIVE LOSS $ (270,471) $ (62,495) Temporary Equity Shareholders’ Equity (Deficit) Common Stock Additional
Paid-in
CapitalAccumulated
DeficitAccumulated
Other
Comprehensive
Income (Loss)Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount BALANCE–December 31, 2019 40,089,513 $ 9,763 23,840,816 $ 20,049 29,070,700 $ 80,519 63,470,884 $ 257,951 157,952,523 $ 1,013,220 83,748,443 0 $ 57,362 $ (790,483) $ 18 $ (733,103) Vesting of restricted stock — — — — — — — — — — 441,326 — 36 — — 36 Exercise of stock options — — — — — — — — — — 237,548 — 426 — — 426 Stock-based compensation — — — — — — — — — — — — 2,970 0 — 2,970 Other comprehensive loss — — — — — — — — — — — — — — (299) (299) Net loss — — — — — — — — — — — — — (62,196) — (62,196) BALANCE–March 31, 2020 40,089,513 $ 9,763 23,840,816 $ 20,049 29,070,700 $ 80,519 63,470,884 $ 257,951 157,952,523 $ 1,013,220 84,427,317 $ 0 $ 60,794 $ (852,679) $ (281) $ (792,166) Temporary Equity Shareholders’ Equity (Deficit) Common Stock Additional
Paid-in
CapitalAccumulated
DeficitAccumulated
Other
Comprehensive
Income (Loss)Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount BALANCE-December 31, 2020 0 0 0 0 0 0 0 0 0 0 540,714,692 54 2,596,012 (1,043,449) 41 1,552,658 Issuance of common stock in connection with the February 2021 Offering — — — — — — — — — — 32,817,421 3 857,219 — — 857,222 Vesting of restricted stock — — — — — — — — — — 331,227 — 16 — — 16 Vesting of restricted stock units — — — — — — — — — — 11,736,872 1 — — 1 Exercise of stock options — — — — — — — — — — 91,517 — 266 — — 266 Stock-based compensation — — — — — — — — — — — — 243,869 — — 243,869 Other comprehensive loss — — — — — — — — — — — — — — (35) (35) Net loss — — — — — — — — — — — — — (270,436) — (270,436) BALANCE–March 31, 2021 0 $ 0 0 $ 0 0 $ 0 0 $ 0 0 $ 0 585,691,729 $ 58 $ 3,697,382 $ (1,313,885) $ 6 $ 2,383,561 Three Months Ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (270,436) $ (62,196) Adjustments to reconcile net loss to cash, cash equivalents, and restricted cash (used in) provided by operating activities: Depreciation and amortization – net of accretion 10,302 9,522 Amortization of right of use asset 2,457 3,660 Stock-based compensation 238,832 2,970 Derivative and warrant fair value adjustment 15,272 1,012 Gain on settlement of lease liabilities (5,237) 0 Inventory valuation adjustment 20 6,221 Changes in fair value of derivative instruments (41) (44) Payment-in-kind interest 0 1,349 Net fair value adjustments and gain (loss) on sale of mortgage loans held for sale (977) (355) Origination of mortgage loans held for sale (32,082) (17,658) Proceeds from sale and principal collections of mortgage loans held for sale 32,281 15,453 Changes in operating assets and liabilities: Escrow receivable (17,770) (826) Real estate inventories (374,665) 480,170 Other assets (9,128) 6,379 Accounts payable and other accrued liabilities 15,680 (4,597) Interest payable 344 (1,590) Lease liabilities (9,559) (3,088) Net cash (used in) provided by operating activities (404,707) 436,382 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (4,141) (5,684) Purchase of marketable securities (34,583) (69,778) Proceeds from sales, maturities, redemptions and paydowns of marketable securities 23,437 20,310 Purchase of non-marketable equity securities (10,000) 0 Net cash used in investing activities (25,287) (55,152) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 250 411 Proceeds from the February 2021 Offering 886,067 0 Issuance cost of common stock (28,848) 0 Proceeds from credit facilities and other secured borrowings 704,047 662,268 Principal payments on credit facilities and other secured borrowings (453,806) (1,008,407) Payment of loan origination fees and debt issuance costs (57) (1,187) Net cash provided by (used in) financing activities 1,107,653 (346,915) NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 677,659 34,315 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH – Beginning of period 1,505,528 684,822 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH – End of period $ 2,183,187 $ 719,137 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION – Cash paid during the period for interest $ 9,091 $ 25,186 RECONCILIATION TO CONDENSED CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents $ 2,039,876 $ 409,257 Restricted cash 143,311 309,880 Cash, cash equivalents, and restricted cash $ 2,183,187 $ 719,137 trust assets, in each case netthe Sponsor Warrants as of the interest which may be withdrawnClosing Date on December 18, 2020 and December 31, 2020 amounted to pay taxes, except$81.1 million and $47.3 million, respectively. The change in fair value from the Closing Date through December 31, 2020 amounted to a gain of $33.8 million. The impact of the misstatement as to any claims by a third party who executed a waiver of anyDecember 31, 2020 resulted in an understatement of the private warrants liability of $47.3 million, and all rights to seek accessan overstatement of accumulated deficit and additional paid-in capital of $33.8 million and $81.1 million respectively.Trust Account and except asaccounting treatment of Sponsor Warrants with respect to any claims under the Company’s indemnityAnnual Report on Form 10-K for the year ended December 31, 2020 and determined, based on consideration of quantitative and qualitative factors, that the error had an immaterial impact, individually and in aggregate. As such, the Company is correcting its accounting for Sponsor Warrants in this Quarterly Report on Form 10-Q.underwriterscorrection on the Company's Condensed Consolidated Balance Sheet as of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933,December 31, 2020, as amended (the “Securities Act”). In the event that an executed waiver is deemedpresented herein (in thousands):Previously Stated Adjustments As Corrected Warrant liabilities $ 0 47,349 $ 47,349 Total liabilities $ 575,575 47,349 $ 622,924 Additional paid-in capital $ 2,677,155 (81,143) $ 2,596,012 Accumulated deficit (1,077,243) 33,794 (1,043,449) Total shareholders' equity $ 1,600,007 (47,349) $ 1,552,658 be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businessesCondensed Consolidated Financial Statementsother entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.as noted)
(Unaudited)SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESin accordance withpursuant to generally accepted accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included inThe condensed consolidated financial statements preparedas of March 31, 2021 and December 31, 2020 and for the three month periods ended March 31, 2021 and 2020 include the accounts of Opendoor, its wholly owned subsidiaries and VIEs where the Company is the primary beneficiary. The accompanying unaudited consolidated financial statements reflect all adjustments which are, in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, necessary to a fair statement of the results for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements herein.unaudited condensedconsolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary and these related notes have been retroactively converted. See “Note 2— Business Combination” for a fair presentation of the financial position, operating results and cash flows for the periods presented.unauditedinterim condensed consolidated financial statements and these related notes should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on April 29, 2020, as well asconsolidated financial statements and related notes included in the Company’s Current ReportsAnnual Report on Form 8-K, as filed with the SEC on April 30, 2020 and May 6, 2020. The interim results for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected10-K for the year endingended December 31, 2020 or for any future periods.Emerging Growth CompanyThe Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”(“Annual Report”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote filed on executive compensation and shareholder approval of any golden parachute payments not previously approved.Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atin the date of the condensed financial statements and accompanying notes. Actual results may differ materially from such estimates. Significant estimates, assumptions and judgments made by management include, among others, the reported amountsdetermination of revenuesthe fair value of common stock, share-based awards, warrants, derivatives, convertible notes, and expenses during the reporting period.Making estimates requires management to exercise significant judgment. It is at least reasonably possibleinventory impairment (“real estate inventory valuation adjustment”). Management believes that the estimateestimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s financial statements will be affected. The COVID-19 pandemic introduced significant additional uncertainties with respect to estimates, judgments and assumptions, which may materially impact these estimates.effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,following areas could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.Cash and Cash EquivalentsThe Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2020 and December 31, 2019.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)Cash andMarketable Securities Held in Trust AccountAt June 30, 2020, the assets held in the Trust Account were held in cash. In July 2020, the Company invested the cash held in the Trust Account in U.S. Treasury securities and money market funds.Class A Ordinary Shares Subject to Possible RedemptionThe Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares 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 the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets.Income TaxesThe Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2020 and December 31, 2019. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOLs”) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The Company does not believe that the CARES Act will have a significant impactnegative effect on Company'sthe Company in terms of its future financial position, results of operations or statementcash flows: public health crises, like the COVID-19 pandemic; its rates of operations.Net Loss per Ordinary ShareNet loss per ordinary share is computed by dividing net lossrevenue growth; its ability to manage advertising inventory or pricing; engagement and usage of its products; the effectiveness of its investment of resources to pursue strategies; competition in its market; the stability of the residential real estate market; the impact of interest rate changes on demand and its costs; changes in technology, products, markets or services by the weighted average numberCompany or its competitors; the addition or loss of ordinary shares outstanding forsignificant customers; its ability to maintain or establish relationships with listings and data providers; its ability to obtain or maintain licenses and permits to support its current and future businesses; actual or anticipated changes to its products and services; changes in government regulation affecting its business; the period. The Company appliesoutcomes of legal proceedings; natural disasters and catastrophic events; scaling and adaptation of existing technology and network infrastructure; its management of its growth; its ability to attract and retain qualified employees and key personnel; its ability to successfully integrate and realize the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption at June 30, 2020, which are not currently redeemablebenefits of its past or future strategic acquisitions or investments; the protection of customers’ information and are not redeemable at fair value, have been excluded fromother privacy concerns; the calculationprotection of basic net loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offeringits brand and the private placement to purchase 19,933,333 ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants into ordinary shares is contingent upon the occurrence of future events. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)Reconciliation of Net Loss Per Ordinary ShareThe Company’s net loss is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate in the earnings of the Trust Accountintellectual property; and not the income or losses of the Company. Accordingly, basicintellectual property infringement and diluted loss per ordinary share is calculated as follows:
Ended
Ended 2020 2020 Net loss $ (277,902 ) $ (277,902 ) Less: Income attributable to ordinary shares subject to possible redemption (24,771 ) (24,771 ) Adjusted net loss $ (302,673 ) $ (302,673 ) Weighted average shares outstanding, basic and diluted 11,111,082 9,066,530 Basic and diluted net loss per ordinary share $ (0.03 ) $ (0.03 ) Concentrationother claims, among other things.thatwhich potentially subject the Company to concentrations of credit risk, consist primarily of a cash accountand cash equivalents, investments in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000.marketable securities, and mortgage loans held for sale pledged under agreements to repurchase (“MLHFS”). The Company has not experienced losses on this accountplaces cash and cash equivalents and investments with major financial institutions, which management believes the Company is not exposedassesses to significant risks on such account.Fair Valuebe of Financial InstrumentsThe fair valuehigh credit quality, in order to limit exposure of the Company’s investments.liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximatesequipment and definite-lived intangible assets, among other long-term assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts represented inamount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the accompanying condensed balance sheets, primarily dueCompany first compares undiscounted cash flows expected to their short-term nature.Recent Accounting StandardsManagement doesbe generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effectrecoverable on the accompanying condensed financial statements.NOTE 3. INITIAL PUBLIC OFFERINGPursuantan undiscounted cash flow basis, an impairment loss is recognized to the Initial extent the carrying amount of the underlying asset exceeds its fair value. Impairment loss of $2.6 million was recognized for the three months ended March 31, 2021. Of this amount, $1.9 million and $0.7 million are included in Technology and development and General and administrative, respectively. There were 0 impairment charges recognized during the three months ended March 31, 2020. The impairment loss recognized for the three months ended March 31, 2021 is related to abandonment of property and equipment and sublease of certain right of use assets.Offering, the Company soldand Sponsor WarrantsUnits, which includes the full exercise by the underwriterunits, consisting of its option to purchase an additional 5,400,000 Units,one share of Class A common stock and one third of one warrant exercisable for Class A common stock, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant (“Public Warrant”).unit. Each whole Public Warrantwarrant entitles the holder to purchase one1 share of Class A ordinary sharecommon stock at an exercise price of $11.50 per whole share (see Note 7)(the “Public Warrants”).NOTE 4. PRIVATE PLACEMENTInitial Public Offering,IPO, SCH completed the Sponsor purchased an aggregateprivate sale of 6,133,333 Private Placement Warrantswarrants to SCH’s sponsor at a price of $1.50 per warrant (the “Sponsor Warrants”). Each Sponsor Warrant allows the sponsor to purchase 1 share of Class A common stock at $11.50 per share. As of December 31, 2020, there were 19,933,333 warrants outstanding.Placement Warrant,Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the consummation of the Business Combination, with subsequent changes in their respective fair values recognized in the consolidated statement of operations at each reporting period. The Company concluded that the Public Warrants, which do not have the same exercise and settlement features as the Sponsor Warrants, meet the criteria to be classified in shareholders' equity.$9,200,000.$600.1 million (“PIPE Investment”), which closed simultaneously with the consummation of the Business Combination. Upon the Closing, the PIPE Shares were automatically converted into shares of the Company's common stock on a one-for-one basis.March 31,
2021December 31,
2020Work-in-process $ 206,943 $ 183,004 Finished goods 633,689 282,932 Total real estate inventory $ 840,632 $ 465,936 March 31, 2021 Fair Value Cash $ 718,476 $ — $ — $ 718,476 $ 718,476 $ — Money market funds 1,252,134 — — 1,252,134 1,252,134 — Commercial paper 83,881 3 0 83,884 60,244 23,640 Corporate debt securities 30,209 8 (9) 30,208 9,022 21,186 U.S. agency securities 6,996 3 0 6,999 0 6,999 Asset-backed securities 6,792 6 (4) 6,794 0 6,794 Total $ 2,098,488 $ 20 $ (13) $ 2,098,495 $ 2,039,876 $ 58,619 December 31, 2020 Fair Value Cash $ 709,924 $ — $ — $ 709,924 $ 709,924 $ — Money market funds 618,197 — — 618,197 618,197 — Commercial paper 81,037 1 0 81,038 81,038 — Corporate debt securities 29,891 26 (2) 29,915 3,506 26,409 Asset-backed securities 12,518 19 (4) 12,533 0 12,533 U.S. agency securities 6,993 2 0 6,995 0 6,995 U.S. Treasury securities 1,700 0 0 1,700 0 1,700 Total $ 1,460,260 $ 48 $ (6) $ 1,460,302 $ 1,412,665 $ 47,637 Less than 12 Months 12 Months or Greater Total March 31, 2021 Fair Value Fair Value Fair Value Commercial paper $ 26,595 $ 0 $ 0 $ 0 $ 26,595 $ 0 Corporate debt securities 22,450 (9) $ 0 $ 0 22,450 (9) Asset-backed securities 3,277 (4) $ 0 $ 0 3,277 (4) Total $ 52,322 $ (13) $ 0 $ 0 $ 52,322 $ (13) Less than 12 Months 12 Months or Greater Total December 31, 2020 Fair Value Fair Value Fair Value Commercial paper $ 19,296 $ 0 $ 0 $ 0 $ 19,296 $ 0 Corporate debt securities 7,538 (2) $ 0 $ 0 7,538 (2) Asset-backed securities 4,611 (4) $ 0 $ 0 4,611 (4) Total $ 31,445 $ (6) $ 0 $ 0 $ 31,445 $ (6) March 31, 2021 Fair Value Commercial paper $ 83,884 $ 83,884 $ 0 Corporate-debt securities 30,208 30,208 0 U.S. agency securities 6,999 6,999 0 Asset-backed securities 6,794 6,794 0 Total $ 127,885 $ 127,885 $ 0 Fair Value Derivatives March 31, 2021 Asset Liability Interest rate lock commitments $ 17,958 $ 414 $ 0 Fair Value Derivatives December 31, 2020 Asset Liability Interest rate lock commitments $ 15,130 $ 373 $ 0 Three Months Ended March 31, 2021 2020 Revenue $ 41 $ 48 Other income, net $ 0 $ (4) March 31,
2021December 31,
2020Assets Cash and cash equivalents $ 9,108 $ 15,849 Restricted cash 133,887 81,408 Real estate inventory 820,961 460,680 29,059 6,729 Total assets $ 993,015 $ 564,666 Liabilities Credit facilities $ 725,247 $ 474,640 5,310 3,394 Total liabilities $ 730,557 $ 478,034 Private Placement WarrantSPE is a consolidated subsidiary of Opendoor and a separate legal entity. Neither the assets nor credit of any such SPE are generally available to satisfy the debts and other obligations of any other Opendoor entities, except to the extent other Opendoor entities are also a party to the financing arrangements. These facilities are non-recourse to Opendoor and, with limited exceptions, non-recourse to other Opendoor subsidiaries. These SPEs are variable interest entities and Opendoor is determined to be the primary beneficiary based on its power to direct the activities that most significantly impact the economic outcomes of the entities through its role in designing the entities and managing the real estate inventory purchased and sold by the entities. The Company has potentially significant variable interest in the entities based upon the equity interest the Company holds in the VIEs.March 31, 2021 Revolving Facility 2018-2 $ 750,000 $ 0 0 % September 23, 2022 December 23, 2022 Revolving Facility 2018-3 100,000 30,472 3.62 % June 1, 2023 June 1, 2023 Revolving Facility 2019-1 300,000 50,893 2.86 % March 4, 2022 March 4, 2022 Revolving Facility 2019-2 1,030,000 398,952 2.70 % July 8, 2021 July 7, 2022 Revolving Facility 2019-3 475,000 108,457 3.25 % August 22, 2022 August 21, 2023 Total $ 2,655,000 $ 588,774 December 31, 2020 Revolving Facility 2018-1 $ 0 4.28 % Revolving Facility 2018-2 0 4.36 % Revolving Facility 2018-3 25,385 4.19 % Revolving Facility 2019-1 32,535 3.58 % Revolving Facility 2019-2 230,352 3.08 % Revolving Facility 2019-3 50,901 3.60 % Total $ 339,173 March 31, 2021 Term Debt Facility 2016-M1 $ 149,000 $ 40,000 10.00 % October 31, 2023 March 31, 2025 Term Debt Facility 2020-M1 300,000 100,000 10.00 % January 23, 2023 January 23, 2026 Total $ 449,000 $ 140,000 Issuance Costs (3,527) Carrying Value $ 136,473 March 31, 2021 Weighted Average Interest Rate End of Revolving Period Repo Facility 2019-R1 $ 50,000 $ 7,789 1.94 % April 29, 2021 April 29, 2021 December 31, 2020 Outstanding Amount Weighted Average Interest Rate Repo Facility 2019-R1 $ 7,149 1.94 % Asset/Liability Class Classification Cash and cash equivalents Carrying value is a reasonable estimate of fair value based on short-term nature of the instruments. Estimated fair value classified as Level 1 Restricted cash Carrying value is a reasonable estimate of fair value based on short-term nature of the instruments. Estimated fair value classified as Level 1 Marketable securities Prices obtained from third-party vendors that compile prices from various sources and often apply matrix pricing for similar securities when no price is observable. Level 2 recurring fair value measurement Mortgage loans held for sale pledged under agreements to repurchase Fair value is estimated based on observable market data including quoted market prices, deal price quotes, and sale commitments. Level 2 recurring fair value measurement Other current assets Interest rate lock commitments Fair value of the underlying loan based on observable quoted market prices in the secondary market and sale commitments, with adjustments for the estimated pull-through rate. Level 2 recurring fair value measurement for fair value based on observable inputs. Level 3 recurring fair value measurement for fair value with unobservable inputs. Other assets Non-marketable equity securities Fair value is estimated using the observable transaction price. Level 2 non-recurring fair value measurement for fair value based on transaction price. Credit facilities and other secured borrowings Credit facilities Fair value is estimated using discounted cash flows based on current lending rates for similar credit facilities with similar terms and remaining time to maturity. Loans sold under agreements to repurchase Fair value is estimated using discounted cash flows based on current lending rates for similar asset-backed financing facilities with similar terms and remaining time to maturity. Warrant liabilities Sponsor Warrants Fair value is estimated using the price of the Public Warrants and applying an adjustment for short-term marketability restrictions. Level 2 recurring fair value measurement March 31, 2021 Balance at Fair Value Level 1 Level 2 Level 3 Marketable securities: Commercial paper $ 23,640 $ 0 $ 23,640 $ 0 Corporate debt securities 21,186 0 21,186 0 U.S. agency securities 6,999 0 6,999 0 Asset-backed securities 6,794 0 6,794 0 Mortgage loans held for sale pledged under agreements to repurchase 8,307 0 8,307 0 Other current assets: Interest rate lock commitments 414 0 0 414 Total assets $ 67,340 $ 0 $ 66,926 $ 414 Warrant liabilities: Sponsor Warrants 62,621 0 62,621 0 Total liabilities $ 62,621 $ 0 $ 62,621 $ 0 December 31, 2020 Balance at Fair Value Level 1 Level 2 Level 3 Marketable securities: Corporate debt securities $ 26,409 $ 0 $ 26,409 $ 0 Asset-backed securities 12,533 0 12,533 0 U.S. agency securities 6,995 0 6,995 0 U.S. Treasury securities 1,700 0 1,700 0 Mortgage loans held for sale pledged under agreements to repurchase 7,529 0 7,529 0 Other current assets: Interest rate lock commitments 373 0 373 0 Total assets $ 55,539 $ 0 $ 55,539 $ 0 Warrant liabilities: Sponsor Warrants 47,349 0 $ 47,349 0 Total liabilities $ 47,349 $ 0 $ 47,349 $ 0 March 31, 2021 Fair Value Level 1 Level 2 Assets: Cash and cash equivalents $ 2,039,876 $ 2,039,876 $ 2,039,876 $ 0 Restricted cash 143,311 143,311 143,311 0 Other assets: Non-marketable equity securities 10,000 10,000 0 10,000 Liabilities: Credit facilities and other secured borrowings $ 733,036 $ 736,563 $ 0 $ 736,563 December 31, 2020 Fair Value Level 1 Level 2 Assets: Cash and cash equivalents $ 1,412,665 $ 1,412,665 $ 1,412,665 $ 0 Restricted cash 92,863 92,863 92,863 0 Liabilities: Credit facilities and other secured borrowings $ 481,789 $ 486,322 $ 0 $ 486,322 Warrants Interest rate lock commitments Balance as of December 31, 2019 $ 4,538 $ 41,697 $ 0 Net change in fair value 1,012 0 0 Balance as of March 31, 2020 $ 5,550 $ 41,697 $ 0 Balance as of December 31, 2020 $ 0 $ 0 $ 0 Additions 0 0 414 Balance as of March 31, 2021 $ 0 $ 0 $ 414 March 31,
2021December 31,
2020Internally developed software $ 52,030 $ 47,823 Computers 6,260 5,511 Furniture and fixtures 2,992 3,279 Leasehold improvements 2,178 2,456 Software implementation costs 1,789 1,680 Office equipment 1,777 2,056 Security systems 1,227 681 Total 68,253 63,486 Accumulated depreciation and amortization (37,211) (34,258) Property and equipment – net $ 31,042 $ 29,228 March 31, 2021 Developed technology $ 2,921 $ (2,921) $ 0 0 Customer relationships 7,400 (2,947) 4,453 3.4 Trademarks 5,400 (1,907) 3,493 3.4 Non-competition agreements 100 (100) 0 0 Intangible assets – net $ 15,821 $ (7,875) $ 7,946 December 31, 2020 Developed technology $ 2,921 $ (2,921) $ 0 0 Customer relationships 7,400 (2,622) 4,778 3.7 Trademarks 5,400 (1,652) 3,748 3.7 Non-competition agreements 100 (100) 0 0 Intangible assets – net $ 15,821 $ (7,295) $ 8,526 Fiscal Years (In thousands) 2021 $ 1,740 2022 2,320 2023 2,320 2024 1,566 Total $ 7,946 one Class the three months ended March 31, 2021, is as follows:Balance-December 31, 2020 24,158 $ 1.91 5.4 $ 502,767 Exercised (99) 2.65 Forfeited (92) 2.58 Expired (2) 3.02 Balance-March 31, 2021 23,965 $ 1.91 5.1 $ 461,961 Exercisable-March 31, 2021 19,766 $ 1.61 4.5 $ 387,097 Sharesummary of the RSU activity for the three months ended March 31, 2021, is as follows:Unvested and outstanding-December 31, 2020 46,525 $ 10.88 Granted 17,471 21.77 Vested (11,737) 4.95 Forfeited (153) 5.63 Unvested and outstanding-March 31, 2021 52,106 $ 15.88 Unvested-December 31, 2020 2,148 $ 3.74 Granted 0 0 Vested (311) 3.58 Unvested-March 31, 2021 1,837 $ 3.76 Vested and outstanding-March 31, 2021 0 0 Three Months Ended March 31, 2021 2020 General and administrative $ 197,036 $ 1,554 Sales, marketing and operations 6,406 352 Technology and development 35,390 1,064 Total stock-based compensation expense $ 238,832 $ 2,970 adjustment (see Note 7).adjustments. The proceeds fromWarrants are exercisable at any time commencing the salelater of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNEa) 30 2020(Unaudited)NOTE 5. RELATED PARTY TRANSACTIONSFounder SharesIn October 2019, the Company issued one ordinary share to the Sponsor for no consideration. On January 21, 2020, the Company cancelled the one share issued in October 2019 and the Sponsor purchased 8,625,000 Founder Shares for an aggregate purchase price of $25,000. On April 27, 2020, the Company effected a share capitalization, resulting in 10,350,000 Founder Shares issued and outstanding as of such date. All share and per-share amounts have been retroactively restated to reflect the share capitalization. The Founder Shares will automatically convert into Class A ordinary shares on the first business day following the completion of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to certain adjustments, as described in Note 7.The Founder Shares included an aggregate of up to 1,350,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent 20% of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are subject to forfeiture.The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Class B ordinary shares or Class A ordinary shares received upon conversion thereof (together, “Founder Shares”) until the earlier of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.Advances – Related PartyThe Sponsor advanced the Company an aggregate of $21,631 to cover expenses related to the Initial Public Offering. The advances were non-interest bearing and due on demand. Advances in the aggregate amount of $21,631 were repaid in February 2020.Promissory Note — Related PartyOn January 21, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company borrowed an aggregate principal amount of $300,000. The note was non-interest bearing and payable on the earlier of (i) June 30, 2020 and (ii) the completion of the Initial Public Offering. The borrowings outstanding under the note in the amount of $300,000 were repaid upon the consummation of the Initial Public Offering on April 30, 2020.Administrative Support AgreementThe Company entered into an agreement whereby, commencing on April 27, 2020, the Company will pay an affiliate of the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2020, the Company incurred $20,000 of such fees. As of June 30, 2020, $20,000 is included in accrued expenses in the accompanying condensed balance sheets.Related Party LoansIn order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)NOTE 6. COMMITMENTSRegistration RightsPursuant to a registration rights agreement entered into on April 27, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.Underwriting AgreementThe underwriters are entitled to a deferred fee of $0.35 per Unit, or $14,490,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.Financial Advisory FeeThe underwriters agreed to reimburse the Company for an amount equal to 10% of the discount paid to the underwriters for financial advisory services provided by Connaught (UK) Limited in connection with the Initial Public Offering, of which $720,000 was paid at the closing of the Initial Public Offering and up to $1,449,000 will be payable at the time of the closing of a Business Combination.NOTE 7. SHAREHOLDERS’ EQUITYPreferred Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At June 30, 2020 and December 31, 2019, there were no preferred shares issued or outstanding.Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At June 30, 2020 and December 31, 2019, there were 1,829,587 and no Class A ordinary shares issued or outstanding, excluding 39,570,413 and no Class A ordinary shares subject to possible redemption, respectively.Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At June 30, 2020 and December 31, 2019, there were 10,350,000 and one Class B ordinary shares issued and outstanding, respectively.Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as otherwise required by law.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSJUNE 30, 2020(Unaudited)The Class B Shares will automatically convert into Class A ordinary shares on the first business day following the completion of the Business Combination or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Founder Shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares) so that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the ordinary shares issued and outstanding upon completion of the Initial Public Offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a Business Combination (net of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor.Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b)b) 12 months from the closingdate of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement registering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use it commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the SCH’s initial public offering on April 30, 2020, and terminating five years after the Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are, at the time of any exercise of a Public Warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.Combination.Public Warrants:●outstanding warrants, in whole and not in part, upon a minimum of 30 days’ prior written notice of redemption (“Redemption Period”). There are two scenarios in whole and not in part;●at a price of $0.01 per Public Warrant;●upon not less than 30 days’ prior written notice of redemption to each warrant holder and●if, and only if, the reported last sale price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like).Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:
Warrants. For purposes of the redemption scenarios, “Reference Value” shall mean the last reported sales price of the Company’s common stock for any twenty trading days within the thirty trading-day period ending on the third trading day prior to the date on which notice of the redemption is given.●in whole and not in part;●at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair market value” of the Class A ordinary shares;●if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like); and●if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
The Company may redeem the outstanding Warrants for cash at a price of $0.01 per warrant if the Reference Value equals or exceeds $18.00 per share. The warrant holders have the right to exercise their outstanding warrants prior to the scheduled redemption date during the Redemption Period at $11.50 per share. The Sponsor Warrants are exempt from redemption if the Reference Value is at or above $18.00 and the Sponsor Warrants continue to be held by the original warrant holder (“Sponsor") or a permitted transferee.
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
The exercise price and number of ordinarypreferred shares issuable upon exercise of the Public Warrants may be adjusted inhave certain circumstances includingliquidation preferences in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, exceptdeemed liquidation. The Company recorded 0 warrant fair value adjustment for the three months ended March 31, 2021 and an increase to the warrant fair value adjustments of $1.0 million for the three months ended March 31, 2020.
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Basic and diluted net loss per share: | |||||||||||
| Numerator: | |||||||||||
| Net loss attributable to common shareholders – basic and diluted | $ | (270,436) | $ | (62,196) | |||||||
| Denominator: | |||||||||||
| Weighted average shares outstanding – basic and diluted | 565,381 | 84,027 | |||||||||
| Basic and diluted net loss per share | $ | (0.48) | $ | (0.74) | |||||||
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Common Stock Warrants | 19,933 | 3,370 | |||||||||
| Series D Preferred Stock Warrants | 0 | 485 | |||||||||
| Series E Preferred Stock Warrants | 0 | 121 | |||||||||
| RSUs | 52,106 | 22,839 | |||||||||
| Options | 23,965 | 34,680 | |||||||||
| Unvested Shares from Early Exercise | 36 | 136 | |||||||||
| Restricted Shares | 1,837 | 3,080 | |||||||||
| Redeemable convertible preferred stock | 0 | 314,424 | |||||||||
| Total anti-dilutive securities | 97,877 | 379,135 | |||||||||
In addition, if (x)FTC at this time.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignableratios, or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable as described above so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 8. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC Topic 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
The following table presents information about the Company's assets that are measured at fair value on a recurring basis at June 30, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description Level June 30, 2020 Assets: Cash and Marketable securities held in Trust Account 1 $ 414,025,917
SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2020
(Unaudited)
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
In July 2020, the Company invested the cash held in the Trust Account in U.S. Treasury securities and money market funds.
(including the purchase of their next home) and further differentiates our service from a traditional sale. Depending on the condition of the home, we leverage our vetted contractor network within each market to complete required repairs and upgrades. Our repair scopes are focused on high-return investments and ensuring the home is in market-ready condition. We continuously refine and adjust our repair strategies based on our operating experience in markets and reviewing neighborhood-level resale outcomes. Results of Operations obligations of any other Opendoor entities except to the extent other Opendoor entities are also a party to the relevant financing arrangements. Our asset-backed financing facilities are non-recourse to Opendoor except for limited guarantees provided by an Opendoor subsidiary for certain obligations in situations involving “bad acts” by an Opendoor entity and certain other limited circumstances that are generally under our control. $1,302.5 million. accordance with GAAP. The preparation of ITEMMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSReferences in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Social Capital Hedosophia Holdings Corp. II. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to SCH Sponsor II LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Special Note Regarding Forward-Looking StatementsThis Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations” regardingOperations.Company’shistorical condensed consolidated financial position, business strategystatements and the plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Suchrelated notes that appear in this Quarterly Report on Form 10-Q.relate to future events or future performance, but reflect management’sbased upon current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performanceexpectations that involve risks and results discussed in the forward-looking statements. For information identifying important factors that could causeuncertainties. Our actual results tomay differ materially from those anticipated in thethese forward-looking statements please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the SEC on April 29, 2020. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Quarterly Report on Form 10-Q, and in “Part I - Item 1A. Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”).information,radically simple way to buy and sell a home with more convenience, control and cost savings than ever before. We believe our consumer-first orientation, scalable and integrated home transaction platform and our proprietary, machine learning-based pricing models are among our core advantages and differentiators for our business. Collectively, these underpin Opendoor’s digital suite of services, which brings simplicity, certainty and speed to the home selling and buying process.or otherwise.OverviewMarch 31, Year Ended December 31, (in whole numbers) 2021 2020 2019 2018 Number of markets (at period end) 27 21 21 18 blank check company incorporatedmarket with only a small field team focused on home assessments and subcontractor oversight, with all other key functions managed centrally, including marketing, customer sales and support and pricing.Cayman Islandsspring and summer, and typically weaker demand in late fall and winter. We expect our financial results and working capital requirements to reflect seasonal variations over time, although our growth and market expansion have obscured the impact of seasonality in our historical financials and may continue to do so. That said, we generally expect stronger sequential revenue growth in the first quarter of the year versus the third and fourth quarters.October 18, 2019 formedpricing accuracy for both home acquisition and disposition, as well as managing our inventory health across markets.purposeperiods indicated:Three Months Ended March 31, (in thousands, except percentages) 2021 2020 Gross profit (GAAP) $ 97,132 $ 91,047 Gross Margin 13.0 % 7.3 % Adjustments: 20 6,222 (114) (8,421) Adjusted Gross Profit $ 97,038 $ 88,848 Adjusted Gross Margin 13.0 % 7.1 % Adjustments: (17,340) (36,648) (2,126) (4,876) (1,426) (8,768) Contribution Profit $ 76,146 $ 38,556 Contribution Margin 10.2 % 3.1 % Adjustments: (2,333) (6,563) (902) (8,578) Contribution Profit After Interest $ 72,911 $ 23,415 Contribution Margin After Interest 9.8 % 1.9 % effecting a merger,Operations.exchange, asset acquisition,and per share purchase, reorganizationdata and ratios, or similar Business Combinationas noted)one or more businesses. We intend to effectuate our Business Combination using cash derived fromhomes held in inventory at the proceedsend of the Initial Public Offeringperiod, impairment costs required to be recorded under GAAP in the same period. These measures could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is net loss.Three Months Ended March 31, (in thousands, except percentages) 2021 2020 Net loss (GAAP) $ (270,436) $ (62,196) Adjustments: Stock-based compensation 238,832 2,970 15,272 1,012 580 1,080 20 6,221 (114) (8,421) 79 889 — 2,695 Gain on lease termination (5,237) — 203 (44) Adjusted Net Loss $ (20,801) $ (55,794) Adjustments: Depreciation and amortization, excluding amortization of intangibles and right of use assets 8,434 5,046 6,980 18,210 4,019 6,822 (867) (2,680) Income tax expense 94 119 Adjusted EBITDA $ (2,141) $ (28,277) Adjusted EBITDA Margin (0.3) % (2.3) % the Private Placement Warrants,marketable securities and sublease income.shares,senior revolving credit facilities and our asset-backed mezzanine term debt or a combinationfacilities.sharescash equivalents and debt.The issuancemarketable securities.additional ordinary shares or preferred shares in a business combination:●may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;●may subordinate the rights of holders of ordinary shares if preferred shares are issued with rights senior to those afforded our ordinary shares;●could cause a change of control if a substantial number of our ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any,Financial Condition and could result in the resignation or removal of our present directors and officers;●may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;●may adversely affect prevailing market prices for our units, ordinary shares and/or warrants; and●may not result in adjustment to the exercise price of our warrants.Similarly, if we issue debt or otherwise incur significant indebtedness, it could result in:●default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;●acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;●our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;●our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;●our inability to pay dividends on our ordinary shares;●using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;●limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;●increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and●limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.neither engagedbeen actively rebuilding our inventory, leading to sequential growth in any operations nor generated any operating revenues to date. Our only activities from inception through June 30, 2020 were organizational activities and those necessary to preparebalances for the Initial Public Offering, described below. We do notfourth quarter of 2020 and the first quarter of 2021. Likewise, we returned to sequential revenue growth in the first quarter of 2021 and expect this trend to generatecontinue for the remainder of the year.operating revenues until afterconcessions.completionproperty purchase price, acquisition costs, direct costs to renovate or repair the home and real estate inventory valuation adjustments, if any. These costs are accumulated in real estate inventory during the property holding period and charged to cost of revenue under the specific identification method when the property is sold. Additionally, for our initial Business Combination. revenue other than home sales revenue, cost of revenue consists of any costs incurred in delivering the service, including associated headcount expenses such as salaries, benefits and stock-based compensation.generate non-operating incomeincrease following the Closing, as we begin to incur public company costs. See “— The Business Combination” above. Additionally, we incurred a significant increase in stock-based compensation in the formfirst quarter of interest income on marketable securities held after the Initial Public Offering. We expect that we will incur increased expenses2021 as a result of beingcertain performance-based awards and historical RSUs satisfying their liquidity event vesting condition. We expect stock based compensation to continue to be elevated in the second quarter of 2021 while we continue to record expense for certain performance-based awards and then decline beginning in the third quarter of 2021. The increase in stock-based compensation will impact each line item within Other operating expenses.public company (for legal,result of marking our warrants and embedded derivatives related to the Convertible Notes to fair value at the end of each reporting period and subsequent settlement through exercise of warrants and conversion of the Convertible Notes to equity.reporting, accountingstatement and auditing compliance)income tax basis of existing assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to apply to taxable income for the years in which differences are expected to reverse. We recognize the effect on deferred income taxes of a change in tax rates in income in the period that includes the enactment date.Three Months Ended March 31, Change in (in thousands, except percentages) 2021 2020 $ % Revenue $ 747,274 $ 1,255,795 $ (508,521) (40) % Cost of revenue 650,142 1,164,748 (514,606) (44) % Gross profit 97,132 91,047 6,085 7 % Operating expenses: Sales, marketing and operations 69,066 81,689 (12,623) (15) % General and administrative 222,084 29,583 192,501 651 % Technology and development 50,677 15,787 34,890 221 % Total operating expenses 341,827 127,059 214,768 169 % Loss from operations (244,695) (36,012) (208,683) 579 % Derivative and warrant fair value adjustment (15,272) (1,012) (14,260) N/M Interest expense (10,999) (27,727) 16,728 (60) % Other income-net 624 2,675 (2,051) (77) % Loss before income taxes (270,342) (62,076) (208,266) 336 % Income tax expense (94) (120) 26 (22) % Net loss $ (270,436) $ (62,196) $ (208,240) 335 % for due diligence expensesimprovements in connection with searchingdirect selling and holding costs. See “— Non-GAAP Financial Measures.” and completing, a Business Combination.For each of the three and six months ended June 30, 2020, we had a net loss of $277,902,March 31, 2021 compared to the three months ended March 31, 2020. The decrease was primarily attributable to resale broker commissions and resale transaction costs, which consisted of operatingdeclined by $16.6 million and $2.4 million, respectively, due to lower resale volumes. In addition, property holding costs of $303,819,declined by $4.6 million due to lower inventory volumes. The decreases were partially offset by interest income on casha $12.3 million increase in advertising expense as we increased advertising in an effort to ramp up acquisition volumes in both existing and marketable securities heldnew markets.Trust Accountthree months ended March 31, 2021 compared to the three months ended March 31, 2020. The increase was primarily attributable to $195.5 million of $25,917.Liquidity and Capital ResourcesUntiladditional stock based compensation from the commencement of expense recognition of certain performance awards following the consummation of the Initial Public Offering, our only sourceBusiness Combination in December 2020 as well as the expense recognition of certain restricted stock units ("RSUs") upon the fulfillment of the liquidity was an initial purchase of ordinary sharesevent vesting condition satisfied by the SponsorFebruary 2021 Offering.loansDevelopment. Technology and development increased by $34.9 million, or 221%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The increase was primarily attributable to a $34.3 million increase in stock based compensation from our Sponsor.On April 30, 2020, we consummated the Initial Public Offeringexpense recognition of 41,400,000 Units, inclusivecertain RSUs upon the fulfillment of the underwriters’ electionliquidity event vesting condition satisfied by the February 2021 Offering.fully exercise their optionthe three months ended March 31, 2020. The loss for the three months ended March 31, 2021 was attributable to purchase an additional 5,400,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $414,000,000. Simultaneously withadjustment to the closingfair value of the InitialSponsor Warrants of $15.3 million. The increase in the fair value of the Sponsor Warrants is observed through the increase in the quotable price for the Public Offering, we consummatedWarrants, which trade on the sale of 6,133,333 Private Placement WarrantsNasdaq Stock Market LLC under the ticker symbol "OPENW." This is compared to the Sponsor at a price of $1.50 per Private Placement Warrant generating gross proceeds of $9,200,000.Followingloss for the Initial Public Offering,three months ended March 31, 2020 that was attributable to the exerciseincrease in the fair value of the over-allotment option in full andWarrant Commitment of $1.0 million.sale ofthree months ended March 31, 2021 compared to the Private Placement Warrants,three months ended March 31, 2020. The decrease was primarily attributable to a total of $414,000,000 was placed48% decrease in the Trust Account, and we had $1,452,394average outstanding balance of cash held outsideour financing facilities due to the reduction in inventory levels as well as the elimination of the Trust Account, after payment of costsinterest expense related to the Initial Public Offering,Convertible Notes which were converted into equity in September 2020.availablemarketable securities.purposes. capital expenditures and business development efforts will depend on our ability to generate cash from operating activities, which is subject to our future operating success, and obtain inventory acquisition financing on reasonable terms, which is subject to factors beyond our control, including general economic, political and financial market conditions.incurred $22,196,558expect our working capital requirements to continue to increase in transaction costs,the immediate future, as we seek to increase our inventory and expand into more markets across the United States. We believe our cash on hand, including $7,200,000the cash we obtained as a result of underwriting fees, $14,490,000the Business Combination and the February 2021 Offering together with cash we expect to generate from future operations and borrowings, will be sufficient to meet our working capital and capital expenditure requirements for a period of deferred underwriting feesat least twelve months from the date of this Quarterly Report on Form 10-Q. The discussion below does not include transactions that occurred subsequent to March 31, 2021. See “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 18. Subsequent Events” for additional information regarding transactions subsequent to the balance sheet date.$506,558Financing Arrangementscosts.March 31, 2021 Revolving Facility 2018-2 $ 750,000 $ — — % September 23, 2022 December 23, 2022 Revolving Facility 2018-3 100,000 30,472 3.62 % June 1, 2023 June 1, 2023 Revolving Facility 2019-1 300,000 50,893 2.86 % March 4, 2022 March 4, 2022 Revolving Facility 2019-2 1,030,000 398,952 2.70 % July 8, 2021 July 7, 2022 Revolving Facility 2019-3 475,000 108,457 3.25 % August 22, 2022 August 21, 2023 Total $ 2,655,000 $ 588,774 March 31, 2021 Term Debt Facility 2016-M1 $ 149,000 $ 40,000 10.00 % October 31, 2023 March 31, 2025 Term Debt Facility 2020-M1 300,000 100,000 10.00 % January 23, 2023 January 23, 2026 Total $ 449,000 $ 140,000 Issuance Costs (3,527) Carrying Value $ 136,473 Three Months Ended March 31, (in thousands) 2021 2020 Net cash (used in) provided by operating activities $ (404,707) $ 436,382 Net cash used in investing activities $ (25,287) $ (55,152) Net cash provided by (used in) financing activities $ 1,107,653 $ (346,915) Net increase in cash, cash equivalents, and restricted cash $ 677,659 $ 34,315 sixthree months ended June 30, 2020,March 31, 2021, cash used in operating activities was $527,138. Net$277,902($55.8) million.offset by interest earned on$25.3 million and $55.2 million for the three months ended March 31, 2021 and 2020, respectively. For the three months ended March 31, 2021, cash andused in investing activities primarily consisted of the $11.1 million increase in marketable securities and the $10.0 million purchase of a strategic investment in a privately held company. For the three months ended March 31, 2020, cash used in the Trust Account of $25,917 and changes in operating assets and liabilities, which used $223,319 of cash.As of June 30, 2020, we had cash and marketable securities held in the Trust Account of $414,025,917. We may withdraw interest to pay our income taxes, if any. We intend to use substantially allinvesting activities primarily consisted of the funds held$49.5 million increase in marketable securities.Trust Account, including any amounts representing interest earned onthree months ended March 31, 2021 and 2020, respectively. For the Trust Account, excluding deferred underwriting commissions,three months ended March 31, 2021, cash provided by financing activities was primarily attributable to complete our Business Combination. We may withdraw interest$886.1 million in proceeds from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operationsFebruary 2021 Offering, net of the target business or businesses, make other acquisitions$28.8 million of issuance costs, and pursue our growth strategies.As of June 30, 2020, we had cash of $987,699 held outside the Trust Account. We intend to use the funds held outside the Trust Account 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, structure, negotiate and complete a Business Combination.In order to fund working capital deficiencies or finance transaction costs in connection with a 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 a Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no$250.2 million net proceeds from our Trust Account wouldsenior revolving credit facilities. For the three months ended March 31, 2020, cash used in financing activities was primarily attributable to the repayment of $346.1 million to our senior revolving credit facilities and mezzanine term debt facilities.Payment Due by Year (in thousands) Total $ 592,930 $ 592,930 7,795 7,795 1,302,506 1,302,506 Total $ 1,903,231 $ 1,903,231 usedwithin one year of March 31, 2021.such repayment. Upmortgage loans.$1,500,000 of such loans may be convertible into warrants, at apurchase 4,027 homes for an aggregate purchase price of $1.50 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.We do not 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 a 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 Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.Financing Arrangementsno obligations, assets or liabilities, which would be consideredany off-balance sheet arrangements as of June 30, 2020. We do not participateMarch 31, 2021.transactions that create relationships with unconsolidated entitiesthousands, except share and per share data and ratios, or as noted)partnerships, often referred to as variable interest entities,condition and results of operations are based on our financial statements, 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 ObligationsWe 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 of $10,000 for office space, administrative and support services, provided to the Company. We began incurring these fees on April 28, 2020 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation.The underwriters are entitled to a deferred fee of $0.35 per unit, or $14,490,000prepared in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.Critical Accounting Policiescondensedthese financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires managementus to make estimates and assumptionsjudgments that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue, and expenses at the date of the condensed financial statements,statements. Generally, we base our estimates on historical experience and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:Class A Ordinary Shares Subject to Possible RedemptionWe account for our ordinary shares subject to possible conversionon various other assumptions in accordance with GAAP that we believe to be reasonable under the guidancecircumstances. Actual results may differ from these estimates under different assumptions or conditions.Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.Policies and Estimates” Ordinaryin the Annual Report. There have been no significant changes to these critical accounting estimates during the first three months of 2021, except as noted below. In addition, we have other key accounting policies and estimates that are described in “Part I – Item 1. Financial Statements –Notes to Condensed Consolidated Financial Statements – Note 1. Description of Business and Accounting Policies” in this Quarterly Report on Form 10-Q.subject to mandatory redemptionof common stock issuable upon the exercise of Sponsor Warrants may not be transferred, assigned, or sold until 30 days after the completion of a Business Combination. Additionally, the Sponsor Warrants are classified as a liability instrumenteligible for cash and cashless exercises, at the holder’s option, and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary sharesonly if the Reference Value, as defined in the Warrant Agreement, is less than $18.00 per share. If the Sponsor Warrants are held by someone other than the sponsors and certain permitted transferees, the Sponsor Warrants will redeemable and exercisable on the same basis as the Public Warrants.feature redemption rightsthe Sponsor Warrants do not meet the criteria to be classified in shareholders’ equity. Specifically the exercise and settlement features for the Sponsor Warrants preclude them from being considered indexed to the Company’s own stock given that are either withina change in the controlholder of the holder or subject to redemption uponSponsor Warrants may alter the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outsidesettlement of the shareholders’ equity sectionSponsor Warrants. Since the holder of our condensed balance sheets.Net Loss Per Ordinary ShareWe apply the two-class methodinstrument is not an input to a standard option pricing model, a consideration with respect to the indexation guidance, a change in calculating earnings per share. Ordinary shares subject to possible redemption, whichthe holder for the Sponsor Warrants impacting their value means the Sponsor Warrants are not currently redeemable and are not redeemableindexed to the Company’s own stock. Since the Private Warrants meet the definition of a derivative under ASC 815, we recorded these warrants as liabilities on the balance sheet at fair value have been excluded fromupon the calculationconsummation of basic net loss per ordinary share since such shares, if redeemed, only participatethe Business Combination, with subsequent changes in their pro rata sharerespective fair values recognized in the consolidated statement of operations at each reporting period. The Company concluded that the Public Warrants, which do not have the same exercise and settlement features as the Sponsor Warrants, meet the criteria to be classified in shareholders' equity.Trust Account earnings. Our net incomeSponsor Warrants to individual owners is adjusted for the portion of income that is attributable to ordinary shares subject to redemption, as these shares only participatecertain barriers. As the Sponsor Warrants are held by a single market participant and the transfer of the Sponsor Warrants outside of a small group of permitted transferees would result in the earningsSponsor Warrants having substantially the same terms as the Public Warrants, management determined that the fair value of each Sponsor Warrant is the same as that of a Public Warrant, with an insignificant adjustment for short-term marketability restrictions. While the changes in the fair value of the Trust AccountSponsor Warrants may be material to our future operating results, there is no significant judgment involved in measuring the fair value of the Sponsor Warrants.not our incomeAnalysis of Financial Condition and Results of Operationslosses.as noted)
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,Pronouncements
Quantitative and Qualitative Disclosures About Market Risk.ITEMQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKJune 30,March 31, 2021 and December 31, 2020 we had outstanding borrowings of $596.6 million and $346.3 million, respectively, which bear interest at a floating rate based on a London Interbank Offered Rate (“LIBOR”) reference rate plus an applicable margin. Accordingly, fluctuations in market interest rates may increase or decrease our interest expense. We may use interest rate cap derivatives, interest rate swaps or other interest rate hedging instruments to economically hedge and manage interest rate risk with respect to our variable floating rate debt. Many of our floating rate debt facilities also have LIBOR floors. Assuming no change in the outstanding borrowings on our credit facilities, we estimate that a one percentage point increase in LIBOR would increase our annual interest expense by approximately $4.0 million and $4.4 million as of March 31, 2021 and December 31, 2020, respectively.notto become subject to any market or interest rate risk. Following the consummationsignificant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability to do so could harm our business, results of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in certain U.S. government securities with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.operations and financial condition.
ITEMCONTROLS AND PROCEDURESDisclosureControls and Procedures.are controls and other proceduresmanagement recognizes that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosureany controls and procedures, include, without limitation,no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures designed to ensuremust reflect the fact that informationthere are resource constraints and that management is required to be disclosedapply judgment in our reports filed or submitted underevaluating the Exchange Act is accumulatedbenefits of possible controls and communicatedprocedures relative to ourtheir costs.includingwith the participation of our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.Evaluation of Disclosure Controls and ProceduresAs required by Rules 13a-15 and 15d-15 underevaluated the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2020.the end of the period covered by this Quarterly Report on Form 10-Q. Based upon theiron that evaluation,(as defined in Rules 13a-15 (e) and 15d-15 (e) underwere not effective at the Exchange Act) were effective.Changes in Internal Control Over Financial ReportingDuringreasonable assurance level.most recently completed fiscal quarter, there has been no changefollowing control deficiencies that constituted a material weakness in our internal control over financial reporting for the year ended December 31, 2020 related to our general information technology controls, including the design and implementation of access and change management controls. Additionally, key components of the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) have not been fully implemented, including control and monitoring activities related to: (1) electing and developing general controls activities over technology to support the achievement of objectives; and (2) electing, developing, and performing ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning.isare reasonably likely to materially affect, our internal control over financial reporting.-– OTHER INFORMATION
ITEMLEGAL PROCEEDINGS.None.
ITEMRISK FACTORS.Factors that could causeRisk Factors.actual resultsbusiness operations, we are exposed to differ materially from those in this Quarterly Report includea variety of risks. These risks are generally inherent to the U.S. residential real estate industry or otherwise generally impact iBuyers like us. Any of the risk factors we described in "Part I – Item 1A. Risk Factors," in our final prospectus filed with the SEC on April 29, 2020. AsAnnual Report or described below, have affected or could materially adversely affect our business, financial condition and results of the dateoperations. The market price of this Quarterly Report, other thanshares of our common stock could decline, possibly significantly or permanently, if one or more of these risks and uncertainties occurs. Certain statements in “Risk Factors” are forward-looking statements. See “Forward-Looking Statements.”describedset forth below, there have been no material changes to the Company's risk factors disclosedsince the Annual Report.final prospectusinternal control over financial reporting and may identify additional material weaknesses in the future or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.The securities This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm will also be required to attest to the effectiveness of our internal control over financial reporting in future annual reports on Form 10-K to be filed with the SEC. We will be required to disclose changes made in our internal controls and procedures on a quarterly basis. Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the applicable stock exchange or other regulatory authorities, which we investwould require additional financial and management resources. We have begun the funds held inprocess of compiling the Trust Account could bear a negative rate of interest, which could reducesystem and processing documentation necessary to perform the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.The proceeds held in the Trust Account are invested only in U.S. government treasury obligationsevaluation needed to comply with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it maySection 404 in the future, adopt similar policies in the United States. In the event thatbut we are unablemay not be able to complete our initial business combination or make certain amendments to our Amendedevaluation, testing and Restated Memorandum and Articles of Association our public shareholders are entitled to receive their pro-rata share of the proceeds heldany required remediation in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by public shareholders.
Unregistered Sales of Equity Securities and Use of Proceeds.ITEMUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.weSCH consummated our Initial Public Offeringits initial public offering of 41,400,000 Units,units, inclusive of 5,400,000 Unitsunits sold to the underwriters upon the election to fully exercise their over-allotment option, at a price of $10.00 per Unit,unit, generating total gross proceeds of $414,000,000.$414.0 million. Each Unit consistsunit consisted of one Class A ordinary share of the Company,SCH, par value $0.0001 per share, and one-third of one redeemable warrant of the Company.SCH. Each whole warrant entitlesentitled the holder thereof to purchase one Class A ordinary share Ordinary Share for $11.50 per share, subject to adjustment. Credit Suisse acted as the sole book-running manager. The securities sold in the offering were registered under the Securities Act on registration statements on Form S-1 (No. 333-236774 and 333-237864). The registration statements became effective on April 27, 2020.Initial Public Offering,initial public offering and the exercise of the over-allotment option in full, and the sale of the Private Placement Warrants, weSCH consummated a private placement of 6,133,333 Private Placement Warrantsprivate placement warrants to ourits sponsor, SCH Sponsor II LLC, at a price of $1.50 per Private Placement Warrant,private placement warrant, generating total additional proceeds of $9,200,000.$9.2 million. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.The Private Placement Warrants are identical towarrants sold as part ofinitial public offering, the Units in the Initial Public Offering except that, so long as they are held by the Sponsor or its permitted transferees: (1) they will not be redeemable by us (except in certain redemption scenarios when the price per Class A ordinary share equals or exceeds $10.00 (as adjusted)); (2) they (including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of our Business Combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the Class A ordinary Shares issuable upon exercise of these warrants) are entitled to registration rights.Of the gross proceeds received from the Initial Public Offering and the full exercise of the over-allotment option to purchase additional Units, $414,000,000in full and the sale of the private placement warrants, a total of $414.0 million was placed in a trust account. After deducting payments to existing shareholders of $0.1 million in connection with their exercise of redemption rights, the Trust Account.We paidpayment of the $14.5 million of deferred underwriting fees and a total of $7,200,000$22.9 million in underwriting discounts and commissions and $506,558 for other costs and expenses related toin connection with the Initial Public Offering. In addition,Business Combination paid from the underwriters agreed to defer $14,490,000 in underwriting discounts and commissions.For a descriptiontrust account, the remainder of the usetrust account is now held on our balance sheet to fund our operations and continued growth.the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.Equity Securities
Defaults Upon Senior Securities.ITEMDEFAULTS UPON SENIOR SECURITIES.
Mine Safety Disclosures.ITEMMINE SAFETY DISCLOSURES.
ITEMOTHER INFORMATION.None.
On May 6, 2021, the Company’s Board of Directors approved a modification to the Company’s management structure following a reassessment of functions due to the addition of Andrew Low Ah Kee in 2020 and Daniel Morillo in early 2021 to the Company's management team. As a result of such modification, Ian Wong, the Company’s co-founder and Chief Technology Officer, and Tom Willerer, the Company’s Chief Product Officer, will no longer be functioning or designated as executive officers of the Company.
Exhibits.ITEMEXHIBITS. are filed as part of or incorporated by reference into, this Quarterly Report on Form 10-Q.*Filed herewith.**Furnished.(1)Previously filed as an exhibit to our Current Report on Form 8-K filed on April 30, 2020 and incorporated by reference herein.Description Form File No. Exhibit Filing Date Filed Herewith 2.1 8-K 001-39253 2.1 09/17/2020 3.1 8-K 001-39253 3.1 12/18/2020 3.2 S-1/A 333-251529 3.3 01/15/2021 4.1 S-4/A 333-249302 4.5 11/06/2020 4.2 8-K 001-39253 4.1 04/30/2020 4.3 * 10.1 # 8-K 001-39253 99.1 04/02/2021 31.1 * 31.2 * 32.1 ** 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document. * 101.SCH Inline XBRL Taxonomy Extension Schema Document. * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. * 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. * 104 Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) *
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP. IIOPENDOOR TECHNOLOGIES INC. Date: August 13, 2020/s/ Chamath PalihapitiyaDate: Name:May 12, 2021Chamath PalihapitiyaBy:/s/ Eric Wu Title:Name: Eric Wu Title: Chief Executive Officer (Principal Executive Officer)Date: May 12, 2021 By: /s/ Carrie Wheeler Date: August 13, 2020/s/ Steven TrieuName:Steven TrieuName: Carrie Wheeler Title:Title: Chief Financial Officer (Principal Financial and Accounting Officer)